[Federal Register Volume 81, Number 243 (Monday, December 19, 2016)]
[Rules and Regulations]
[Pages 92122-92230]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-27551]



[[Page 92121]]

Vol. 81

Monday,

No. 243

December 19, 2016

Part III

Book 2 of 2 Books

Pages 92121-92498





Department of the Interior





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Bureau of Land Management



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43 CFR Parts 2800 and 2880



Competitive Processes, Terms, and Conditions for Leasing Public Lands 
for Solar and Wind Energy Development and Technical Changes and 
Corrections; Final Rule

  Federal Register / Vol. 81 , No. 243 / Monday, December 19, 2016 / 
Rules and Regulations  

[[Page 92122]]


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DEPARTMENT OF THE INTERIOR

Bureau of Land Management

43 CFR Parts 2800 and 2880

[LLWO301000.L13400000]
RIN 1004-AE24


Competitive Processes, Terms, and Conditions for Leasing Public 
Lands for Solar and Wind Energy Development and Technical Changes and 
Corrections

AGENCY: Bureau of Land Management, Department of the Interior.

ACTION: Final rule.

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SUMMARY: Through this final rule the Bureau of Land Management (BLM) is 
amending its regulations governing rights-of-way issued under the 
Federal Land Policy and Management Act (FLPMA) and the Mineral Leasing 
Act (MLA). The principal purposes of these amendments are to facilitate 
responsible solar and wind energy development on BLM-managed public 
lands and to ensure that the American taxpayer receives fair market 
value for such development. This final rule includes provisions to 
promote the use of preferred areas for solar and wind energy 
development, called ``designated leasing areas'' (DLAs). It builds upon 
existing regulations and policies to expand BLM's ability to utilize 
competitive processes to offer authorizations for development inside or 
outside of DLAs. It also addresses the appropriate terms and conditions 
(including payment and bonding requirements) for solar and wind energy 
development rights-of-way issued under the regulations. Finally, the 
rule makes technical changes, corrections, and clarifications to the 
existing rights-of-way regulations. Some of these changes affect all 
rights-of-way, while some provisions affect only specific rights-of-
way, such as those for transmission lines with a capacity of 100 
kilovolts (kV) or more.

DATES: Effective Date: This final rule is effective January 18, 2017.

FOR FURTHER INFORMATION CONTACT: John Kalish, Bureau of Land 
Management, at 202-912-7312, for information relating to the BLM's 
solar and wind renewable energy programs, or the substance of the final 
rule. For information pertaining to the changes made for any 
transmission line with a capacity of 100 kV or more you may contact 
Stephen Fusilier at 202-912-7426. For information on procedural matters 
or the rulemaking process you may contact Charles Yudson at 202-912-
7437. Persons who use a telecommunications device for the deaf (TDD) 
may call the Federal Information Relay Service (FIRS) at 1-800-877-
8339, to contact the above individuals.

SUPPLEMENTARY INFORMATION:
I. Executive Summary
II. Background
III. Final Rule as Adopted and Responses to Comments
IV. Section-by-Section Analysis for Part 2800
V. Section-by-Section Analysis for Part 2880
VI. Procedural Matters

I. Executive Summary

    The BLM initiated this rulemaking in 2011 through publication of an 
Advance Notice of Proposed Rulemaking (ANPR) seeking public comment on 
a potential regulatory framework for competitive solar and wind energy 
rights-of-way. A proposed rule was published in the Federal Register on 
September 30, 2014, summarizing and discussing the comments that the 
BLM received on the ANPR. The proposed rule set forth a framework for 
the competitive leasing of solar and wind energy rights-of-way both 
inside and outside of designated leasing areas. It also proposed 
codifying existing solar and wind energy policies in 43 CFR part 2800, 
establishing a new acreage rent for wind energy projects, and updating 
the methods used to set acreage rents and megawatt (MW) capacity fees 
for existing and future solar and wind energy projects. In addition to 
the changes related to solar and wind energy development, the rule also 
proposed related updates to other provisions of the rights-of-way 
regulations, including those applicable to transmission lines with a 
capacity of 100 kV or more and pipelines 10 inches or more in diameter. 
Based on comments on the proposed rule and consideration of other 
factors, the BLM prepared this final rule.

Statutory and Regulatory Authority

    Facilities for the generation, transmission, and distribution of 
electric energy are authorized under Title V of the FLPMA (43 U.S.C. 
1761-1771) and its implementing regulations at 43 CFR part 2800. 
Section 504(g) requires that the BLM generally receive fair market 
value for a right-of-way. Under Title V, the BLM can issue easements, 
leases, licenses, and permits to occupy, use or traverse public lands 
for particular purposes. The BLM generally refers to all such rights-
of-way as ``grants.'' The final rule continues to refer to solar and 
wind energy development rights-of-way issued noncompetitively or 
outside a DLA as ``grants,'' but designates solar and wind energy 
development rights-of-way issued competitively and within a DLA under 
revised subpart 2809 as ``leases,'' to which specific requirements and 
benefits are attached, as explained below.
    Rights-of-way for oil and gas pipelines are authorized under 
Section 28 of the MLA (30 U.S.C. 185), Sections 302, 303, and 310 of 
FLPMA (43 U.S.C. 1732, 1733, and 1740), and the applicable implementing 
regulations at 43 CFR part 2880. The BLM processes applications for 
these categories of rights-of-way in accordance with section 2884.11.

Policies

    The BLM released a Draft Solar Energy Programmatic Environmental 
Impact Statement (EIS) on December 17, 2010 and released a Supplement 
to the Draft EIS on October 28, 2011. The Supplement to the Draft EIS 
contemplated a process to identify and offer public lands in solar 
energy zones (SEZs) through a competitive leasing process. The 
Supplement to the Draft EIS described how the BLM intended to pursue a 
rulemaking process to implement a competitive leasing program within 
SEZs. The BLM released the Final Solar EIS on July 27, 2012, and the 
Secretary of the Interior (Secretary) signed the Record of Decision 
(ROD) on October 12, 2012. The Solar Programmatic EIS ROD, or Western 
Solar Plan, likewise described the BLM's intent to establish a 
competitive leasing program within the SEZs.
    The Western Solar Plan provides the foundation for a Bureau-
initiated competitive process for offering lands for solar energy 
development within the SEZs. Similar comprehensive or regional land use 
planning efforts could be initiated by the BLM in the future to 
designate additional renewable energy development areas, such as for 
wind development. For example, the recently completed Desert Renewable 
Energy Conservation Plan (DRECP) identified Development Focus Areas 
(DFAs) in Southern California that were designed to support wind, 
solar, and geothermal development. As explained elsewhere in this 
preamble, in the Western Solar Plan and in the DRECP Record of Decision 
(ROD), SEZs and DFAs, like all DLAs, represent areas that have been 
prescreened by the BLM and identified as having high energy generation 
potential, access to transmission (either existing or proposed), and 
low potential for conflicts with other resources. The rule supports the 
establishment of these areas through procedures to inform their 
identification and establishment.

[[Page 92123]]

Competitive Leasing Process

    Existing regulations authorize the BLM to determine whether 
competition exists among right-of-way applications filed for the same 
facility or system; however, they do not allow the BLM to offer such 
lands competitively absent such a finding. The existing regulations 
allow the BLM to resolve any such competition using competitive bidding 
procedures. All such grants are issued subject to valid existing rights 
in accordance with 43 CFR 2805.14.
    Building on recommendations and analysis in the Western Solar Plan, 
this final rule expands the existing regulations to allow the BLM to 
offer lands competitively on its own initiative, both inside and 
outside DLAs, even in the absence of identified competition. Within 
DLAs, the rule will require competitive leasing procedures except in 
certain circumstances, when applications could be considered outside 
the competitive process. Outside DLAs, the BLM will have discretion 
whether to utilize competitive leasing procedures. This rule identifies 
what constitutes a DLA, and outlines the competitive process for solar 
and wind energy leasing inside DLAs, including the nomination process 
for areas inside DLAs, the process for reviewing nominations, the 
competitive bidding procedures to be deployed, and the rules governing 
administration of solar or wind energy leases issued through the 
competitive process.

Incentives

    This rule includes various provisions to incentivize development 
inside rather than outside of DLAs. For example, the rule establishes a 
new $15 per acre application filing fee for right-of-way applications 
outside of DLAs to discourage speculative applications and encourage 
development in DLAs. In addition, a winning bidder outside a DLA will 
be deemed the ``preferred applicant'' and eligible to apply for a 
grant, while a winning bidder within a DLA will be offered a lease. A 
primary reason for this distinction is that the prescreening done by 
the BLM as part of the identification of DLAs enables it to issue a 
lease prior to the conclusion of the project-specific reviews (such 
project-specific reviews would, however, have to be completed prior to 
the commencement of construction).
    Further, this final rule establishes a mechanism whereby bidders 
inside DLAs may qualify for variable offsets (a form of bidding credit) 
that will give them a financial advantage in the competitive bidding 
process. Specifically, a bidder that meets the qualifications set forth 
in the Notice of Competitive Offer for a particular offset will have an 
opportunity to pre-qualify for a reduction to their bid amount, up to 
20 percent of the bid. Suppose, for example, a bidder pre-qualified for 
a 20 percent offset and then won the auction with a high bid of $100. 
The bidder would only be obligated to pay the BLM $80 for the lease. 
These reductions would be sale-specific and would be based on factors 
identified in the initial sale notice. The final rule gives the BLM the 
flexibility to vary the factors that could enable a bidder to obtain a 
variable offset from one competitive offer to another, but possible 
factors include having an approved Power Purchase Agreement (PPA) or 
Interconnect Agreement, or employing a less water-intensive technology. 
Each of the factors will be identified in the Notice of Competitive 
Offer, which will also specify the pre-determined reduction (e.g., 5 
percent) associated with any individual factor. The total aggregate 
reduction across all factors cannot exceed 20 percent.
    Additional provisions that incentivize development within DLAs 
include a reduced nomination fee of $5 per acre, which is electively 
paid by a potential bidder, compared to $15 per acre non-elective 
application filing fee for competitive parcels outside of DLAs; a 10-
year phase-in of the MW capacity fee inside a DLA as opposed to a 3-
year phase-in of the fee outside of a DLA; and more favorable bonding 
requirements inside DLAs. Specifically, outside DLAs, bonding must be 
determined based on reclamation cost estimates, whereas inside DLAs, 
the final rule requires a standard bond in the amount of $10,000 per 
acre for solar energy development and either $10,000 or $20,000 per 
wind energy turbine for wind energy development, depending on the 
nameplate capacity of the turbine.
    Finally, successful competitive processes within DLAs will result 
in the issuance of a 30-year fixed-term lease, whereas a successful 
competitive process outside of a DLA will result in a preferred 
applicant status for the winner. The 30-year fixed term lease issued to 
the high bidder for a parcel offered competitively within a DLA will 
increase the certainty for developers and, in turn, make it easier to 
secure financing or reach terms on other agreements. Specifically, the 
lease will provide developers with evidence of site control, and they 
will obtain it much earlier in the review process than they would under 
existing regulations (notably, before project-specific NEPA reviews 
have been concluded).

Rents and Fees

    The rule updates the payments currently established by BLM policies 
to ensure that the BLM obtains fair market value for the use of the 
public lands. Specifically, it updates and codifies the acreage rent 
for both solar and wind energy authorizations. The acreage rent will be 
based on the acreage of the authorization, using a 10 percent 
encumbrance value for wind energy authorizations and a 100 percent 
encumbrance value for solar energy authorizations. This compares to the 
50 percent encumbrance value that is used for determining rent for 
linear rights-of-way on the public lands.
    The acreage rent for linear rights-of-way and solar and wind energy 
rights-of-way will vary by individual counties and is based on 
agricultural land values determined from data published by the National 
Agricultural Statistics Service (NASS). The BLM may also determine on a 
project-specific or regional basis that a different rate should be 
utilized. The ``acreage rent'' component captures the value of 
unimproved rural land encumbered by a project.
    In addition to acreage rent, the rule also updates and codifies the 
MW capacity fee that the BLM already charges under existing policies. 
As under existing policy, that fee is designed to capture the 
difference between a particular project area's unimproved land value 
and the higher value associated with the area's solar or wind energy 
development potential. The BLM uses a MW capacity fee as a proxy for 
the area's electrical generation development potential. That fee is 
calculated using a formula that includes the nameplate capacity of the 
approved project, a capacity factor or efficiency factor that varies 
based on the average potential electric generation of different solar 
and wind technologies, the average wholesale prices of electricity, and 
a Federal rate of return based on a 20-year Treasury bond. In this 
final rule, the capacity factors used for calculating the MW capacity 
fee are 20 percent for solar photovoltaic (PV), 25 percent for 
concentrated solar power (CSP), 30 percent for CSP with storage 
capacity of 3 hours or more, and 35 percent for wind. Additionally, the 
final rule allows the BLM to determine, on a project-specific or 
regional basis, that a different net capacity factor is more 
appropriate, such as if a project takes advantage of a new technology 
(e.g., energy storage) or project design considerations (e.g., solar 
array layout).
    The final rule increases the MW capacity fee currently established 
by BLM policy from $4,155 per MW to

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$5,010 per MW for wind energy authorizations, and reduces the MW 
capacity fee from $5,256 to $2,863 per MW for PV solar, from $6,570 to 
$3,578 per MW for concentrated photovoltaic (CPV) or CSP solar, and 
from $7,884 to $4,294 per MW for CSP with storage capacity of 3 hours 
or more. The rule provides for a three-year phase-in of the MW capacity 
fee for right-of-way grants outside DLAs (25 percent in year one, 50 
percent in year two, and 100 percent for subsequent years) and for a 
longer, ten-year phase-in for right-of-way leases inside DLAs (50 
percent for the first 10 years and 100 percent for subsequent years).
    As explained elsewhere in this preamble, both the acreage rent and 
MW capacity fees adjust periodically based on identified factors, 
including changes in NASS survey values and wholesale power prices. In 
addition, based on comments received on the proposed rule, this final 
rule includes provisions that allow grant or lease holders the option 
to select fixed, scheduled rate adjustments to the applicable per acre 
zone rate (or rent) and MW rate over the term of the right-of-way grant 
or lease. This scheduled rate adjustment method would be used in lieu 
of the rule's standard rate adjustment method, under which those rates 
could increase or decrease by irregular amounts depending on changes to 
NASS survey values or wholesale power prices.
    The rule includes requirements to hold preliminary application 
review meetings after the submission of an application for a solar or 
wind energy project, including authorizing the BLM to collect cost 
recovery fees for those meetings. Through this final rule the BLM is 
also extending the preliminary application review meeting requirement 
to any transmission line having a capacity of 100 kV or more. This 
change is appropriate because both solar or wind energy projects and 
transmission lines with a capacity greater than 100 kV are generally 
large-scale facilities with greater potential for impacts and resource 
conflicts. Based on experience with existing solar and wind energy 
projects, the BLM has found that those preliminary application meetings 
provide both the applicant and the BLM with an opportunity to identify 
and discuss resource conflicts early on in the process. In addition, 
the rule provides for additional cost reimbursement measures, 
consistent with Sections 304(b) and 504(g) of FLPMA.

Changes to 43 CFR Part 2880

    In addition to the changes to 43 CFR part 2800, this final rule 
also revises several subparts of part 2880. These revisions are 
necessary to ensure consistency of policies, processes, and procedures, 
where possible, between rights-of-way applied for and administered 
under part 2800 and rights-of-way applied for and administered under 
part 2880. These changes are discussed in more detail in Section II of 
this preamble. However, a proposal to require preliminary application 
review meetings for right-of-way applications for pipelines exceeding 
10 inches in diameter was dropped from this final rule in response to 
comments.

II. Background

A. Rule Overview

    The BLM published the proposed rule in the Federal Register on 
September 30, 2014 (79 FR 59022) for a 60-day comment period ending on 
December 1, 2014. In response to public requests for extensions of the 
public comment period the BLM extended the period for an additional 15 
days on November 29, 2014, through December 16, 2014. We received 36 
comment letters on the proposed rule. We also received similar feedback 
through stakeholder engagement meetings held as part of BLM's regular 
course of business. This final rule addresses the comments received 
during the comment period and during stakeholder engagement meetings in 
the section-by-section discussion in section III. of this preamble.
    As explained above, the primary purpose of this rule is to 
facilitate the responsible development of solar and wind energy 
development on the public lands, with a specific focus on incentivizing 
development on lands identified as DLAs. To that end, this rule, in an 
amendment of section 2801.5, defines the term ``designated leasing 
area'' as a parcel of land with specific boundaries identified by the 
BLM land use planning process as being a preferred location for solar 
or wind energy that can be leased competitively for energy development. 
In this rule, the BLM amends its regulations implementing FLPMA to 
provide for two competitive processes for solar and wind energy rights-
of-way on public lands. One of the processes is for lands inside DLAs. 
The other process is for lands outside of DLAs.
    For lands outside DLAs, the BLM amends section 2804.23 to provide 
for a competitive bidding process designed specifically for solar or 
wind energy development. Prior to this final rule, section 2804.23 
authorized a competitive process to resolve competing right-of-way 
applications for the same facility or system. Under amended section 
2804.23, the BLM can now competitively offer lands on its own 
initiative. The competitive process for solar and wind energy 
development on lands outside of DLAs is outlined in new section 
2804.30.
    The competitive process for lands inside DLAs is outlined in 
revised 43 CFR subpart 2809, which provides for a parcel nomination and 
competitive offer, instead of an application process.
    This rule includes not only these competitive processes, but also a 
number of amendments to other provisions of the right-of-way 
regulations found at 43 CFR parts 2800 and 2880. The BLM determined 
that it is necessary to first articulate the general requirements for 
rights-of-way in order to set the solar and wind requirements apart.
    For example, the final rule has mandatory bonding requirements for 
solar and wind energy, including a minimum bond amount. The BLM 
determined that bonding is necessary for all solar and wind energy 
rights-of-way because of the intensity and duration of the impacts of 
such authorizations. For other right-of-way authorizations, the BLM 
will continue to require bonding at its discretion under this final 
rule.
    Other amendments to the regulations include changes in right-of-way 
application submission and processing requirements, rents and fees, and 
alternative requirement requests. In addition, this final rule makes 
several technical corrections as explained in the section-by-section 
analysis below.

B. Statutory and Regulatory Background

    FLPMA provides comprehensive authority for the administration and 
protection of the public lands and their resources and directs that the 
public lands be managed ``on the basis of multiple use and sustained 
yield'' (43 U.S.C. 1701(a)(7) and 1732(a)). As defined by FLPMA, the 
term ``right-of-way'' includes an easement, lease, permit, or license 
to occupy, use, or traverse public lands (43 U.S.C. 1702(f)). Title V 
of FLPMA (43 U.S.C. 1761-1771) authorizes the BLM to issue rights-of-
way on the public lands for electric generation systems, including 
solar and wind energy generation systems. FLPMA also mandates that 
``the United States receive fair market value for the use of the public 
lands and their resources unless otherwise provided for by statute'' 
(43 U.S.C. 1701(a)(9) and 1764(g)). Section 28 of the MLA (30 U.S.C. 
185) and FLPMA provide similar authority for authorizing rights-of-way

[[Page 92125]]

for oil and gas pipelines. The BLM has authority to issue regulations 
under both FLPMA (43 U.S.C. 1732, 1733, and 1740) and the MLA (30 
U.S.C. 185 and 189).
    The Energy Policy Act of 2005 (codified at 42 U.S.C. 15801 et seq.) 
(EPAct) includes provisions authorizing and encouraging the Federal 
Government to develop energy producing facilities. Title II of the 
EPAct includes a provision encouraging the Secretary to approve non-
hydropower renewable energy projects (solar, wind, and geothermal) on 
public lands with a total combined generation capacity of at least 
10,000 MWs of electricity by 2015. See Section 211, Public Law 109-58, 
119 Stat. 660 (2005).
    Since passage of the EPAct, the Secretary has issued several orders 
that emphasize the importance of renewable energy development on public 
lands and the Department of the Interior's (Department's) efforts to 
achieve the goal that Congress established in Section 211 of the EPAct. 
Secretarial Order No. 3283, ``Enhancing Renewable Energy Development on 
the Public Lands,'' signed by Secretary Kempthorne on January 16, 2009, 
facilitates the Department's efforts to achieve the goal established by 
Congress in Section 211 of the EPAct. On March 11, 2009, Secretary 
Salazar signed Secretarial Order No. 3285, ``Renewable Energy 
Development by the Department of the Interior,'' which describes the 
need for strategic planning and a balanced approach to domestic 
resource development. This order was amended by Secretarial Order 
3285A1 in February 2010. Amended Order 3285A1 establishes the 
development of renewable energy on public lands as one of the 
Department's highest priorities.
    While the BLM has already met the goal established by Congress by 
approving over 12,000 MWs of renewable energy by the end of 2012, the 
development of renewable energy resources on the public lands remains a 
national priority. To advance that goal, President Obama included in 
the administration's Climate Action Plan to reduce carbon pollution, 
released on June 25, 2013, a new goal for the Department to approve at 
least 20,000 MWs of new renewable energy capacity on federal lands by 
2020. As of the end of fiscal year 2015, the BLM has reviewed and 
approved 60 projects capable of generating over 15,000 MWs of power.
    The BLM has issued several instruction memoranda (IMs) that 
identify policies and procedures related to processing solar and wind 
energy right-of-way applications. The BLM is incorporating some of 
these existing policies and procedures into its right-of-way 
regulations. The IMs can be found at: http://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.
    Briefly, the IMs are as follows:
    1. IM 2009-043, Wind Energy Development Policy. This IM provides 
guidance on processing right-of-way applications for wind energy 
projects on public lands;
    2. IM 2011-003, Solar Energy Development Policy. This IM provides 
guidance on the processing of right-of-way applications and the 
administration of authorized solar energy projects on public lands;
    3. IM 2011-059, National Environmental Policy Act (NEPA) Compliance 
for Utility-Scale Renewable Energy Right-of-Way Authorizations. This IM 
clarifies NEPA policy for evaluating solar and wind energy project 
right-of-way applications;
    4. IM 2011-060, Solar and Wind Energy Applications--Due Diligence. 
This IM provides guidance on the due diligence requirements for solar 
and wind energy development right-of-way applications; and
    5. IM 2011-061, Solar and Wind Energy Applications--Pre-Application 
and Screening. This IM provides guidance on the review of right-of-way 
applications for solar and wind energy development projects on public 
lands; and
    6. IM 2016-122, Policy Guidance for Federal Land Policy and 
Management Act Right-of-Way Rent Exemptions for Electric or Telephone 
Facilities Financed or Eligible for Financing under the Rural 
Electrification Act of 1936, as amended (IM 2016-122). This IM provides 
guidance for processing requests for FLPMA right-of-way rent exemptions 
for electric and telephone facilities financed or eligible for 
financing by the United States Department of Agriculture, Rural 
Utilities Service (RUS) under the Rural Electrification Act of 1936, as 
amended (Rural Electrification Act), 7 U.S.C.901 et seq. In particular, 
this IM makes clear that wind and solar entities that qualify under the 
Rural Electrification Act pay the MW capacity fees but not acreage 
rent.
    In addition, in 2005 and 2012 the BLM issued landscape-level land 
use plan amendment decisions supported by programmatic EISs to 
facilitate wind and solar energy development. These land use plan 
amendments guide future BLM management actions by identifying desired 
outcomes and allowable uses on public lands.
    On June 24, 2005, the BLM published the Final Programmatic 
Environmental Impact Statement on Wind Energy Development on BLM-
Administered Lands in the Western United States (Wind Programmatic EIS) 
(70 FR 36651), which analyzed the environmental impact of the 
development of wind energy projects on public lands in the West and 
identified approximately 20.6 million acres of public lands with wind 
energy development potential (http://windeis.anl.gov). Following the 
publication of the Wind Programmatic EIS, the BLM issued the ROD for 
Implementation of a Wind Energy Development Program and Associated Land 
Use Plan Amendments (Wind Programmatic EIS ROD) (71 FR 1768), which 
amended 48 BLM land use plans. The Wind Programmatic EIS ROD did not 
identify specific wind energy development leasing areas, but rather 
identified areas that have potential for the development of wind energy 
production facilities, along with areas excluded from consideration for 
wind energy facility development because of other resource values that 
are incompatible with that use.
    On July 27, 2012, the BLM and the Department of Energy published 
the Notice of Availability of the Final Programmatic Environmental 
Impact Statement for Solar Energy Development in Six Southwestern 
States (Solar Programmatic EIS) (77 FR 44267). The Solar Programmatic 
EIS assessed the environmental, social, and economic impacts associated 
with utility-scale solar energy development on public lands in Arizona, 
California, Colorado, Nevada, New Mexico, and Utah (http://solareis.anl.gov). On October 12, 2012, the Department and the BLM 
issued the Western Solar Plan, which amended 89 BLM land use plans to 
identify 17 solar energy zones (SEZs) and identify mandatory design 
features applicable to utility-scale solar development on BLM managed 
lands. The Western Solar Plan also described the BLM's intent to use a 
competitive offer process to facilitate solar energy development 
projects in SEZs. SEZs, including those identified in the Western Solar 
plan, will be considered DLAs under this final rule.
    This final rule is one of the steps being taken by the Department 
and the BLM to promote renewable energy development on the public 
lands. It implements one of the Western Solar Plan's key 
recommendations, namely that the BLM institute a process whereby it can 
competitively offer lands within DLAs. In addition to addressing 
recommendations in the Western Solar Plan, the final rule also 
implements suggestions for improving the renewable energy program made 
by the Department of the Interior's Office of

[[Page 92126]]

Inspector General for the Department, initially in a draft report and 
carried over to the final report (Report No. CR-EV-BLM-0004-2010), and 
by the Government Accountability Office (GAO) (Audit No. 361373), both 
of which address the use of competitive leasing for solar and wind 
development authorizations. The Inspector General (OIG) reviewed the 
BLM's renewable energy activities to assess the effectiveness of the 
BLM's development and management of its renewable energy program. The 
IG also made recommendations on other aspects of the BLM's right-of-way 
program.
    The OIG report discusses only wind energy projects, as the solar 
energy program was not at a stage where it had been fully implemented. 
However, based on experience gained from its authorization of solar 
projects, the BLM believes that recommendations made for the wind 
energy program would also benefit the solar energy program. Other OIG 
recommendations pertained to the amounts and collection procedures for 
bonds for wind energy projects. These recommendations included:
    1. Requiring a bond for all wind energy projects and reassessing 
the minimum bond requirements;
    2. Tracking and managing bond information;
    3. Developing and implementing procedures to ensure that when a 
project is transferred from one entity to another, the BLM would return 
the first bond to the company that obtained it and request a new bond 
from the newly assigned company; and
    4. Developing and implementing Bureau-wide guidance for using 
competitive bidding on wind and solar energy rights-of-way.
    The BLM concurred with all of the OIG's recommendations. The last 
recommendation is one of the principal reasons for developing this 
rule. The other recommendations form the basis for other changes being 
made as part of the BLM's operating procedures that are also addressed 
through this rulemaking.
    Through this rulemaking, the BLM amends regulations in 43 CFR parts 
2800 and 2880, and in particular:
    1. Section 2804.12, to establish preliminary application review 
requirements for solar and wind energy development, and for development 
of any transmission line with a capacity of 100 kV or more;
    2. Section 2804.25, to establish application processing and 
evaluation requirements for solar and wind energy development;
    3. Section 2804.30, to establish a competitive process for public 
lands outside of DLAs for solar and wind energy development;
    4. Section 2804.31, to establish a two-step process for solar or 
wind energy testing and conversion of testing areas to DLAs;
    5. Section 2804.35, to establish screening criteria to prioritize 
applications for solar or wind energy development;
    6. Section 2804.40, to establish a requirement to propose 
alternative requirements with a showing of good cause;
    7. Section 2805.11(b), to establish a term for granting rights-of-
way for solar or wind energy development;
    8. Section 2805.12(c), to establish terms and conditions for a 
solar or wind energy development grant or lease;
    9. Section 2805.20, to provide more detail on bonding requirements;
    10. Sections 2806.50, 2806.52, 2806.54, 2806.56, and 2806.58, to 
provide information on rents for solar energy development rights-of-
way;
    11. Sections 2806.60, 2806.62, 2806.64, 2806.66, and 2806.68, to 
provide information on rents for wind energy development rights-of-way;
    12. Subpart 2809, to establish a competitive process for leasing 
public lands inside DLAs for solar and wind energy development; and
    13. Provisions in 43 CFR part 2800 pertaining to transmission lines 
with a capacity of 100 kV or more.
    In addition to these amendments, this rule also makes several 
technical changes, corrections, and clarifications to the regulations 
at 43 CFR parts 2800 and 2880. The following table provides a summary 
of the principal changes made in this final rulemaking. The table 
shows: A description and CFR reference to the existing rule, a 
description of the changes in the proposed rule, and a description of 
the changes made in this final rule. The BLM made minor revisions 
throughout the final rule to improve its readability, which are not 
noted in this table but are discussed in the section- by- section 
analysis of this preamble.

     Table 1--Abbreviated Descriptions of the Major Changes Made to 43 CFR Parts 2800 and 2880 by This Rule
----------------------------------------------------------------------------------------------------------------
                                           Changes between
   43 CFR reference and description       proposed rule and      Changes between final     Additional comments
                                         existing regulations    rule and proposed rule
----------------------------------------------------------------------------------------------------------------
2801.5(b)--Acronyms and terms........  Adds definitions for 10  This final rule adopts   Changes made in this
                                        items and revises        the definitions in the   section were based on
                                        definitions for 3        proposed rule, except    comments received from
                                        items, mostly            that under the final     the public to account
                                        pertaining to solar      rule the definitions     for the application
                                        and wind energy          allow the BLM to         filing fee, energy
                                        development.             determine a more         storage, and MW rate.
                                                                 appropriate Net
                                                                 Capacity Factor for
                                                                 rights-of-way with
                                                                 storage on a case-by-
                                                                 case basis.
                                                                No other substantive
                                                                 changes were made from
                                                                 the proposed to the
                                                                 final rule.
2801.6--Scope........................  Clarifies that the       No changes were made
                                        regulations in this      from the proposed to
                                        part apply to all        the final rule for
                                        systems and facilities   this section.
                                        identified under
                                        section 2801.9(a).
2801.9--When do I need a grant?......  Revises language in      The testing provisions   Changes made in this
                                        paragraph (a)(7) to      at new paragraphs        section were based on
                                        include solar and wind   (d)(1) and (2) are       comments received from
                                        development              revised to include       the public requesting
                                        facilities. Adds         both solar and wind      that the testing
                                        paragraph (d) that       facilities, as opposed   provisions account for
                                        references solar and     to just wind.            solar facilities as
                                        wind energy projects.                             well as wind
                                                                                          facilities.
2802.11--Designation of right-of-way   Adds a process for       No changes were made
 corridors and leasing areas.           designating leasing      from the proposed to
                                        areas for solar and      the final rule.
                                        wind energy projects.

[[Page 92127]]

 
2804.10--Actions to be taken before    Discusses pre-           Removes all discussion   Requirements of this
 filing a right-of-way application.     application              or requirements for      section are also
                                        requirements and         pre-application          applicable to
                                        specifically addresses   meetings. Now the only   transmission lines
                                        solar and wind filing    change from the          with a capacity of 100
                                        requirements.            existing regulation is   kV or more. Based on
                                                                 to include designated    comments received, the
                                                                 leasing areas in         final rule removes the
                                                                 paragraph (a)(2).        provision in the
                                                                                          proposed rule that
                                                                                          would have applied
                                                                                          certain application
                                                                                          requirements to
                                                                                          pipelines greater than
                                                                                          10 inches in diameter.
2804.12--Right-of-way application      Discusses additional     This section has been    Changes made in this
 requirements.                          filing fees required     retitled to improve      section were based on
                                        for solar and wind       clarity. This section    comments received from
                                        energy applications.     also removes             the public. The
                                                                 requirements for pre-    paragraphs formerly
                                                                 application meetings     located in section
                                                                 and substitutes          2804.10(b) and (c) are
                                                                 preliminary              now found in section
                                                                 application review       2804.12(b) and (c).
                                                                 meetings that will
                                                                 occur after rather
                                                                 than before an
                                                                 application is filed.
                                                                 This section is also
                                                                 revised to clarify how
                                                                 the BLM will use the
                                                                 IPD-GDP to update fees.
2804.14--Processing fees for grant     Gives the BLM            No changes were made
 applications.                          discretion to collect    from the proposed to
                                        the estimated            the final rule for
                                        reasonable costs         this section.
                                        incurred by other
                                        Federal agencies.
2804.18 and 2804.19--Master            Adds information on      No changes were made
 agreements and major projects.         cost reimbursement       from the proposed to
                                        requirements for work    the final rule.
                                        performed by other
                                        Federal agencies.
2804.20--Determining reasonable costs  Section title revised    Any reference to ``pre-  Changes made in this
 for work on major (Category 6)         for clarity. Adds        application''            section were based on
 rights-of-ways.                        discussions on right-    requirements was         comments received from
                                        of-way work performed    removed to be            the public in regards
                                        by other Federal         consistent with other    to collecting cost
                                        agencies and pre-        changes made to this     recovery with the
                                        application              final rule to            submission of an
                                        requirements for major   reference preliminary    application.
                                        rights-of-way.           application meetings.
2804.23--Competitive process for       Adds provisions for      Minor changes were made  Changes made in this
 applications.                          competition for solar    from the proposed to     section were based on
                                        and wind energy rights-  the final rule. The      comments received from
                                        of-way, both inside      latter clarifies that    the public requesting
                                        and outside of           the BLM will not         that the BLM provide
                                        designated leasing       competitively offer      assurance that it will
                                        areas.                   lands where a plan of    not competitively
                                                                 development (POD) has    offer lands if a
                                                                 been accepted and cost   developer has
                                                                 recovery established.    committed considerable
                                                                 The requirement to       time and resources to
                                                                 publish in a newspaper   a project, as
                                                                 is now optional          evidenced by the
                                                                 instead of required.     existence of a
                                                                                          complete POD and
                                                                                          executed cost recovery
                                                                                          agreement.
2804.24--Use of Standard Form 299 for  Updates the              No changes were made
 submitting a right-of-way              circumstances when an    from the proposed to
 application.                           application is not       the final rule for
                                        required to account      this section.
                                        for competitive offers
                                        under both section
                                        2804.23(c) and subpart
                                        2809.
2804.25--BLM actions in processing a   Describes POD            Changes were made from   Changes were made in
 right-of-way application.              requirements and adds    the proposed to the      the final rule for
                                        additional other         final rule to reflect    clarity, especially a
                                        requirements for solar   the shift from ``pre-    description of what
                                        and wind energy          application meetings''   constitutes ``unpaid
                                        applications. Covers     to ``preliminary         debts.'' Other changes
                                        instances where a        application review       were made to
                                        right-of-way is          meetings'' as            accommodate new
                                        authorized to resolve    described in section     requirements for solar
                                        a trespass.              2804.12. The             and wind rights-of-way
                                                                 requirement to publish   and to clarify when
                                                                 in a newspaper is now    the time clock begins
                                                                 optional instead of      for a due diligence
                                                                 required.                request.
2804.26--Circumstances when the BLM    Adds additional          Adds language to         This change was made to
 may deny your application.             situations where the     correspond to the due    be consistent with
                                        BLM may deny your        diligence requirements   other changes in this
                                        application, including   found in sections        final rule.
                                        specific examples for    2804.12 and 2804.25.
                                        solar and wind energy    Additional language
                                        applications.            added to provide
                                                                 consideration when the
                                                                 BLM may deny an
                                                                 application when
                                                                 circumstances are
                                                                 outside of an
                                                                 applicant's control.
2804.27--What fees are owed if an      Revises this section to  Removes the term pre-    This change was made to
 application is not completed?.         include any pre-         application costs and    be consistent with
                                        application costs that   substitutes              other changes in this
                                        must be paid if an       preliminary              final rule with
                                        application is           application review       respect to the pre-
                                        withdrawn or rejected.   costs.                   application meeting
                                                                                          identified in the
                                                                                          proposed rule.

[[Page 92128]]

 
2804.30--Description of the            Adds section 2804.30,    Several minor changes    The final rule changes
 competitive process for solar or       which describes the      were made from the       were made principally
 wind energy development.               competitive process      proposed to the final    for clarification. The
                                        for solar or wind        rule, including          change in notification
                                        energy development       removing a reference     requirements is
                                        outside of DLAs.         to mitigation costs, a   consistent with other
                                                                 statement that filing    changes in this final
                                                                 fees will be refunded    rule.
                                                                 to unsuccessful
                                                                 bidders, and that a
                                                                 successful bidder will
                                                                 have site control over
                                                                 applications from
                                                                 other developers (by
                                                                 virtue of being
                                                                 identified as the
                                                                 preferred applicant
                                                                 following completion
                                                                 of the sale process).
                                                                 Additionally, the
                                                                 requirement to publish
                                                                 in a newspaper is now
                                                                 optional instead of
                                                                 required.
2804.31--Site testing for solar and    No section 2804.31 in    Adds section 2804.31.    This new section is a
 wind energy.                           proposed rule.           This new section         result of public
                                                                 describes how the BLM    comments on the
                                                                 will inform the public   proposed rule
                                                                 that site-testing        requesting
                                                                 applications will be     clarification on site
                                                                 accepted for lands       testing procedures.
                                                                 within a DLA.            This new section does
                                                                                          not make any changes
                                                                                          to existing policies
                                                                                          or procedures.
2804.35--Prioritizing solar and wind   Adds section 2804.35     The rule clarifies that  The changes were made
 energy applications.                   which describes a        the BLM will generally   to clarify how the BLM
                                        process for              prioritize the           will prioritize leases
                                        prioritizing solar and   processing of solar      and applications.
                                        wind energy              and wind energy leases
                                        applications.            issued under subpart
                                                                 2809 over applications
                                                                 for solar and wind
                                                                 energy grants issued
                                                                 under subpart 2804.
                                                                 Other minor revisions
                                                                 were made in response
                                                                 to comments and
                                                                 discussed further in
                                                                 the section-by-section
                                                                 analysis.
2804.40--Alternative requirements....  No section 2804.40 in    Adds a provision that    This section was added
                                        proposed rule.           allows an applicant to   in response to
                                                                 submit an alternate      comments about the BLM
                                                                 requirement if it is     need for a process for
                                                                 believed that the        applicants to
                                                                 original requirements    demonstrate, based on
                                                                 cannot be met.           a showing of good
                                                                                          cause, the reasons for
                                                                                          its failure to meet
                                                                                          the rule requirements
                                                                                          and demonstrate why
                                                                                          alternative
                                                                                          requirements should be
                                                                                          put in place in their
                                                                                          stead.
2805.10--Approving or denying a grant  Includes right-of-way    No changes were made
                                        leases in addition to    from the proposed to
                                        grants, and adds         the final rule.
                                        specific items to be
                                        included within a
                                        solar or wind energy
                                        grant or lease.
2805.11- What does a grant contain?    Adds specific terms for  Removed specific         This change was made to
                                        solar and wind energy    references to ``wind''   be consistent with
                                        grants and leases.       so that section would    other changes in this
                                                                 apply to project         final rule.
                                                                 testing for either
                                                                 solar or wind.
2805.12--Terms and conditions in a     Revises this section in  Adds new section         Changes made in this
 right-of-way authorization.            its entirety and adds    2805.12(e) stating       section were based on
                                        specific terms and       that good cause must     comments received from
                                        conditions for solar     be shown for extension   the public, concerning
                                        and wind energy grants   of time requests. This   a holder's inability
                                        and leases.              section now includes     to meet BLM
                                                                 solar in addition to     requirements in some
                                                                 wind energy              circumstances.
                                                                 development processes.
                                                                 Other revisions in
                                                                 this section are
                                                                 discussed in the
                                                                 section-by-section
                                                                 analysis.
2805.14--Rights conveyed by a right-   Adds section 2805.14(g)  Removed specific         This change was made to
 of-way grant.                          allowing for renewal     references to ``wind''   be consistent with
                                        applications for wind    so that section would    other changes in this
                                        projects and section     apply to project         final rule.
                                        2805.14(h) allowing      testing for either
                                        renewal for site         solar or wind.
                                        testing grants.
2805.15--Rights retained by the        Adds a provision         No changes were made
 United States.                         requiring common use     from the proposed to
                                        of your right-of-way     the final rule.
                                        for compatible uses.
2805.16--Payment of monitoring fees..  Adds a provision to      Adds the word            This change was made to
                                        allow the BLM to         ``inspecting'' in        be consistent with
                                        collect monitoring       addition to the          other changes in this
                                        fees for expenses        existing word            final rule.
                                        incurred by other        ``monitoring.''.
                                        Federal agencies.

[[Page 92129]]

 
2805.20--Bonding requirements........  Adds new section         The final rule adds a    Changes made in this
                                        2805.20 describing       requirement to have      section were based on
                                        bonding requirements.    periodic reviews of      comments received from
                                                                 project bonds for        the public.
                                                                 adequacy. Also, the
                                                                 bond amounts for wind
                                                                 turbines are changed
                                                                 to be based on the
                                                                 nameplate capacity.
                                                                 The final rule also
                                                                 explains that the BLM
                                                                 may consider factors
                                                                 in addition to the
                                                                 reclamation cost
                                                                 estimate (RCE), such
                                                                 as the salvage value
                                                                 of project components,
                                                                 when determining bond
                                                                 amounts.
2806.12--Payment of rents............  Adds provisions for the  No changes were made
                                        payment of rents for     from the proposed to
                                        non-linear rights-of-    the final rule for
                                        way, including solar     this section.
                                        and wind grants and
                                        leases.
2806.13--Late payment of rents.......  Adds penalties for non-  No changes were made
                                        payment of rents and     from the proposed to
                                        removes the $500 limit   the final rule.
                                        for late payment fees.
2806.20--Rents for linear right-of-    Describes where you may  No changes were made
 way grants.                            obtain a copy of the     from the proposed to
                                        current rent schedule.   the final rule.
2806.22--Changes in the Per Acre Rent  Corrects a reference to  No changes were made
 Schedule.                              the IPD-GDP.             from the proposed to
                                                                 the final rule.
2806.24--Making payment for a linear   Requires making a        No changes were made
 grant.                                 payment for the          from the proposed to
                                        initial partial year,    the final rule.
                                        along with the first
                                        year's rent. Also,
                                        provides for multiple
                                        year payments.
2806.30--Communication site rents....  The communication site   No changes were made
                                        rent schedule is         from the proposed to
                                        removed. Several other   the final rule.
                                        minor changes made for
                                        clarification.
2806.34--Calculation of rent for a     Corrects an existing     No changes were made
 multiple-use communication facility.   citation to read         from the proposed to
                                        section 2806.14(a)(4).   the final rule.
2806.43--Calculation of rents for      Changes a former         No changes were made
 passive reflectors and local           reference to new         from the proposed to
 exchange networks.                     section 2806.70.         the final rule.
2806.44--Calculation of rents for a    Changes a former         No changes were made
 facility owners that authorizes        reference to new         from the proposed to
 communication uses.                    section 2806.70.         the final rule.
2806.50--Rents and fees for solar      Existing section         No substantive changes
 energy rights-of-way.                  2806.50 (provisions      were made to the final
                                        for determining rents    rule.
                                        where the linear right-
                                        of-way schedule or the
                                        communication rent
                                        schedule do not apply)
                                        is redesignated as
                                        section 2806.70. New
                                        section 2806.50
                                        introduces rents and
                                        fees for solar energy
                                        rights-of-way.
2806.51--Scheduled Rate Adjustment...  Not in the proposed      This section gives       These changes were made
                                        rule; added to the       solar project            in response to
                                        final rule in response   proponents the option    comments received from
                                        to comments received.    of selecting scheduled   the public and were
                                                                 rate adjustments to      designed to provide
                                                                 the per acre zone rate   project proponents
                                                                 and MW rate for an       with the option to
                                                                 individual grant or      choose greater payment
                                                                 lease, instead of        certainty over the
                                                                 following the process    life of a right-of-way
                                                                 in the rule for          grant or lease.
                                                                 periodic adjustments
                                                                 in response to changes
                                                                 in NASS values and
                                                                 wholesale market
                                                                 prices.
                                                                Parallel revisions were
                                                                 made to section
                                                                 2806.52 for grants and
                                                                 section 2806.54 for
                                                                 leases.

[[Page 92130]]

 
2806.52 through 2806.58 Provide data   Sections 2806.50,        The rule now allows for  The methodology of
 for rents and fees for solar energy    2806.52, 2806.54,        solar energy site        determining rents and
 projects.                              2806.56, and 2806.58     testing. The             fees for wind is the
                                        describe rents and       calculation of the       same as solar, except
                                        fees for solar energy    acreage rent has been    where noted in the
                                        authorizations.          expanded to explain      preamble.
                                                                 the process more        Changes made in this
                                                                 thoroughly. Acreage      section were based on
                                                                 rent reductions are      comments received from
                                                                 now adjusted to show     the public and to be
                                                                 greater rent             consistent with other
                                                                 reductions in certain    changes in this final
                                                                 States for solar         rule.
                                                                 energy rights-of-way.
2806.60 through 2806.68 Provide data   Sections 2806.60,        The changes to these     Changes made in this
 for rents and fees for wind energy     2806.62, 2806.64,        sections parallel the    section were made to
 projects.                              2806.66 and 2806.68      changes in sections      be consistent with
                                        describe rents and       2806.50 through          other changes in this
                                        fees for wind energy     2806.58.                 final rule.
                                        authorizations.
2806.61--Scheduled Rate Adjustment...  Not in the proposed      Similar to the           These changes were made
                                        rule; added to the       provisions of section    in response to
                                        final rule in response   2806.51. This section    comments received from
                                        to comments received.    gives wind project       the public and were
                                                                 proponents the option    designed to provide
                                                                 of selecting scheduled   project proponents
                                                                 rate adjustments to      with an option to
                                                                 the per acre zone rate   choose greater payment
                                                                 and MW rate for an       certainty over the
                                                                 individual grant or      life of a right-of-way
                                                                 lease, instead of        grant or lease.
                                                                 following the process
                                                                 in the rule for
                                                                 periodic adjustments
                                                                 in response to changes
                                                                 in NASS values and
                                                                 wholesale market
                                                                 prices.
                                                                Parallel revisions were
                                                                 made to section
                                                                 2806.62 for grants and
                                                                 section 2806.64 for
                                                                 leases.
2806.70--Rent determinations for       Adds redesignated        No changes were made     This section is
 other rights-of-way.                   section 2806.70, which   from the proposed to     applicable to all
                                        contains the text        the final rule.          rights-of-way that are
                                        formerly found at                                 not subject to rent
                                        section 2806.50, with                             schedules.
                                        minor modifications.
2807.11--Contacting the BLM during     Specifies requirements   No changes were made
 operations.                            when a change in a       from the proposed to
                                        right-of-way grant is    the final rule.
                                        warranted.
2807.17--Grant suspensions or          This provision contains  No changes were made
 terminations.                          the regulation           from the proposed to
                                        formerly located at      the final rule.
                                        section 2809.10.
2807.21--Assigning a grant or lease..  Revises the title to     Adds two events that     Changes made in this
                                        include leases and       may require an           section were based on
                                        clarifies when an        assignment. Clarifies    comments received from
                                        assignment is or is      that changing only a     the public requesting
                                        not required.            holder's name does not   clarity on assignments
                                                                 constitute an            and name changes
                                                                 assignment and
                                                                 explains how the BLM
                                                                 will process a change
                                                                 only to a holder's
                                                                 name for a grant or
                                                                 lease. It also
                                                                 clarifies that
                                                                 ownership changes
                                                                 within the same
                                                                 corporate family do
                                                                 not constitute an
                                                                 assignment.
2807.22--Renewing a grant............  Revises the title to     No changes were made
                                        include leases and       from the proposed to
                                        clarifies that if you    the final rule.
                                        apply for a renewal
                                        before it expires,
                                        your grant will not
                                        expire until a
                                        decision has been made
                                        on your renewal
                                        request.
Subpart 2809--Grants for Federal       Existing language in     No changes were made
 agencies.                              this subpart             from the proposed to
                                        redesignated as new      the final rule.
                                        paragraph (d) of
                                        section 2807.17. The
                                        title is changed to
                                        reflect that it now
                                        pertains to
                                        competitive leasing
                                        for solar or wind
                                        energy rights-of-way.
                                        This subpart is
                                        divided into several
                                        added sections as
                                        described below.
2809.10--Competitive process for       Section 2809.10          Clarifies that leases    Changes made in this
 leasing public lands for solar and     provides for solar and   under this section       section were made to
 wind energy projects.                  wind energy leasing      generally have           be consistent with
                                        inside designated        processing priority      other changes in this
                                        leasing areas.           over grant               final rule.
                                                                 applications to the
                                                                 extent they require
                                                                 the same BLM
                                                                 resources. No other
                                                                 changes were made from
                                                                 the proposed to the
                                                                 final rule.
2809.11--Solicitation of nominations.  Section 2809.11          The requirement to       This change is
                                        describes how the BLM    publish in a newspaper   consistent with other
                                        will solicit             is now optional          notification
                                        nominations for solar    instead of required.     requirements in the
                                        or wind energy                                    final rule.
                                        development.

[[Page 92131]]

 
2809.12--Parcel selection............  Section 2809.12          No changes were made
                                        describes how the BLM    from the proposed to
                                        will select and          the final rule.
                                        prepare parcels.
2809.13--Competitive offers for solar  Section 2809.13          A reference to lease     The reference to
 and wind energy development.           describes how the BLM    mitigation               mitigation was added
                                        will conduct a           requirements is added.   in response to
                                        competitive offer for    The requirement to       comments received from
                                        solar or wind energy     publish in a newspaper   the public. The
                                        development.             is now optional          notification change is
                                                                 instead of required.     consistent with other
                                                                                          notification
                                                                                          requirements in the
                                                                                          final rule
2809.14--Acceptable bids.............  Section 2809.14          The words ``and          Changes made in this
                                        describes the types of   mitigation costs''       section were made to
                                        bids that the BLM will   were removed to be       be consistent with
                                        accept.                  consistent with          other changes in this
                                                                 section 2804.30.         final rule.
2809.15--How will BLM select the       Section 2809.15          No changes were made
 successful bidder?.                    describes how the BLM    from the proposed to
                                        will select a            the final rule.
                                        successful bidder.
2809.16--Variable offsets............  Section 2809.16          Added a new offset       Changes made in this
                                        identifies when          factor for preparing     section were based on
                                        variable offsets will    draft biological         comments received from
                                        be applied.              strategies and plans.    the public on variable
                                                                                          offset factors.
2809.17--Rejection of bids...........  Section 2809.17          No changes were made
                                        describes conditions     from the proposed to
                                        when the BLM may         the final rule.
                                        reject bids or re-
                                        conduct a competitive
                                        offer.
2809.18--Lease terms and conditions..  Section 2809.18          Paragraph (e)(2) of      These changes are
                                        identifies terms and     this section is          consistent with
                                        conditions that will     changed so bond          changes to section
                                        apply to leases.         amounts for wind         2805.20.
                                                                 turbines reflect their
                                                                 nameplate capacity.
                                                                 Paragraph (e)(3) is
                                                                 added to this section
                                                                 to account for testing.
2809.19--Applications made inside      Section 2809.19          This section is revised  The changes made in the
 designated leasing areas.              describes situations     to clarify how the BLM   final rule were made
                                        when an application      will handle              in response to
                                        may be accepted inside   applications submitted   comments and are
                                        a DLA.                   inside DLAs.             intended to clarify
                                                                                          the final rule.
2884.10--What needs to be done before  Adds a provision to      The reference to pre-    See the discussion in
 filing an application for an oil or    this section that        application meetings     section 2804.10 of
 gas pipeline right-of-way?.            describes several        and additional           this preamble for
                                        additional steps,        requirements for         additional information
                                        including pre-           pipelines greater than   on changes made in
                                        application meetings,    10 inches were           response to comment.
                                        to be taken if an        removed, resulting in
                                        application is for a     no changes being made
                                        pipeline 10 inches or    from the existing
                                        more in diameter.        regulation.
2884.11--Information submitted with    Adds provision to be     No changes were made
 application.                           consistent with POD      from the proposed to
                                        template development     the final rule.
                                        schedule and other
                                        requirements.
2884.12--Processing fees for an        Adds information on      No changes were made
 application or permit.                 cost reimbursement       from the proposed to
                                        requirements for work    the final rule.
                                        performed by other
                                        Federal agencies.
2884.16--Master Agreements...........  Adds information on      No changes were made
                                        cost reimbursement       from the proposed to
                                        requirements for work    the final rule.
                                        performed by other
                                        Federal agencies.
2884.17--Processing Category 6 right-  Adds discussions on      No changes were made
 of-way applications.                   right-of-way costs for   from the proposed to
                                        work performed by        the final rule.
                                        other Federal agencies
                                        to this section.
2884.18--Competing applications for    Adds discussions on      The requirement to       This change is
 the same pipeline.                     right-of-way costs for   publish in a newspaper   consistent with other
                                        work performed by        is now optional          notification
                                        other Federal agencies   instead of required.     requirements of this
                                        to this section.                                  final rule.
2884.20--Public notification           Adds a provision to      The requirements to      This change is
 requirements for an application.       this section that we     publish in a newspaper   consistent with other
                                        may put a notice on      are now optional         notification
                                        the Internet or use      instead of required.     requirements of this
                                        other forms of                                    final rule.
                                        notification as deemed
                                        appropriate.
2884.21--Application processing by     The BLM will not         Changes are made to      Changes made in this
 the BLM.                               process your             section 2884.21          section were made to
                                        application if you are   consistent with those    be consistent with
                                        in trespass. Several     made to section          other changes in this
                                        other minor changes      2807.21.                 final rule.
                                        were made to be
                                        consistent with other
                                        changes made in these
                                        regulations.
2884.22--Additional information        No change was proposed   This section was         This change was not
 requirements.                          for this section.        revised by changing      proposed, but is made
                                                                 the reference found in   to be consistent with
                                                                 paragraph (a) from       other changes in this
                                                                 section 2804.25(b) to    final rule. No other
                                                                 section 2804.25(c).      changes were made to
                                                                                          this section.

[[Page 92132]]

 
2884.23--When can my application be    To be consistent with    No changes were made
 denied?.                               section 2804.27,         from the proposed to
                                        section 2884.23 was      the final rule.
                                        changed to state that
                                        the BLM may deny an
                                        application if the
                                        required POD fails to
                                        meet the development
                                        schedule and other
                                        requirements for oil
                                        and gas pipelines.
2884.24--Fees owed if application is   Changes made to be       Since pre-application    The revisions to this
 withdrawn or denied.                   consistent with          meetings are no longer   section suggested by
                                        section 2804.27, would   required in this final   the proposed rule are
                                        require an applicant     rule and additional      not included in the
                                        to pay any pre-          requirements for         final rule based on
                                        application costs        pipelines greater than   comments received from
                                        submitted under          10 inches were           the public on BLM's
                                        section 2884.10(b)(4).   removed, the final       criteria for large-
                                                                 rule does not make any   scale pipeline
                                                                 changes to this          projects.
                                                                 existing provision.
2884.30--Showing of good cause.......  There was no section     This section was added   This section was added
                                        2884.30 in proposed      to be consistent with    to be consistent with
                                        rule.                    section 2804.40.         other changes in this
                                                                                          final rule.
2885.11--Terms and conditions........  This section makes       No changes were made
                                        reference to section     from the proposed to
                                        2805.12(b) (bond         the final rule.
                                        requirements for FLPMA
                                        authorizations) and
                                        makes those bonding
                                        requirements
                                        applicable to MLA
                                        rights-of-way. Also,
                                        the regulation will be
                                        clarified by providing
                                        guidance on terms of
                                        MLA grants.
2885.15--Rental charges..............  Clarifies that there is  No changes were made
                                        no reduction in rents    from the proposed to
                                        for grants or TUPs,      the final rule.
                                        except as provided in
                                        section 2885.20(b).
2885.16--When is rent paid?..........  Requires making a        No changes were made
                                        payment for the          from the proposed to
                                        initial partial year,    the final rule.
                                        along with the first
                                        years rent. Also,
                                        provides for multiple
                                        year payments.
2885.17--Consequences for not paying   New paragraph (e)        No changes were made
 or paying rent late.                   explains the             from the proposed to
                                        circumstances under      the final rule.
                                        which the BLM would
                                        retroactively collect
                                        rents or fees.
2885.19--Rents for linear right-of-    Provides information     No changes were made
 way grants.                            about where you may      from the proposed to
                                        obtain a copy of the     the final rule.
                                        current rental
                                        schedule.
2885.20--Per Acre Rent Schedule        Would remove an          No changes were made
 calculations.                          obsolete provision       from the proposed to
                                        (existing paragraph      the final rule.
                                        (b)(1)) that provided
                                        for a 25 percent
                                        reduction in rent for
                                        calendar year 2009.
2885.24--Monitoring fees.............  Provides an updated      Minor revisions were     Changes made in this
                                        table describing         made consistent with     section were made to
                                        monitoring categories,   changes to section       be consistent with
                                        but without the cost     2805.16.                 other changes in this
                                        schedule. Paragraph                               final rule.
                                        (b) provides
                                        information about
                                        where to obtain a copy
                                        of the current
                                        monitoring cost
                                        schedule.
2886.12--When you must contact the     Adds to this section,    No changes were made
 BLM during operations.                 contact requirements     from the proposed to
                                        for when there is a      the final rule.
                                        need for changes to a
                                        right-of-way grant and
                                        to correct
                                        discrepancies.
2887.11--Assigning a right-of-way      Clarifies this section   Adds two events that     These changes are made
 grant or TUP.                          to show when an          may require an           to be consistent with
                                        assignment is or is      assignment. Clarifies    section 2807.21.
                                        not required.            that a change in a
                                                                 holder's name only
                                                                 does not constitute an
                                                                 assignment.
2887.12--Renewing a grant............  Clarifies that if you    No changes were made
                                        apply for a renewal      from the proposed to
                                        before it expires,       the final rule.
                                        your grant will not
                                        expire until a
                                        decision has been made
                                        on your renewal
                                        request.
----------------------------------------------------------------------------------------------------------------


[[Page 92133]]

III. Final Rule as Adopted and Responses to Comments

General Comments by Topic

Competitive Process Comments
    A number of comments agreed with the BLM's proposals to create a 
competitive process for solar and wind development.
    One comment stated that the proposed rule, if made final, would be 
a positive first step in improving the existing processes for solar and 
wind energy development by incentivizing development in appropriate 
areas, helping developers estimate costs, and providing a fair return 
to the taxpayer for the use of public lands. The BLM did not make any 
changes in response to this comment.
    Another comment, on the other hand, recommended that the BLM 
maintain its current pre-application and application processes rather 
than adding untested or unproven administrative processes to promote 
competition inside and outside of DLAs. The BLM notes that it has 
already successfully used competitive processes when authorizing 
renewable energy development and it continues to gain experience with 
competitive auctions. The BLM also intends to continue improving its 
solar and wind energy policies, including by building upon the 
provisions codified in this final rule, to reduce administrative 
timeframes and costs in order to support reasonable and responsible 
project development, such as those policies designed to further 
streamline application review and processing.
    Several comments provided statements on the use of a competitive 
process for issuing grants.
    One comment stated that we should clarify that the competitive bid 
process applies only to renewable energy authorizations. The BLM only 
agrees with this comment in part. In this final rule, the BLM has 
codified competitive processes inside of DLAs that relate only to solar 
and wind energy rights-of-way. However, the final rule modifies 
existing regulations so that those same competitive processes may also 
be used outside of DLAs and for other types of rights-of-way in the 
future, such as when they are necessary to resolve other situations 
where there are competing right-of-way and other land use authorization 
requests or when the BLM otherwise determines it is appropriate to 
initiate a competitive process for a particular use in a given area. 
Specifically, the final rule expands the BLM's ability to initiate a 
competitive process for other rights-of-way relative to existing 
regulations. Should the BLM hold a competitive offer for another type 
of right-of-way, it would be appropriate for the BLM to use processes 
similar to those developed for this rule because those policies were 
developed based on sound competitive principles. Therefore, utilizing 
them as a model in other areas would promote consistency across the 
agency.
    One comment stated that competitive leasing would both lengthen and 
complicate project siting, using the recent Dry Lake competitive 
offering in Nevada as an example, noting that the preparations for 
competition took years. The BLM believes that much of the work required 
for competitive leasing has already been completed for solar energy in 
the SEZs identified in the Western Solar Plan and other DLAs 
established by other planning efforts. The upfront work done when 
identifying these areas provides a basis for them to be offered under 
the most favorable competitive process provisions of this rule. That 
analysis also increases the certainty that the BLM will approve a 
project in those areas, which ultimately reduces the overall project 
review timeframes. The work done in establishing a DLA through the land 
use planning process, including completion of a NEPA analysis, provides 
a framework from which future project-specific analyses can tier, which 
should save time and money for both the BLM and project developers. 
Additionally, by expanding the circumstances under which the BLM can 
utilize competitive procedures the final rules provides a more direct 
path than was available to the BLM when setting up the Dry Lake SEZ 
sale in Nevada.
    To further support development in these areas, the BLM is also 
developing regional mitigation strategies for many of the identified 
SEZs. While the existence of a regional mitigation strategy is not a 
prerequisite for holding a competitive sale, the BLM believes that such 
strategies further clarify development requirements in a given area 
allowing auction participants to more carefully evaluate potential 
costs and requirements when formulating a project or a bid in advance 
of competitive sale.
    Collectively, these efforts and the provisions of this rule are 
consistent with existing policies to encourage the timely and 
responsible development of renewable energy while protecting the public 
land and its resources.
    One comment suggested that competition should be used only where 
there are multiple applications for use of the same land. While the BLM 
intends to use competition in those circumstances, it does not believe 
that is the only circumstances where such processes are appropriate. 
The existence of competition is not only indicated by competing 
application; in some situations competition would be determined where 
other evidence of competitive interests becomes known through emails, 
letters, and other contact with the public. As a result, the BLM does 
not believe it is appropriate to limit the use of competitive leasing 
regulations to just instances of competing applications. Instead, the 
provisions of this rule have been designed to provide more flexibility. 
The BLM is able to hold competitive offers inside DLAs, outside DLA, in 
response to competing applications, and on its own initiative, in order 
to encourage development in areas where it determines those processes 
to be appropriate, such as when it determines that fewer resource 
conflicts are present. In total, the BLM believes that the competitive 
processes established by this final rule will enable the BLM to 
encourage solar and wind energy development on public lands, while also 
protecting the sensitive resources found on those lands.
Summary of Key Changes Between the Proposed and Final Rule
    One comment suggested that we use a table to identify technical 
changes, corrections, and clarifications being made to the right-of-way 
regulations by this rule, similar to the table we included in the 
preamble of the proposed rule. We agree and have included a similar 
table in this preamble.
Pipeline and Transmission Line Comments
    Some comments questioned the BLM's description of pipelines 10 
inches or greater in diameter as a measure for large-scale pipeline 
projects and recommended the removal of additional processes such as 
mandatory pre-application meetings to facilitate Federal and State 
reviews of the project. Alternatives for the description of a large-
scale project were suggested, such as using a total acreage of 
disturbance.
    In light of these comments, the BLM has decided to remove the 
description of large-scale pipelines and additional processes required 
for such projects from the final rule. While some comments included 
recommendations for alternative ways of determining a threshold for 
large-scale pipelines, the BLM decided that it must further analyze how 
it will identify large-scale pipelines before including requirements 
for such projects in its regulations. If the

[[Page 92134]]

BLM were to take such action in the future it would coordinate with 
other Federal agencies, as appropriate, to identify an appropriate 
threshold for large-scale pipeline projects and establish consistent, 
non-duplicative requirements. The removal of the pipeline threshold 
from the final rule requires deletion of the requirements in the 
proposed rule that were specifically applicable to large-scale pipeline 
projects. A more detailed discussion of these revisions can be found in 
the relevant portions of the section-by-section analysis in this 
preamble (see sections 2804.10, 2884.10, and 2885.11 of this preamble).
    Some comments also questioned the BLM's description of transmission 
lines with capacities of 100 kV or more as constituting large-scale 
transmission projects. Those commenters recommended the removal of that 
threshold and the associated requirements. Some comments suggested that 
there are no readily identifiable 100 kV transmission projects by which 
to determine if the proposed threshold is a fair representation of a 
large-scale project. The BLM does not agree with these comments and 
believes that the description is appropriate since there is a clear 
separation between lower voltage transmission lines, generally 69 kV or 
less, and high voltage transmission lines, beginning at 115 kV of 
capacity or more. For example, the North American Electric Reliability 
Corporation established the 100 kV threshold as a bright line criterion 
to determine which transmission lines are included in the Bulk Electric 
System, a system that is used by the Regional Reliability Organization 
for electric system reliability. The BLM is maintaining the description 
of transmission lines with capacity of 100 kV or the rule as a suitable 
description to determine large-scale transmission projects.
Megawatt Capacity Fee Comments
    Some comments argued that the BLM lacks authority to collect a MW 
capacity fee because the Federal Government does not own the sunlight 
or the wind, which are inexhaustible resources. While the BLM agrees 
that sunlight and wind are renewable resources present on the public 
lands, it does not agree that it lacks the authority to collect a fee 
for the use of such resources.
    Under FLPMA, the BLM is generally required to obtain fair market 
value for the use of the public lands and its resources, including for 
rights-of-way. In accordance with the BLM's FLPMA authority and 
existing policies, the BLM has determined that the most appropriate way 
to obtain fair market value is through the collection of multi-
component fee that comprises an acreage rent, a MW capacity fee, and, 
where applicable, a minimum and a bonus bid for lands offered 
competitively. The BLM determined that the collection of this multi-
component fee will ensure that the BLM obtains fair market value for 
the BLM-authorized uses of the public lands, including for solar and 
wind energy generation.
    The BLM notes that the MW capacity payments are best characterized 
as ``fees'' rather than ``rent'' because they reflect the commercial 
utilization value of the public's resource, above and beyond the rural 
or agricultural value of the land in its unimproved state. In the BLM's 
experience, and in accordance with generally accepted appraisal and 
valuation standards, the value of the public lands for solar or wind 
energy generation use depends on factors other than the acreage of the 
occupied land and that land's unimproved value. Other key elements that 
add value include the solar insolation level, wind speed and density, 
proximity to demand for electricity, proximity to transmission lines, 
and the relative degree of resource conflicts that could inhibit solar 
or wind energy development. To account for these elements of land use 
value that are not intrinsic to the rural value of the lands in their 
unimproved state, the solar and wind right-of-way payments in this 
final rule incorporate ``MW capacity fees'' in addition to ``acreage 
rent.''
    The use of a multi-component fee that comprises both an acreage 
rent and a MW capacity fee, and in some cases also a minimum and a 
bonus bid, achieves four important BLM objectives. First, the approach 
allows BLM to ensure that it is capturing the full fair market value of 
the land being encumbered by these projects. Second, the approach is 
consistent with the approach employed by the BLM for other uses of the 
public land (i.e., it ensures that our approach to acreage rent is 
consistent across various categories of public land uses, while 
mirroring the multi-component payments received from activities like 
oil and gas development where both rent and royalties are charged), 
ensuring consistency across users. Third, the approach encourages the 
efficient use of the public lands by reducing relative costs for 
comparable projects that take up less acreage. That is, for a project 
with a given MW capacity, the overall payments to the BLM will be lower 
if the project employs a more efficient technology that produces more 
MW per acre and thus encumbers fewer acres. Fourth, the approach is 
consistent with existing policies governing the BLM's renewable energy 
program, which have been in place since 2008. As explained in the 
section-by-section analysis in Section IV of this preamble, this final 
rule refines the calculation of the fee components (e.g., the MW 
capacity fee for solar is reduced relative to existing policies) but 
does not alter the basic multi-component fee structure for solar and 
wind projects on the public lands.
    The BLM's multi-component fee structure also bears similarities to 
one of the more common structures for solar and wind energy development 
on private lands, where projects pay a rent for the use of an area of 
land at the outset and, and then a royalty on the power produced once 
generation commences. (The BLM recognizes that private-land projects 
use a variety of fee structures. For example, some projects rely solely 
on an acreage rent--but in those cases, the BLM believes that the 
increased value of the land due to project development is captured in 
other ways, such as by charging a higher base rent that reflects more 
than the land's unimproved value.)
    The acreage rent charged by the BLM is analogous to the rent 
charged in most private land leases. With respect to the MW capacity 
fee, the BLM uses the approved electrical generation capacity as a 
component of the value of the use of the public lands for renewable 
energy development instead of relying on a royalty like private 
landowners do. On private lands, such royalties are typically assessed 
after-the-fact, as a percentage of the value of power actually 
produced, and the rate can range from 2 to 12 percent. The BLM has 
determined instead to charge a fee based on the installed nameplate MW 
capacity of an authorized wind or solar project. This approach is 
consistent with the BLM's legal authority, including the direction in 
FLPMA that right-of-way holders ``pay in advance'' the fair market 
value for the use of the lands. The BLM considered charging a royalty, 
assessed as a percentage of power generated, but the FLPMA directive 
that right-of-way holders must ``pay in advance'' would require the BLM 
to collect any such royalty payments in advance of the corresponding 
power generation and then ``true up'' at the end of each calendar year. 
The BLM determined that the MW capacity fee approach in the final rule 
presents fewer administrative burdens and costs for both the BLM and 
right-of-way holders than an approach based on in-advance royalty 
payments followed by annual ``true-ups.'' The BLM worked with the 
Office of

[[Page 92135]]

Valuation Services to compare its combined acreage rent and MW capacity 
fee against the total stream of payments from a similarly situated 
private land project to ensure the total payments collected by the BLM 
are comparable to those collected on private land. Finally, the BLM 
notes that in retaining the multi-component payment structure for solar 
or wind developments as separate ``rent'' and ``fee'' components as 
established under existing policy, the BLM is retaining its existing 
interpretation of how that multi-component structure interfaces with 
the Rural Electrification Act (IM 2016-122). Under the final rule, 
consistent with existing policy, the acreage payment remains classified 
as ``rent,'' as it is directly tied to the area of public lands 
encumbered by the project and the constraints that the project imposes 
on other uses of the public lands. As noted, however, the MW capacity 
fee is more properly characterized as a ``fee'' because it reflects the 
commercial utilization value of the public's resource, independent of 
the acreage encumbered. As specified under FLPMA, facilities that 
qualify for financing under the Rural Electrification Act may be exempt 
from paying ``rental fees.'' As explained in IM 2016-122, however, the 
BLM has determined that such facilities are not exempt from paying 
other components of the fair market value of the land, such as the MW 
capacity fee, minimum bid, bonus bid, or other administrative costs, as 
none of those costs are related to the rental value of the unimproved 
land.
Designated Leasing Areas Comments
    Several comments requested clarification about the differences 
between the competitive processes for lands inside and outside of a 
DLA. Other comments expressed confusion over whether certain 
requirements of the proposed rule would apply to both ``grants'' 
(authorizations issued under subpart 2804 for solar and wind energy 
development) and ``leases'' (authorizations issued under subpart 2809). 
The BLM has expanded multiple provisions in the final rule to clarify 
the requirements for solar and wind energy development grants and 
leases, including those relating to competitive processes, rents and 
fees, bonding, and due diligence.
Comments Beyond the Scope of the Proposed Rule
    In addition to the general comments discussed above and the more 
specific ones discussed in the section-by-section portion of this 
preamble below, the BLM received many other comments that suggested 
revisions to the BLMs right-of-way regulations that were beyond the 
scope of the proposed rule and/or that are better suited for 
supplemental policy guidance of the type found in BLM manuals, 
handbooks, or IMs. The BLM did not make any changes to the proposed 
rule in light of these comments. However, they are discussed in the 
relevant portions of the section-by-section analysis of this preamble.
Additional Comments on the Rule
    During the preparation of this final rule, the BLM received 
additional comments from various stakeholders and other interested 
parties following the close of the comment period and participated in 
additional stakeholder engagement meetings as part of the BLM's regular 
course of business. During those meetings and in those comments, 
stakeholders provided additional information clarifying the concerns, 
comments, and questions they had previously raised through written 
comments on the proposed rule. The BLM considered this additional 
information during the drafting of this final rule. This additional 
information is addressed in the relevant section-by-section discussion 
of this preamble.
    For example, industry stakeholders provided additional information 
that was previously unavailable regarding their uncertainty, under the 
proposed rule, about how both acreage rent and MW capacity fee payments 
would increase over the life of a lease or grant, and particularly 
their concern that such rents and fees could increase in an 
unpredictable manner. These comments and the BLM's responses are 
discussed further in sections 2806.51 and 2806.61 of this preamble.
    Industry stakeholders also raised concern over the factors that the 
BLM considers when determining a bond amount. This comment and the 
BLM's response are discussed further under sections 2805.12(e)(1) and 
2805.20(a)(3).
    Environmental stakeholders also provided additional substantive 
discussion of their comments. Specifically, they requested additional 
detail in the final rule explaining the evaluation criteria that the 
BLM uses when establishing DLAs going forward. The environmental 
stakeholders' comment and the BLM's response are discussed further in 
section 2802.11 of this preamble.

IV. Section-by-Section Analysis for Part 2800

    This rule makes the following changes in part 2800. The language 
found at section 2809.10 of the existing regulations is revised and 
redesignated as section 2807.17(d), while revised subpart 2809 is now 
devoted to solar and wind energy development in DLAs. This rule also 
amends parts 2800 and 2880 to clarify the BLM's administrative 
procedures used to process right-of-way grants and leases. These 
clarifications ensure uniform application of the BLM's procedures and 
requirements. A more in-depth discussion of the comments and changes 
made is provided below.

Subpart 2801--General Information

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. Several comments suggested changes to the 
proposed rule. These suggestions and comments are analyzed under the 
applicable definition contained in the final rule.
    The following terms are added to the definitions in section 2801.5:
    ``Acreage rent'' is a new term that means rent assessed for solar 
and wind energy development grants and leases that is determined by the 
number of acres authorized by the grant or lease. The acreage rent is 
calculated by multiplying the number of acres (rounded up to the 
nearest tenth of an acre) within the authorized area times the per acre 
zone rate in effect at the time the authorization is issued. Provisions 
addressing adjustments in the acreage rent are found in sections 
2806.52, 2806.54, 2806.62, and 2806.64. An example of how to calculate 
acreage rent is discussed in this preamble in the section-by-section 
analysis of section 2806.52(a). No comments pertaining to this 
definition were received and no changes are made from the proposed to 
the final rule.
    ``Application filing fee'' is a new term that means a filing fee 
specific to solar and wind energy right-of-way applications for the 
initial reasonable costs for processing, inspecting, and monitoring a 
right-of-way. The fee is $15 per acre for solar and wind energy 
development applications and $2 per acre for energy project-area 
testing applications. The BLM will adjust the application filing fee 
once every 10 years to account for inflation. Further discussion of 
application filing fees can be found in section 2804.12. This 
definition is revised for consistency with comments received on 
sections 2804.12 and 2804.30 on application filing fees. See those 
respective sections of this preamble for further discussion. No other 
comments were received and no other change is made from the proposed 
rule to the final rule concerning this definition.

[[Page 92136]]

    ``Assignment'' means the transfer, in whole or in part, of any 
right or interest in a right-of-way grant or lease from the holder 
(assignor) to a subsequent party (assignee) with the BLM's written 
approval. The rule adds this definition to section 2801.5 to help 
clarify regulations. A more detailed explanation of assignments and the 
changes made is found under section 2807.21. Although some comments 
were received pertaining to assignments, as discussed later in this 
preamble, none of them pertain to the definition. No change is made 
from the proposed to the final rule concerning this definition.
    ``Designated leasing area'' (DLA) is a new term that means a parcel 
of land with specific boundaries identified by the BLM's land use 
planning process as being a preferred location for the leasing of 
public lands for solar or wind energy development via a competitive 
offer. Examples of DLAs for solar energy include SEZs designated 
through the Western Solar Plan; Renewable Energy Development Areas 
(REDAs) designated through the BLM Arizona Restoration Design Energy 
Project (REDP) planning process; and Development Focus Areas (DFAs) 
designated through BLM's California's Desert Renewable Energy 
Conservation Plan (DRECP) planning process. The competitive offer 
process is discussed in subpart 2809 of this preamble. Further 
discussion of DLAs can be found under section 2802.11 of this preamble.
    Comments: Some comments recommended that the definition of DLA 
should indicate criteria that must be met to designate a DLA, in 
particular, wind energy-specific DLAs. The comment also suggested the 
final rule include criteria to identify right-of-way exclusion and 
avoidance areas. Other comments stated a similar concern, and indicated 
that land use planning varies by BLM State or field office, so DLA 
standards should be developed.
    Response: The BLM considered establishing standard criteria for 
DLAs as well as for exclusion and avoidance areas, but this approach is 
not carried forward in the final rule. Doing so could unintentionally 
limit the BLM's management of such lands when considering the varied 
landscapes and resources that the BLM manages. However, the BLM intends 
to establish guidance, as part of the implementation of this rule, to 
assist the BLM in establishing DLAs, such as wind energy sites, through 
its land use planning processes. Further discussion on this issue is 
found under section 2804.31 of this preamble.
    Comments: Some comments stated that identifying new DLAs through 
land use planning was too time consuming, and therefore DLA designation 
should be a separate process.
    Response: Many land use planning efforts take several years to 
complete and consider many resources and uses in addition to solar or 
wind energy development. These types of land use planning efforts would 
not consider a specific project, but instead the effect of such 
developments in the planning area, and inform the BLM if the lands 
should be an exclusion or avoidance area, or identified as a DLA for 
solar or wind energy development. Although the BLM's land use planning 
process may be time consuming, it is necessary for the BLM in its 
orderly administration of the public lands to use this process to 
properly protect and manage the public lands. When amending a resource 
management plan, the BLM must be consistent with its planning 
regulations (see 43 CFR part 1600). Absent a larger planning effort 
underway for the same planning area, the BLM could use a targeted land 
use plan amendment to identify a designated leasing area. In such 
cases, the land use planning process may be less time consuming than 
suggested by commenters. For further discussion, please see section 
2804.31 of this preamble. No specific changes were made in response to 
this comment.
    In addition to the amendments to section 2804.31, the BLM has begun 
its Planning 2.0 initiative, which is aimed at improving the BLM's 
planning process. This initiative includes targeted revisions to the 
planning regulations (see 43 CFR part 1600) and land use planning 
handbook, in order to improve the BLM's use of Resource Management 
Plans, which guide the BLM's administration of the public lands. The 
Planning 2.0 initiative will help the BLM to conduct effective planning 
across landscapes at multiple scales, create more dynamic and efficient 
planning processes that are responsive to change, and provide new and 
enhanced opportunities for collaboration with the public and partners. 
You can find further information on the BLM's Planning 2.0 initiative 
at the following Web site http://www.blm.gov/wo/st/en/prog/planning/planning_overview/planning_2_0.html.
    Comment: A comment recommended that the BLM use one consistent 
definition to ensure that DLAs represent areas of fewer resource 
conflicts for solar and wind energy development.
    Response: Because of the many variables that the BLM must consider 
when designating a DLA, the definition provided is intentionally broad 
and identifies a DLA as a preferred location for development that may 
be offered competitively. This definition allows the BLM to identify 
such areas in land use planning processes using plan-specific criteria 
to best identify the area. However, we are modifying the definition by 
removing the example of solar energy zones that was cited in the 
proposed rule in order to eliminate potential confusion about the 
future identification of additional DLAs, which may not be identified 
in the same manner as the solar energy zones. No other comments were 
received concerning this definition.
    ``Designated right-of-way corridor'' is a term that is defined in 
existing regulations. The word ``linear'' has been added to this 
definition in the final rule to distinguish between these corridors and 
DLAs. No comments were received concerning this definition change and 
no changes are made from the proposed rule to the final rule.
    ``Management overhead costs'' is defined in existing regulations as 
Federal expenditures associated with the BLM. This definition has been 
expanded in the final rule to include other Federal agencies. This 
revision is consistent with Secretarial Order 3327 and will help to 
promote effective cost reimbursement. Under Sections 304(b) and 504(g) 
of FLPMA, the Secretary may require payments intended to reimburse the 
United States for its reasonable costs with respect to applications and 
other documents relating to public lands. Secretarial Order 3327 
delegated the Secretary's authority under FLPMA to receive reimbursable 
payments to the bureaus and offices of the Department. No comments were 
received pertaining to this definition change, and no revisions were 
made from the proposed rule to the final rule.
    ``Megawatt capacity fee'' is a new term meaning the fee paid in 
addition to the acreage rent for solar and wind development grants and 
leases based on the approved MW capacity of the solar or wind 
authorization. The MW capacity fee is calculated based on the MW 
capacity for an approved solar or wind energy project authorized by the 
BLM. Examples of how MW capacity fees are calculated may be found after 
the discussion of section 2806.56. While the acreage rent reflects the 
value of the land itself in its unimproved state, the MW capacity fee 
reflects the value of the industrial use of the property to generate 
electricity. Specifically, it captures the additional value of public 
land used for solar and wind energy generation that are not reflected 
in the NASS land values.

[[Page 92137]]

    The BLM revised the definition of MW capacity fee from the proposed 
to final rule to clarify that the MW capacity fee is calculated for 
staged developments by multiplying the MW rate by the approved MW 
capacity for each stage of development. The proposed rule stated that 
the MW rate would be multiplied to the approved stage of development, 
but did not specify that it was the approved MW capacity for the stage 
of development. The BLM made this revision to help improve the public's 
understanding of the MW capacity fee calculation for staged 
developments.
    Comment: One comment acknowledged that fair market value can be 
determined by using a competitive process and agreed with the proposed 
rule's approach of using a competitive process to authorize solar and 
wind energy development on public lands. The comment went on to express 
a preference for a system that includes the payment of a royalty fee 
for the use of commercial power facilities on public lands.
    Response: As explained above, the BLM has established through 
existing policy, and now by this rule, a multi-component structure for 
obtaining fair market value from renewable energy development. Since 
FLPMA directs right-of-way holders ``to pay in advance the fair market 
value'' for the use of the public lands, subject to certain exceptions 
(43 U.S.C. 1764(g)), the BLM's existing regulations governing the use 
of public lands, under Title V of FLPMA, generally require the 
prepayment of annual rent and fees in amounts determined by the BLM. 
This requirement is carried forward in existing guidance governing 
acreage rent and MW capacity fees for wind and solar energy projects 
and was selected in lieu of other means of obtaining fair market value. 
Consistent with the BLM's authority under FLPMA, its existing policies, 
and the proposed rule, the BLM has determined that it will continue to 
charge in advance both an acreage rent and a MW capacity fee for solar 
and wind energy projects, as a means of obtaining fair market value for 
those projects. Given that FLPMA requires payment in advance, the BLM 
has determined it is appropriate to base that the MW capacity fee on 
rated MW capacity as opposed to actual generation. In instances where 
competitive processes are utilized, any minimum and bonus bids 
represent an additional component of fair market value on top of the 
annual acreage rent and MW capacity. No other comments were received on 
the proposed definition of MW capacity fee, and no changes to the 
definition were made in this final rule.
    ``Megawatt rate'' is a new term that means the price of each MW for 
various solar and wind energy technologies as determined by the MW rate 
schedule. The MW rate equals the (1) the net capacity factor multiplied 
by (2) the MW per hour (MWh) price multiplied by (3) the rate of return 
multiplied by (4) the total number of hours per year where:
    1. The ``net capacity factor'' means the average operational time 
divided by the average potential operational time of a solar or wind 
energy development, multiplied by the current technology efficiency 
rates. This rule establishes net capacity factors for different 
technology types, but the BLM may determine a different net capacity 
factor to be more appropriate, on a case-by-case or regional basis, to 
reflect changes in technology, such as a solar or wind project that 
employs energy storage technologies, or if a grant or lease holder or 
applicant is able to demonstrate that a different net capacity factor 
is more appropriate for a particular project design, layout, or 
location.
    The default net capacity factor for each technology type is:
    a. Photovoltaic (PV) = 20 percent;
    b. Concentrated photovoltaic (CVP) and concentrated solar power 
(CSP) = 25 percent;
    c. CSP with storage capacity of 3 hours or more = 30 percent; and
    d. Wind energy = 35 percent.
    Comments: Several comments were received concerning the definition 
and description of net capacity factor. One comment stated that the net 
capacity factors should not be specified in the proposed rule for CSP 
projects, as they will undoubtedly increase over time with technology 
improvements and be updated on a regular basis, in a similar manner as 
rents. CSP can be designed to operate from a range of 10 to 50 percent 
efficiency depending on the intended use of the facility (e.g., base 
load or peaker plant). Another comment recommended using an estimate of 
the capacity factor identified in the POD and the plant's design as the 
basis for this calculation.
    Response: The BLM recognizes that there may be technology 
improvements over time, and that there are variables which may affect a 
specific project's net capacity factor. For example, a CSP project may 
be designed to operate at lower or higher efficiency rate depending on 
its intended use. The BLM took this into account in determining the net 
capacity factor of the technologies for the final rule. Future 
rulemaking would be required to change the established net capacity 
factors for each technology. The BLM will not incorporate the 
recommendation to use the project owner's estimate of the capacity 
factor in the POD to calculate its MW capacity fee. The estimated net 
capacity factor in a POD would be specific to a particular project, but 
would be a subjective value that could be inaccurate or misleading. 
Incorporating the methodology suggested by the comment could raise 
questions as to whether the BLM was truly collecting a reasonable 
return for use of the public lands.
    However, the BLM has revised the final rule, consistent with this 
comment and those comments submitted regarding storage technologies, to 
allow the BLM to determine another net capacity factor to be more 
appropriate on a case-by-case basis. The BLM could determine another 
net capacity factor to be more appropriate when there is a change in 
technology, such as when a project employs energy storage technologies. 
Determining another net capacity factor may also be appropriate if a 
project uses a more current version of a technology.
    Comment: Another comment agreed with the BLM's proposal to use an 
average net capacity factor for wind energy projects. However, the 
comment recommended using a net capacity factor of 26 percent as 
identified in the wind capacity factor for Western States (see the 
Department of Energy's 2013 Wind Technologies Report) instead of the 
national average wind capacity factor of 35 percent.
    Response: While the BLM acknowledges that most solar and wind 
projects on public lands will be located in the western United States, 
it nevertheless elected to use the national averages in calculating the 
net capacity factors for both solar and wind projects, because the BLM 
believes those values are more representative of the technology that 
will be deployed on projects developed in the future. The net capacity 
factor for a given project is greatly influenced by project design, 
layout, and location. The national average reflects a larger set of 
projects than the regional average, and is therefore more 
representative of the full range of older and newer technologies 
currently sited on public lands.
    With respect to the wind capacity factor in particular, the BLM 
reviewed data from the Department of Energy's 2014 and 2015 Wind 
Technology Reports (https://emp.lbl.gov/sites/all/files/lbnl-188167.pdf 
and https://emp.lbl.gov/sites/all/files/2015-windtechreport.final.pdf, 
respectively). Based on its review of that data, the

[[Page 92138]]

BLM determined that its selection of a 35 percent capacity factor for 
wind was appropriate for several reasons.
    First, the geographic scope of the lands included in the ``West 
Region'' of the Department of Energy's reports does not adequately 
capture the full extent of BLM lands. Using the geographic distribution 
classifications set by the Department of Energy, BLM lands are located 
in both the ``West'' and ``Interior'' regions, with 7 states in the 
West and 4 states in the Interior (Colorado, Montana, New Mexico, and 
Wyoming). It should also be noted that the four BLM states in the 
Interior region possess significant wind energy development potential. 
Accordingly, the BLM believes it is reasonable to select a wind 
capacity factor between the values for the West and Interior. In the 
Interior Region the Department of Energy reported capacity factors of 
41.2 percent and 42.7 percent in 2014 and 2015, respectively. Data from 
the 2014 report shows that while the average capacity factor in the 
West was 27 percent, there was considerable spread in the factors by 
project, from just below 20 percent to over 37 percent. In the 
Interior, the spread in capacity factors was from 26 percent to 52 
percent. Thirty-five percent represents a reasonable average of these 
very disparate, project-specific capacity factors.
    In addition to looking at capacity factors regionally, the 
Department of Energy's analysis also controlled for wind quality. 
Notably, the Department of Energy determined that even in low wind 
quality areas, which predominate in the West, new projects achieve 35 
percent capacity factors. As explained in the reports, this analysis 
was based on wind turbine specific power, which is the ratio of a 
turbine's nameplate capacity rating to its rotor-swept area. All else 
being equal, a decline in specific power leads to an increase in 
capacity factor according to the analysis presented in the report. In 
general, since the wind industry is shifting towards deploying lower 
specific power wind turbines at new wind energy projects across the 
United States, the BLM believes it is reasonable to select 35 percent 
as the default capacity factor for a wind project in the final rule.
    It should also be noted that the BLM considered basing the net 
capacity factors for these technologies on an average of the annual 
capacity factors posted by the Energy Information Administration (EIA) 
on its Web site at: http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_6_07_b. However, the BLM is not carrying 
this approach forward in the final rule because, as discussed earlier 
in the preamble regarding net capacity factors, we believe that the 35 
percent capacity factor better represents the technologies that will be 
deployed on projects developed in the future. For this reason, the BLM 
determined that the EIA annual capacity factors are not appropriate for 
use in this rule.
    Finally, the BLM notes that if an applicant or a grant or lease 
holder believes that the BLM's net capacity factor is set too high for 
a particular project, the project proponent can request that the BLM 
use an alternative net capacity factor when setting the MW capacity 
rate for the project. Such a request would be made as described under 
section 2804.40 for applicants or section 2805.12(e) for grant or lease 
holders. See the section-by-section portion of this preamble for 
further discussion of requests for alternative requirements.
    No other comments were received, and the definition of ``net 
capacity factor'' was not changed from the proposed to the final rule 
as result of this comment.
    2. The ``MWh price'' equals the 5 calendar-year average of the 
annual weighted average wholesale price per MWh for the major trading 
hubs serving the 11 Western States of the continental United States 
(see sections 2806.52(b) and 2806.62(b)).
    Comment: One comment believed that rent and fee calculations may be 
inaccurate based on inaccurate determinations of the capacity factor 
and the wholesale price of electricity used in the formula. In the 
proposed rule, the BLM specified the Intercontinental Exchange (ICE) as 
the source of data for the wholesale price data.
    Response: As discussed under section 2806.52 for MW capacity fee, 
ICE was removed as the only vendor for the wholesale data. We revised 
this definition to account for appropriate wholesale data without 
limiting it by source. This will allow the BLM to use the best 
information available, should a company that tracks trading hubs fail 
to maintain accurate or reliable trade information. No other comments 
were received concerning this definition.
    3. The ``rate of return'' is the relationship of income to the 
property owner (or, in this case, the United States) to the revenue 
generated from authorized solar and wind energy development facilities, 
based on the 10-year average of the 20-year U.S. Treasury bond yield, 
rounded to the nearest one-tenth percent.
    Comment: One comment believed that the BLM should use a 5-year 
average, not a 10-year average, eliminate the 4 percent minimum, and 
consider rounding down or not at all.
    Response: The BLM disagrees with the suggestion to use a 5-year 
average. A 10-year average of the 20-year Treasury bond rate provides a 
more stable rate of return and will benefit the holder when interest 
rates rise. Under the same concept, this would benefit the BLM when 
interest rates decline, as is the case in the current cycle.
    The BLM also disagrees that it should eliminate a 4 percent minimum 
rate of return, considering the risk of energy development projects and 
the fluctuation of energy commodity prices. It is not uncommon for 
private parties to insist on a minimum return. The 4 percent minimum 
rate of return recognizes a grant or lease holder's risk of projects 
that have other financial safeguards in place, such as performance 
bonds. The minimum is at the lower end of similar rates in the private 
sector.
    The 4 percent minimum rate of return is established for solar 
energy in section 2806.52(b)(3)(ii) and for wind energy in section 
2806.62(b)(3)(ii). The minimum is not included in the definitions 
section of this final rule because setting the minimum is a substantive 
regulatory provision. This is not a change from the proposed rule. No 
changes are made in this final rule from the proposed rule regarding 
the rate of return in the definitions section (section 2801.5) or in 
the specific solar (section 2806.52(b)(3)(ii)) or wind (section 
2806.62(b)(3)(ii)) provisions.
    With respect to rounding, the BLM did agree that it should revisit 
the proposed rule's approach. While it does not agree with the 
commenter's suggestion that it should always round down, the BLM did 
determine upon further review that it should round bond yields to the 
nearest tenth of a percent to avoid a rounding-based surcharge.
    4. The number of hours per year is a fixed number (i.e., 8,760 
hours, the total number of hours in a 365-day year). No comments were 
received on the definition of this term and no changes are made to this 
definition from the proposed rule to the final rule.
    ``Performance and reclamation bond'' is a new term that means the 
document provided by the holder of a right-of-way grant or lease that 
provides the appropriate financial guarantees, including cash, to cover 
potential liabilities or specific requirements identified by the BLM. 
This term is defined here to clarify the expectations of what a bond 
accomplishes. The definition also explains which instruments are or are 
not acceptable.

[[Page 92139]]

Acceptable bond instruments include cash, cashiers or certified checks, 
certificate or book entry deposits, negotiable U.S. Treasury 
securities, surety bonds from the approved list of sureties, and 
irrevocable letters of credit. The BLM will not accept a corporate 
guarantee. These provisions codify the BLM's existing procedures and 
practices.
    Comment: A comment suggested adding the words ``certificate of 
insurance or other acceptable security'' to each of these paragraphs in 
appropriate places.
    Response: The BLM believes that adding the comment's suggestion to 
the text of the rule is unnecessary, as the definition of acceptable 
bond instruments includes insurance policies and does not need to be 
expanded to include a specific form of insurance. Furthermore, the list 
of bond instruments that are acceptable is not an all-inclusive list. 
There may be other forms of bond instruments, but they are not 
specified in the rule as they are not as common a form of bond as those 
identified. If we had intended the bond list to be an all-inclusive 
list we may have unintentionally excluded an acceptable bond 
instrument. No other comments were received and no changes to this 
definition were made from the proposed rule to the final rule.
    ``Reclamation cost estimate (RCE)'' is a new term that means the 
report used by the BLM to estimate the costs to restore the intensive 
land uses on the right-of-way to a condition that would support pre-
disturbance land uses.
    The BLM revised this definition from the proposed to final rule to 
clarify that the reclamation work described must meet the BLM's 
requirements. This change is important because the BLM is required to 
protect the public lands and must determine if the reclamation work 
done by the holder is acceptable.
    No comments were received on the definition of this term and no 
other changes are made from the proposed to the final rule.
    ``Right-of-way'' is defined in existing regulations as the public 
lands the BLM authorizes a holder to use or occupy under a grant. The 
revised definition describes the authorizing instrument for use of the 
public lands as ``a particular grant or lease.'' No comments were 
received on the definition of this term and no changes are made from 
the proposed to the final rule.
    ``Screening criteria for solar and wind energy development'' is a 
term referring to the policies and procedures that the BLM uses to 
prioritize how it processes solar and wind energy development right-of-
way applications outside of DLAs. Some examples of screening criteria 
are:
    1. Applications filed for areas specifically identified for solar 
or wind energy development, other than DLAs;
    2. Previously disturbed areas or areas located adjacent to 
previously disturbed areas;
    3. Lands currently designated as Visual Resource Management (VRM) 
Class IV; and
    4. Lands identified for disposal in a BLM land use plan.
    Screening criteria for solar and wind energy development were 
previously established by policy through IM 2011-61, and are further 
discussed in section 2804.25(d)(2) and section 2804.35 of this rule. 
The IM may be found at: http://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html. No changes were made from the proposed rule to 
the final rule, nor were any comments received pertaining to this 
definition. However, there are several comments made on the specific 
screening criteria proposed that are addressed later in the section-by-
section analysis of these criteria.
    ``Short term right-of-way grant'' is a new term meaning any grant 
issued for a term of 3 years or less for such uses as storage sites, 
construction sites, and short-term site testing and monitoring 
activities. The holder may find the area unsuitable for development or 
the BLM may determine that a resource conflict exists in the area. No 
comments were received and no changes are made from the proposed rule 
to the final rule.
Section 2801.6 Scope
    The scope in 43 CFR part 2800 clarifies that the regulations in 
this part apply to all systems and facilities identified under section 
2801.9(a). No comments were received and no changes are made from the 
proposed rule to the final rule on this provision.
Section 2801.9 When do I need a grant?
    Section 2801.9 explains when a grant or lease is required for 
systems or facilities located on public lands. In section 2801.9(a)(4), 
the term ``systems for generation, transmission, and distribution of 
electricity'' is expanded to include solar and wind energy development 
facilities and associated short-term authorizations. Language is also 
added to section 2801.9(a)(7) to allow any temporary or short-term 
surface-disturbing activities associated with any of the systems 
described in this section. A new paragraph (d) is added to specifically 
describe the types of authorizations required for various components of 
solar and wind energy development projects. These are:
    1. Short term authorizations (term to not exceed 3 years);
    2. Long term right-of-way grants (up to 30 years); and
    3. Solar and wind energy development leases (30 years).
    This paragraph also identifies the type of authorizations issued 
for solar and wind projects depending on whether they are located 
inside or outside of DLAs. Authorizations for solar or wind energy 
development outside a DLA, or authorizations issued non-competitively 
within a DLA, will be issued under subpart 2804 as right-of-way grants 
for a term of up to 30 years. Authorizations within a DLA will be 
issued under subpart 2809 as right-of-way leases for a term of 30 
years.
    Comments: Some comments were received requesting that the site-
specific and project-area testing authorizations be made available for 
solar energy. A comment further suggested that section 2801.9 be 
revised so that the authorization types would be listed in the order in 
which actions are taken to develop a project.
    Response: The BLM revised this section, in response to the comment, 
by removing the specific references to ``wind.'' As a result, the 
testing provisions apply to both solar and wind energy. The BLM also 
revised this section to reflect the order in which actions are taken to 
develop a project. The ``other appropriate actions'' listed under 
paragraph (d)(3) of this section in the proposed rule are moved to 
paragraph (d)(5) of this section in the final rule. Paragraphs (d)(4) 
and (5) of this section in the proposed rule are now paragraphs (d)(3) 
and (4) of this section, respectively.

Subpart 2802--Lands Available for FLPMA Grants

Section 2802.11 How does the BLM designate right-of-way corridors and 
designated leasing areas?
    Section 2802.11, which explains how the BLM designates right-of-way 
corridors, is revised to include DLAs. Under this rule, the BLM will 
identify DLAs as preferred areas for solar or wind energy development, 
based on a high potential for energy development and lesser resource 
impacts. This section provides the factors the BLM considers when 
determining which lands may be suitable for right-of-way corridors or 
DLAs. These factors are unchanged from the existing regulations. This 
final rule amends paragraphs (a), (b) introductory text,

[[Page 92140]]

(b)(3), (4), (6), and (7) and (d) of section 2802.11 to include 
references to DLAs.
    Comment: One recommendation was made suggesting that the BLM make 
it clear that we will not accept applications in areas that are closed 
to development by means of land use plans or other mechanisms.
    Response: The comment's recommendation is addressed in the existing 
rule at section 2802.10(a). This section clarifies that some lands are 
not available for a right-of-way grant, which includes those lands that 
the BLM identifies through the land use planning process as 
inappropriate for rights-of-way, as well as public land orders, 
statutes, and regulations that exclude rights-of-way, and lands 
segregated from application.
    Comment: One comment stated that DLAs are created through the BLM's 
resource management planning process, but that such plans are changed 
only every 15 to 20 years. Also, many plans are undergoing or have 
recently undergone such changes, especially in areas having sage-grouse 
habitat, but those plans do not designate any DLAs.
    Response: Due to the timing of the comment submission and the BLM's 
response, the plans noted in this comment have been finalized and the 
BLM decisions are issued. The Greater Sage-Grouse Plan Amendments and 
Revisions did not designate any DLAs. These plans are focused on 
conservation of the Greater Sage-Grouse and its habitat. The decisions 
issued in these plans safeguard primary and general habitat from the 
impacts of development, including solar and wind energy.
    However, the BLM may have an opportunity to designate some areas 
for wind energy development using recent analyses or information that 
identifies areas suitable for energy development on public lands. 
Examples of such areas may be those identified as not having 
significant resource and use siting concerns, as identified in the 
BLM's wind mapper. The wind mapper is a BLM web-based geographic data 
viewer, found at http://wwmp.anl.gov, that has up-to-date geographic 
information representing the BLM's land use planning decisions for 
administering public lands and other pertinent regulatory information, 
specific to wind energy resources. Using information on the wind 
mapper, a targeted land use plan amendment may be completed more 
expeditiously than the 15 to 20 years discussed in this comment.
    Comment: Another comment suggested that we consider developing a 
generic EIS process suitable to all prospective solar and wind leases, 
coupled with a specific discussion of variations between areas. Also, 
the comment suggested that we should automate the EIS process to 
leverage existing GIS and satellite data whenever possible.
    Response: Although worth considering, this concept is outside the 
scope of this rule, which is focused on the administrative process of 
solar and wind energy rights-of-way and competitive processes. However, 
the BLM plans to evaluate its NEPA process and promote automation of 
the process where possible. Until that time, the BLM will designate 
such areas through its existing land use planning process.
    Comment: Another comment states that the designation of DLAs will 
waste taxpayers' money and impede development. The cost to the public 
for the BLM to designate a DLA will not be fully recaptured and the DLA 
will not provide any additional value to the public through the 
competitive process.
    Response: Costs for the preparation of DLAs will be recaptured at 
the competitive bidding stage as the administrative costs will be paid 
by the successful bidder. As demonstrated by the BLM's recent 
competitive actions for solar energy, there is a monetary return to the 
public for auctions of parcels within renewable energy development 
areas.
    Comment: During stakeholder engagement meetings, environmental 
stakeholders expanded on their comment on the definition of 
``designated leasing area.'' The stakeholders suggested that the BLM 
should not only revise the definition of DLA to include additional 
specific criteria, but also make changes to section 2802.11 to specify 
that the BLM consider those criteria when designating DLAs. The 
stakeholders also recommended that the BLM consider sensitive 
environmental resources when evaluating potential DLAs.
    Response: The BLM considered adding additional criteria to section 
2802.11 that would be considered when the BLM evaluates an area for 
inclusion in a DLA, but it ultimately made no changes in the final 
rule. The existing regulations in section 2802.11(b) already explain in 
great detail what the BLM considers when making a DLA designation. 
Adding an undefined term, ``sensitive environmental resources,'' could 
unintentionally limit the BLM's management of public lands when 
considering the varied landscapes and resources that are found there. 
Furthermore, consideration of sensitive resources is already addressed 
in section 2802.11(b)(2), which requires the BLM to consider 
``environmental impacts on cultural resources and natural resources, 
including air, water, soil, fish, wildlife, and vegetation.''
    While the BLM did not make any changes to the final rule in 
response to this comment, it should be noted that the BLM intends to 
establish guidance, as part of the implementation of this rule, to 
assist the BLM in establishing DLAs through its land use planning 
processes. The implementing guidance will allow the BLM to be more 
specific for these areas without unintentionally limiting itself, and 
maintain the BLM's flexibility to make any necessary adjustments to the 
process for evaluating potential DLAs across the varied landscapes that 
it manages.

Subpart 2804--Applying for FLPMA Grants

Section 2804.10 What should I do before I file my application?
    Existing section 2804.10 encourages prospective applicants for a 
right-of-way grant to schedule and hold a pre-application meeting. 
Under this final rule, section 2804.10 continues to encourage such 
meetings regarding some right-of-way grants, and under paragraph 
(a)(2), would now identify DLAs along with right-of-way corridors as a 
point of discussion for these meetings if held.
    Under existing section 2804.10(a)(2), the BLM determines if your 
application is on BLM land within a right-of-way corridor. This revised 
paragraph now includes ``or a designated leasing area.'' The BLM 
generally will not accept applications for grants on lands inside DLAs. 
The BLM will offer lands inside DLAs competitively through the process 
described in subpart 2809, which does not involve submitting an 
application. The BLM will only accept applications on lands inside DLAs 
in limited circumstances (see section 2809.19(c) and (d)).
    The BLM proposed amending paragraphs (a) introductory text and 
(a)(2) and (4), and also adding two new paragraphs that would apply to 
any solar or wind energy project, transmission line with a capacity of 
100 kV or more, or pipeline 10 inches or more in diameter. For these 
types of projects, the BLM proposed mandatory pre-application meetings. 
Proposed amendments for paragraphs (a) introductory text and (a)(4) are 
not included in the final rule, since pre-application meetings will not 
be required and specific requirements associated with them are no 
longer necessary. Paragraph (b) of the existing regulations will not be 
redesignated and there will be no new paragraphs (b) and

[[Page 92141]]

(c) in this final rule. The only changes to section 2804.10 in the 
final rule are found in paragraph (a)(2).
    Under this final rule, pre-application meetings will not be 
required for solar and wind energy developments, or any transmission 
line with a capacity of 100 kV or more. Instead, the BLM will require 
what we term ``preliminary application review meetings'' that will be 
held after an application for a right-of-way has been filed with the 
BLM. These meetings will fall under the BLM's cost recovery authority 
for processing applications and are discussed in greater detail under 
section 2804.12. Based on comments received, no requirements for 
pipelines 10 inches or more in diameter are carried forward into the 
final rule.
Section 2804.12 What must I do when submitting my application?
    In this final rule, section 2804.12 has been retitled from ``What 
information must I submit in my application?'' to ``What must I do when 
submitting my application?''. Relocation of the early coordination 
meeting requirements to this section has resulted in revisions to this 
section that would make the previous title misleading. As revised, 
section 2804.12 requires that an applicant must provide specific 
information, and in the case of solar or wind energy development 
projects and transmission line projects with a capacity of 100 kV or 
more, must also complete certain actions when initially submitting an 
application.
    The last sentence in section 2804.12(a) is revised to show that a 
completed application must include all of the items identified in 
section 2804.12(a)(1) through (8). The text of paragraphs (a)(1) 
through (7) are republished without amendment, and new paragraph (a)(8) 
is added.
    Comments: Several comments were submitted regarding the BLM's 
proposed pre-application requirements for solar and wind energy 
development and transmission lines with a capacity of 100 kV or more. 
Comments suggested that the BLM could not place requirements on a 
developer prior to an application being submitted to the BLM. This 
general comment was focused on two aspects of the BLM's proposed 
requirement for pre-application meetings. The first aspect was that the 
BLM was requiring that two pre-application meetings be completed prior 
to a developer submitting an application for a solar or wind energy 
development project or transmission line with a capacity of 100 kV or 
more. The second aspect of concern was that the BLM would require the 
developer to pay cost recovery for the required pre-application 
meetings. Under the proposed rule, the BLM would have required both of 
these prior to submission of an application for use of the public 
lands.
    Response: The intent of the pre-meeting requirements is to ensure 
early coordination with the developer and other Federal, State, and 
tribal governments to gather information to better inform the developer 
of different considerations to be made if pursuing their project on 
BLM-administered lands. Considerations would include existing uses, 
environmental resources, and cultural or tribal values in the area of 
the proposed project. Pre-application meetings are currently required 
by the BLM's policy. Discussing a proposed project with a developer 
early on has demonstrated an improvement in project siting and design, 
avoiding and minimizing impacts the project would have to the public 
land, and reducing the BLM's processing timeframes. This final rule has 
been revised and now requires early coordination, not through pre-
application meetings, but through preliminary application review 
meetings, which are to be held after an application is submitted to the 
BLM. These requirements for early coordination with developer and other 
Federal, State, and tribal governments are found under section 
2804.12(b). Additional discussion of the preliminary application review 
meetings is found under section 2804.12(b) of this preamble.
    Section 2804.12(a)(8) states that if the BLM requires you to submit 
a POD, you must include a schedule for its submittal in your 
application. This requirement was in the proposed rule's section 
2804.10(c)(4), but is now moved to section 2804.12(a)(8) in the final 
rule. This provision was proposed in section 2804.10 because the early 
coordination with BLM was done under pre-application meetings. It is 
moved to section 2804.12 of this final rule to coincide with the timing 
of the preliminary application review meetings.
    Section 2804.12(b) explains requirements for submitting an 
application for solar or wind energy development (outside of DLAs), or 
any transmission line with a capacity of 100 kV or more. Requirements 
under section 2804.12(b) were found at section 2804.10(b) in the 
proposed rule, but have been moved to this section instead as 
application processing requirements. This includes the BLM's 
requirement for preliminary application review meetings. This provision 
provides clear instructions to the public about what they should expect 
when filing an application for such developments.
    The BLM commonly refers to the first filing of an application as an 
``initial'' application due to the BLM's experience with such projects. 
In most cases, a project POD goes through several iterations during the 
BLM's application review process and may require additional submissions 
or revisions of the application to accompany the revised plans. 
Additional applications are not always necessary when revising a 
project POD, but could be required.
    Section 2804.12(b) also contains provisions from section 2804.10(b) 
and (c) of the proposed rule. These provisions are moved in the final 
rule in response to comments. An additional provision is added to 
paragraph (b) of this section to reiterate that the requirements for 
submitting a solar or wind application are in addition to those 
described in paragraph (a) of this section for all rights-of-way.
    Comments: Several comments questioned the requirement to hold pre-
application meetings, as well as the BLM's authority to require 
conditions for project processing, prior to the submission of an 
application to the BLM and collecting cost recovery fees for that time 
period.
    Response: The early coordination that resulted from the pre-
application meetings required by existing BLM policy has been essential 
to the timely review and approval of solar and wind energy projects on 
the public lands. However, this final rule moves these meetings and 
requirements so that they occur after the submission of an application 
in response to comments received. The changes retain BLM's intent to 
ensure earlier coordination on such applications with other Federal, 
State, local, and tribal governments. Under the final rule, such 
meetings would be subject to cost recovery requirements.
    Section 2804.12(b) also states that your application for a solar or 
wind energy project, or a transmission line project with a capacity of 
100 kV or more, must include a general description of the proposed 
project and a schedule for submittal of a POD, address all known 
resource conflicts, and initiate early discussions with any grazing 
permittees that may be affected by the proposed project. Further, 
section 2804.12(b) requires that you hold two preliminary application 
review meetings, within 6 months from the date on which the BLM 
receives the cost recovery fee payment required under section 2804.14.
    Section 2804.12(b)(4), as previously described, is relocated from 
section

[[Page 92142]]

2804.10(c) of the proposed rule. Under this paragraph, the BLM will 
process an application only if the application addresses the following 
items: (1) Known potential resource conflicts with sensitive resources; 
(2) Values that are the basis for special designations or protections; 
and (3) Applicant-proposed measures to avoid, minimize, and compensate 
for such resource conflicts. For example, some applicant-proposed 
measures could utilize a landscape-level approach as conceptualized by 
Secretarial Order 3330 and subsequent reports, and be consistent with 
the BLM's IM 2013-142, interim policy guidance. Due to the intense use 
of the land from the projects covered in this section, the BLM will 
require applicants to identify potential conflicts and how they may be 
avoided, minimized, or mitigated. The BLM will work with applicants 
throughout the application process to ensure the most efficient use of 
public land and to minimize possible resource conflicts. This provision 
will require an applicant to consider these concerns before submitting 
an application and, therefore, provide the BLM with potential plans to 
minimize and mitigate conflicts.
    Comments: Some comments stated that the BLM should ensure that 
meetings are structured so that participants are provided all the 
project information necessary so they can meaningfully assist the BLM 
to make an appropriate determination about the proposed project.
    Response: The BLM agrees with these comments and has modified the 
regulation to have meetings occur after an application is filed, rather 
than hold the meetings beforehand. The intent of these meetings will be 
to bring all Federal, State, local, and tribal governments together and 
provide them with the best available information to have an informed 
discussion on the right-of-way application. Authorizations for solar 
and wind energy projects, and transmission lines with a capacity of 100 
kV or more, are generally larger and more complex than the average 
right-of-way authorization, and this extra step will help protect the 
public lands and make application processing more efficient.
    Furthermore, the BLM will not proceed with an application until all 
appropriate meetings are held and the BLM has notified appropriate 
grazing permittees (see 43 CFR 4110.4-2(b)). Applicants must pay 
reasonable or actual costs associated with the requirements identified 
in section 2804.12(b). Payment for reasonable costs associated with an 
application must be received by the BLM after the initial filing of the 
application and prior to the first meeting, consistent with section 
2804.14.
    After enactment of the Energy Policy Act of 2005, the BLM received 
an influx of solar and wind energy development applications. Many of 
these applications were unlikely to be approved due to issues such as 
siting, environmental impacts, and lack of involvement with other 
interested parties. As the BLM gained more experience with these 
applications, it developed policies and procedures to process 
applications more efficiently. These policies and procedures required 
pre-application meetings and use of application screening criteria (see 
section 2804.35 of this preamble) in order to help BLM and the 
proponent address siting concerns early on in the process.
    Pre-application meetings have helped both the BLM and prospective 
applicants to identify necessary resource studies, and other interests 
and concerns associated with a project. Further, the meetings have 
provided an opportunity to direct development away from lands with high 
conflict or sensitive resource values. As a result of these meetings, 
the applications submitted were more appropriately sited and had fewer 
resource issues than those submitted where no pre-application meetings 
were held. Holding these meetings early in the application process made 
the applications more likely to be approved by the BLM. This saved the 
applicant the time and money spent on doing resource studies and 
developing projects that may not have been accepted or approved by the 
BLM.
    Some prospective applicants chose not to pursue development after 
these meetings, once they had a better understanding of the potential 
issues and resource conflicts with the project as proposed. The BLM 
found that applicants who participated in these meetings saved money 
that would have been spent planning a project that the BLM would not 
have approved. This also saved the BLM time by reducing the number of 
applications it would need to process and the time spent reviewing 
resource studies and project plans.
    A January 2013 Government Accountability Office report (GAO-13-189) 
found that the average BLM permitting timeframes have decreased since 
implementation of BLM's solar and wind energy policies, which include 
the early inter-agency coordination meeting requirements in this rule. 
The GAO concluded that applications submitted in 2006 averaged about 4 
years to process, while applications submitted in 2009 and later 
averaged about 1.5 years to process. At the time of the GAO review, 
these meetings were pre-application meetings. In the final rule, the 
timing of these early meetings has been changed until after the 
submission of an application to the BLM. Based on its experience, the 
BLM believes that holding inter-agency and government coordination 
meetings early in the review of a proposed large-scale development will 
continue to save both the BLM and applicant time and money during the 
BLM's review and processing of the application.
    Based on a review of its records, the BLM identified a range of 
costs and time estimated associated with the processing of each type of 
application for a use of the public lands. These cost and time 
estimates varied between the solar and wind energy and transmission 
line projects. For solar and wind energy rights-of-way a range of costs 
was identified between $40,000 and $4 million, including up to 
approximately 40,000 BLM staff labor hours and other non-labor costs 
per project. For transmission lines 100 kV or larger a range of costs 
was identified between $260,000 and $2.1 million, including up to 
approximately 21,000 BLM staff labor hours and other non-labor costs 
per project. Based on this review, the BLM observed that projects with 
early coordination generally had lower costs relative to similarly 
situated projects.
    Based on the BLM's experience, two meetings are usually sufficient 
to address all known potential concerns with a project, which is why 
the final rule calls for two meetings. However, the BLM understands 
that additional meetings may be beneficial to a project before an 
application is submitted. The BLM does not want to limit its ability to 
hold additional meetings should a project be particularly complex and, 
therefore, the final rule allows for additional preliminary application 
review meetings to be held when mutually agreed upon. For example, a 
project that crosses State lines could require additional coordination 
with local governments and other interested parties.
    Comments: Some comments noted concern over the BLM's existing and 
proposed pre-application process and its open-ended timeframe. Comments 
were concerned that this would be a deterrent for pursuing development 
on the public land, even if the project itself was well sited and 
designed. A developer would need assurances that a project would 
proceed expeditiously. Suggested timeframes included 30 days between 
meetings and application submittal.

[[Page 92143]]

    Response: New paragraph (b)(4) specifies that within 6 months from 
the time the BLM receives the cost recovery fee, you must hold at least 
two preliminary application review meetings. The first meeting will be 
held with the BLM to discuss the proposal, the right-of-way application 
process, the status of BLM land use planning for the lands involved, 
potential siting and environmental issues, and alternative site 
locations. The second meeting will be held with appropriate Federal and 
State agencies and tribal and local governments to discuss concerns as 
identified above. If you do not believe you need to schedule the first 
or second meeting described above, you can ask the BLM for an 
exemption. The process of requesting an exemption is discussed further 
in section 2804.12(i), under the newly added paragraph labeled ``Inter-
agency Coordination.''
    Section 2804.12(c) contains requirements for submitting an 
application for solar and wind energy development. These requirements, 
located in section 2804.10(a)(8) and (c)(2) in the proposed rule, have 
been relocated to section 2804.12(c)(1) and (2) in this final rule. 
Under section 2804.12(c)(1), the BLM specifies that an application for 
solar or wind energy development must be submitted for lands outside of 
DLAs, except as provided for by section 2809.19. Lands inside DLAs will 
be offered competitively under subpart 2809. See section 2809.19 of 
this preamble for further discussion. No comments were received and the 
only changes made to this paragraph are those identified for relocating 
the requirement to this section and putting it in the context of a 
requirement for submitting an application.
    Section 2804.12(c)(2) requires that an applicant submit an 
application filing fee with any initial solar or wind energy right-of-
way application. Section 304 of FLPMA authorizes the BLM to establish 
filing and service fees. A per acre application filing fee may 
discourage applicants from applying for more land than is necessary for 
a proposed project. Under this final rule, application filing fees will 
be retained by the BLM as a cost recovery fee, instead of being sent to 
the General Fund of the Treasury as collected revenue as proposed. A 
similarly structured nomination fee is established following the same 
criteria and is described in section 2809.11(b)(1).
    Paragraph (c)(2) of this section is revised to replace ``by the 
average annual change in the Implicit Price Deflator, Gross Domestic 
Product (IPD-GDP)'' to read as ''using the change in the Implicit Price 
Deflator, Gross Domestic Product (IPD-GDP)''. As proposed, this 
provision may have been interpreted as limiting how the BLM would use 
the IPD-GDP when updating this fee. It is appropriate for adjustments 
that occur annually, such as acreage rent, to refer to the average 
annual change in the IPD-GDP. However, the application filing fee may 
be adjusted once every ten years and this adjustment would be based on 
the cumulative change to the IPD-GDP over the 10-year period.
    The application filing fee is the initial fee paid to the BLM for 
the reasonable costs of processing, inspecting, and monitoring a right-
of-way. The BLM will use these funds towards processing your 
application. The balance of these funds, if any, will be allocated 
towards a cost reimbursement agreement that is later established 
between the BLM and the applicant or refunded if the application is 
denied or otherwise terminated. A cost reimbursement agreement is 
established under the authority of FLPMA section 304(b) and 504(g). 
This change is made in conformance with those changes made under 
section 2804.30(e)(4) in response to comments.
    The application filing fee is based on the appraisal consultation 
report performed by the Department's Office of Valuation Services. The 
appraisal consultation report compared similar costs on private lands, 
and provided a range between $10 and $25 per acre per year. The nominal 
range or median was reported as between $15 and $17 per acre per year. 
The appraisal consultation report is available for review by contacting 
individuals listed under the FOR FURTHER INFORMATION CONTACT section of 
this preamble.
    The BLM is adopting a single filing fee at the time of filing an 
application, as opposed to a yearly payment. Based on the appraisal 
consultation report, fees are $15 per acre for solar and wind energy 
applications and $2 per acre for wind energy project-area and site-
specific testing applications.
    Comments: Several comments were made concerning the fees identified 
in the description of requirements for section 2804.12(c)(2). One 
comment suggested that the $15 per acre filing fee should be made a 
part of a cost recovery fee and used to reimburse the BLM for its 
expenses. In addition, the comment suggested that the fee should be 
refundable if the lands are later made subject to competition.
    Response: The BLM has revised this rule, including this section, to 
make application filing fees part of cost reimbursement paid to the 
BLM. Payment of cost reimbursement to the BLM is under Sections 304(b) 
and 504(g) of FLPMA. Application filing fees and other costs associated 
with the BLM's processing of applications can be recovered because the 
BLM's application review and other work facilitates, and will generally 
be essential for, the BLM's processing, inspecting, and monitoring of a 
right-of-way. Consistent with FLPMA, application filing fees are 
retained by the BLM as cost reimbursement and will not be sent to the 
General Fund of the U.S. Treasury as originally proposed. If lands are 
later subject to a competitive offer for the use for which application 
filing fees were provided, (e.g., competition for a site development 
when development application filing fees are paid), then these fees 
would be refunded to the unsuccessful bidders who had already paid 
them, except for the reasonable costs incurred.
    Comment: One comment opposes the proposed $15 per acre filing fee 
for wind energy applications and $2 per acre fee for wind energy site-
specific testing applications as this would increase processing costs. 
The comment suggested that fees should be as low as possible to 
encourage wind energy development on public lands.
    Response: The BLM has removed the application filing fee from site-
specific testing applications to address concerns of increasing costs 
for development on the public lands. Site-specific testing generally 
takes up less than an acre, so it would not be necessary to encourage a 
smaller area of use. Project area testing and developments can each 
encompass thousands of acres and a per acre filing fee is appropriate. 
This final rule retains a $2 per acre filing fee for project area 
testing applications and a $15 per acre filing fee for development 
applications to encourage thoughtful development on public lands. Fees 
for solar and wind energy development applications will be adjusted for 
inflation once every 10 years, using the Implicit Price Deflator for 
Gross Domestic Product (IPD-GDP).
    Section 2804.12(d) references an applicant's option to request an 
alternative requirement if the applicant is unable to meet one of the 
requirements outlined for submitting an application. Requests for an 
alternative requirement are submitted under section 2804.40. This 
provision applies to all right-of-way applications submitted to the BLM 
and is added to the final rule in response to comments submitted on the 
proposed rule. Further discussion on requesting an alternative 
requirement is found under section 2804.40.

[[Page 92144]]

    Comments: Some comments stated that the mandatory pre-application 
meetings included in the proposed rule would discourage a developer 
from pursuing public lands for development, since the process and costs 
associated with development on BLM lands are greater than those on 
private lands. These comments expressed concern that these requirements 
are overly burdensome and duplicative of the NEPA process.
    Response: Although costs to develop a project may end up being 
higher on public lands, the BLM has a different scope of authority and 
responsibility than agencies and offices that administer developments 
that occur on private land. The BLM is charged with managing the public 
lands under principles of multiple use and sustained yield. The BLM 
must take into account resources and use of the public land, and 
balance those with each additional proposed use and its impacts to 
resources for current and future generations.
    Based on the BLM's experience, these early coordination meetings 
help reduce the overall time and costs associated with the BLM's 
application process. The pre-application meetings described in the 
proposed rule, which are existing policy, are changed in this final 
rule to ``preliminary application review meetings,'' which take place 
after an application is submitted. The BLM believes these meetings will 
facilitate a more efficient application process and will not discourage 
development on public lands.
    The BLM is required, under NEPA, to consider the environmental 
impacts of a significant action on the public lands. These early 
coordination meetings help the BLM and proponent determine the best 
possible approach for developing a proposed project that would avoid, 
minimize, reduce or otherwise compensate for its environmental impacts. 
Based on the BLM's experience, these meetings have reduced the overall 
time of the NEPA analysis necessary for projects on the public lands. 
The GAO's report (GAO-13-189) found that the average BLM permitting 
timeframes have decreased since implementation of BLM's solar and wind 
energy policies, which include the early inter-agency coordination 
meeting requirements in this rule.
    The BLM added section 2804.12(i), ``Inter-agency Coordination,'' in 
response to these comments. This paragraph provides that an applicant 
may request an exemption from some of the requirements of this section, 
should they participate in an inter-agency coordination process with 
another Federal, State, local, or tribal authority. This final rule 
allows a developer to formally request an exemption to the requirements 
under section 2804.12, pertaining to application filings and other 
requirements that may be duplicative of other activities that a 
developer is completing. In order for a developer to qualify for an 
exemption from these requirements, the other activities must meet the 
same criteria as required by the BLM. An example of such a situation 
would be if a developer had already met with the Department of Energy 
for purposes similar to what is required under the BLM's first 
preliminary application review meeting.
    No other comments were received and no additional changes made to 
this section.
    Sections 2804.12(e) through (h) are redesignated in the final rule 
from paragraphs (b) through (e) of the existing regulations and no 
other changes were made to these paragraphs.
Section 2804.14 What is the processing fee for a grant application?
    Under section 2804.14, applicants must pay for reasonable costs for 
processing an application as defined by FLPMA. Under section 
2804.14(a), the BLM may collect the estimated reasonable costs incurred 
by other Federal agencies. Applicants may pay those costs to other 
affected agencies directly instead of paying them to the BLM.
    Section 2804.14(b) includes a table of the application processing 
categories. The specific outdated values for cost recovery categories 1 
through 4 have been removed from this table, while the explanations of 
the categories and the methodology of calculating the costs remain. 
These numbers are available in writing upon request or may be found on 
the BLM's Web site at http://www.blm.gov/. These cost figures were 
removed from the regulations because they are outdated after the first 
year, since the BLM updates these costs annually and has done so since 
this section of the regulations was originally published. The revision 
allows the BLM to update these numbers without modifying the CFR and 
prevents confusion to potential applicants who would see incorrect 
information. The explanation of how these costs are calculated, 
formerly found in section 2804.14(c), is moved up to paragraph (b) to 
provide better context for the amended table. Redundant language is 
removed from the Category 1 processing fee.
    Comments: Some comments were received stating that the BLM does not 
have authority to collect cost recovery on behalf of other Federal, 
State, and non-regulatory offices, such as tribal governments and 
interested public stakeholders. These comments stated that the 
authority delegated by the Secretarial Order was by the Secretary, and, 
therefore, delegation of the authority could not apply to any agency or 
office outside of the Department.
    Response: Secretarial Order 3327 delegating cost recovery authority 
applies only to agencies and offices of the Department of the Interior. 
Sections 304(b) and 504(g) of FLPMA, however, give the Secretary 
authority to collect payments intended to reimburse the United States, 
not just the Department of the Interior. Under Section 304(b) of FLPMA, 
the Secretary may charge for reasonable costs of the United States 
concerning ``applications and other documents relating to [the public] 
lands.'' Section 504(g) of FLPMA provides that the Secretary may charge 
for ``all reasonable administrative and other costs incurred in 
processing'' a right-of-way application and costs associated with the 
inspection and monitoring of right-of-way facilities.
    The revision under section 2804.14 and other cost recovery 
provisions of this rule clarify that the BLM's cost recovery authority 
is consistent with FLPMA, in that it seeks reimbursement to the United 
States--i.e., it can seek reimbursement of its own costs as well as 
those of other Federal agencies. This does not include reimbursement of 
costs for State and non-regulatory offices. The BLM intends that 
collecting such reasonable costs for other Federal agencies would 
primarily arise in situations where the BLM's decision to approve or 
deny a right-of-way application depends on another Federal agency's 
issuance of a decision or other determination before or in conjunction 
with the BLM's right-of-way decision. An example of this can been seen 
in the BLM's May 2013 Memorandum of Understanding with the Fish and 
Wildlife Service (FWS), where the BLM and FWS have established a 
protocol for the BLM to collect and then provide cost recovery funds to 
the FWS for Endangered Species Act and other work that the BLM 
determines is necessary for it to process right-of-way applications. A 
copy of the Secretarial Order and Memorandum of Understanding can be 
found at the following Web site: http://www.blm.gov/wo/st/en/info/regulations/Instruction_Memos_and_Bulletins/national_information/2013/IB_2013-074.html. No other comments were received, and no changes were 
made to this section of the final rule.

[[Page 92145]]

Section 2804.18 What provisions do Master Agreements contain and what 
are their limitations?
    As defined in section 2804.18, a Master Agreement is a written 
agreement covering processing and monitoring fees negotiated between 
the BLM and a right-of-way applicant that involves multiple BLM rights-
of-way for projects within a defined geographic area. New section 
2804.18(a)(6) requires that a Master Agreement also describe existing 
agreements between the BLM and other Federal agencies for cost 
reimbursement. With the recent authority delegated by Secretarial Order 
3327 to collect costs for other Federal agencies, it is important for 
the applicant, the BLM, and other Federal agencies to coordinate and 
maintain consistency for cost reimbursement. No additional comments 
were received, except for those discussed under section 2804.14, and no 
changes were made to this section in the final rule.
Section 2804.19 How will BLM process my processing Category 6 
application?
    Under section 2804.19(a), an applicant for a Category 6 application 
must enter into a written agreement with the BLM identifying how such 
applications will be processed. Under this final rule, the final 
agreement includes a description of any existing agreements the 
applicant has with other Federal agencies for cost reimbursement 
associated with the application. No comments were received for this 
section, and no changes were made from the proposed rule to this 
section of the final rule.
    Under section 2804.19(e), the BLM may collect reimbursement to the 
United States for its reasonable costs for processing applications and 
preparation of other documents under this part relating to the public 
lands. Adding this language to these regulations clarifies the BLM's 
authority when collecting for other agencies. No additional comments 
were received, except for those discussed under section 2804.14 and no 
changes were made to this section of the final rule.
Section 2804.20 How does BLM determine reasonable costs for processing 
Category 6 or monitoring Category 6 applications?
    Section 2804.20 is revised to clarify the scope of the BLM's cost 
recovery and how the BLM will determine reasonable costs of the United 
States when processing and monitoring Category 6 applications. In 
paragraph (a)(1) of this section, ``BLM'' is changed to ``the Federal 
Government,'' to make it clear that the BLM may collect cost recovery 
for other Federal agencies as well. Processing costs include reasonable 
costs for processing a right-of-way application, while monitoring costs 
include reasonable costs for those actions the Federal Government 
performs to ensure compliance with the terms, conditions, and 
stipulations of the right-of-way grant. As pre-application requirements 
are not included in this final rule, section 2804.20(a)(7) was deleted. 
No additional comments were received, except for those discussed under 
section 2804.14, and no other changes were made to this section of the 
final rule.
Section 2804.23 When will the BLM use a competitive process?
    Section 2804.23 was previously titled ``What if there are two or 
more competing applications for the same facility or system?'' but is 
revised to read, ``When will the BLM use a competitive process?'' This 
change is necessary because, under the final rule, the BLM may use a 
competitive process even when there are not two competing applications.
    Paragraph (a)(1) of this section now requires applicants to 
reimburse the Federal Government, as opposed to just the BLM, for 
processing costs, consistent with the cost recovery authority in 
Sections 304(b) and 504(g) of FLPMA. This means that the BLM could 
require applicants to reimburse the BLM for the costs incurred by other 
agencies, such as the U.S. Fish and Wildlife Service, in processing the 
application.
    A new sentence in section 2804.23(c) gives the BLM authority to 
offer lands through a competitive process on its own initiative. Under 
the existing regulations, the BLM can use a competitive process only 
when there were two or more competing applications for a single right-
of-way system. This change gives the BLM more flexibility to offer 
lands competitively, and applies to all potential rights-of-way, not 
just solar and wind energy development projects.
    Throughout the proposed rule, the BLM required publication of a 
notice in the Federal Register as well as in a newspaper in general 
circulation in the area affected by the potential right-of-way. 
Publication in a newspaper is included in the final rule as one of the 
``other methods'' of public notification that the BLM may use, but is 
no longer a requirement. The potential area affected by a proposed BLM 
action may not be covered by a single newspaper. As the BLM considers 
issues at a broader scale, such as multi-state transmission lines, 
several communities may be affected by a single BLM action. The Federal 
Register is a national publication that is available to all interested 
parties. In addition, the BLM will make available a copy of all Federal 
Register notices on its Web site at www.blm.gov. The BLM may use a 
newspaper to notify the public on a case-by-case basis, as appropriate. 
The public notification methods throughout this final rule are revised 
consistent with this section.
    Comments: Some comments expressed concern that the BLM may 
determine to hold a competitive offer after an applicant has 
substantially progressed in the processing of their non-competitive 
application for a right-of-way grant. These comments argued that this 
possibility would discourage developers from submitting a solar or wind 
energy right-of-way application.
    Response: Proposed paragraph (c) of this section has been revised 
to state that a competitive process will not be held for public lands 
where a right-of-way application for solar or wind development has been 
accepted, including the POD and cost recovery agreement. Adding this 
criterion provides assurances to prospective applicants that the BLM 
will not competitively offer lands after considerable time and 
resources have been committed to processing a particular application.
    Under section 2804.23(d), lands outside of DLAs are made available 
for solar or wind energy applications through the competitive process 
outlined in section 2804.30. This provision directs the reader to new 
section 2804.30, which explains the competitive process for solar and 
wind energy development outside of DLAs. This paragraph is necessary to 
differentiate between development inside and development outside of a 
DLA. No comments were received on this paragraph, and no changes are 
made from the proposed rule to the final rule.
    Under section 2804.23(e), lands inside a DLA will now be offered 
competitively through the process described in subpart 2809. This new 
paragraph directs the reader to revised subpart 2809, which explains 
the competitive process for solar and wind energy development inside of 
DLAs. This paragraph is necessary to differentiate between development 
inside and outside of a DLA. No additional comments were received for 
this section, except for those discussed under paragraph (c), and no 
other

[[Page 92146]]

changes were made from the proposed to the final rule.
Section 2804.24 Do I always have to submit an application for a grant 
using Standard Form 299?
    Section 2804.24, which is unchanged from the proposed rule, 
explains when you do not have to use Standard Form 299 (SF-299) to 
apply for a right-of-way. Under the existing rule, you do not have to 
use SF-299 if the BLM determines competition exists under section 
2804.23(c). The BLM only determines competition exists when there are 
two or more competing applications for the same right-of-way facility 
or system.
    Due to the changes made to section 2804.23, section 2804.24 
specifies when an SF-299 is required. Under both the existing 
regulations and this final rule, the BLM will implement a competitive 
process if there are two or more competing applications. Under section 
2804.24(a), you do not have to submit a SF-299 if the BLM offers lands 
competitively and you have already submitted an application for that 
facility or system.
    Under paragraph (a) of this section, if you have not submitted an 
application for that facility or system, you must submit an SF-299, as 
specified by the BLM. Under the competitive process for solar or wind 
energy in section 2804.30, for example, the successful bidder becomes 
the preferred applicant, and may apply for a grant. The preferred 
applicant will be required to submit an SF-299, but unsuccessful 
bidders will not.
    Paragraph (b) explains that an applicant does not have to use an 
SF-299 when the BLM is offering lands competitively under subpart 2809. 
Under subpart 2809, the BLM will offer lands competitively for solar 
and wind energy development inside DLAs. The successful bidder will be 
offered a lease if the requirements described in section 2809.15(d) are 
met. The successful bidder will not have to submit an application using 
SF-299. The following chart explains when the filing of an SF-299 is or 
is not required under this final rule:

                        When a SF-299 Is Required
------------------------------------------------------------------------
                                              Would have to submit a SF
    Type of solar or wind right-of-way                  299?
------------------------------------------------------------------------
Have two or more competing applications     Yes.
 for the same area, outside of DLAs.
Lands are offered competitively outside of  No.
 a DLA and you have already submitted an
 application for the parcel before the
 Notice of Competitive Offer.
Lands are being offered competitively       Yes.
 outside of a DLA and you have not
 submitted an application.
You are the successful bidder in a          Yes.
 competitive offer outside of a DLA and
 have been declared the preferred
 applicant and may apply for a grant.
Lands are being offered competitively       No.
 within a DLA under subpart 2809.
------------------------------------------------------------------------

    No comments were received and, no were other changes are made to 
this section of the final rule.
Section 2804.25 How will BLM process my application?
    This section of the final rule has been modified from the proposed 
rule to reflect the shift of early BLM coordination from pre-
application meetings, under section 2804.10, to preliminary application 
review meetings, under section 2804.12. These preliminary application 
review meetings are now required after the initial filing of a right-
of-way application for solar or wind projects, or for electric 
transmission lines with a capacity of 100 kV or more.
    Section 2804.25(a) of this final rule has been modified from the 
proposed rule to include a provision from current section 2804.25(b) 
that states the BLM will inform you of any other grant applications 
that involve any of the lands for which you have applied. This new 
provision has been added as paragraph (a)(2). Paragraph (a) has been 
reformatted providing an introductory statement and putting the 
existing requirement for identifying the processing fee as paragraph 
(a)(1). This is an existing provision of the regulations and is only 
added to this paragraph as part of formatting revisions that are made 
in response to comments submitted concerning confusion with existing 
requirements of section 2804.25(b).
    Comments: Some comments were received noting confusion over the 
proposed section 2804.25(b) and its requirements.
    Response: This paragraph has been reformatted into two new separate 
paragraphs, (b) and (c).
    New section 2804.25(b) contains existing regulatory requirements 
that were part of proposed section 2804.25(b). This paragraph helps 
explain the existing requirements found in section 2808.12 of the 
regulations. In paragraph (b), the BLM will not process your 
application if you have any trespass action pending for any activity on 
BLM-administered lands or have any unpaid debts owed to the Federal 
Government. If you have an outstanding trespass action, the BLM will 
only process your application, under part 2800 or part 2920, if it will 
resolve the underlying trespass. Similarly, if you have any debts 
outstanding, the BLM will only process your application after those 
outstanding debts are paid. The requirement in section 2808.12 is often 
overlooked by potential right-of-way applicants and this addition to 
the regulations would insert the requirement into the application 
process and improve applicant understanding of the BLM's process under 
subpart 2804.
    Comments: Some comments expressed concern with the clarity of this 
proposed section and were also unsure whether using an application for 
a right-of-way to resolve trespass was appropriate. Further, concern 
was raised over what constituted an unpaid debt to the Federal 
Government.
    Response: In response to the comment about clarity, the BLM revised 
the language in paragraph (b) of this section, by adding paragraphs 
(b)(1) and (2), discussing when the BLM will not process an 
application.
    Section 2804.25(b)(1) clarifies that the BLM will not process your 
application if you have an outstanding debt to the Federal Government 
and then describes what constitutes an outstanding debt to the 
government. An additional sentence was added to paragraph (b)(1) of 
this section, explaining that unpaid debts are what are owed to the 
Federal Government after all administrative collection actions have 
occurred, including administrative appeal proceedings under applicable 
Federal regulations and review under the Administrative Procedure Act 
(APA). Adding this provision to the regulations makes it clear to 
right-of-way holders and trespassers that the BLM will evaluate 
applications in this manner.

[[Page 92147]]

    Paragraph (b)(2) of this section clarifies that if you are in 
trespass, the BLM will only process an application that would resolve 
that particular trespass. Reformatting this paragraph in this manner 
separates the concepts of unpaid debts and existing trespass situations 
as they pertain to new applications. Under this final rule, the BLM 
will not always issue a right-of-way to resolve a trespass. The BLM 
will consider the situation on a case-by-case basis and will evaluate 
whether the trespass was knowing and willful. The BLM will also 
consider whether issuing a right-of-way to resolve the trespass is 
appropriate. If a right-of-way is not an appropriate way to resolve a 
trespass, the BLM will consider other options for resolving a trespass, 
such as requiring its removal from public lands.
    Section 2804.25(c) contains the requirements from section 
2804.25(b) of the existing regulations, under which the BLM may require 
the submittal of a POD. The POD or other plans must be submitted to the 
BLM within the period specified by the BLM.
    Under paragraph (c)(1) of this section, the BLM requires an 
applicant to commence resource surveys or studies within 1 year of 
receiving a request from the BLM. This requirement was identified in 
the preamble of the proposed rule and carried forward in this final 
rule. The requirement to begin the surveys or studies within 1 year of 
the request establishes a default period, which will apply if the BLM 
does not specify a different time period within which the survey or 
study must begin. The BLM may identify a different time period through 
written correspondence with applicants, or by other means, as 
appropriate. Generally, these surveys or studies will not require a 
permit from the BLM or any other agency. Proponents need only 
coordinate the work with the applicable agencies as appropriate. 
However, for some surveys or studies, there may be a permit that is 
necessary, such as when performing pedestrian archaeological surveys. 
In those instances, the BLM will work with applicants to ensure that 
the applicable permitting requirements are understood by all parties.
    Under paragraph (c)(2) of this section, an applicant could request 
an alternative requirement to one of the requirements of this section, 
such as the period of time described in paragraph (c)(1) of this 
section. However, the applicant must show good cause why it is unable 
to meet the requirement. This new paragraph directs the reader to new 
section 2804.40, consistent with revisions made from comments received 
as discussed under section 2804.40, if the applicant is unable to meet 
the requirements of this section. Failure to meet the 1 year 
requirement for application due diligence may result in denial of the 
application, unless an alternative compliance period has been requested 
and agreed to by the BLM. Paragraph (c)(2) of this section gives 
applicants the ability to address circumstances outside of their 
control with respect to time periods.
    Comments: Some comments were received regarding due diligence 
requirements for applicants to begin resource studies or provide other 
such survey work to the BLM. Comments recommended varying timeframes 
for application due diligence ranging from 1 to 3 years after the BLM's 
approval of survey protocols or other identified study requirements. 
Comments generally agreed with implementing such requirements for 
applications.
    Response: In consideration of the comments received on application 
due diligence requirements, the BLM determined that a longer timeframe 
would not be appropriate. Under this final rule, an applicant would be 
required to begin surveys or inventories within a year of the BLM's 
request date, unless otherwise specified by the BLM. The BLM determined 
that a one year default timeframe was adequate to commence surveys and 
inventories. This rule does, however, leave the BLM with the discretion 
to establish a different timeframe where appropriate.
    Section 2804.25(c) of the existing regulations is redesignated as 
paragraph (d) of this section. It remains unchanged and is relocated to 
make room for the reformatting of this section in response to comments 
submitted on the proposed rule.
    The introductory text of section 2804.25(e), which is redesignated 
from existing paragraph (d), is revised by replacing the words ``before 
issuing a grant'' with ``in processing an application.'' This change is 
made to account for the situation where the BLM would issue a grant 
without accepting applications. For example, lands leased inside DLAs 
will be offered through a competitive bidding process under subpart 
2809 in situations where no applications for those lands are received. 
The provisions in section 2804.25 do not apply to the leases issued 
under subpart 2809. However, they will apply to all other rights-of-
way, including solar and wind energy development grants outside of 
DLAs. The process for issuing leases inside DLAs is discussed in 
subpart 2809. This revision clarifies that the requirements of this 
section apply to applications.
    Section 2804.25(e) is further revised to incorporate new provisions 
for all rights-of-way as well as specific provisions for solar and wind 
energy development. Existing section 2804.25(d)(5), which provides the 
requirement to hold a public meeting if there is sufficient public 
interest, is moved to section 2804.25(e)(1). Revisions are made in this 
final rule, consistent with those made in section 2804.23(c). Language 
is added specifying that a public notice may also be provided by other 
methods, such as publication in a newspaper in the area affected by the 
potential right-of-way or the Internet.
    Section 2804.25(e)(2) contains three separate requirements for 
solar and wind energy development applications. Under section 
2804.25(e)(2)(i), the BLM will hold a public meeting in the vicinity of 
the lands affected by the potential right-of-way for all solar or wind 
energy development applications. Based on the BLM's experience, most 
solar and wind energy development projects are large-scale projects 
that draw a high level of public interest. This requirement is added to 
provide an opportunity for public involvement early in the process. 
Under paragraph (e)(2)(ii), the BLM will apply screening criteria when 
processing an application outside of DLAs. These screening criteria are 
explained further in section 2804.35. The BLM removed the word 
``priority'' from this requirement to improve reader understanding that 
the screening criteria are used to determine the priority of 
applications, not ``resource priorities.''
    Under section 2804.25(e)(2)(iii), the BLM will evaluate an 
application, based on the input it has received from other government 
and tribal entities, as well as information received in the 
application, public meetings, and preliminary application review 
meetings. The BLM may consider information it has received outside of 
these meetings when evaluating an application. This paragraph is 
revised in the final rule to remove reference to pre-application 
meetings and add preliminary application review meeting requirements, 
consistent with other changes in this final rule. The BLM has also 
added more detail to this paragraph explaining why it may deny an 
application at this point in the process. For example, the BLM may deny 
an application if you fail to address known resource values raised 
during preliminary application review (see section 2804.12(c)(4)), or 
during public meetings (see section 2804.25(e)(2)(i)), or if you 
improperly site the project. The BLM made this revision to help

[[Page 92148]]

improve the public's understanding of this process.
    Based on its evaluation of an application, the BLM will either deny 
or continue processing it. The BLM's denial of an application will be 
in writing and is an appealable decision under section 2801.10. The 
denial or approval of all grant applications is at the BLM's 
discretion.
    As noted previously under section 2804.12, you must submit an 
application for a solar or wind energy development. Requirements for 
submitting this application are noted in section 2804.25(b) and (c), 
and these must be fulfilled before an application is ready to be 
evaluated by the BLM. Section 2804.25(e)(2)(iii) has been revised to 
explain what criteria must be met in order for the BLM to continue 
processing your application. These criteria are: Whether the 
development application is appropriately sited on the public lands 
(e.g. outside of DLAs--where leasing must proceed under Section 2809 
rather than 2804--and outside of exclusion areas), and whether you 
address known resource values that were discussed in the preliminary 
application review meetings. Known resource values must also be 
addressed in general project descriptions and in further detail in a 
project's POD.
    Under section 2804.25(e)(3), the BLM will determine whether the POD 
schedule submitted with an application meets the applicable development 
schedule and other requirements or whether an applicant must provide 
additional information. This is a necessary step that allows the BLM to 
evaluate the application requirements under section 2804.12. Those 
requirements can be found in section 2804.12(b) and (c). The BLM 
determines if the development schedule and other requirements of the 
POD templates have been met. The POD templates can be found at http://www.blm.gov.
    Under the proposed rule, paragraph (e)(3) of this section applied 
to applications for solar and wind energy development, transmission 
lines with a capacity of 100 kV or more, and pipelines 10 inches or 
greater in diameter. Under this final rule, this paragraph would apply 
to all applications for which a POD is required. Although a POD is 
mandatory for some types of projects, the BLM may require an applicant 
to submit a POD with any type of right-of-way application under section 
2804.25(c) of this final rule (section 2804.25(b) of the existing 
regulations). Should the BLM require an applicant to submit a POD, the 
application would be evaluated under this paragraph based on the POD 
schedule submitted with the application.
    Section 2804.25(e)(4) of this final rule is revised from the 
proposed rule to include a cross-reference to the Department's NEPA 
implementation regulations at 43 CFR part 46. The Departmental 
regulations reinforce the CEQ's regulations and the requirements to 
comply with NEPA. This cross-reference is made to increase the public's 
awareness of these requirements and where they may be found, but does 
not impose any additional requirements on the public.
    Redesignated paragraphs (e)(5), (6), (7), and (8) of this section 
are existing provisions that were formerly found in paragraph (d) of 
this section. Former paragraph (e) is redesignated as new paragraph 
(f). No other comments were received or other changes made to the final 
rule, except that references to the ``U.S.'' were changed to read 
``United States.''
Section 2804.26 Under what circumstances may BLM deny my application?
    Section 2804.26 explains the circumstances in which the BLM may 
deny an application. The BLM considers the criteria outlined in this 
section during its decision-making process, which for right-of-way 
authorizations ends with the issuance of a decision--either a ROD or a 
Decision Record (DR), or in the absence of a ROD or DR, the perfection 
of a right-of-way instrument or the issuance of a written decision 
denying the right-of-way application. Once the BLM issues a ROD or DR 
to approve a right-of-way, any subsequent BLM determination that is 
inconsistent with that ROD or DR, including any decision to suspend or 
terminate the right-of-way, is a separate action that requires the BLM 
to complete a separate decision-making process.
    Section 2804.26(a)(5) explains one such circumstance. This 
provision of the existing regulations is revised to include ``or 
operation of facilities'' and now reads, ``when an applicant does not 
have or cannot demonstrate the technical or financial capability to 
construct the project or operate facilities in the proposed right-of-
way.'' The rule adds text to clarify this requirement, which applies to 
all rights-of-way. The added paragraphs explain how an applicant could 
provide evidence of the financial and technical capability to be able 
to construct, operate, maintain, and decommission a solar or wind 
energy development project. The applicant may provide documented 
evidence showing prior successful experience in developing similar 
projects, provide information of sufficient capitalization to carry out 
development, or provide documentation of loan guarantees, a confirmed 
PPA, or contracts for the manufacture and/or supply of key components 
for solar or wind energy project facilities.
    Paragraphs (a)(6), (7), and (8) are added to section 2804.26 to 
reiterate the new requirements of the final rule and explain that the 
BLM may deny an application should an applicant not comply with these 
provisions.
    Under section 2804.26(a)(6), the BLM may deny your application if 
you do not meet the POD submittal requirements under section 
2804.12(a)(8) and (c)(1) and 2804.25(e)(3). The final rule is updated 
to ensure that the citations match the reformatted rule, after changes 
were made based upon comments received.
    Paragraph (a)(7) of section 2804.26 is a new paragraph added to the 
final rule that corresponds to the provisions by which the BLM will 
require surveys under section 2804.25(c). Under section 2804.26(a)(7), 
the BLM may deny your application if you fail to meet its requirements 
to commence surveys and studies, or provide plans for permit processing 
as required by section 2804.25(c). This paragraph is new in the final 
rule and is added to be consistent with the new requirements in section 
2804.25(c), which are added based upon public comment.
    Section 2804.26(a)(8) references the possible application denial 
based on the screening criteria established in section 
2804.25(e)(2)(iii).
    Comments: Some comments expressed concern regarding the BLM 
exercising its authority to deny an application without accounting for 
the fact that some circumstances may be outside an applicant's control.
    Response: In response to this generalized concern, the BLM added 
section 2804.40 to this final rule. Under this new section, an 
applicant may request an alternative requirement in place of a 
requirement that they are unable to meet. References are made to this 
new section in specific parts of the application processing 
requirements found under subpart 2804.
    No other changes were made to this section and no other comments 
were received.
Section 2804.27 What fees must I pay if BLM denies my application or if 
I withdraw my application?
    The heading of section 2804.27, ``What fees do I owe if BLM denies 
my application or if I withdraw my application?'' is revised to read, 
``What fees must I pay if BLM denies my

[[Page 92149]]

application or if I withdraw my application?''. With the addition of 
application filing fees, the revised title more clearly describes the 
requirements of the final rule. A new provision in this paragraph 
provides that if the BLM denies your application, or if you withdraw 
it, you must still pay any application filing fees submitted or due 
under section 2804.12(c)(2), and the processing fee set forth at 
section 2804.14. Sections 304(b) and 504(g) of FLPMA provide for the 
deposit of payments to reimburse the United States for reasonable costs 
with respect to right-of-way applications and other documents relating 
to the public lands. In the case of preliminary application review 
meetings, the expense could be considerable, depending on the 
complexity of the project. The BLM will refund any part of the 
application filing fees received that is not used for processing the 
application. This paragraph is revised by removing references to pre-
application meetings that were originally proposed for the rule, but 
not carried forward in the final rule. These revisions are consistent 
with other changes made in the final rule under section 2804.12 
regarding the change from pre-application to preliminary application 
review meetings. No other comments were received on this section, and 
no other changes were made to the final rule.
Section 2804.30 What is the competitive process for solar or wind 
development for lands outside of designated leasing areas?
    Section 2804.30 explains the process for the BLM to competitively 
offer lands outside of DLAs. This bidding process is similar to that 
established in subpart 2809 (competitive offers inside DLAs), except 
that the end result of the bidding is different. Under paragraph (f) of 
this section, the successful bidder will become the preferred right-of-
way applicant. Under this section, the high bidder is not guaranteed a 
grant, but is identified as the ``preferred applicant.'' As explained 
under paragraph (g) of this section, the preferred applicant is the 
only party that may submit an application for the parcel identified by 
the BLM, but the BLM must still review and accept the application. This 
is different from subpart 2809, which provides that the successful 
bidder for a lease inside a DLA may be offered a lease upon 
successfully meeting all requirements of section 2809.15.
    Comments: Three general comments were received on this section. The 
first comment requested that language be added to encourage additional 
consultation with members of the public, such as developers, non-
governmental organizations, and stakeholders, during the competitive 
process outside of DLAs.
    Response: Many opportunities for public engagement are provided 
throughout the competitive process for right-of-way applications filed 
on public lands outside of DLAs. As part of the competitive processes 
outside of DLAs, the BLM may engage the public through a notice seeking 
competitive interest in a particular area, which would provide the 
public and interested stakeholders with an opportunity to comment on 
the potential development of a particular parcel. If the BLM decides to 
move forward with a competitive offer for a parcel, a Notice will be 
published in the Federal Register and may also be announced through 
other means. Upon the completion of the competitive process, the BLM 
will process an application for the solar or wind energy development, 
following the requirements of this final rule, which include a 
mandatory public meeting before the BLM determines whether to deny the 
application or continue processing it. If the BLM continues to review 
an application, there may be additional opportunities for public 
involvement through the NEPA process, including during the notice and 
comment period. As a result of these measures, the BLM believes that 
there is adequate opportunity for the public to be fully engaged 
throughout the competitive process, application review, and NEPA 
processes for projects outside of DLAs.
    Comments: The second comment on this section stated that only 
developers are capable of making a determination of whether development 
in a particular area will be economically sound and, therefore, a 
worthwhile pursuit for public land use. The comment contended that 
developers will not expend the effort necessary to determine the 
economic suitability for projects before a competitive process is held 
(either inside or outside areas such as DLAs).
    Response: While the BLM agrees that only a developer can determine 
whether a particular project in a particular area makes sense for them, 
that determination does not necessarily apply to all developers, nor is 
it the only consideration relevant to the BLM. Each developer may 
follow a different business model and may consider different funding, 
financing, and procurement opportunities when assessing a potential 
project site. In identifying DLAs, the BLM has to consider the 
environmental and other resource impacts of a potential development, in 
addition to the known solar or wind potential for the area. For these 
reasons, the BLM does not make an economic evaluation when identifying 
an area for a competitive process. The BLM will rely on developer 
interest, among other indications of competitive interest in an area, 
to determine whether utilization of a competitive process is 
appropriate. Recognizing that determining economic viability for a 
particular area may involve site-specific testing information, the 
final rule contains provisions allowing for such activities. For wind 
or solar energy projects outside of a DLA, interested developers can 
apply for testing authorizations as described in section 2804.31 of 
this rule, or apply for a testing authorization inside DLAs prior to a 
competitive action as described in section 2809.19(d) of this rule.
    Comments: The third comment on this section suggested that the 
leasing process should be restructured from a local ``electric-
centric'' focus to a macro-level objective to provide the greatest 
benefit to ``We the People.'' This comment suggests that the BLM should 
explicitly recognize that the available solar and wind resources could 
be used to provide most of, and potentially all of, the United States' 
fuel, electricity, transportation, and natural resource needs.
    Response: FLPMA directs the BLM to generally receive fair market 
value for the use of public lands and to utilize and protect public 
land resources while balancing the use of the public lands for current 
and future generations. The BLM intends for this rule to promote the 
development of solar and wind energy on public lands, while also 
ensuring a fair return to the Federal Government.
    Paragraph (a) of section 2804.30 identifies lands available for 
competitive lease; paragraph (b) of this section explains the variety 
of competitive procedure options available; and paragraph (c) explains 
how the BLM identifies parcels for competitive offers. Under this final 
rule, the BLM may identify a parcel for competitive offer if 
competition exists or the BLM elects to offer a parcel on its own 
initiative. The BLM may include lands in a competitive offer in 
response to interest from the public or industry, or to facilitate an 
individual State's renewable energy goals. This is a change from 
existing regulations, which only allow the BLM to use a competitive 
process when there are two competing applications; however, the changes 
made to section 2804.23(c) in this rule give the BLM more flexibility.

[[Page 92150]]

    Paragraph (d) of this section, ``Notice of competitive offer,'' 
establishes the content of the materials of a notice of competitive 
offer that include the date, time, and location (if any) of the 
competitive offer, bidding procedures, qualifications of potential 
bidders, and the minimum bid required. The notice also explains that 
the successful bidder becomes the preferred applicant, which can then 
apply for a grant under this subpart. This is different from the 
competitive offers held under subpart 2809, where the successful bidder 
is offered a lease.
    Paragraph (d)(4) of this section requires that the notice identify 
the minimum bid amount, explain how the authorized officer determined 
the minimum bid amount, and describe the administrative costs borne by 
the Federal agencies involved. As indicated in the general discussion 
section of this preamble, administrative costs are not a component of 
fair market value, but instead are a cost reimbursement paid to the 
Federal Government for its expenses. The BLM will publish a notice 
containing all of the identified elements in the Federal Register, and 
may also use other notification methods, including newspapers in the 
affected area or the internet. Consistent with sections 2804.23(c), 
this section's public notice requirements were revised, establishing 
notice through a newspaper or internet as an additional optional form 
of notice. This change in the final rule is discussed further in 
section 2804.23(c) of this preamble. No comments were received on 
section 2804.30(a) through (d). However, a cross-reference has been 
updated in section 2804.30(d)(6) to include section 2804.12, due to 
revisions made to that section based upon comments received.
    Under paragraph (e) of this section, the BLM requires that bid 
submissions include both the minimum bid amount and at least 20 percent 
of the bonus bid. The minimum bid consists of administrative costs and 
an amount determined by the authorized officer. Included in the 
administrative costs are those expenses pertaining to the development 
of environmental analyses and those costs to the Federal Government 
associated with holding the competitive offer.
    The authorized officer may specifically identify a second component 
for the minimum bid(s) submitted for each competitive offer. This 
amount will be based on the known or potential values of the offered 
parcel. The authorized officer may consider values that include, but 
are not limited to, the acreage rent, the MW capacity fee, or other 
known or potential values of the parcel. For example, the BLM may use a 
percentage of the acreage rent value for the parcel competitively 
offered. An explanation of the minimum bid amount and how the BLM 
derived it will be provided in the notice of competitive offer.
    Comments: Several comments were received pertaining to bidding 
under section 2804.30(e). One comment suggested that the BLM: (1) 
Establish global objectives to evaluate bids based on the 
constitutional greater good for the ``People'' to meet many objectives 
of the renewable energy bidding process; (2) Ensure that successful 
bidders use energy to meet public objectives; (3) Ensure that 
appropriate values are received for the right to develop energy; (4) 
Ensure that evaluations of electrical supply include the full costs and 
benefits to the public; (5) Ensure that effects from manmade impacts on 
global warming shall be based on transient climate sensitivity; and (6) 
Focus on ``We the People'' instead of creating processes that incur 
higher costs for developments.
    Response: The comments submitted are suggesting revisions to the 
final rule that are outside of the BLM's authority to consider. FLPMA 
directs the BLM to generally receive fair market value for the use of 
public lands and to utilize and protect public land resources while 
balancing the use of the public lands for current and future 
generations. The provisions of this final rule will ensure that the BLM 
is receiving fair market value for the uses of the public lands that it 
authorizes.
    The second comment suggested that the BLM direct where or how 
renewable energy that is generated on public lands is deployed. The BLM 
could place a requirement on the use of the electricity generated, 
through a term or condition of a right-of-way, but the BLM expects that 
it would do so only in limited circumstances, if at all, as it is a 
land management agency charged with managing the public lands under 
principles of multiple use and sustained yield.
    The BLM evaluates proposed projects before issuing a decision to 
approve, approve with modifications, or deny a project. In general, the 
BLM will analyze a project using reasonable scientific or other 
methods, to understand the impacts to the public lands and other lands, 
uses, resources and other systems outside of its authority to control. 
These other lands, uses, resources, and other systems outside of the 
BLM's authority to control could include electrical transmission 
systems that may be owned or controlled by an Independent System 
Operator, or the energy needs of a State or local community as 
identified by the State government offices, or lands administered by a 
Federal, State, or private entity. When evaluating prospective 
projects, the BLM considers their reasonably foreseeable direct, 
indirect, and cumulative impact on climate change on a local, regional, 
and national scale, as appropriate.
    Comment: Another comment suggested that administrative costs 
discussed under section 2804.30(e)(2)(i) should not be included as part 
of the minimum bid. The initial costs of preparing for and holding a 
competitive offer are completed at the volition of the BLM, not an 
applicant. The comment suggested that including administrative costs as 
part of the minimum bid will discourage development inside and outside 
of DLAs. The comment suggested that a successful bidder should 
essentially pay for the same administrative and NEPA costs as 
noncompetitive applicants for right-of-ways outside of DLAs.
    Response: Under the final rule, reimbursement for the reasonable 
administrative and other costs is generally required from any 
successful bidder. Consistent with Sections 304(b) and 504(g) of FLPMA, 
the BLM may recover reasonable administrative and other costs incurred 
in processing an application for a right-of-way. Administrative and 
other costs associated with the use of a competitive process to 
identify a preferred applicant can be recovered because this work 
facilitates, and will generally be essential to, the BLM's review of a 
right-of-way application. These costs would be paid only by the 
preferred applicant. Bidders will be given notice of the administrative 
costs portion of the minimum bid prior to their bidding at a 
competitive offer. The BLM believes that it is preferable for a 
prospective bidder to know these costs, which are required to prepare 
and hold a competitive auction, before submitting a bid in a 
competitive offer. Prospective applicants would not otherwise be able 
to submit an application to the BLM for development of that area 
without first being the successful bidder. The BLM considers the 
competitive process described in subpart 2809 for lands inside a DLA to 
be even more preferable to prospective developers, as a successful 
bidder would be issued a lease immediately upon paying the full amount 
of their winning bid.
    Comments: Comments stated that the mitigation costs identified in 
section 2804.30(e)(2)(ii) should not be factored into the minimum bid 
because the successful bidder should have to pay separately for 
mitigation if and when

[[Page 92151]]

construction commences and not at the time of bidding. A successful 
bidder cannot pay twice for the same mitigation. Several other comments 
also addressed what should or should not be included as acceptable 
factors.
    Response: The BLM has removed the reference to mitigation costs 
found in proposed section 2804.30(e)(2)(ii), as this may be misleading 
and open to interpretation. However, the BLM has maintained the acreage 
rent and the megawatt capacity fee as considerations when determining a 
minimum bid amount. These factors which are used only to determine the 
amount above the administrative costs where bidding will start (see 
section 2804.30(e)(2)(ii)). Their inclusion as a potential 
consideration in the development of the minimum bid does not count 
towards other obligations. For example, if the BLM arrives at a minimum 
bid amount using the annual acreage rent for a lease area, a successful 
bidder will still be required to pay the first year's acreage rent, as 
identified in this rule, before being awarded a grant or lease. No 
offset or discount toward future acreage rent will be provided.
    Comments: A number of comments expressed concern that requiring 
unsuccessful bidders to pay application filing fees would discourage 
prospective developers. They suggested that application filing fees 
should be refundable if a bidder is not successful.
    Response: New section 2804.30(e)(4) has been revised based on these 
comments to refund application filing fees for unsuccessful bidders, 
except for the reasonable costs incurred by the United States. This 
change is consistent with the revisions under section 2804.12(c)(2) and 
discussed further under that section of this preamble.
    Under section 2804.30(f), the successful bidder is determined by 
their submission of the highest total bid for a parcel at a competitive 
offer. The successful bidder must fulfill the payment requirements of 
the successful bid in order to become the preferred right-of-way 
applicant. The preferred applicant must submit the balance of the bid 
to the BLM within 15 calendar days after the end of the competitive 
offer. No comments were received pertaining to section 2804.30(f), and 
no other changes are made from the proposed rule to the final rule.
    Under section 2804.30(g), a preferred applicant is the only party 
who may submit an application for the parcel that is offered. Unlike 
the process under subpart 2809, the approval of a grant under this 
paragraph is not guaranteed to a successful bidder. Approval of a grant 
is solely at the BLM's discretion. The preferred applicant may also 
apply for an energy project-area or site-specific testing grant.
    Comments: A comment suggested adding a new provision to the rule 
stating that upon making a winning bid, the preferred applicant also 
secures site control. Adding such a condition would provide more 
certainty to the process for prospective developers, further 
incentivizing the competitive bidding.
    Response: The BLM agrees with this comment and has revised 
paragraph (g) to make it clear that the BLM will not accept 
applications on lands where a preferred applicant has been identified, 
unless submitted or allowed by the preferred applicant in order to 
provide additional certainty with respect to site control. If ancillary 
facilities for projects or facilities on adjacent parcels, such as 
roads or transmission lines, need to be constructed on the parcel where 
a preferred applicant's project would be sited, the companies 
constructing the ancillary facilities would need to apply to the BLM 
for a right-of-way, and the BLM would consult with the preferred 
applicant before processing any such application. This is intended to 
provide certainty to the preferred applicant when applying for 
renewable energy developments on the public lands that applications 
from other entities will not be accepted for the competitively gained 
application area unless they are allowed by the preferred applicant.
    Section 2804.30(h) describes how the BLM will address certain 
situations that could arise from a competitive offer. Under paragraph 
(h)(1) of this section, the BLM retains discretion to reject bids, 
regardless of the amount offered. For example, the BLM may reject a bid 
if there is evidence of conflicts of interest or collusion among 
bidders or if there is new information regarding potential 
environmental conflicts. The BLM will notify the bidder of the reason 
for the rejection and what refunds are available. If the BLM rejects a 
bid, the bidder may administratively appeal that decision (see 43 CFR 
part 4 for details). Under paragraph (h)(2) of this section, the BLM 
may make the next highest bidder the preferred applicant if the first 
successful bidder does not satisfy the requirements under section 
2804.30(f). This allows the BLM to determine a preferred applicant 
without reoffering the land and could save time and money for the BLM 
and potential applicants.
    The BLM may reoffer lands competitively under section 2804.30(h)(3) 
if the BLM cannot identify a successful bidder. If there is a tie, this 
re-offer could either be limited to tied bidders or include all 
bidders. This provides the BLM with flexibility to resolve ties and 
other issues that could arise during a competitive offer process.
    Under section 2804.30(h)(4), if the BLM receives no bids, the BLM 
may re-offer the lands through the competitive process provided for in 
section 2804.30. The BLM may also make the lands available through the 
non-competitive process described in subparts 2803, 2804, and 2805, if 
doing so is determined to be in the public interest. No other comments 
were received, and no additional changes were made to final paragraph 
(h) of this section, except those discussed above.
Section 2804.31 How will the BLM call for site testing for solar or 
wind energy applications?
    This section, which was not in the proposed rule, is added to this 
final rule to describe how the BLM will call for site testing for solar 
and wind energy. This section also explains how the BLM may create a 
new DLA, through the land use planning process described in new section 
2802.11, in response to public interest.
    Under new paragraph (a) of this section, the BLM may call for site 
testing in a DLA by publishing a notice in the Federal Register and may 
also use other notification methods, such as a local newspaper or the 
Internet. Paragraph (a) also specifies what information will be 
included in any public notice issued under the section, including the 
following information: (1) The date, time, and location where site 
testing applications may be sent; (2) The date by which applicants will 
be notified of the BLM's decision on timely submitted site testing 
applications; (3) The legal land description of the area for which site 
testing applications are being requested; and (4) Qualification 
requirements for applicants. The BLM is limiting the testing 
authorizations that would be offered under a call for site testing 
applications under this section to site-specific grants identified 
under section 2801.9(d)(1). This limitation is established to reduce 
the potential for multiple interested parties having overlapping 
applications. The BLM does not intend to use a competitive process for 
the site testing. Rather, the BLM intends to determine whether there is 
competitive interest for solar and wind energy development for these 
public lands. Should there be overlapping testing applications, the BLM 
will notify those applicants of the overlap and may hold a competitive 
offer for that site testing location to determine a preferred 
applicant.
    Paragraph (b) of this section explains that any interested parties 
may request that the BLM hold a call for site testing

[[Page 92152]]

for certain public lands. However, how the BLM responds to those 
requests is at its sole discretion. The ``call for site testing'' may 
be used as a step in the process for lands either inside or outside of 
DLAs. A subsequent step would be the competitive offer for an 
application for a development grant under section 2804.30, or for a 
development lease under subpart 2809, if the area is designated as a 
leasing area, as described in section 2804.31(c).
    Under paragraph (c) of this section, the BLM may determine that 
areas receiving interest from the public may be appropriate to 
establish as a DLA. The BLM may turn an area surrounding the site 
testing into a DLA as described under section 2802.11. Following the 
designation of an area for competitive leasing, the rules described 
under subpart 2809 would be used for any subsequent competitive 
processes in the area. Establishing such an area would be performed by 
following the land use planning process described in the revised 
section 2802.11. This process would be completed during the time that 
testing is being undertaken, which is typically a 3 year process. 
Designating such an area would allow interested developers to benefit 
from the incentives provided by development in a DLA. This approach 
also provides a mechanism for public interest to drive the 
establishment of DLAs.
    Comments: Some comments suggested that the BLM retain the 
discretion to structure the DLA leasing process for wind in accordance 
with a two-phased development approach. The first phase of this 
approach would be a competitive process for site testing. The winner of 
this offer would receive exclusive rights to the parcel offered. The 
BLM would then create a DLA in the area where this competitive offer 
was held. The second phase would be a competitive offer for a lease in 
this newly established DLA.
    Response: The BLM recognizes that potential developers should have 
a clear avenue for helping the BLM identify new DLAs. The BLM added the 
new section 2804.31 to this final rule in direct response to these 
comments. This new section provides another way for developers to 
identify and benefit from the competitive process and DLA incentives 
established in subpart 2809 of this final rule. Providing a mechanism 
for site testing while DLA designation is ongoing will allow developers 
to benefit from the specific data they obtain during testing as they 
evaluate whether a competitive offer or further development of the 
lands is in their interest.
Section 2804.35 How will the BLM prioritize my solar or wind energy 
application?
    Section 2804.35 explains how the BLM will prioritize review of an 
application for a solar or wind energy development right-of-way based 
on the screening criteria for projects outside of DLAs. The BLM will 
evaluate such applications based on the screening criteria in that 
section and categorize the application as high, medium, or low 
priority.
    Through existing guidance, the BLM has established screening 
criteria (see Instruction Memorandum (IM) 2011-061), which identify and 
prioritize land use for solar and wind energy development rights-of-
way. In order to facilitate environmentally responsible development the 
IM directs BLM to consider resource conflicts, applicable land use 
plans, and other statutory and regulatory criteria pertinent to the 
applications and the lands in question. Applications with lesser 
resource conflicts are anticipated to be less costly and time-consuming 
for the BLM to process, and the IM directs that these applications be 
prioritized over those with greater resource conflicts. IM 2011-061 may 
be found at http://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.
    This rule includes criteria similar to those in the IM. The 
codification of these criteria gives certainty to applicants that such 
criteria will not change, and therefore provides more certainty as to 
how an application might be categorized. By specifying these criteria, 
applications could be tailored to fit them in order to streamline the 
processing of an application.
    Comment: One comment indicated that the BLM should clarify the 
proposed rule's application prioritization concept. This comment 
indicated that the proposed rule left several questions unanswered, 
including: (1) How the BLM's staff time will be allocated within field 
staff among projects based on priority and time of submission; (2) 
Whether BLM staff working on a medium-conflict priority project will 
shift focus if a high-priority application is submitted; and (3) 
Whether BLM staff workload will be shifted across different field 
offices if certain field offices have a disproportionate number of 
high-priority applications as compared to others, which may have more 
medium- or low-priority applications.
    Response. This final rule provides the criteria that the BLM will 
use to prioritize applications it receives. This allows potential 
applicants to understand not only how these applications will be 
prioritized, but also how they can submit an application that is more 
likely to become a high priority for the BLM. The BLM's internal 
management and workload processes are not addressed as that is not 
appropriate for a rulemaking. The criteria for determining how workload 
priorities are addressed are more appropriately handled by the policy 
guidance for implementing this final rule. Such guidance will elaborate 
on these points. It should be noted that the BLM will continue to 
process all applications received, but will prioritize staff workload 
based upon these priority categorizations.
    Comments: Comments were received requesting clarity over whether 
leases awarded under subpart 2809 would be given priority over 
applications made outside of DLAs.
    Response: New language has been added to the introductory paragraph 
of this section to clarify that the BLM generally prioritizes the 
processing of leases awarded under subpart 2809 over applications 
submitted under subpart 2804. There are some instances where the BLM 
may determine that it is in the public interest to prioritize the 
processing of an application over the processing of a lease. However, 
the BLM generally intends to prioritize the processing of leases first.
    Comments: Comments were received requesting that the BLM expand on 
the criteria used in the rule and better define and describe the 
resource areas and potential conflicts. Some specific recommendations 
were made by the commenters. Each comment provided a greater level of 
specificity or detail than the proposed rule regarding how the BLM 
should prioritize resource conflicts.
    Response: The descriptions of the resource conflicts in the final 
rule are mostly unchanged, except where noted in this section's 
discussion. The BLM determined that the level of specificity and detail 
recommended by commenters is not appropriate for this final rule. 
Screening applications to prioritize them has only been done by the BLM 
recently. Based upon the BLM's experience, it is better to establish 
broader criteria in this final rule that can then be further refined in 
its internal guidance. National priorities change and BLM continues to 
learn more about the resource conflicts associated with solar and wind 
energy projects. Therefore, the BLM believes that the specific internal 
guidance, rather than regulatory criteria, is more appropriate to 
provide a greater level of specificity and detail as recommended

[[Page 92153]]

by commenters. This approach gives the BLM flexibility to make changes 
as workload or conditions on the ground or in the wind and solar 
industry change. Guidance may need to be updated as national priorities 
change and the BLM better understands these resource conflicts with 
solar and wind energy projects. As part of the rule's implementation, 
the BLM will issue guidance aimed at better describing the BLM's 
considerations and prioritization of applications. This guidance is 
expected to be issued after this final rule is published.
    Section 2804.35(a) identifies criteria for high-priority 
applications, which are given processing priority over medium- and low-
priority applications. These criteria include:
    1. Lands specifically identified as appropriate for solar or wind 
energy development outside DLAs;
    2. Previously disturbed sites or areas adjacent to previously 
disturbed or developed sites;
    3. Lands currently designated as Visual Resource Management (VRM) 
Class IV; and
    4. Lands identified as suitable for disposal in the BLM's land use 
plans.
    The BLM may have identified lands that are appropriate for solar or 
wind energy development, but are not inside DLAs. These lands may 
include areas approved for solar or wind area development for which a 
right-of-way was never issued or an existing right-of-way was 
relinquished.
    The VRM inventory process is a means to determine visual resource 
values. The VRM inventory consists of a scenic quality evaluation, 
sensitivity level analysis, and a delineation of distance zones. Based 
on these three factors, BLM-administered lands are placed into one of 
four VRM classes, with Classes I and II being the most valued, Class 
III representing a moderate value, and Class IV being of least value. 
The BLM assigns VRM classes through the land use planning process, and 
these values can range from areas having few scenic qualities to areas 
with exceptional scenic quality.
    Section 2804.35(b) identifies criteria for medium-priority 
applications, which will be considered before low-priority 
applications. These criteria include:
    1. BLM special management areas that provide for limited 
development or where a project may adversely affect lands having value 
for conservation purposes, such as historical, cultural, or other 
similar values;
    2. Areas where a project may adversely affect conservation lands to 
include lands with wilderness characteristics that have been identified 
in an updated wilderness characteristics inventory;
    3. Right-of-way avoidance areas;
    4. Areas where a project may adversely affect resources listed 
nationally;
    5. Sensitive plant or animal habitat areas;
    6. Lands designated as VRM Class III;
    7. Department of Defense (DOD) operating areas with land use or 
operational mission conflicts; and
    8. Projects with proposed groundwater uses within groundwater 
basins that have been allocated by State water resource agencies.
    Comment: One comment suggested for Criterion 5, that BLM's 
designated priority sage-grouse areas be a low priority and not a 
medium priority.
    Response: The BLM removed the reference to sage-grouse habitat in 
this final rule. In September 2015, the BLM issued the Greater Sage-
Grouse Plan Amendments and Revisions (80 FR 57633, 80 FR 57639). Those 
plans generally excluded priority habitat areas from major right-of-way 
developments, including wind energy. General sage-grouse habitat 
management areas generally fall into the medium-priority application 
category under Criterion 5.
    With the removal of priority sage-grouse habitat from this final 
rule in criterion 5, the BLM also revised the specificity of 
``important eagle use areas'' to read as ``important species use 
areas.'' This revision makes the criterion more broad and applicable to 
all important species areas, and does not unintentionally exclude other 
identified important species areas that are not specifically identified 
for eagles.
    Comments: Several comments were made concerning the above factors. 
For Criterion 2, a comment recommended revising the description of 
``conservation lands'' and excluding Alaska from this requirement.
    Response: The final rule does not revise the section 2804.35(b)(2) 
as recommended in the comment. This final rule does not define 
``conservation lands,'' which include areas of critical environmental 
concern and lands inventoried and managed for wilderness 
characteristics. These lands are often identified for their unique 
characteristics by the BLM to protect scenic, historic, cultural, and 
other natural values. The status of conservation lands is considered by 
the BLM when processing solar and wind energy applications. When the 
BLM considers such lands for wind or solar use, it evaluates the 
impacts and effects to the resources, including those resources for 
which conservation lands are designated. Depending on the proposed 
development, the impacts to the resources for which the lands were 
designated for conservation purposes may be very small. Applications, 
such as those submitted for lands in Alaska, will be reviewed on a 
case-by-case basis.
    Comment: Another comment suggested that Criterion 7 be moved to low 
priority and changed to read ``Areas where the Department of Defense 
has testing, training, or operational mission impacts.''
    Response: The BLM considered the suggestion, but did not revise the 
rule as suggested. The BLM kept this requirement largely unchanged 
because the DOD has overlapping interest in some locations with the BLM 
lands--e.g., withdrawn lands that are transferred to the DOD or have an 
aerial easement--where solar and wind energy development does not pose 
significant adverse impacts to the DOD operations. However, we did 
revise criterion number 7 to read as follows ``Department of Defense 
operating areas with land use or operational mission conflicts.'' The 
BLM will coordinate with the DOD on solar and wind energy applications 
submitted to the BLM that may affect DOD operations.
    Section 2804.35(c) identifies criteria for low priority 
applications, which may not be feasible to authorize due to a high 
potential for conflict. Examples of applications that may be assigned 
low priority would involve:
    1. Lands near or adjacent to areas specifically designated by the 
Congress, the President, or the Secretary for the conservation of 
resource values;
    2. Lands near or adjacent to wild, scenic, and recreational river 
and river segments determined as suitable for wild or scenic river 
status, if project development may have significant adverse effects on 
sensitive viewsheds, resources, and values;
    3. Lands designated as critical habitat for federally designated 
threatened or endangered species under the ESA;
    4. Lands currently designated as VRM Class I or II;
    5. Right-of-way exclusion areas;
    6. Lands currently designated as no surface occupancy areas; and
    Comment: One comment recommended that applications within lands 
under Criterion 2 not be considered a low priority. This comment 
further suggested that an additional criterion be added that would read 
as ``Nothing in this section creates a protective perimeter or buffer 
zone around the special status conservation lands specified in Sections 
2804.35(c)(1) and 2804.35(c)(2). The fact that a proposed activity or 
use on BLM-administered lands outside such special

[[Page 92154]]

status conservation lands can be seen or heard within such special 
status conservation lands shall not accord an application low-priority 
status even if the use or activity is prohibited within the special 
status conservation lands.''
    Response: Nothing in this criterion creates a protective perimeter 
or buffer zone around the areas described in this section and, 
therefore, precludes the BLM's approval of an application that is near 
or adjacent to such areas. In the BLM's experience, solar and wind 
energy development applications are complex and difficult to analyze. 
If a proposed right-of-way would affect such areas, the BLM will 
consider effects when processing the application. Potential impacts to 
these areas and their resources may prove unacceptable, even after 
mitigation.
    The BLM also revised criterion 3 of this section from the proposed 
to final rule, from ``is likely to'' to ``may'' ``. . . result in the 
destruction or adverse modification of that critical habitat.'' This 
revision is necessary because it is difficult to determine based on an 
application what impacts are ``likely.'' However, it is the BLM's 
responsibility to protect critical habitat. Therefore, any application 
that may destroy or adversely affect critical habitat will be a 
categorized as low priority under this final rule.
    The low priority status of applications meeting these criteria 
relates only to the BLM's management of its workload in processing 
applications; it is not a proxy for the BLM's final decision. No other 
comments were received, nor were any changes made to section 2804.35.
Section 2804.40 Alternative Requirements
    Section 2804.40 is added to this final rule in response to comments 
received on the proposed rule.
    Comments: Several comments expressed concern that the BLM's 
proposed requirements were too strict and would be difficult to meet, 
resulting in applications being denied or a holder's authorization 
being terminated. They supported the BLM's reference to a showing of 
good cause to support why a developer was unable to meet the BLM's 
requirement.
    Response: The BLM has added this section to the final rule due to 
the number of comments received discussing the BLM's requirements that 
had no specific provision allowing a developer to show good cause why 
an alternative to a regulatory requirement should be approved.
    Section 2804.40 expands on the BLM's show of good cause provision 
that was in the proposed rule with several different new requirements. 
This new provision replaces the specific provisions originally proposed 
and now applies to all rights-of-way and to all requirements the BLM 
has established under this subpart. An applicant may request an 
alternative requirement from the BLM by following the process outlined 
in this section. A similar provision is added in section 2805.12(e). 
That provision is discussed in that section's preamble discussion.
    Paragraph (a) of this section notes that the requester must show 
good cause for its inability to meet a particular requirement. An 
applicant may request an alternative requirement for any requirement in 
this subpart. Requirements include surveys or studies to be completed, 
timeframes in which to provide information, development and reclamation 
plans, fees, and other appropriate requirements.
    Paragraph (b) of this section states that you must suggest an 
alternative requirement to the BLM and explain why the alternative 
requirement is appropriate. The BLM will not approve an alternative 
requirement without an explanation from the right-of-way holder as to 
why the current requirement is inappropriate. When implementing this 
final rule, the BLM intends to issue guidance on what constitutes an 
``appropriate'' alternative requirement.
    Paragraph (c) of this section states that a request for an 
alternative requirement must be in writing and be received by the BLM 
in a timely manner. In order for the request to be timely, the BLM must 
have received it prior to the deadline originally given for the 
relevant requirement. As explained in the final rule, any such request 
is not approved until you receive BLM approval in writing. The BLM may 
provide written approval through a letter, email or other written 
means.

Subpart 2805--Terms and Conditions of Grants

Section 2805.10 How will I know whether the BLM has approved or denied 
my application, or if my bid for a solar or wind energy development 
grant or lease is successful or unsuccessful?
    The heading for section 2805.10 is revised to read as stated above. 
This section is updated to reflect the new competitive process for 
lands inside DLAs (see subpart 2809) by stating that a successful 
bidder for a solar or wind development lease on such lands will not 
have to submit a SF-299 application. Instead, in these circumstances, 
the successful bidder will have the option to sign the lease offered by 
the BLM.
    Paragraph (a) of this section contains the language from the 
existing regulations explaining how the BLM will notify you about your 
application. This paragraph is revised to add a new provision requiring 
that the BLM send the successful bidder a written response, including 
an unsigned lease for review and signature. The BLM will notify 
unsuccessful bidders, and any unused funds submitted with their bids 
will be returned. If an application is rejected, the applicant must pay 
any processing costs (see section 2804.14).
    In paragraph (a) of this section of the final rule, the BLM changed 
``will send you an unsigned lease'' to ``may send you an unsigned 
lease,'' for consistency with revisions to section 2809.15(a). See the 
preamble for that section for more discussion.
    Paragraphs (b) introductory text and (b)(1) and (2) of this section 
parallel paragraphs (a)(1) and (2) of the existing regulations, and 
describe the unsigned grant or lease that the BLM will send to you for 
approval and signature.
    Paragraph (b)(3) of this section specifies that in accordance with 
section 2805.15(e), the BLM may make changes to any grant or lease, 
including to leases issued under subpart 2809, as a result of the 
periodic review required by this section. This provision is necessary 
because it makes clear why the BLM would amend a lease issued under 
subpart 2809. The terms and conditions of a right-of-way grant or lease 
may be changed in accordance with section 2805.15(e) as a result of 
changes in legislation or regulation, or as otherwise necessary to 
protect public health or safety or the environment. Because any changes 
to the terms and conditions of a right-of-way grant or lease would 
occur after the completion of the agency action (the BLM's decision to 
approve the right-of-way), the BLM generally anticipates making the 
change through a separate action, generally initiated at the BLM's 
discretion and requiring its own decision-making process.
    Sections 2805.10(c), (d) introductory text, and (d)(1) and (2) and 
2805.20(d)(3) contain the language from existing sections 2805.10(b), 
(c) introductory text, and (c)(1) and (2) and 2805.20(c)(3). These 
provisions remain unchanged from existing regulations. No comments were 
received and no changes were made from the proposed rule to the final 
rule.
Section 2805.11 What does a grant contain?
    Existing section 2805.11(b) explains how the duration of each 
potential right-

[[Page 92155]]

of-way is determined. This paragraph is revised to include specific 
terms for solar and wind energy authorizations, because they are unique 
and different from other right-of-way authorizations. Where the 
proposed rule discussed only wind energy testing in some portions, the 
final rule is changed to include both solar and wind for each type of 
authorization. This revision is made in connection with changes made 
under section 2801.9(d), where comments requested that site- and 
project-area testing authorizations include solar energy, and not be 
exclusive to wind.
    Section 2805.11(b)(2)(i) limits the term for a site-specific grant 
for testing and monitoring of wind energy potential to 3 years. Under 
this rule, this type of grant will be issued only for a single 
meteorological tower or study facility and will include any access 
necessary to reach the site. This authorization cannot be renewed. If a 
holder of a grant wishes to keep its site for additional time, it must 
reapply. These authorizations are intended for testing, not energy 
generation, and are limited to an area large enough for only a single 
tower or study facility. If a developer wishes for a larger study area, 
it can apply for a project-area testing grant under paragraph 
(b)(2)(ii) of this section.
    Section 2805.11(b)(2)(ii) provides for an initial term of 3 years 
for project-area energy testing. Such grants may include any number of 
meteorological towers or study facilities inside the right-of-way. Any 
renewal application must be submitted before the end of the third year 
if a proponent wishes to continue the grant. For the BLM to be able to 
renew such an authorization, the project-area testing grant holder must 
submit two applications, one for renewal of the project-area testing 
grant and one for a solar or wind energy development grant, plus a POD 
for the facility covered by the development application. Renewals for 
project-area testing grants may be authorized for one additional 3-year 
term.
    Section 2805.11(b)(2)(iii) provides for a short-term grant for all 
other associated actions, such as geotechnical testing and other 
temporary land-disturbing activities, with a term of 3 years or less. A 
renewal of this grant may be issued for an additional 3-year term.
    Section 2805.11(b)(2)(iv) provides for an initial grant term of up 
to 30 years for solar and wind energy grants outside of DLAs, with a 
possibility of renewal in accordance with section 2805.14(g). A holder 
must apply for renewal before the end of the authorization term.
    Section 2805.11(b)(2)(v) provides for a 30-year term for solar and 
wind energy development leases issued under subpart 2809. A holder may 
apply for renewal for this term and any subsequent terms of the lease 
before the end of the authorization.
    Comment: A comment suggested that the standard term be 40 years for 
both solar and wind energy grants (outside of DLAs) and up to 100 years 
for leases (inside of DLAs), with a condition of the grant or lease 
providing for renegotiation every 10 years. Other comments suggested 
longer terms for grants and leases.
    Response: The final rule remains as proposed. The comment did not 
provide any justification for adding the additional years to the term 
of the grant or lease or explain why the additional time is necessary. 
Generally, it takes 1 year to secure a PPA after a project is 
authorized and an additional 2 to 3 years to construct. Since the term 
of a PPA is generally 20 to 25 years, the BLM believes that a 30 year 
period is sufficient to cover the developer's needs for constructing 
and operating a facility, while protecting the public lands from 
unnecessary burdens. If a longer term is suitable or desired by a 
developer, an application to renew the grant or lease may be submitted 
to the BLM pursuant to the applicable requirements.
    For all grants and leases under this section with terms greater 
than 3 years, the actual term will include the number of full years 
specified, plus the initial partial year, if any. This provision 
differs from the grant term for rights-of-way authorized under the MLA 
(see the discussion of section 2885.11 later in this preamble) as FLPMA 
rights-of-way may be issued for terms greater than 30 years, while an 
MLA right-of-way may be issued for a maximum term of 30 years and a 
partial year would count as the first year of a grant.
    Section 2805.11(b)(3) contains the language from section 
2805.11(b)(2) of the existing regulations, but further requires that 
grants and leases with terms greater than 3 years include the number of 
full years specified, plus the partial year, if any. A grant that is 
issued for a term of 3 years will expire on its anniversary date, 3 
years after it was first issued. This change affects the duration of 
all FLPMA right-of-way grants that are issued or amended after the 
final rule becomes effective. This change provides specific direction 
for consistently calculating the term of a right-of-way grant or lease.
    No other comments were received, nor were any changes made to this 
section.
Section 2805.12 What terms and conditions must I comply with?
    Section 2805.12 lists terms and conditions with which all right-of-
way holders must comply. This section is reorganized to better present 
a large amount of information. Paragraph (a) of this section carries 
forward, without adjustment, most of the requirements from the existing 
regulations found at section 2805.12. Paragraph (b) of this section 
refers the reader to new section 2805.20, which explains bonding 
requirements for right-of-way holders. Paragraph (c) of this section 
contains specific terms and conditions for solar or wind energy right-
of-way authorizations. Paragraph (d) describes specific requirements 
for energy site or project testing grants. Paragraph (e) is a show of 
good cause condition that is added to the final rule consistent with 
the provisions added as new section 2804.40. All requirements of 
paragraph (a) are part of the existing regulations and are not 
discussed in this preamble unless we received a substantive comment.
    Comments: Two general comments were received concerning this 
section. One comment stated that terms and conditions for leasing 
public lands for power generation should be the same regardless of the 
power source. The second comment suggested that the free market should 
drive success, not government policy on the terms and conditions of an 
authorization.
    Response: The BLM processes each development proposal for use of 
public lands on a project-by-project basis. All of the terms and 
conditions in section 2805.12 would apply to power generation 
authorizations, regardless of the technology used. However, based on 
the BLM's experience with solar and wind energy developments, 
additional terms and conditions are required for such authorizations on 
public lands because the different types of technology may have varying 
impacts on the public lands and the resources they contain. For 
example, a string of wind turbines or an array of solar panels will 
have a different footprint, and accordingly will have a different 
impact on the lands and resources than other energy generation types.
    Separately, the free market alone (a market without oversight), 
cannot determine the use of the public lands, as those lands are 
managed by the BLM on behalf of the American public. The terms and 
conditions of each BLM authorization address the protection of the 
public lands and resources, consistent with the BLM's responsibility to 
manage the public lands under

[[Page 92156]]

FLPMA's multiple use and sustained yield mandate. Without regulations 
that ensure the necessary terms and conditions are put in place, 
development of the public lands could result in the unacceptable loss 
of the public lands and the resources they contain.
    The BLM regularly engages the public, including private businesses, 
to seek comments and input on the BLM's administration of the public 
lands. The BLM will continue to do so through this rulemaking and its 
other decision-making processes.
    Section 2805.12(a)(5) contains language from existing section 
2805.12(e) with two small changes. The word ``phase'' was changed to 
``stage'' to prevent confusion with the use of ``phase-in of the MW 
capacity fee'' and similar phrases in this rule.
    This paragraph also prohibits discrimination based on sexual 
orientation. Adding sexual orientation as a protected class in this 
regulation is consistent with the policy of the Department that no 
employee or applicant for employment be subjected to discrimination or 
harassment because of his or her sexual orientation. See 373 
Departmental Manual 7 (June 5, 2013). Several comments were received 
either for or against modifying this paragraph.
    Comments: One comment recommended that additional language be added 
to identify ``pregnancy and gender relations'' as protected classes, 
while another recommended deleting ``sexual orientation'' from the 
rule.
    Response: We did not revise the rule as a result of these comments. 
This paragraph refers to existing Federal law prohibiting 
discrimination and does not add or expand upon requirements under 
existing law.
    Comments: Some comments suggested that the BLM include greater 
connection between the rule and landscape-level mitigation as described 
in Secretarial Order 3330 and subsequent reports, and be consistent 
with the BLM's IM 2013-142, interim policy guidance for offsite 
mitigation.
    Response: Developing landscape-level mitigation policy for use of 
the public lands is an ongoing BLM effort. Examples of landscape 
mitigation plans are the solar regional mitigation strategies. The BLM 
is currently developing regional mitigation strategies for many of the 
SEZs established as part of the Western Solar Plan. For an example of a 
complete mitigation plan, see the BLM's Dry Lake regional mitigation 
strategy known as Technical Note 444, which may be found on the BLM's 
Web site at: http://www.blm.gov/style/medialib/blm/wo/blm_library/tech_notes.Par.29872.File.dat/TN_444.pdf. Since more detailed 
requirements and guidance will be addressed in the BLM's policies, 
handbooks, and other forms of guidance that are currently under 
development, the BLM did not make any changes in response to this 
comment.
    Section 2805.12(a)(8)(iv) is added to the final rule based upon 
comments on the proposed rule to incorporate clear measures that are 
consistent with landscape-level mitigation and the BLM's IM 2013-142 
for offsite mitigation. The added provision clarifies that the BLM can 
require offsite mitigation to address residual impacts associated with 
a right-of-way. Any compensatory mitigation requirements would be 
established through a land use planning decision or implementation 
decision, possibly relying on a previously developed strategy, such as 
a solar regional mitigation strategy.
    Section 2805.12(a)(8)(vi) requires compliance with project-specific 
terms, conditions, and stipulations, including proper maintenance and 
repair of equipment during the operation of a grant. This is an 
existing policy requirement affecting all rights-of-way and in this 
rule is expanded to include leases offered under revised subpart 2809. 
In addition, this provision requires a holder to comply with the terms 
and conditions in the POD. This may include project-specific conditions 
to maintain the project in a manner that will not unnecessarily harm 
the public land by poor maintenance and operational practices. Any 
holder that does not comply with the POD approved by the BLM would be 
subject to remedial actions under section 2807.17, which may include 
the suspension or termination of the grant or lease
    Comment: Another comment suggested adding language that the BLM 
implement a condition to begin early coordination with State fish and 
wildlife offices.
    Response: In the proposed rule, the BLM identified two pre-
application meetings under section 2804.10. One meeting was focused on 
early coordination among the BLM, applicant, and other Federal, State, 
and tribal authorities. This early coordination requirement has been 
carried forward in the final rule under section 2804.12 as part of a 
preliminary application review meeting for proposed solar and wind 
energy projects and transmission lines with a capacity of 100 kV or 
more. No other change has been made in the final rule. Early 
coordination among Federal and State wildlife offices has been carried 
forward into the final rule.
    Paragraph (a)(8)(vii) of this section discusses the use of State 
standards and requires the right-of-way holder to comply with such 
standards when they are more stringent than Federal standards.
    Comment: A comment suggested that we add the word ``environmental'' 
so that the paragraph would now read, ``When the State [environmental] 
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.''
    Response: Under FLPMA, the BLM considers an array of State 
standards, including those relating to public health and safety. Under 
the existing regulations, the BLM may apply State standards when those 
standards do not conflict with Federal law or policy for the 
administration of the public lands. No revision was made to the text of 
this paragraph in response to this comment.
    Paragraph (a)(8)(viii) of this section requires that a grantee or 
lessee grant the BLM an equivalent authorization for an access road 
across the applicant's land if the BLM determines that a reciprocal 
authorization is needed in the public interest and the authorization 
the BLM issues to you is also for road access.
    Comment: One comment was concerned that the BLM was proposing to 
revise section 2804.25 rule to read, ``If your application is for a 
road, BLM will determine if it is in the public interest to require you 
to grant the U.S. an equivalent authorization across land you own.'' 
The comment raised concern that section 2805.12(a)(8) appeared to be 
directed at landowners and not utility companies. The comment expressed 
concern about waiving rental payments and who would be responsible for 
maintenance and repair of damage caused to the road.
    Response: The BLM did not propose to revise section 2804.25 to read 
as noted. The quoted text from the comment is from regulations that 
were formerly found at existing section 2804.25(d)(3) and are now 
identified as section 2804.25(e)(6) of this final rule. The paragraph 
was redesignated in this final rule after the rest of the section was 
revised. In section 2805.12, the requirement regarding reciprocal 
rights-of-way has also been redesignated as section 
2805.12(a)(8)(viii).
    This text in the final rule, which remains unchanged from the text 
in the existing regulation, is used by the BLM for administration of 
the public lands. Where there are inter-mixed or

[[Page 92157]]

adjoining private and public lands, the issuance of reciprocal right-
of-way authorizations would allow the BLM to cross your land to inspect 
and administer the public lands as well as grant you access across the 
public lands for purposes of ingress and egress to your property. The 
reciprocal authorization may include use for the public to access your 
land, but does not require such an authorization as the intended use is 
for the BLM to utilize the right-of-way. A reciprocal right-of-way is 
not intended as a public use access, such as those issued by a State's 
Department of Transportation or the Federal Highway Administration. 
Each reciprocal authorization is evaluated on a case-by-case basis, and 
additional questions may be addressed at that time.
    Comment: A comment raised further concerns about the proposed 
requirements of section 2805.12(a)(3), which read ``Build and maintain 
suitable crossings for existing roads and significant trails that 
intersect the project,'' noting that this should only be applicable if 
the roads or trails are used by the grant holder. The comment also 
noted that the grant holder should not be responsible for repairing or 
maintaining these roads or trails if they have not caused or 
contributed to damages.
    Response: The BLM did not propose to revise the terms and 
conditions found at section 2805.12 to read as noted in the comment. 
The quoted text is from section 2805.12(c) of the existing regulations, 
now identified as section 2805.12(a)(3) of this final rule. The 
paragraph is redesignated in the final rule for readability, and is not 
amended further.
    This condition is retained from the existing regulations as the BLM 
must allow for multiple-use of the public lands. Should a right-of-way 
be granted, it does not displace other uses of the public land, 
including use of existing trails and other crossing that may intersect 
the project. The BLM will require that such trails and accesses are 
maintained by the right-of-way grant holder only to the extent that 
they have impacted it. If there is damage to the trail or access that 
is not the fault of the grant holder, then they will not be required to 
repair or fix it.
    Comment: A comment raised concerns over the proposed requirements 
of section 2805.12(a)(4), ``Do everything reasonable to prevent and 
suppress wildfires on or in the immediate vicinity of the right-of-way 
area.'' The comment noted that utilities frequently perform fire 
prevention activities as part of regular maintenance, which are 
frequently delayed by the BLM. The comment further noted that the grant 
holder should not be responsible for performing activities outside of 
the right-of-way, and that the fighting of fires should be the 
responsibility of the BLM, not the grant holder.
    Response: The BLM did not propose to revise the terms and 
conditions found at section 2805.12 to read as noted by the comment. 
The quoted text is from regulations that were formerly found at 
2805.12(d) and are now identified as section 2805.12(a)(4) of this 
final rule. The paragraph is redesignated in the final rule for 
readability. This condition is retained from the existing regulations 
in this final rule without amendment. The condition requires the holder 
of an authorization to do everything that is reasonable to prevent or 
suppress wildfires. This condition is not intended to require a grant 
holder to perform actions outside of a right-of-way, unless the actions 
are related to the right-of-way, such as trimming trees as a component 
of BLM-authorized regular maintenance on an overhead transmission line. 
Other actions outside of the right-of-way, which are not related to the 
right-of-way, would not be the holder's responsibility.
    Additionally, this condition does not delay actions that are 
already permitted in the right-of-way grant, which would be completed 
by a grant holder to prevent or suppress wildfires. However, actions 
proposed to be taken by a grant holder may be delayed if they are 
outside the permission granted by the BLM.
    Comment: One comment raised concerns over the BLM proposing to 
revise the terms and conditions to read, ``Assume full liability if 
third parties are injured or damages occur on or near the right-of-
way.'' The comment raised concerns that this appeared to be an 
unreasonable requirement since a grant-holder does not generally have 
authority to enforce laws. The comment also said that grant holders 
could be responsible for damages related to faulty equipment, but 
should not be responsible for actions outside of lands they are 
authorized to use, and for actions that are not their own, such as 
those by vandals or even the BLM.
    Response: The BLM did not propose to revise the terms and 
conditions found at section 2805.12 to read as noted. The quoted text 
is from regulations that were formerly found at section 2805.12(h) and 
are now identified as section 2804.12(a)(7) of this final rule. The 
paragraph is redesignated in the final rule for readability.
    The condition is retained from existing regulations in this final 
rule without amendment. The condition does not require that a holder 
should enforce the laws and regulations on public lands. However, the 
condition provides notice that, when agreeing to be a right-of-way 
holder on the public lands, the grant holder assumes responsibility for 
the permitted use. A holder assumes the responsibility for any injury 
or damages caused that are associated with their right-of-way. Injury 
or damages could be those that are directly caused by the grant holder, 
such as by electrocution or collision with a permitted use, or 
indirectly, such as those from flood events which can carry objects 
outside of the permitted right-of-way, but are still the responsibility 
of the grant holder.
    Section 2805.12(a)(15) requires that a grant holder or lessee 
provide, or make available upon the BLM's direction, any pertinent 
environmental, technical, and financial records for inspection and 
review. Any confidential or proprietary information will be kept 
confidential to the extent allowed by law. Review of the requested 
records facilitates the BLM's monitoring and inspection activities 
related to the development it authorizes. The records will also be used 
to determine if the holder is complying with the requirements for 
holding a grant under section 2803.10(b).
    Comments: Several comments stated that: (1) The BLM does not have 
authority to make such requirements; (2) In the case of a PPA or other 
similar type agreements, the BLM has no need to see such documents; and 
(3) These documents relate to private party transactions and are 
subject to confidentiality provisions.
    Response: The BLM does not need all of the documents described in 
this paragraph for every right-of-way. However, in some circumstances 
the BLM might need these documents when processing an application or 
where the BLM may need verification that such an agreement has been put 
in place, such as if a variable offset is to be awarded under the 
competitive leasing process inside a DLA. Information that is 
proprietary or confidential that is submitted to the BLM will be 
treated as such to the extent allowed by law. The BLM will require 
information under this provision, including PPAs, only if it is 
necessary for the BLM's administration of an authorization.
    Section 2805.12(b) requires that grant holders and lessees comply 
with the bonding requirements of added section 2805.20. The former 
bonding requirements were lacking in detail and this new section will 
help clarify the requirements of a grant or lease. This paragraph is 
revised in this final rule to

[[Page 92158]]

state that the BLM will not issue a Notice to Proceed or give written 
approval until the grant holder complies with the bonding requirements 
of section 2805.20. This revision clarifies that when required by the 
BLM, a bond must be obtained before beginning ground-disturbing 
activities. No comments were received and no other changes made from 
the proposed rule to the final rule.
    Section 2805.12(c) identifies specific terms and conditions for 
grants and leases issued for solar or wind energy development, 
including those issued under subpart 2809. Several comments were 
received on this paragraph and these are discussed at the end of 
section 2805.12(c)(6). Minor revisions are made from the proposed to 
the final rule to improve readability, but any significant changes are 
discussed in detail in this preamble.
    Section 2805.12(c)(1) prohibits ground-disturbing activities until 
either a notice to proceed is issued under section 2807.10 or the BLM 
states in writing that all requirements have been met to allow 
construction to begin. Requirements may include the payment of rents, 
fees, or monitoring costs, and securing a performance and reclamation 
bond. The BLM will generally apply this requirement to all solar and 
wind rights-of-way due to the large scale of most of these projects.
    Section 2805.12(c)(2) requires that construction be completed 
within the timeframes provided in the approved POD. Construction must 
begin within 24 months of the effective date of the grant authorization 
or within 12 months, if approved as a staged development. This section 
is revised from the proposed to final rule to include a ``or as 
otherwise authorized by the BLM.'' This revision is consistent with 
other sections of this final rule where the BLM retains discretion to 
approve or authorize different timeframes or requirements. The BLM may 
approve a request for an alternative requirement (see section 
2805.12(e)), but the BLM may also authorize a different timeframe in 
the approved POD. The BLM made similar revisions to the requirements 
described in section 2805.12(c)(3)(ii) and (iii). Further discussion of 
a staged development is found under section 2806.50.
    Section 2805.12(c)(3) describes the requirements for projects that 
include staged development in the POD, unless other agreements have 
been made between the developer and the BLM. Minor revisions are made 
from the proposed to the final rule to improve readability, but any 
significant changes are discussed in detail in this preamble.
    Under paragraph (c)(3)(i) of this section, a developer must begin 
construction of the initial phase of development within 12 months after 
issuance of the Notice to Proceed, but no later than 24 months after 
the effective date of the right-of-way authorization.
    Paragraph (c)(3)(ii) of this section requires that each stage of 
construction after the first begin within 3 years after construction 
began for the previous stage of development. Construction must be 
completed no later than 24 months after the start of construction for 
that stage of development, unless otherwise authorized by the BLM.
    These time periods were selected after evaluating the timing of 
other completed energy development projects. These timeframes will help 
ensure that the public land is not unreasonably encumbered by these 
large authorizations, which are exclusive to other rights during the 
construction period of the project.
    Section 2805.12(c)(3)(iii) limits the number of development stages 
to three, unless the BLM specifically approves additional stages. The 
BLM will generally approve up to three stages for solar and wind energy 
development. An applicant may request approval of additional stages 
with a showing of good cause under section 2804.40. This request must 
be accompanied by a supporting discussion showing good cause for your 
inability to meet the conditions of the right-of-way. A grant holder 
may request alternative stipulations, terms, or conditions under 
section 2805.12(e). The BLM revised paragraph (c)(3)(iii) of this 
section, from the proposed to final rule by removing ``in advance'' 
when referring to the BLM's approval. The requirement in this section 
is unchanged from the proposed rule but is rephrased for consistency 
with other sections of the final rule. The addition of 2805.12(e) 
provides additional information about the requests for alternative 
requirements.
    Paragraphs (c)(4), (5), and (6) of this section contain specific 
requirements for diligent development and the potential consequences of 
not complying with these requirements.
    Section 2805.12(c)(4) requires the holder to maintain all onsite 
electrical generation equipment and facilities in accordance with the 
design standards of the approved POD. This paragraph reiterates the 
requirement to comply with the POD that must be submitted as scheduled 
under section 2804.12(c)(1).
    Section 2805.12(c)(5) provides requirements for repairing or 
removing damaged or abandoned equipment and facilities within 30 days 
of receipt of a notice from the BLM. The BLM will issue a notice of 
noncompliance under this provision only after identifying damaged or 
abandoned facilities that present an unnecessary hazard to the public 
health or safety or the environment for a continuous period of 3 
months. Upon receipt of a notice of noncompliance under this provision, 
an operator must take appropriate remedial action within 30 days, or 
show good cause for any delays. Failure to comply with these 
requirements may result in suspension or termination of a grant or 
lease.
    Under section 2805.12(c)(6), the BLM may suspend or terminate a 
grant if the holder does not comply with the diligent development 
requirements of the authorization. The citation in this section is 
revised in the final rule from section 2807.17 to sections 2807.17 
through 2807.19. Sections 2807.18 and 2807.19 are existing sections of 
the regulations, which are not a part of this final rule, that describe 
the BLM's processes for suspending or terminating rights-of-way. This 
revision does not represent a change in meaning, but provides more 
information for the reader.
    Comments: Comments disagreed with the proposed rule and suggested 
that it would require arbitrary and disparate terms and conditions 
between rights-of-way issued under subpart 2804 and those issued under 
subpart 2809. The comments stated that the authority granted by FLPMA 
does not authorize the BLM to penalize developers who submit an 
application for and obtain BLM approval for rights-of-way on other BLM 
managed lands (i.e., non-DLAs).
    Response: The BLM disagrees. A focus of the proposed and final rule 
is to encourage solar and wind energy development inside DLAs. 
Encouraging DLA developments is meant to locate large scale 
developments in areas with lesser impacts to resources and uses of the 
public lands. Incentivizing the use of DLAs is achieved by increasing 
certainty, longevity, and reducing some costs in a DLA relative to 
other areas. The proposed rule does not increase costs and uncertainty 
outside of the DLAs. In areas outside of DLAs, the BLM is simply 
incorporating its processes established by policy for solar and wind 
energy. The BLM believes that the final rule will reduce costs and 
increase certainty inside of DLAs and maintain the streamlined 
application process for lands outside of DLAs.
    Comments: Some comments stated that a CFR reference cited in 
2805.12(c)(6)(iii) was incorrect.

[[Page 92159]]

    Response: The comment is correct and this reference is revised to 
paragraph (c)(7) of this section. Furthermore, another citation was 
updated in this paragraph, referring to submitting a written request 
for an extension for a timeline in a POD. The updated reference now 
cites paragraph (e) of this section where a right-of-way holder may 
request an alternative requirement.
    Comment: Some comments opposed the requirement in section 
2805.12(c)(7) that a bond include Indian cultural resource 
identification, protection, and mitigation. The comments assert this is 
in error because there are no distinguishing factors that can justify 
requiring cultural resource bonding for non-DLA authorizations, but not 
for DLA authorizations.
    Response: Paragraph (c) applies to all solar and wind energy 
rights-of-way, both leases issued under subpart 2809 and grants issued 
under subpart 2804. This requirement does not distinguish between 
requirements for grants and leases.
    However, the BLM recognizes that these costs are difficult to 
determine and revised this section to specifically include ``the 
estimated costs of cultural resource and Indian cultural resource 
identification, protection, and mitigation for project impacts.'' This 
revision helps tie the required costs to the impacts of the project.
    Comment: One comment suggested that bonding for cultural, scenic, 
and wildlife impacts adds unnecessary risk to a project. The comment 
stated that bonding for such impacts is unnecessary for solar 
activities, as the majority of mitigation expenses are incurred during 
construction, and operation expenses are minimal and easily covered by 
fixed PPA revenues in excess of low operational costs.
    Response: The bond instrument required by the BLM is necessary to 
protect public lands and their resources. A minimum bond and standard 
bond amount are provided in sections 2805.20 and 2809.18 of this final 
rule. Including these amounts in the rule provide the opportunity for a 
developer to incorporate these costs in their project plan, reducing 
unexpected and unnecessary risk to a project that may keep it from 
proceeding.
    The bonding requirement for cultural, scenic, and wildlife impacts 
protects the public land resources when developing the land for various 
uses. For example, possible damages to the public land that would need 
to be covered by a bond could include surface disturbing activities, 
recontouring of soils to alter the flow of water, and the removal of 
vegetation. Other damages could be those to resources outside the 
right-of-way that are diminished, such as water supply or biological 
resources. No revision to this paragraph is made as a result of this 
comment.
    Comment: One comment suggested that the BLM's timeframes are too 
restrictive and would be a disincentive to the development of solar and 
wind energy on public lands.
    Response: No changes were made to this provision; however, the 
addition of section 2805.12(e) allows adjustments of the timeframes, 
provided that a good cause rationale is submitted by the project 
proponent and the BLM approves the request. No other comments were 
received or changes made to the paragraphs under section 2805.12(c).
    Section 2805.12(d) describes specific requirements for energy site 
or project testing grants. Because these are short term grants, for 
three years or less, the BLM believes it is appropriate to require 
facilities to be installed within 12 months of the effective date of 
the grant. All equipment must be maintained and failure to comply with 
any terms may result in termination of the authorization.
    No comments were received on this paragraph. However, two revisions 
have been made as follows. The word ``wind'' has been removed from the 
text of the paragraph describing the energy site- and project-area 
testing grants, to make it clear that these grants are not limited to 
wind project proponents, but are also available to solar project 
proponents. This change is consistent with other parts of the final 
rule where commenters requested that the BLM make the site- and 
project-area testing grants available for both solar and wind energy. 
Additionally, the language from the proposed rule that required a 
showing of good cause for an extension of project timelines has been 
revised to direct the reader to paragraph (e) of this section in the 
final rule, which governs reporting requirements for instances of 
noncompliance and requests for alternative stipulations, terms, or 
conditions. No other comments were received and no additional changes 
were made to this section.
    Section 2805.12(e) addresses reporting requirements for instances 
of noncompliance, and requests by project proponents for alternative 
stipulations, terms, or conditions of the approved right-of-way grant 
or lease. This provision was added to the final rule based on comments 
received. This section is similar to section 2804.40 of the final rule, 
but that section applies to subpart 2804 of the final rule and the 
application process for a grant, whereas this section applies to grant 
and lease holders and applies to the terms, conditions, and 
stipulations of all approved authorizations. Under this section, a 
holder must notify the BLM of noncompliance, and may request an 
alternative requirement during project operation.
    Paragraph (e)(1) of this section provides that a holder of a right-
of-way must notify the BLM as soon as the holder either anticipates 
noncompliance or learns of its noncompliance with any stipulation, 
term, or condition of the approved right-of-way grant or lease. 
Notification to the BLM must be in writing and show good cause for the 
noncompliance, including an explanation of the reasons for failure.
    Comments: As noted previously in the preamble of this final rule, 
the BLM participated in stakeholder engagement meetings as part of the 
BLM's regular course of business. During some such meetings, 
stakeholders clarified the concerns they had previously raised through 
written comments on the proposed rule. Specifically, industry 
representatives expressed concern that the rule did not include 
provisions giving the BLM flexibility to respond to project-specific or 
regional circumstances by, for example, adjusting capacity factors 
based on technical considerations or adjusting county zone assignments 
using land value assessments, which could be more accurate than NASS 
land values in a given area.
    Industry also provided additional information regarding its concern 
that the proposed rule's bonding requirements were too rigorous. 
Commenters suggested that the BLM add provisions to the rule that 
authorize it to consider other factors when determining a bond amount, 
instead of only the reclamation cost estimate.
    Response: The BLM agrees that it may be reasonable to set 
alternative terms, conditions, and stipulations, and to consider other 
factors in setting bond amounts on a project-specific or regional 
basis. After considering this comment, the BLM included a new provision 
in the final rule, section 2805.12(e)(2), under which a grant or lease 
holder may request an alternative to the terms, conditions, and 
stipulations of their authorization, including requesting an 
alternative bonding requirement. The requested alternative requirement 
could include those identified in a project's POD, the right-of-way's 
terms and conditions, or other such requirements, such as a request for 
an extension of time. A request for an alternative payment

[[Page 92160]]

requirement may include a request for an alternative net capacity 
factor or per acre zone rate consideration. Requests may be submitted 
after notification has been provided as required in paragraph (e)(1) of 
this section or at the holder's request. However, this section 
specifically notes that any request for an alternative must comply with 
applicable law in order to be considered.
    The BLM recognizes that some requests, such as those related to 
acreage rent, may be appropriately considered on a larger, regional 
scale. Under the authority in section 2806.70 of this final rule, 
therefore, the BLM may adjust the acreage rent schedule or MW capacity 
fee applicable to a particular project or in a given area, so long as 
the BLM determines such changes are based on reasonable methods for 
determining appropriate values for the use of public land resources.
    With respect to bonding requirements, the BLM recognizes it may be 
appropriate to consider other factors in addition to the reclamation 
cost estimate, such as the salvage value of project components. The BLM 
amended both sections 2805.12(e)(2) and 2805.20(a)(3) to accommodate 
that possibility, as discussed further in the section of this preamble 
that discusses section 2805.20(a)(3). Any proposed alternative to 
bonding must provide the United States with adequate financial security 
for the potential liabilities associated with any particular grant or 
lease. For example, a request for an alternative bonding requirement 
may include a holder's request for consideration of project salvage 
values, but must also include the cost for processing and handling 
salvage actions.
    No alternative requirements request is approved unless and until 
you receive BLM approval in writing.
    Comments: As discussed in section 2804.40, several comments on 
various rule provisions expressed concern that a developer may not be 
able to meet BLM requirements. Comments said that failure to meet such 
requirements may be due to delays or environmental changes outside a 
developer's control, statutory or policy changes, or other 
unanticipated situations.
    Response: The BLM believes that new paragraph (e) of this section 
addresses these concerns. The BLM intends to issue policies to address 
how it will implement these provisions following the issuance of this 
final rule. Consistent use of the final rule's requirements and clear 
expectations will be outlined in these policies, to include the 
provisions of this paragraph and those of section 2804.40.
Section 2805.14 What rights does a grant convey?
    The BLM has added two new paragraphs to section 2805.14, both 
addressing applications for renewal of existing grants or leases. 
Paragraph (g) states that a holder of a solar or wind energy 
development grant or lease may apply for renewal under section 2807.22. 
Paragraph (h) of this section states that a holder of an energy 
project-area testing grant may apply for a renewal of such a grant for 
up to an additional 3 years, provided that the renewal application also 
includes an energy development application. Paragraph (g) is added to 
this rule to explain how one may apply for a solar or wind energy 
development grant or lease renewal. The BLM added paragraph (h) to 
recognize that project-area testing may be necessary for longer than an 
initial 3-year term, even after an applicant believes that energy 
development at a proposed project site is feasible. Revisions in this 
final rule were made consistent with those made in section 2801.9 for 
project-area grants.
    The proposed rule stated that specific project-area grants were for 
only wind energy, but based upon comments received, project-area grants 
have been expanded to include project-area testing grants for solar 
energy as well. No other comments were received or additional changes 
made to this section.
Section 2805.15 What rights does the United States retain?
    In section 2805.15, the word ``facilities'' and a reference to 
section 2805.14(b) are added to the first sentence of paragraph (b) to 
clarify that the BLM may require common use of right-of-way facilities. 
The sentence now makes clear that the BLM retains the right to 
``require common use of your right-of-way, including facilities (see 
section 2805.14(b)), subsurface, and air space, and authorize use of 
the right-of-way for compatible uses.'' The term ``facility'' is 
defined in the BLM's existing regulations at section 2801.5 and means 
an improvement or structure owned and controlled by the grant holder or 
lessee. Common use of a right-of-way occurs when more than one entity 
uses the same area for their authorization. This revision facilitates 
the cooperation and coordination between users of the public lands 
managed by the BLM so that resources are not unnecessarily impacted. An 
example of common use of a facility is authorization for a roadway and 
an adjacent transmission line. In this case, maintenance of the 
transmission line would include use of the adjacent roadway. Under 
existing section 2805.14(b), the BLM may authorize or require common 
use of a facility as a term of the grant and a grant holder may charge 
for the use of its facility. Section 2805.15(b) is revised to include a 
reference to section 2805.14(b).
    Comment: Two comments were received on this proposed change. One 
comment suggested clarifying that the change in section 2805.15(b) is 
intended to harmonize this paragraph with section 2805.14(b). The 
comment made special note that they do not protest this amendment to 
include ``facilities,'' so long as this was the only intent of the 
requirement.
    Response: The BLM agrees with the comment, and believes that the 
proposed adjustments to this rule would make the regulations consistent 
and not open to interpretation. The intent of this revision is not to 
go beyond what is discussed in the preamble for this paragraph. No 
changes to the proposed rule are necessary in response to this comment.
    Comment: The second comment stated that the rule deletes language 
from the existing section that prohibits charges for the common use of 
rights-of-way. The comment recommended modifying the section, but not 
deleting it, suggesting that the modification should prohibit charges 
except for pro-rata, fair-share cost allocations for the shared 
construction and/or operation and maintenance of facilities authorized 
under a grant or lease. The comment expressed concern that if this 
section is not modified, the first holder could intentionally charge a 
prohibitively expensive fee for common use.
    Response: The proposed rule did not delete this requirement from 
the existing regulations. Instead, it added the two words ``including 
facilities.'' Requiring a pro-rata, fair-share cost allocation 
agreement between private parties is outside BLM's role of 
administering the public lands. The BLM believes that two private 
parties should reach an agreement without the BLM dictating its 
conditions. The BLM did not make any change in response to this comment 
since dictating third party contracts is beyond the scope of this rule.
    No other comments were received, nor were any additional changes 
made to this section.
Section 2805.16 If I hold a grant, what monitoring fees must I pay?
    The table of monitoring categories in section 2805.16 no longer has 
the outdated dollar amounts for the category

[[Page 92161]]

fees. Paragraph (b) explains that the current year's monitoring cost 
schedule is available from any BLM State, district, or field office, or 
by writing, and is adjusted annually for inflation using the same 
methodology as the table in section 2804.14(b). The table now includes 
only the definition of the monitoring categories in terms of hours 
worked, instead of providing specific dollar amounts. Also, the word 
``application'' found in each category is changed to ``inspecting and 
monitoring'' to clarify that the inspecting and monitoring does not 
apply to right-of-way applications. This change was made to avoid 
either adjusting the table each year through a rulemaking or relying on 
outdated material. The current monitoring fee schedule may be found at 
http://www.blm.gov.
    This paragraph also provides that you may pay directly to another 
Federal agency their incurred costs in monitoring your grant instead of 
paying the fee to the BLM. As the regulations will no longer identify 
the costs by category, the current cost information is provided in the 
following table. The monitoring fees and work hours for FY 2015 are as 
follows:

               Monitoring Categories and Fees for FY 2016
------------------------------------------------------------------------
       Monitoring category        Federal work hours   Fees for FY 2016
------------------------------------------------------------------------
(1) Inspecting and monitoring of  Estimated Federal   $122.
 new grants, renewals, and         Work are >1 <=8.
 amendments to existing grants.
(2) Inspecting and monitoring of  Estimated Federal   428.
 new grants, renewals, and         Work are >>8 <=24.
 amendments to existing grants.
(3) Inspecting and monitoring of  Estimated Federal   806.
 new grants, renewals, and         Work are ><24
 amendments to existing grants.    <=36.
(4) Monitoring of new grants,     Estimated Federal   1,156.
 renewals, and amendments to       Work are >36 <=50.
 existing grants.
(5) Master Agreements...........  Varies............  As specified in
                                                       the agreement.
(6) Inspecting and monitoring of  Estimated Federal   As specified in
 new grants, renewals, and         Work are >50.       the agreement.
 amendments to existing grants.
------------------------------------------------------------------------

    Consistent with revisions made under monitoring fees table in 
2805.16(a), the BLM is adding the words ``inspecting and'' to section 
2805.16(a). This additional language is not a change from current BLM 
practice or policy and will allow the BLM to inspect and monitor the 
right-of-way to ensure project compliance with the terms and conditions 
of an authorization. Under this provision, if a project is out of 
compliance, the BLM could inspect the project to ensure that the 
required actions are completed to the satisfaction of the BLM, such as 
continued maintenance of the required activity or efficacy of the 
requirement.
    The BLM added a new sentence to paragraph (a) of this section that 
directs the reader to section 2805.17(c), which is an existing section 
of the regulations that describes category 6 monitoring fees. The two 
sentences preceding this revision describe when the other monitoring 
categories are updated, but there was no reference for category 6 
monitoring fees. This revision is made for consistency with how the 
other monitoring categories are described in this section. No comments 
were received and no other changes are made from the proposed rule to 
the final rule.
Section 2805.20 Bonding Requirements
    Section 2805.20 provides bonding requirements for all grant holders 
or lessees. These provisions are moved from existing section 2805.12. 
Under the existing regulations, bonds are required only at the BLM's 
discretion. This expanded section explains the details of when a bond 
is required and what the bond must cover. This is not a change from 
existing practice and is intended to provide clarity to the public. 
Specific bonding requirements for solar and wind energy development are 
outlined in paragraphs (b) and (c) of this section. This final rule 
explains requires are for the performance of the terms and conditions 
of a grant or lease and reclamation of a right-of-way grant or lease 
area.
    Comments: One comment indicated that solar facilities should not be 
subject to the same bonding framework as surface mining. The proposed 
bonding imposes unnecessary costs on the solar industry without 
providing any additional land protection. Surface mining operations may 
be abandoned and there is often significant surface disturbance, which 
is not the case with solar developments. Some comments said that 
acceptable bonding instruments should include corporate guarantees 
backed by financial tests. Bonding costs could be expensive, even 
doubling annual operating costs. The use of letters of credit could 
significantly reduce the bond amounts. Also, the BLM could have an 
initial lower bond amount until decommissioning is near and at that 
time the bond could be increased.
    Response: The framework used by surface mining development was a 
starting point for the solar and wind energy development process on 
what to consider when completing a RCE and determining the bond amount. 
However, this framework has been adapted to address circumstances 
specific to solar and wind energy development as well as all other 
right-of-way developments on the public lands. The bond amounts, as 
determined by an RCE or those using a standard bond, are necessary to 
ensure the protection of the public lands.
    Corporate guarantees are not an acceptable form of bond for the 
BLM. They are too risky to accept, even when financial tests are used, 
because they require continual confirmation of the quality of the 
corporate guarantee. However, irrevocable letters of credit are 
accepted by the BLM. Furthermore, the BLM cannot accept a lesser bond 
amount until the decommissioning of a grant or lease, because the BLM 
cannot be responsible for the financial stability of any company, nor 
can it bear the risk that a company may default or go bankrupt during 
the term of a grant, before decommissioning. To secure an increased 
bond at that time would be difficult if not impossible and having such 
a regulatory provision would place the public lands at unnecessary risk 
from the impacts of unreclaimed developments.
    Section 2805.20(a) provides that, if required by the BLM, you must 
obtain or certify that you have obtained a performance and reclamation 
bond or other acceptable bond instrument to cover any losses, damages, 
or injury to human health or damages to property or the environment in 
connection with your use of an authorized right-of-way. This paragraph 
also includes the language from existing section

[[Page 92162]]

2805.12(g), which details bonding requirements.
    Consistent with other revisions made in the final rule for better 
understanding of the rule, section 2805.20(a) is revised to add ``costs 
associated with'' when discussing what a bond will cover when 
terminating a grant. This added language makes it clear that the bond 
covers costs associated with terminating a grant.
    Comments: Some comments suggested expanding the language of this 
and subsequent bonding paragraphs to include ``certificate of insurance 
or other acceptable security'' in appropriate places.
    Response: Adding the language ``certificate of insurance or other 
acceptable security'' is unnecessary in the text of the regulation as 
the definition of acceptable bond instruments includes insurance 
policies, and therefore a specific form of insurance does not need to 
be included in the text of the regulation. Furthermore, the list of 
bond instruments that are acceptable is not an all-inclusive list. 
There are other forms of bond instruments, but they are not specified 
in the text of the rule because they are not as common as the ones 
identified. If the bond instrument list were to be considered as ``all 
inclusive'' it could unintentionally exclude acceptable bond 
instruments. As a result, the recommended addition to the rule text is 
not incorporated in the final rule.
    Section 2805.20(a)(1) requires that bonds list the BLM as an 
additionally covered party if a State regulatory authority requires a 
bond to cover some portion of environmental liabilities. If the BLM 
were not named as an additionally covered party for such bonds, the BLM 
would not be covered by the instrument. This provision allows the BLM 
to accept a State bond to satisfy a portion of the BLM's bonding 
requirement, thus, limiting double bonding.
    Comment: One comment was received pertaining to this paragraph. The 
comment stated that bond requirements are unnecessary for ``regulated 
entities'' and that additional bonding requirements are duplicative and 
pose additional costs on a public utility's customers.
    Response: The BLM disagrees, because regulated utilities present 
the same risks as unregulated utilities. Under section 2805.20(a), a 
bond is not required for all authorizations. Requirement of a bond for 
an authorization is at the discretion of the BLM and is dependent on 
the scale of the development and potential for risk to the public 
lands. Also, the BLM may accept a bonding instrument submitted to the 
State if it meets the criteria identified in paragraphs (i) through 
(iii) of section 2805.20(a)(1). The intent of the bonding provisions in 
section 2805.20(a)(1)(iii) is to mitigate the potential for duplicative 
costs to right-of-way holders using the public lands.
    An additional requirement is added to paragraph (a) in this final 
rule that requires periodic review of bonds for adequacy. This 
provision is added to ensure consistency with the provisions added in 
response to comments on section 2805.20(c). This additional requirement 
includes bonds held by a State and accepted by the BLM and applies to 
all bonds held by the BLM, regardless of the size or complexity of an 
authorized project. The frequency of the bond adequacy reviews will be 
described in greater detail within BLM guidance issued as part of 
implementation of this rule. Review frequency, as described in the 
recently issued instruction memorandum 2015-138, will be no less than 
once every 5 years, giving review priority to those that pose a greater 
risk to the public lands.
    Under section 2805.20(a)(1)(i), a State bond must be redeemable by 
the BLM. If such instrument is provided to the BLM and it is not 
redeemable, the BLM would be unable to use the bond for its intended 
purpose(s).
    Under section 2805.20(a)(1)(ii), a State bond must be held or 
approved by a State agency for the same reclamation requirements as the 
BLM requires.
    Under section 2805.20(a)(1)(iii), a State bond must provide the 
same or greater financial guarantee than the BLM requires for the 
portion of environmental liabilities covered by the State's bond.
    Comment: One comment concerning this paragraph stated that section 
2805.20(a)(3) makes clear that a bond will not be required for solar 
energy projects developed inside DLAs, and bonds will be required for 
solar projects outside DLAs.
    Response: This comment is not correct. Section 2809.18(e) requires 
a specific performance bond for leases authorized under subpart 2809, 
identified as a standard bond. Standard bonds are not determined by a 
RCE, but rather are set as specified in the regulations.
    Under section 2805.20(a)(2) a bond must be approved by the BLM's 
authorized officer. This approval ensures that the bond meets the BLM's 
standards. Under section 2805.20(a)(3), the bond amount is determined 
by the BLM based on a RCE, and must also include the BLM's costs for 
administering a reclamation contract. As defined in section 2801.5, a 
RCE identifies an appropriate amount for financial guarantees for uses 
of the public lands. An additional requirement is included in paragraph 
(a)(3) requiring periodic review of bonds for adequacy. This 
requirement was added to ensure consistency with the provisions added 
to section 2805.20(c). Both paragraphs (c)(3) and (4) of this section 
contain a stipulation that they do not apply to leases issued under 
subpart 2809. Bonds issued under subpart 2809 for leases inside DLAs 
have standard amounts. Bond acceptance and amounts for solar and wind 
energy facilities outside of DLAs are discussed in paragraphs (b) and 
(c) of this section.
    Paragraph (a)(3) of this section is revised from the proposed to 
final rule to improve readability. Specifically, the BLM removed the 
second sentence of the paragraph that stated the BLM may require you to 
prepare an acceptable RCE. The first sentence of this paragraph is 
revised to include ``, which the BLM may require you to prepare and 
submit.'' This revision is intended to improve the reader's 
understanding of the final rule and its requirements by streamlining 
the text of the rule.
    In addition to the changes made for readability, this paragraph is 
revised by adding, ``The BLM may also consider other factors, such as 
salvage values, when determining the bond amount.'' This revision 
responds to concerns raised in stakeholder engagement meetings and is 
consistent with section 2805.12(e)(2) of this final rule, which 
specifies that a developer may request an alternative requirement for 
bonding.
    A request for an alternative bonding requirement may include a 
holder's request for consideration of project component salvage values. 
Such a request may reduce the BLM's bond determination amount, even to 
an amount below the minimum or standard bond amount. However, the 
request must be fully supported by documentation from the requestor 
that includes the costs for processing and handling salvage materials, 
such as information about distribution centers for such materials and 
other reasonable considerations. Further, as noted under paragraph 
2805.12(e)(2), requests for an alternative bonding requirement must 
comply with applicable law in order to be considered, and must provide 
the United States with adequate financial security for potential 
liabilities.
    Regardless of the nature of the request, any such request is not 
approved until you receive BLM approval in writing.

[[Page 92163]]

    Section 2805.20(a)(4) requires that a bond be submitted on or 
before the deadline provided by the BLM. Current regulations have no 
such provision, and this revision makes it clear what the BLM expects 
when it requires a bond instrument. The BLM believes this provision 
will improve the timely collection of bonds. The timely submittal of a 
bond promotes efficient stewardship of the public lands and ensures 
that the bond amount provided is acceptable to the BLM and available 
prior to beginning ground-disturbing activities.
    Section 2805.20(a)(5) outlines the components to be addressed when 
determining a RCE. They include environmental liabilities, maintenance 
of equipment and facilities, and reclamation of the right-of-way. This 
paragraph consolidates and presents what liabilities the bond must 
cover.
    Under section 2805.20(a)(6), a holder of a grant or lease may ask 
the BLM to accept a replacement bond. The BLM must review and approve 
the replacement bond before accepting it. If a replacement bond is 
accepted, the surety company for the old bond is not released from 
obligations that accrued while the old bond was in effect, unless the 
new bond covers such obligations to the BLM's satisfaction. This gives 
the grant holder flexibility to find a new bond, potentially reducing 
their costs, while ensuring that the right-of-way is adequately bonded.
    Under section 2805.20(a)(7), a holder of a grant or lease is 
required to notify the BLM that reclamation has occurred. If the BLM 
determines reclamation is complete, the BLM may release all or part of 
the bond that covers these liabilities. However, section 2805.20(a)(8) 
reiterates that a grant holder is still liable in certain circumstances 
under section 2807.12. Despite the bonding requirements of this 
section, grant holders are still liable for damage done during the term 
of the grant or lease even if: The BLM releases all or part of your 
bond, the bond amount does not cover the cost of reclamation, or no 
bond remains in place.
    Section 2805.20(b) and (c) identify specific bond requirements for 
solar and wind energy development respectively outside of DLAs. A 
holder of a solar or wind energy grant outside of a DLA will be 
required to submit a RCE to help the BLM determine the bond amount. For 
solar energy development grants outside of DLAs, the bond amount will 
be no less than $10,000 per acre. For wind energy development grants 
outside of DLAs, the bond amount will be no less than $10,000 per 
authorized turbine with a nameplate generating capacity of less than 
one MW, and no less than $20,000 per authorized turbine with a 
nameplate generating capacity of one MW or greater.
    Section 2805.20(d) is new to the final rule. This paragraph 
separates site- and project-area testing authorization bond 
requirements from section 2805.20(c). This change is consistent with 
other provisions that have been modified to expand the wind energy 
site- and project-area testing authorizations in the proposed rule to 
include solar energy. With this adjustment, meteorological and other 
instrumentation facilities are required to be bonded at no less than 
$2,000 per location. These bond amounts are the same as standard bond 
amounts for leases required under section 2809.18(e)(3).
    The BLM recently completed a review of bonded solar and wind energy 
projects and based the bond amounts provided in this final rule on the 
information found during the review. When determining these bond 
amounts, the BLM considered potential liabilities associated with the 
lands affected by the rights-of-way, such as potential impacts to 
cultural values, wildlife habitat, and scenic values. The range of 
costs included in the review represented the cost differences in 
performing reclamation activities for solar and wind energy 
developments throughout the various geographic regions the BLM manages. 
The BLM used the review to determine an appropriate bond amount to 
cover potential liabilities associated with solar and wind energy 
projects.
    Minimum bond amounts are set for solar development for each acre of 
authorization because solar energy development encumbers 100 percent of 
the lands and excludes them from other uses. The recent review of bonds 
showed a range of bond amounts for solar energy development of 
approximately $10,000 to $18,000 per acre of the rights-of-way on 
public lands. Minimum bond amounts for wind energy development are set 
for each wind turbine authorized on public land, rather than per acre, 
because the encumbrance is factored at 10 percent and is not exclusive 
to other uses. The review showed that the bond amounts for recently 
authorized wind energy development ranged between $22,000 and $60,000 
per wind turbine. Recently bonded wind energy projects use wind 
turbines that are one MW or larger in nameplate capacity, whereas older 
projects generally use turbines that are less than one MW.
    Comment: Some comments suggested that bonds should not be required 
for solar facilities on the public lands because they pose low 
environmental risk and that some solar energy generation technologies 
have less potential impacts than others and, therefore, less risk.
    Response: The BLM agrees that generally, solar facilities do not 
pose the same environmental hazards as other energy development 
facilities. However, the BLM's requirement for bonding is not only for 
the potential environmental risks that a development poses on the 
public lands. Rather, a bond is required to cover direct impacts to the 
resources and their reclamation to a condition as near as possible to 
what they were before development occurred.
    This comment is specific to solar energy, but raises the question 
of lesser risk for certain developments, which is an issue that arises 
with respect to wind energy as well. In the BLM's review of recently 
bonded solar and wind energy projects, for example, the range of bond 
amounts identified was for newer wind energy turbines, with a nameplate 
capacity of one MW or greater. These wind energy turbines are larger, 
have a greater footprint, and require larger and more equipment and 
materials to install and remove than wind turbines that have a smaller 
nameplate capacity. In order to accommodate developments that employ 
smaller wind turbines that pose lesser risk to resources, the BLM is 
including in the final rule the existing policy requirement of a 
$10,000 minimum bond amount for projects utilizing smaller turbines. 
Turbines with a nameplate capacity of one MW or greater will have a 
minimum bond amount of $20,000, consistent with the proposed rule. A 
reclamation cost estimate will still be required for each project on 
lands outside of designated leasing areas, as described in section 
2805.20(a)(3) of this rule. The BLM's bond amount determination for 
wind energy projects using turbines with lesser nameplate capacities 
could exceed the minimum bond amount based upon site-specific risks.

Subpart 2806--Annual Rents and Payments

    Existing subpart 2806, has been retitled to more clearly and 
consistently identify the content of and revisions to this subpart of 
the final rule. The content and revisions to this subpart of the final 
rule include those requiring a payment of an acreage rent and MW 
capacity fee for rights-of-way. Retitling this subpart makes it clear 
that the BLM may require payments that are not specifically a rent.

[[Page 92164]]

Section 2806.12 When and where do I pay rents?
    The heading of section 2806.12 is revised by adding the words ``and 
where.'' This revision is not a change in the BLM's practice or policy, 
but is intended to help clarify where rental payments should be made.
    Section 2806.12(a) describes the proration of rent for the first 
year of a grant. Specific dates are used for proration to prevent any 
confusion to grant holders and promote consistent implementation by the 
BLM. Rent is prorated for the first partial year of a grant, since the 
use of public lands in such situations is for only a partial year. 
Paragraph (a)(2) of this section explains that if you have a short-term 
grant, you may request that the BLM bill you for the entire duration of 
the grant in the first payment. Some short term grant holders may wish 
to pay this amount up front. Consistent with other sections of the 
final rule, a revision to paragraph (a)(2) has been made to delete the 
reference to wind energy in connection with site-specific testing.
    Paragraph (b) of this section is revised by removing the word 
``other'' from the first sentence. This revision is intended to clarify 
that all rental payments must be made in accordance with the payment 
plan described in section 2806.24. This revision is made to improve 
readability, but does not constitute a change from existing 
requirements.
    Section 2806.12(d) directs right-of-way grant holders to make 
rental payments as instructed by the BLM or as otherwise provided for 
by Secretarial Order or legislative authority. This provision 
acknowledges that either the Secretary or Congress may take action that 
could affect rents and fees. The BLM will provide payment instructions 
for grant holders that will include where payments may be made. The 
word ``must'' is added into the first sentence of this paragraph to 
improve readability and for consistency with the phrasing of other 
requirements in this final rule. This revision does not constitute a 
change from existing requirements. No comments were received on this 
section, and no other changes were made from the proposed rule to the 
final rule.
Section 2806.13 What happens if I do not pay rents and fees or if I pay 
the rents and fees late?
    Section 2806.13 is revised from ``What happens if I pay the rent 
late?'' to read ``What happens if I do not pay rents and fees or if I 
pay the rents and fees late?'' This change addresses the addition of 
paragraph (e) to this section, which specifies that the BLM may 
retroactively bill for uncollected or under-collected rents and fees. 
The BLM will collect rent retroactively if: (1) A clerical error is 
identified; (2) A rental schedule adjustment is not applied; or (3) An 
omission or error in complying with the terms and conditions of the 
authorized right-of-way is identified.
    Paragraph (a) of this section is amended by removing language from 
the existing rule that stated a fee for a late rental payment may not 
exceed $500 per authorization. The BLM determined that the current $500 
limit is not a sufficient financial incentive to ensure the timely 
payment of rent. Therefore, under this final rule, late fees will now 
be proportional to late rental amounts, to provide more incentive for 
the timely payment of rents to the BLM. The BLM also added the term 
``fees'' so the MW capacity fees for solar and wind energy development 
grants and leases may be collected consistently with any rent due.
    New paragraph (g) of this section allows the BLM to condition any 
further activities associated with the right-of-way on the payment of 
outstanding payments. The BLM believes that this consequence imposed 
for outstanding payments is further incentive to timely pay rents and 
fees to the BLM.
    Comment: A comment suggested that the BLM should be responsible for 
clerical and other possible errors, and that the holder should not be 
responsible for payment of rents, fees, or late payments if such an 
error occurs due to the BLM. Further, the comment suggested a 6 month 
time limit for enforcing such corrections that would be retroactive, 
and that a late payment fee would be no more than 5 percent of the 
total rents and fees.
    Response: The BLM considered the 6-month and 5 percent limits 
suggested by the comment and decided to not include these limits in the 
final rule. When entering into a right-of-way agreement with the BLM, a 
holder agrees to the terms and conditions for the use of the public 
lands. Included as part of these terms and conditions is the 
requirement that a holder pay, in advance, the appropriate amount for 
the use of the public lands. Generally, the BLM sends a bill or other 
notice to a holder that is a notice of payment due to the BLM, as 
agreed to in the right-of-way grant. Even if the BLM were to make a 
clerical or administrative error when transmitting a notice of payment 
obligations, such an error in a notice would not permanently relieve a 
right-of-way grant holder from its independent requirement to pay the 
appropriate amount for the use of the public lands as specified in the 
grant. No other comments were received for this section, and no changes 
were made to the final rule.
Section 2806.20 What is the rent for a linear right-of-way grant?
    In section 2806.20, the address to obtain a current rent schedule 
for linear rights-of-way is updated. Also, district offices are added 
to State and field offices as a location where you may request a rent 
schedule. These minor corrections are made to provide current 
information to the public. No comments were received on this provision, 
and no changes are made from the proposed rule to it in the final rule.
Section 2806.22 When and how does the per acre rent change?
    A technical change in section 2806.22 corrects the acronym IPD-GDP, 
referring to the Implicit Price Deflator for Gross Domestic Product. No 
comments were received and no changes are made from the proposed rule 
to the final rule.
Section 2806.23 How will the BLM calculate my rent for linear rights-
of-way the Per Acre Rent Schedule covers?
    In the existing regulations, paragraph (b) of this section provides 
for phasing in the initial implementation of the Per Acre Rent Schedule 
by allowing a one-time reduction of 25 percent of the 2009 acreage rent 
for grant holders. This paragraph was flagged for removal in the 
proposed rule and is being removed by this final rule because the 
phase-in for the updated rent schedule referenced in that provision 
ended in 2011 and thus is no longer applicable. No comments were 
received and no other changes are made from the proposed rule to the 
final rule.
Section 2806.24 How must I make payments for a linear grant?
    Section 2806.24(c) explains how the BLM prorates the first year 
rental amount. The rule adds an option to pay rent for multiple year 
periods. The new language requires payment for the remaining partial 
year along with the first year, or multiples thereof, if proration 
applies. No comments were received and no other changes are made from 
the proposed rule to the final rule.
Section 2806.30 What are the rents for communication site rights-of-
way?
    Section 2806.30 is amended by removing paragraph (b), which 
contained the communications site rent schedule table. Paragraph (c) is 
redesignated as new paragraph (b). Section 2806.30(a) is revised to 
remove redundant language referring to the BLM communication site 
rights-of-way

[[Page 92165]]

rent schedule. Section 2806.30(a)(1) is revised to update the mailing 
address. Section 2806.30(a)(2) is revised by removing references to the 
table that has been removed. This paragraph still describes the 
methodology for updating the schedule, but directs the reader to the 
BLM's Web site or BLM offices instead. No comments were received, and 
no other changes are made inform the proposed rule to the final rule.
Section 2806.34 How will BLM calculate the rent for a grant or lease 
authorizing a multiple-use communication facility?
    Section 2806.34(b)(4) is revised to fix a citation in the existing 
regulations that was incorrect. No comments were received, and no other 
changes are made from the proposed rule to the final rule.
Section 2806.43 How does BLM calculate rent for passive reflectors and 
local exchange networks? and Section 2806.44 How will BLM calculate 
rent for a facility owner's or facility manager's grant or lease which 
authorizes communication uses?
    Sections 2806.43(a) and 2806.44(a) are each revised by changing the 
cross-reference from section 2806.50 to section 2806.70. Section 
2806.50 is redesignated as section 2806.70, and these citations are 
updated to reflect this change.
    Section 2806.44 is retitled from ``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?'' to read as above. This section has been retitled to more 
clearly identify the content and additions made. The addition is a new 
introductory paragraph describing that this section applies to grants 
or leases. Such authorizations may include a mixture of communication 
uses, some of which are subject to the BLM's communication rent 
schedule. Such rent determinations will be made under the provisions of 
this section. No comments were received, and no other changes are made 
from the proposed rule to the final rule.
Sections 2806.50 Through 2806.68 Rents and Fees for Solar Energy 
Rights-of-Way and Wind Energy Rights-of-Way
    Sections 2806.50 through 2806.58 and sections 2806.60 through 
2806.68 provide new rules for the rents and fees for solar and wind 
energy development, respectively. The rents and fees described in these 
sections, along with the bidding process, will help the BLM generally 
receive fair market value for the use of public lands. There are 
similarities between the provisions governing solar and wind energy 
grants and leases. For example, each type of project and authorization 
instrument is subject to acreage rent and MW capacity fee obligations. 
However, there are differences in the final rule with respect to wind 
and solar projects (e.g., solar energy projects assume 100% encumbrance 
within the project footprint, whereas wind energy projects assume 10% 
encumbrance). There are also differences in the way acreage rent and MW 
capacity fees are applied to solar energy grants versus leases. These 
differences are discussed in sections 2806.52 and 2806.54; wind energy 
grants and leases are discussed in sections 2806.62 and 2806.64, 
respectively. Section 2806.50 is retitled ``Rents and fees for solar 
energy rights-of-way.'' The former regulation at section 2806.50 has 
been redesignated as section 2806.70. Section 2806.51 is added to this 
final rule in response to comments received regarding potential payment 
uncertainty.
    Revised section 2806.50 requires a holder of a solar energy right-
of-way authorization to pay annual rents and fees for right-of-way 
authorizations issued under subparts 2804 and 2809. Those right-of-way 
holders with authorizations issued under subpart 2804 will pay rent for 
a grant and those right-of-way holders with authorizations issued under 
subpart 2809 will pay rent for a lease. Payment obligations for both 
types of right-of-way authorizations now consist of an acreage rent and 
MW capacity fee. The acreage rent must be paid in advance, prior to the 
issuance of an authorization, and the MW capacity fee will be phased-in 
after the start of energy generation. Both the acreage rent and MW 
capacity fee must be paid in advance annually during the term of the 
authorization. The initial acreage rent and MW capacity fee are 
calculated, charged, and prorated consistently with the requirements 
found in sections 2806.11 and 2806.12. Rent for solar authorizations 
vary depending on the number of acres, technology of the solar 
development, and whether the right-of-way authorization is a grant or 
lease.
    The BLM received some comments that generally applied to its rental 
provisions of the final rule. The BLM also revised sections 2806.50 
through 2806.68 to improve the readability of these sections.
    Comment: One comment on the rental provisions stated that the 
proposed rule requires full payment immediately upon the award of an 
authorization. The comment suggested that payment should begin at the 
time infrastructure is placed in service instead at the time of award.
    Response: The BLM does not require full payment immediately upon 
award of an authorization. Both an acreage rent and MW capacity fee are 
charged for solar and wind energy authorizations, but only the acreage 
rent is paid at the time a right-of-way is authorized. Acreage rent is 
charged upon the authorization of such developments as the public lands 
are being encumbered. The MW capacity fee may be phased-in during the 
term of the right-of-way as approved in the POD. This meets the 
concerns of the comment because the rules do not require full payment 
of rents and fees immediately upon authorization of a right-of-way.
    Comments: Some comments stated that the BLM does not have authority 
to levy a MW capacity fee. These comments argued that because the 
Federal Government lacks an ownership interest in sunlight or the wind, 
it cannot sell the rights to use them for profit (unlike the sale of 
Federal mineral interests at fair market value), charge a royalty 
against sale proceeds (unlike Federal oil and gas rights), or charge 
rent for the use of sunlight (unlike Federal land surface occupancy 
rights). Aside from the ownership issue, these commenters argued that 
the MW capacity fee is an inappropriate element of fair market value 
because it is based on the value of electricity generated and sold, 
rather than the value of the underlying land itself. For example, the 
comments pointed out, if two facilities occupy the same amount of land, 
but one has more efficient technology, the more efficient facility 
would pay more because of the additional electricity generated, not 
because of land rental values. The comments recommended that, for solar 
and wind energy generation rights-of-way, the BLM should exclusively 
charge rent, through a per acre rent schedule informed only by the 
NASS.
    Response: FLPMA generally requires the BLM to obtain fair market 
value for the use of the public lands, including for rights-of-way. In 
accordance with the BLM's authority, and similar to valuation practices 
for solar and wind energy development on private lands, the BLM uses 
electrical generation capacity as a component of the value it assigns 
to the use of the lands by the projects. From information the BLM has 
been provided by industry or has otherwise collected, the BLM 
determined that private land owners customarily charge a ``royalty,'' 
typically a percentage of the value of actual production, for the use 
of private land. As explained above, the BLM has

[[Page 92166]]

elected in this final rule to charge a fee based on installed MW 
capacity rather than a royalty. This fee, when added to the applicable 
acreage rent and any minimum and bonus bids received, ensures that the 
BLM will obtain an appropriate value for the use of the public lands by 
solar and wind energy projects.
    The BLM classifies MW capacity payments as ``fees'' rather than 
``rent,'' because they reflect the commercial utilization value of the 
public's resource, above and beyond the rural or agricultural value of 
the land in its unimproved state. In the BLM's experience and 
consistent with generally accepted valuation methods, the value of the 
public lands for solar or wind energy generation use depends on factors 
other than the acreage occupied and the underlying land's unimproved 
value. Other key factors include the solar insolation value or wind 
speed and density, proximity to demand for electricity, proximity to 
transmission lines, and the relative absence of resource conflicts that 
tend to inhibit solar and wind energy development. To account for these 
elements of land use value that are not intrinsic to the rural value of 
the lands in their unimproved state, under this final rule, solar and 
wind right-of-way payments include ``MW capacity fees'' in addition to 
the ``acreage rent'' as a component of fair market value for these 
authorizations.
    The acreage payment remains classified as ``rent'' under the final 
rule, as it is directly tied to the area of public lands encumbered by 
the project and the constraints the project imposes on other uses of 
the public lands. Electric or telephone facilities that qualify for 
financing under the Rural Electrification Act may be exempt from paying 
a ``rental fee,'' which includes the solar or wind energy acreage 
rents. However, as explained in IM 2016-122, and consistent with the 
BLM's current practice, any such facilities must pay other costs 
associated with the fair market value of the land, such as the MW 
capacity fee, minimum bid, or bonus bid, because these other payments 
are independent of the land acreage and value of the unimproved land, 
and therefore are not appropriately termed ``rental fees.''
    The use of an acreage rent and MW capacity fee is also intended to 
encourage a developer to more efficiently use the public lands 
encumbered by a project. In the situation where two parcels with the 
same MW capacity for projects have differing technologies, the more 
efficient technology (and therefore the higher approved MW capacity) 
would be paying more in fees, but less in acreage rent for the same 
generation capacity as the more efficient technology would allow a 
developer to pay less in acreage rent to achieve the same approved MW 
capacity.
    The BLM intends to evaluate the adequacy and impact of the 
provisions of this final rule after it has had an opportunity to 
observe how the payment requirements and rate adjustment methods put in 
place affect the BLM's ability to support renewable energy development 
and simultaneously collect fair market value from the projects it 
authorizes.
Section 2806.50 Rents and Fees for Solar Energy Rights-of-Way
    The BLM revised section 2806.50 to include site- and project-area 
testing. In the proposed rule, rights-of-way for site-specific and 
project-area testing were allowed only for wind energy. The final rule 
deletes the word ``wind'', to make the provision generally applicable 
to wind or solar energy testing. This change is made in response to a 
comment, which will be discussed under section 2806.58 of this 
preamble. No other comments were received, and no other changes made to 
the final rule.
Section 2806.51 Scheduled Rate Adjustment
    Comments: After the comment period of the proposed rule closed, the 
BLM continued to hold general meetings with stakeholders about the 
BLM's renewable energy program. In some of those meetings, stakeholders 
asked questions about the proposed rulemaking and clarified concerns 
they had raised through their written comments. Industry 
representatives shared additional information regarding their concerns 
with the proposed rule's approach to calculating annual payment 
requirements, including uncertainty about potential future payment 
requirements over the life of the right-of-way authorization. 
Specifically, commenters expressed concerns about the potential for 
NASS values in certain areas to jump significantly between surveys, 
resulting in unexpected and unsustainable changes in the per acre zone 
rates for those lands.
    The BLM understands that when financing a project, developers must 
predict project costs, including for the construction, operation, and 
maintenance phases of the project. Included with these costs are 
expenses for land use, such as annual payment requirements of a BLM 
grant or lease. The BLM also understands that in some areas there is 
the potential for NASS land values to change significantly from one 5-
year period to the next in a manner that is unpredictable, and that can 
result in significant acreage rent increases or decreases. For lands 
that experience those large changes in NASS land values, the standard 
rate adjustment method's periodic update to rates may create financial 
uncertainty. This may, in turn, complicate project financing and 
require a developer to pay a higher cost of capital.
    Response: The BLM agrees with these comments and recognizes that 
increasing payment certainty over the term of the grant or lease may 
help facilitate project financing and even reduce financing costs. To 
respond to these comments and concerns, the BLM added section 2806.51 
to the final rule. This section allows a grant or lease holder to 
choose one of two rate adjustment methods, the ``standard'' rate 
adjustment method, or the scheduled rate adjustment method.
    Under the standard rate adjustment method, which was described in 
the proposed rule and is now named in the final rule, the BLM will 
periodically reassess the rates it charges for use of the public lands 
and resources based on the latest NASS survey data and the applicable 
western hub energy prices, as well as other data discussed in greater 
detail in connection with section 2806.52 of this final rule.
    By contrast, if the grant or lease holder chooses the scheduled 
rate adjustment method, the BLM will implement scheduled, predictable 
rate increases over the term of the grant. Under this approach, annual 
project costs are easily modeled, which increases the certainty as to 
future costs. By selecting the scheduled adjustment method a proponent 
would trade the potential upsides of rate adjustments pegged to a 
fluctuating national indicator (which may only increase slightly in a 
given period, or may even go down) for greater payment certainty.
    Based on historical trends, the BLM expects that in some areas, the 
rates under the standard rate adjustment method will increase by more 
than they would under the scheduled rate adjustment method. However, 
the opposite is also true: in other areas, rates under the standard 
method may increase by very little, or even decrease, while rates under 
the scheduled rate adjustment method will increase by a fixed amount at 
fixed intervals. The BLM determined that it is appropriate to allow 
developers to choose between these rate adjustment methods, as some 
grant or lease holders may want to take advantage of the possibility 
that NASS values could stay nearly constant or

[[Page 92167]]

even go down, while other holders may want to increase payment 
certainty.
    The adjustments contemplated under the scheduled rate increase are 
similar to the terms found in many power purchase agreements, which 
build in fixed annual increases. The BLM based the scheduled adjustment 
approach on an evaluation of market trends over the last 10 years. The 
trend over that period is consistent with a longer term trend showing 
power pricing has increased generally. The BLM believes that the 
scheduled rate adjustment method provides certainty for prospective 
developers while also ensuring that the BLM will obtain fair market 
value for the use of the public lands.
    Paragraph (a) of this section provides that a holder may choose the 
standard rate adjustments for a right-of-way, which are detailed in 
section 2806.52(a)(5) and (b)(3) for grants, or section 2806.54(a)(4) 
and (c) for leases, or the scheduled rate adjustments for a right-of-
way, which are detailed in section 2806.52(d) for grants, or section 
2806.54(d) for leases. If a holder selects the standard adjustment 
method, the BLM will increase or decrease the per acre zone rate and MW 
rate for the authorization, as dictated by the specified calculation 
method, at fixed intervals over the term of a grant or lease. If a 
holder selects the scheduled rate adjustment method, the BLM will 
increase the per acre zone rate and MW rate by a fixed amount, 
described in section 2806.52(d) or 2806.54(d), respectively, at those 
same intervals. The BLM created the scheduled rate adjustment method 
using percentages and values that reflect current market conditions and 
trends; if, in the future, the BLM considers it necessary to revise the 
applicable rates in the scheduled rate adjustment provisions, it will 
do so via rulemaking.
    Once a holder selects a rate adjustment method, the holder will not 
be able to change the rate adjustment method until the grant or lease 
is renewed. This rule clearly articulates the differences between these 
methods. As such, a holder will not be able to change its selection in 
the future, if one method proves more favorable than another during the 
term of the authorization. The rates paid by grant or lease holders 
that chose the standard adjustment approach may, in some cases, diverge 
from the rates paid by grant or lease holders that chose the scheduled 
adjustment approach. The BLM believes, however, that over the length of 
the grant or lease both methods will provide fair market value for the 
underlying authorization to use the public lands and resources.
    Paragraph (b) of this section requires that a holder provide 
written notice to the BLM, before a grant or lease is issued, if the 
holder wishes to select the scheduled rate adjustment. In the absence 
of such a notice, the BLM will continue to use the standard rate 
adjustment method for the authorization.
    The BLM will generally not consider a request for an alternative 
rate structure or terms from holders that select the scheduled rate 
adjustment method. The holder knows what their rates will be when 
selecting the scheduled rate adjustment method and is committing to 
those rates, understanding that they cannot change this selection. 
Paragraph (c) of this section explains how the final rule will affect 
existing grant holders. Like new grant holders, existing grant holders 
also have the option to choose between standard or scheduled rate 
adjustments. The holder of a solar or wind energy grant that is in 
effect prior to the effective date of this final rule may request that 
the BLM apply the scheduled rate adjustment to their grant, rather than 
the standard rate adjustment. Any such request must be received by the 
BLM in writing within 2 years of this rule's publication in the Federal 
Register. The BLM determined that 2 years was a reasonable amount of 
time for grant holders to consider the benefits of the different rate 
adjustment methods.
    For existing grant holders that choose the scheduled rate 
adjustment method, the BLM will apply the scheduled rate adjustment in 
section 2806.52(d) to the rates in effect prior to the publication of 
this final rule.
    For existing grant holders that choose the scheduled rate 
adjustment method, however, the BLM will first adjust the rates in 
existing grants and leases upward by 20%, to account for the fact that 
the BLM elected not to undertake the most recent adjustment under its 
existing guidance because of the pendency of this rulemaking process. 
The scheduled rate adjustment method will then apply, resulting in 
fixed rate increases at set intervals thereafter.
    The BLM will continue to apply the standard rate adjustments to the 
rates for existing grant holders unless and until written notice is 
received requesting the scheduled rate adjustment method. As previously 
mentioned, the standard rate adjustment is BLM's default method and 
current practice, as outlined in existing policy.
Section 2806.52 Rents and Fees for Solar Energy Development Grants
    Section 2806.52 requires a grant holder to make annual payments 
that include the acreage rent and MW capacity fee.
    Comments: Some comments expressed confusion over whether certain 
costs in the proposed rule were a ``rent'' or a ``fee.''
    Response: The introductory paragraph for section 2806.52 in the 
final rule has been revised to clarify what is a ``rent'' and what is a 
``fee.'' ``Rent'' is now described as an ``acreage rent,'' and ``fee'' 
has been clarified as a ``MW capacity fee.'' Paragraph (a) of this 
section describes the acreage rent requirements and calculation 
methodology, and paragraph (b) of this section describes the MW 
capacity fee requirements and calculation methodology.
    Section 2806.52(a), ``Acreage rent,'' describes the acreage rent 
payment for solar energy grants. ``Acreage rent,'' as defined in 
section 2801.5, means rents assessed for solar energy development 
grants and leases that are determined by the number of acres authorized 
for the grant or lease times the per acre zone rate. Under existing 
policy, entities that qualify for financing under the Rural 
Electrification Act may be exempted from paying solar acreage rent (IM 
2016-122).
    Comments: Several comments were concerned about using the values 
set for NASS and believed that they would not apply to vacant BLM land. 
Comments suggested that solar and wind energy development should be 
appraised or assessed differently than other authorization types, such 
as linear rights-of-way. To determine the acreage rent for such 
developments following the same criteria as linear facilities would 
make development cost prohibitive on the public lands due to unfairly 
applying a linear acreage rent.
    Response: In response to these comments, both sections 2806.52 and 
2806.62 are revised to incorporate State-specific reductions from the 
baseline NASS values in the calculation of acreage rents. The proposed 
rule used the linear rent schedule as the basis for determining acreage 
rent values by proposing solar and wind acreage rent as a percentage 
factor of the linear rent schedule. Using a percentage factor for 
acreage rent allows the BLM to adopt the linear rent calculation and 
effectively change the encumbrance factor to be specific for solar or 
wind energy.
    For the final rule, the BLM has further modified the calculation 
used to determine acreage rent for solar and wind energy 
authorizations. The BLM recognizes that the NASS agricultural values 
may not always be a fair representation of public lands because

[[Page 92168]]

they include the agricultural improvements (e.g., buildings, ditches, 
irrigation) to the land. To account for this possibility, the final 
rule uses the NASS agricultural values as a baseline for the 
determination of acreage rent, then incorporates a 20 percent or 
greater State-specific reduction that accounts for the extent to which 
the NASS values reflect agricultural improvements to land in each 
State. By applying these State-specific reductions to the baseline NASS 
values when calculating acreage rent, the BLM more accurately 
identifies the value of unimproved land for a project site.
    The proposed rule based the acreage rent calculation on the linear 
rent schedule, which uses a nationwide reduction of 20 percent. In the 
final rule, the State-specific factors will be no less than the 20 
percent reduction initially proposed for the rule, but may be greater. 
A more detailed discussion on how these values are calculated and a 
table showing the specific values for each State is found under section 
2806.52(a)(2) of this preamble.
    Paragraph (a)(1) summarizes how the BLM identifies a per acre zone 
rate using the NASS land values. Paragraph (a)(2) describes how the BLM 
adjusts the per acre zone rate, by 20 percent or more, to account for 
agricultural improvements to the lands in each State. A State with a 
larger calculated reduction than the minimum 20 percent may lower a 
particular county's acreage rent. In the case of some States, such as 
Utah, the State-specific reduction that applies to unimproved 
agricultural land values is approximately 50 percent. This is discussed 
in greater detail under section 2806.52(a)(2).
    Using this methodology, the BLM is able to establish a method for 
calculating acreage rents for solar and wind energy developments that 
are appropriate for the location of the development. New section 
2806.52(c) is added to this final rule providing the BLM's 
implementation of the acreage rent and MW capacity fee for solar energy 
developments.
    Under section 2806.52(a)(1), the acreage rent for solar energy 
rights-of-way is calculated by multiplying the number of acres (rounded 
up to the nearest tenth of an acre) within the authorized area times 
the per acre zone rate in effect at the time the authorization is 
issued. Under section 2806.52(a)(1), the initial per acre zone rate for 
solar energy authorizations is now established by considering four 
factors; the per acre zone value multiplied by the encumbrance factor 
multiplied by the rate of return multiplied by the annual adjustment 
factor. This calculation is reflected in the following formula - A x B 
x C x D = E, where:
    ``A'' is the per acre zone value, as described in the linear rent 
schedule in section 2806.20(c);
    ``B'' is the encumbrance, equaling 100 percent;
    ``C'' is the rate of return, equaling 5.27 percent;
    ``D'' is the annual adjustment factor, equaling the average annual 
change in the IPD-GDP for the 10-year period immediately preceding the 
year that the NASS census data becomes available; and
    ``E'' is the annual per acre zone rate.
    The BLM will adjust the per acre zone rates each year, based on the 
average annual change in the IPD-GDP, consistent with section 
2806.22(a). Adjusted rates are effective each year on January first.
    Under new section 2806.52(a)(2), counties (or other geographical 
areas) are assigned to a Per Acre Zone Value on the solar energy 
acreage rent schedule, based on the State-specific percent of the 
average land and building value published in the NASS Census.
    The BLM currently uses an acreage rent schedule for linear rights-
of-way to determine annual payments. The rent schedule separates land 
values into 15 different zones and establishes values for each zone 
ranging from $0 to $1,000,000 per acre. These values are based on the 
published agricultural values of the land, as determined by the NASS. 
Solar and wind energy acreage rents will be determined using the same 
zone values as linear rights-of-way. However, the BLM will use a state 
specific reduction when assigning lands to a zone.
    The Per Acre Zone Value is a component of calculating the Per Acre 
Zone Rate under paragraph (a)(1) of this section. The calculation in 
this paragraph establishes a State-specific percent factor that 
represents the difference between the improved agricultural land values 
provided by NASS and the unimproved rangeland values that represent BLM 
land. This calculation is reflected in the following formula--(A/B)-(C/
D) = E, where:
    ``A'' is the NASS Census statewide average per acre value of non-
irrigated acres;
    ``B'' is the NASS Census statewide average per acre land and 
building value;
    ``C'' is the NASS Census total statewide acres in farmsteads, 
homes, buildings, livestock facilities, ponds, roads, wasteland, etc.;
    ``D'' is the total statewide acres in farms; and
    ``E'' is the State-specific percent factor or 20 percent, whichever 
is greater.
    The county average per acre land and building values that exceed 
the 20 percent threshold for solar and wind energy development are as 
follows for BLM managed lands.

                      Table of State-Specific Factors and Other Data for Applicable States
----------------------------------------------------------------------------------------------------------------
                                                              Existing
                                                          regulations and   Final rule state-
                                                           proposed rule:        by-state      Final rule state-
                         State                             Nationwide 20        calculated      specific  factor
                                                           percent factor      factor  (%)            (%)
                                                                (%)
----------------------------------------------------------------------------------------------------------------
Alaska.................................................                 20                 12                 20
Arizona................................................                 20                 49                 49
California.............................................                 20                 51                 51
Colorado...............................................                 20                 24                 24
Idaho..................................................                 20                 29                 29
Montana................................................                 20                 12                 20
Nevada.................................................                 20                 16                 20
New Mexico.............................................                 20                 24                 24
North Dakota...........................................                 20                  5                 20
South Dakota...........................................                 20                  5                 20
Oregon.................................................                 20                  2                 20
Texas..................................................                 20                 -1                 20

[[Page 92169]]

 
Utah...................................................                 20                 54                 54
Washington.............................................                 20                 21                 21
Wyoming................................................                 20                 16                 20
    Average............................................                 20                 21                 27
----------------------------------------------------------------------------------------------------------------

    Assignment of counties example: This example uses the zone numbers 
and values of the acreage rent schedule to assign Clark County, Nevada, 
to the appropriate zone. Current NASS land values for Clark County are 
$5,611 per acre. The state-specific factor for Nevada is 16 percent, 
which is less than the 20 percent minimum established in this rule. 
Therefore, the BLM applied a 20 percent reduction to the NASS land 
values, which results in a per acre value of $4,489. Based on this, 
Clark County is assigned to zone 7 (counties with zone values between 
$3,394.01 and $4,746 per acre). For the purposes of calculating the 
acreage rent, the BLM will use the value for zone 7, which is $4,746 
per acre.
    The following paragraph is an acreage rent example describing the 
acreage rent for solar energy development.
    Acreage rent example: The 2016 acreage rent for a 4,000 acre solar 
energy development in Clark County, Nevada (zone 7) would be $1,021,480 
(4,000 acres x $255.37 per acre). Please note that the acreage rent 
calculation rounds the per acre dollar amount for the county to the 
nearest cent. In this example ($4,746/acre x 100% x 5.27% x 1.021%) is 
rounded to $255.37 per acre.
    As specified in new section 2806.52(a)(3), the initial assignment 
of counties to the zones on the solar energy acreage rent schedule is 
based upon the NASS Census data from 2012 and is established for year 
2016 through 2020. Subsequent reassignments of counties will occur 
every 5 years following the publication of the NASS Census as is 
described in section 2806.21.
    Comment: The BLM received comments expressing concern that the 
assignment of some counties or regions to zones on the solar acreage 
rent schedule may not accurately reflect the value of those lands.
    Response: The BLM recognizes that it may be necessary to adjust the 
initial assignment of counties to zones on the solar energy acreage 
rent schedule. Section 2806.52(a)(3) of the final rule is revised to 
clarify that the BLM may, on its own initiative or in response to 
requests, adjust initial NASS survey data-based county assignments on a 
regional basis if it determines that assignments based solely on NASS 
data do not accurately reflect the values of the BLM lands in question. 
A similar clarification was made to section 2806.62(a)(3).
    Section 2806.52(a)(4) requires acreage rent payments each year, 
regardless of the stage of development or status of operations of a 
grant. Acreage rent must be paid for the public land acreage described 
in the right-of-way grant prior to issuance of the grant and prior to 
the start of each subsequent year of the authorized term. There is no 
phase-in period for acreage rent, which must be paid annually and in 
full upon issuance of the grant. In the event of undue hardship, a rent 
payment plan may be requested and approved by a BLM State director, 
consistent with section 2806.15(c), so long as such a plan is in the 
public interest.
    Section 2806.52(a)(5) states that the BLM will adjust the per acre 
zone rates each year based on the average annual change in the IPD-GDP 
as determined under section 2806.22(a). The acreage rent also will 
adjust each year for solar energy development grants issued under 
subpart 2804. The BLM will use the most current per acre zone rates to 
calculate the acreage rent for each year of the grant term, unless the 
holder selects the scheduled rate adjustment method under section 
2806.52(d). The acreage rent for a solar energy development lease is 
adjusted under section 2806.54(a)(4).
    This paragraph is revised in the final rule by removing ``for 
authorizations outside of designated leasing areas, the BLM . . .'' 
from the first sentence and replacing it with ``We.'' This edit is 
consistent with the acreage rent adjustment provision for wind energy 
(see section 2806.62(b)(5)). It is necessary because the BLM may issue 
a grant inside a DLA in some situations (see section 2809.19) and the 
proposed section would have been inaccurate. This paragraph is also 
revised in the final rule by including the reference to the scheduled 
rate adjustment option, as described in section 2806.51 of this 
preamble.
    Section 2806.52(a)(6) explains where you may obtain a copy of the 
current per acre zone rates for solar energy development (solar energy 
acreage rent schedule) from any BLM State, district, or field office or 
by writing: U.S. Department of the Interior, Bureau of Land Management, 
20 M St SE., Room 2134LM, Attention: Renewable Energy Coordination 
Office, Washington, DC 20003. This paragraph is added so the public is 
aware of where to obtain a copy of the solar energy acreage rent 
schedule described under this section. The BLM also posts the solar 
energy acreage rent schedule online at http://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.
    Section 2806.52(b), ``MW capacity fee,'' describes the components 
used to calculate this fee. Paragraphs (b)(1), (2), (3), and (4) 
explain the MW rate, MW rate schedule, adjustments to the MW rate, and 
the phase-in of the MW rate. As explained in IM 2016-122, electric and 
telephone facilities that qualify for financing under the Rural 
Electrification Act must pay the MW capacity fee and other payments 
required under this rule, except the acreage rent.
    Comments: Some comments noted uncertainty regarding the meaning or 
definition of words in the proposed rule, such as ``MW capacity fee'' 
and its component parts of the MW rate, MW hour price, net capacity 
factor, and rate of return.
    Response: The BLM acknowledges that this rule introduces a number 
of new terms and concepts. The BLM attempted to clearly define these 
terms in section 2801.5(b). Some of the terminology is similar as some 
terms relate to the same general subject matter (e.g., MW capacity fee 
and MW rate). The BLM has revised the regulations and provided 
additional discussion in the preamble to help facilitate a better 
understanding of the rule and its requirements. For example, a more 
specific citation is provided in section

[[Page 92170]]

2806.52(b)(1) and other locations in the final rule to help readers 
better locate and understand the terms of the final rule. These 
revisions and terms are discussed in greater detail throughout the 
preamble for sections 2806.50 through 2806.68.
    The MW capacity fee, as defined in section 2801.5(b), refers to 
payment, in addition to the acreage rent, for solar energy development 
grants and leases based on the approved MW capacity of the solar energy 
authorization. The MW capacity fee is the total authorized MW capacity 
approved by the BLM for a project, or an approved stage of development, 
multiplied by the appropriate MW rate. The MW capacity fee is prorated 
and must be paid for the first partial calendar year in which 
generation of electricity starts or when identified within an approved 
POD. This fee captures the increased value of the right-of-way for the 
particular solar-or wind-project use, above the limited rural or 
agricultural land value captured by the acreage rent. The MW capacity 
fee will vary, depending on the size and type of solar project and 
technology and whether the solar energy right-of-way authorization is a 
grant (issued under subpart 2804) or a lease (issued under subpart 
2809). The MW capacity fee is paid annually either when electricity 
generation begins, or as otherwise stated in the approved POD, 
whichever comes first. If electricity generation does not begin on or 
before the time approved in the POD, the BLM will begin charging a MW 
capacity fee at the time identified in the POD.
    The POD submitted to the BLM by the right-of-way applicant must 
identify the stages of development for the solar or wind energy 
project's energy generation, including the time by which energy 
generation is projected to begin. The BLM will generally allow up to 
three development stages for a solar energy project. As the facility 
becomes operational, the approved MW capacity will increase as 
described in the POD. These stages are part of the approved POD and 
allow the BLM to enforce the diligence requirements associated with the 
grant.
    Comments: Other comments suggested that a bid could include an 
alternative payment structure to the BLM over the life of the project. 
This alternative payment structure would replace the acreage rent and 
MW capacity fee described in this final rule. The comments further 
suggested that the BLM reduce costs to developers by eliminating the MW 
capacity fee, conducting regional mitigation planning for DLAs, and 
performing a majority of the work necessary for the NEPA and Section 7 
(endangered species) reviews early in the process inside DLAs.
    Response: As explained elsewhere in this preamble, the BLM has 
determined that the rule's multi-component payment structure, involving 
both an ``acreage rent'' and ``MW capacity fee'' constitute the full 
fair market value for the use of the public lands by a wind and solar 
energy project. An alternative payment structure may not provide a fair 
return for the use of the public lands, and therefore, would be 
inconsistent with the BLM's obligations under FLPMA. The rule's 
structure is consistent with existing policy. That said, the final rule 
does allow the BLM to establish alternate fiscal terms for an 
individual project or region upon sufficient showing by an applicant 
that such alternative terms are justified. These alternative terms, if 
approved by the BLM, would be used in lieu of the default terms 
established by the rule inside and outside of designated leasing areas.
    Under the rule's multi-component structure, the ``acreage rent'' 
represents the value of the raw undeveloped land, while the MW capacity 
fee represents the value for this particular commercial use of the 
public lands above and beyond the rural or agricultural value of the 
land in its unimproved state. Both are necessary components of 
obtaining the fair market value for the use of the public lands for 
wind and solar energy development. As explained above, this multi-
component structure bears similarities to private land leases, which 
typically involve a land rent and royalty rate.
    As suggested by the comments, the BLM does perform a majority of 
the work up front for the NEPA and Section 7 compliance processes for 
right-of-way leases inside DLAs. Mitigation work and costs may be 
identified in some cases before a competitive process occurs, such as 
in Dry Lake Valley solar energy zone in Nevada. The BLM held a 
competitive process in 2014 and reached a decision within 10 months of 
the auction. This was less than half the time it generally takes to 
process the project applications.
    The BLM had great success in the Dry Lake Valley solar auction, at 
least in part, because there was a regional mitigation strategy in 
place. However, there may be instances in the future where a mitigation 
strategy is not appropriate or necessary. The BLM will not include a 
requirement for mitigation strategies in this final rule, but will be 
consistent with its interim policy guidance for offsite mitigation (IM 
2013-142).
    Comments: Some comments argue that the value of land for purposes 
of renewable energy development should be determined exclusively by MW 
capacity fees or by fees based on the number of MWs actually produced 
and delivered, not by the right-of-way's acreage value.
    Response: Under the final rule, the BLM does not calculate annual 
charges for solar and wind energy development by using only a MW 
capacity fee, as suggested by the comments. The BLM has determined that 
requiring an acreage rent and MW capacity fee is the best method, 
consistent with applicable legal authorities, for determining the 
appropriate value of a solar or wind energy development right-of-way. 
The BLM also notes that the MW capacity fee and acreage rent in the 
final rule have been discounted from comparable costs that are 
typically charged in the private sector to account for the cost to 
comply with the terms and conditions of the BLM's authorization 
(bonding, due diligence, etc.).
    Comments: A comment suggested that the BLM treat solar and wind 
energy technologies the same when setting acreage rents and MW capacity 
fees. Another comment suggested that the BLM give additional 
consideration to the use of energy storage technologies when setting 
acreage rents and MW capacity fees.
    Response: In the BLM's examination of the different energy 
generation technologies it was determined that some technologies, such 
as CSP, are generally more efficient (i.e., generate more energy using 
the same amount of sunlight) than other technology types and often 
require that the site selected for development include certain specific 
characteristics, such as limited grade. This is evidenced by the 
average efficiencies of the various solar technologies as reflected in 
the capacity factors on the EIA's Web site. Since the efficiencies of 
PV and CSP technologies are inherent to the technologies and are, in 
part, related to the particular conditions of the land to be used, the 
BLM maintained this distinction in the final rule and did not implement 
the comment's suggestion on limiting the various solar technology MW 
capacity fees to a single non-distinct fee.
    The BLM did reconsider how it considers storage when charging a MW 
capacity fee. The BLM will maintain the proposed net capacity factor 
for CSP with storage capacity of 3 hours or more. CSP is a technology 
which is generally engineered with storage, which increases the 
efficiency, but decreases overall net capacity. The BLM is confident, 
based on its experience,

[[Page 92171]]

that this is the appropriate net capacity factor for this technology 
based on the technology currently deployed and available information.
    However, the BLM does recognize that storage could have 
implications for other technology types as well. Based upon the premise 
that storage increases the efficiency of a project, the BLM requested 
that the National Renewable Energy Laboratory (NREL) provide a report 
on the status of energy storage in the United States. The BLM hoped to 
use this report to establish in the regulations an appropriate 
methodology for determining the value of storage for solar and wind 
projects on public lands. However, NREL's report noted that energy 
storage is an emerging and rapidly growing market, so there is not 
enough empirical data and commercial experience on storage to support 
an accurate calculation for valuing storage. Therefore, the BLM 
determined that it would be premature to add energy storage values to 
the regulations at this time beyond the one provided for CSP with 3 
hours of storage.
    In this final rule, the BLM adds a new sentence under the 
definition of MW rate to explain that in the future, the BLM may 
establish a different net capacity factor on a case-by-case basis, such 
as when a project uses storage, and the BLM determines that the 
efficiency rating varies from the established net capacity factors in 
this final rule. For example, if a wind energy project includes storage 
in its design, the BLM may determine an appropriate net capacity factor 
for that project.
    Section 2806.52(b)(1) identifies the ``MW rate'' as a formula that 
is the product of four components: The hours per year, multiplied by 
the net capacity factor, multiplied by the MWh price, multiplied by the 
rate of return. This can be represented by the following equation: MW 
Rate = H (8,760 hrs.) x N (net capacity factor) x MWh (Megawatt Hour 
price) x R (rate of return). The components of this formula are 
discussed here at greater length.
    Hours per year. This component of the MW rate formula is the fixed 
number of hours in a year (8,760). The BLM uses this number of hours 
per year for both standard and leap years.
    Net capacity factor. The net capacity factor is the average 
operational time divided by the average potential operational time of a 
solar or wind energy development, multiplied by the current technology 
efficiency rates. A net capacity factor is used to identify the 
efficiency at which a project operates. The net capacity factor is 
influenced by several common factors such as geographic location and 
topography and the technology employed. Other factors can influence a 
project's net capacity factor. For example, placement of a solar panel 
in the direction that captures the most sun may increase the efficiency 
at which a project operates. These other factors tend to be 
specifically related to a project and its design and layout. An 
increase in the net capacity factor is most readily seen when a 
developer sites a project geographically for the energy source they are 
seeking and utilizes the best technology for harnessing the power. An 
example of this is placing wind turbines in a steady wind speed 
location using a wind turbine designed for optimal performance at those 
wind speeds.
    The efficiency rates may vary by location for each specific 
project, but the BLM will use the national average for each technology. 
Efficiency rates for solar and wind energy technology can be found in 
the market reports provided by the Department of Energy through its 
Lawrence Berkeley National Laboratory. For solar energy see ``Utility-
Scale Solar 2012'' at http://emp.lbl.gov/sites/all/files/lbnl-6408e_0.pdf and for wind energy, please see ``2012 Wind Technologies 
Market Report'' at http://emp.lbl.gov/sites/all/files/lbnl-6356e.pdf. 
This rule establishes the net capacity factor for each technology as 
follows:

------------------------------------------------------------------------
                                                           Net capacity
                     Technology type                        factor (%)
------------------------------------------------------------------------
Photovoltaic (PV).......................................              20
Concentrated Photovoltaic (CPV) or Concentrated Solar                 25
 Power (CSP)............................................
CSP w/Storage Capacity of 3 Hours or More...............              30
Wind Energy.............................................              35
------------------------------------------------------------------------

    As previously discussed in this preamble, the BLM has revised the 
proposed description of net capacity factor in this final rule. This 
final rule maintains the proposed net capacity factor for CSP with 
storage capacity of 3 hours or more at 30 percent. The BLM adds in this 
final rule a description of the net capacity factor in the definition 
recognizing that as technology evolves, the BLM may determine a net 
capacity factor for a specific project on a case-by-case basis in the 
future, as appropriate. This will better allow the BLM to receive fair 
market value payment for use of the public lands in the rapidly 
changing storage market.
    The BLM intends to periodically review the efficiency factors for 
the various solar and wind technologies.
    In the proposed rule, the BLM considered basing the net capacity 
factors for these technologies on an average of the annual capacity 
factors listed by the EIA. The EIA posts an average of the capacity 
factors on its Web site at http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_6_07_b. However, the BLM decided not to go 
forward with this provision and removed it from the final rule because 
those annual capacity factors are not reviewed or confirmed by 
technical experts, such as those at the National Laboratories, and 
therefore, they are not a sufficiently reliable source of information 
on which to base the net capacity factor. Further, EIA may not continue 
to maintain and update this information in the future, and therefore, 
it may not be a viable source of information in the future.
    MWh price. This component of the MW rate formula is the full 5 
calendar-year average of the annual weighted average wholesale prices 
of electricity per MWh for the major trading hubs serving the 11 
Western States of the continental United States. This wholesale price 
of the trading hubs is the price paid for energy on the open market 
between power purchasers and is an indication of current pricing for 
the purchase of power. Several comments were submitted concerning the 
MWh price.
    Comment: One comment suggested that this component not be rounded 
to the nearest half cent.
    Response: The BLM proposed to round the MWh price to the nearest 5-
dollar increment. In other portions of the regulations the BLM rounds 
to the nearest cent. The proposed rule was explicit that the MWh price 
would be rounded to the nearest 5-dollar increment, but the final rule 
has been adjusted to round the MWh price to the nearest dollar 
increment. Rounding to the nearest dollar increment is consistent with 
current BLM practices for calculating annual payments. The BLM 
declined, however, to adopt the commenter's suggestion and round to the 
nearest half cent, because the MWh price is an estimated 5-year average 
of wholesale prices. Providing a more specific calculated MWh price 
could give a false precision to the actual rates provided by the BLM.
    Comment: Another comment stated that we should not rely on the ICE 
trading hub as our source for data. Relying on a single vendor for 
determining the MWh price may lead to inaccurate fees if the vendor's 
data is inaccurate. There are other vendors that have current data 
available for the major trading hubs in the West as well.

[[Page 92172]]

    Response: The proposed rule identified the ICE as the source of 
data to be used in calculating the MWh price. However, the final rule 
is revised to remove ICE as the only source of the major trading hub 
data in section 2806.52(b)(3)(i). Removing the specific source of data 
from the final rule is consistent with the proposed rule, in that the 
BLM has indicated that other sources may be used in the future should 
ICE stop providing such data. Furthermore, since publication of the 
proposed rule, the BLM became aware that the ICE no longer provides 
such market data for free to the public, but now offers these data 
under a paid subscription. Future updates to the MWh price may use ICE 
or other similar purveyors of market data to determine the major 
trading hubs and the wholesale market prices of electricity. Under this 
final rule, the BLM is using market data from SNL Financial to 
calculate the 5-year average of the annual weighted average wholesale 
price per MWh.
    Comments: Several comments requested an update of the MWh price and 
stated that any update being made should include language to identify 
the most recent full calendar year data and to remove the uncertainty 
of how the BLM will determine the most recent 5-year data with future 
updates. Commenters further indicated that the data used in calculating 
the MWh price were skewed to numbers higher than the true recent market 
average since market pricing for the year 2008 were much higher than 
the years preceding or following it.
    Response: The BLM understands the concern regarding the intent to 
establish the MWh price using current market data. In the proposed 
rule, market data from calendar years 2008 through 2012 were used to 
determine the MWh price. In the final rule section 2806.52(b)(3)(i), 
the BLM updated the MWh price to reflect the most recent full 5 
calendar-year data (that is, data from 2010-2014) from the major 
trading hubs located in the West.
    In addition, the BLM adjusted provisions governing revisions to the 
MWh price to account for the fact that under section 2806.50, the BLM 
bills customers in advance for the following year. Specifically, the 
BLM revised the final rule so that the next update to the MWh price 
will occur for 2021, not 2020. This will allow the BLM to set the new 
price during 2020 using the most current market data for the previous 
five full years (2015-2019) without using the 2014 data twice. Market 
data for 2019 are not expected to be available until early 2020. Once 
data are available, the BLM will calculate the new, 2021-2025 MW 
capacity fee using the full five calendar-year average of the market 
data for 2015-2019, and notify existing right-of-way holders of the new 
fee.
    In addition to using years 2010 through 2014 in calculating the MWh 
price, and adjusting the provisions governing revisions to that price, 
the BLM also revised the final rule to require that the MWh price be 
rounded to the nearest dollar increment, as opposed to the proposed 
rule's approach of rounding up to the nearest five-dollar increment. 
The BLM made this change to avoid imposing a surcharge due solely to 
rounding. The BLM found that at the current MWh price, rounding to the 
nearest five-dollar increment could impose a surcharge of up to 5 
percent, or $158 per MW of project capacity. Rounding to the nearest 
dollar increment will limit the surcharge without implying false 
precision.
    Note that the current MW rate is $38 per MWh as calculated using 
wholesale market data from SNL Financial for the major trading hubs in 
the west. The calculation for the MWh price is described in more detail 
in following paragraphs with a table provided showing the averages for 
the trading hubs used in the calculation.
    When calculating the MWh price, the BLM used the yearly average 
value for each of the major trading hubs that cover the BLM public 
lands in the West. The BLM then calculated the overall annual average 
yearly hub value for each of the years 2010-2014, and then averaged 
these five annual values to establish the MWh price. The average of the 
five annual average values for 2010 through 2014 is $38.07, so the BLM 
set the MWh price at $38.00.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Mid-
                Year                   Columbia   Palo- Verde      Four       Mead Hub    SP15-EZ CA    NP15 Hub      CA-OR       West US        Avg.
                                         Hub          Hub      Corners Hub                  Hub *                   Border Hub
--------------------------------------------------------------------------------------------------------------------------------------------------------
2010...............................       $35.86       $38.79       $40.13       $40.07       $39.86       $39.81       $38.80       $39.05       $39.05
2011...............................        29.48        36.43        36.66        37.02        36.78        36.00        32.93        35.04        35.04
2012...............................        22.90        29.68        30.59        30.87        34.86        32.03        27.09        29.72        29.72
2013...............................        37.59        37.66  ...........        39.84        48.34        43.97        40.19        41.27        41.27
2014...............................        38.67        42.42  ...........        44.84        51.13        51.06        43.48        45.27        45.27
                                    --------------------------------------------------------------------------------------------------------------------
    2010-2015 Avg..................  ...........  ...........  ...........  ...........  ...........  ...........  ...........        38.07
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Rate of return. The rate of return component used in the MW rate 
schedule reflects the relationship of income (to the property owner) to 
revenue generated from authorized solar or wind energy development 
facilities on the encumbered property. A rate of return for the 
developed land can range from 2 to 12 percent, but is typically around 
5 percent, as identified in the appraisal consultation report completed 
by the Office of Valuation Services. These rates take into account 
certain risk considerations, i.e., the possibility of not receiving or 
losing future income benefits, and do not normally include an allowance 
for inflation.
    An applicant seeking a right-of-way from the BLM must show that it 
is financially able to construct and operate the facility. In addition, 
the BLM may require surety or performance bonds from the holder to 
facilitate compliance with the terms and conditions of the 
authorization, including any payment obligations. This reduces the 
BLM's risk and should allow the BLM to use a ``safe rate'' of return, 
i.e., the prevailing rate on guaranteed government securities that 
includes an allowance for inflation. The BLM has established a rate of 
return that adjusts every 5 years to reflect the preceding 10-year 
average of the 20-year U.S. Treasury bond yield, rounded to the nearest 
one-tenth percent, with a minimum rate of 4 percent. Applying this 
criterion, the initial rate of return is 4 and 3 tenths percent (the 
10-year average of the 20-year U.S. Treasury bond yield (4.32 percent), 
rounded to the nearest one-tenth percent).
    This final rule is revised to round the rate of return to the 
nearest one-tenth percent to address a commenter's concern that BLM's 
usual rounding convention (rounding to the nearest one half percent) 
could result in rate jumps due only to rounding; rounding to the 
nearest one-tenth percent will limit the change in BLM's rates without 
giving a false impression of precision.
    As provided under paragraph (b)(2) of this section, the MW rate 
schedule is

[[Page 92173]]

made available to the public in the MW rate schedule for Solar and Wind 
Energy Development. The current MW rate schedule is available to the 
public at any BLM office, via mail by request, or at http://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.

                             MW Rate Schedule for Solar and Wind Energy Development
                                                   [2016-2020]
----------------------------------------------------------------------------------------------------------------
                                                   Net capacity                                    MW rate 2016-
    Type of energy technology     Hours per year      factor         MWh price    Rate of return       2020
----------------------------------------------------------------------------------------------------------------
Solar--Photovoltaic (PV)........           8,760            0.20             $38           0.043          $2,863
Solar--Concentrated photovoltaic           8,760            0.25              38           0.043           3,578
 (CPV) and concentrated solar
 power (CSP)....................
CSP with storage capacity of 3             8,760            0.30              38           0.043           4,294
 hours or more..................
Wind--All technologies..........           8,760            0.35              38           0.043           5,010
----------------------------------------------------------------------------------------------------------------

    For lease holders that choose the standard rate adjustment method, 
the periodic adjustments in the MW rate are discussed in connection 
with section 2806.52(b)(3). Under that section, adjustments to the MW 
rate will occur every 5 years, beginning with the 2021 rate, by 
recalculating the MWh price and rate of return, as provided in section 
2806.52(b)(3)(i) and (ii), respectively.
    Section 2806.52(b)(3)(i) requires that the MW rate be adjusted 
using the full 5 calendar-year average of the annual weighted average 
wholesale price per MWh for the major trading hubs serving the 11 
Western States of the continental United States. The next update for 
the MW rate will use years 2015 through 2019, rounded to the nearest 
dollar increment. Following this methodology, the resulting MWh price 
will be used to determine the MW rate for each subsequent 5-year 
interval. The availability of data to establish the MWh price is 
described in this preamble in the discussion of the definition of MWh 
price, a component of the MW rate in section 2801.5(b).
    As noted above, section 2806.52(b)(3)(ii) provides that when 
adjusting the rate of return, the BLM will use the 10-year average of 
the 20-year U.S. Treasury bond yield for the full 10 calendar-year 
period preceding the rate of return adjustment. The rate of return is 
rounded to the nearest one-tenth percent, and must be no less than 4 
percent. In the final rule, the rate of return was calculated using 
years 2003 through 2012 of the 20-year U.S. Treasury bond yield (4.32 
percent), rounded to the nearest one-tenth percent (4.3 percent). The 
rate of 4.3 percent will be used for calendar years 2016 through 2020. 
The rate of return will be recalculated every 5 years beginning in 
2020, by determining the 10-year average of the 20-year U.S. Treasury 
bond yield for the previous ten calendar years (2010 through 2019, for 
2020) rounded to the nearest one-tenth percent. The resulting rate of 
return, if not less than 4 percent, will be used to determine the MW 
rate for calendar years 2020 through 2024, and so forth. The 20-year 
U.S. Treasury bond yields are tracked daily and are accessible at 
http://www.treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=longtermrateAll.
    To allow for a reasonable and diligent testing and operational 
period, under section 2806.52(b)(4)(i), the BLM will provide for a 3-
year phase-in of the MW capacity fee for solar energy development 
grants issued under subpart 2804 of 25 percent for the first year, 50 
percent the second year, and 100 percent the third and subsequent years 
of operations. The first year is the first partial calendar year of 
operations and the second year is the first full year. For example, if 
a facility begins producing electricity in June 2016, 25 percent of the 
capacity fee would be assessed for July through December of 2016 and 50 
percent of the capacity fee would be assessed for January through 
December of 2017. One hundred percent would be assessed thereafter.
    This BLM will apply the phase-in after electricity generation 
begins, or is scheduled to begin in the approved POD, whichever comes 
first. The proposed rule stated that the BLM would apply the phase-in 
``. . . after the generation of electricity starts.'' The BLM revised 
section 2806.52(b)(4)(i), from the proposed to final rule, for 
consistency with other sections, including section 2806.52(b). The BLM 
made a corresponding revision to section 2806.62(b)(4)(i).
    Under section 2806.52(b)(4)(ii), this rule explains the staged 
development of a right-of-way. Such staged development, consistent with 
the rule in section 2805.12(c)(3)(iii), can have no more than three 
development stages, unless the BLM approves in advance additional 
development stages. The 3-year phase-in of the MW rate applies 
individually to each stage of the solar development. The MW capacity 
fee is calculated using the authorized MW capacity approved for that 
stage multiplied by the MW rate for that year of the phase-in, plus any 
previously approved stages multiplied by the MW rate.
    Section 2806.52(b)(5) is added to this final rule to explain that 
the general payment provisions of subpart 2806, except for section 
2804.14(a)(4), apply to the MW capacity fee. For example, section 
2806.12 explains when and where a grant holder must pay rent. These 
requirements would also apply to the MW capacity fee. Although the MW 
capacity fee is charged to reflect the commercial utilization value of 
the public's resource, it is an annual payment required to the BLM and 
these general payment provisions will apply.
    The final rule specifies that section 2804.14(a)(4) does not apply 
to the MW capacity fee. As explained in IM 2016-122, the MW capacity 
fee is not a rental fee, and therefore must be paid by electric and 
telephone facilities that qualify for financing under the Rural 
Electrification Act. A new section (see section 2806.62(b)(4)) that 
parallels this requirement is added into the wind energy provisions for 
consistency.
    Section 2806.52(c) is included in the final rule in support of 
revisions the BLM has made to charge fairly for the use of solar and 
wind energy authorizations. See the comment discussion under section 
2806.52(a) for further information.
    Section 2806.52(c) describes how the BLM will reduce the acreage 
rent and the MW capacity fee. The BLM will compare the total annual 
payment of the acreage rent and MW capacity fee for 2017 to the base 
rent and MW capacity fee currently established by policy for the 2016 
billing year. Any net increase in costs to a right-of-way holder will 
be

[[Page 92174]]

reduced by 50 percent for the 2017 billing year. This one-year 
reduction is intended to ease the transition for grant holders from the 
current policies to this final rule. If 2017 is the first year for 
which you make an annual payment, the phase-in described under section 
2806.52(b)(4) will apply without the BLM implementation reduction of 50 
percent. The rates established by policy will remain in effect until 
2017 for rights-of-way that are not issued under subpart 2809 of this 
final rule in order to provide notice of the adjusted rent and fees to 
existing holders.
    Section 2806.52(d) is added to this final rule to establish the 
method by which the BLM will perform scheduled rate adjustments for 
solar and wind energy grants. In order for scheduled rate adjustments 
to be applied to a grant, a grant holder must have selected the 
scheduled rate adjustment method and notified the BLM, as provided in 
section 2806.51 of the final rule.
    Paragraph 2806.52(d)(1) specifies which rates will be used 
initially for the scheduled rate adjustments. For new grants, the BLM 
will use the per acre zone rate (see section 2806.52(a)(1)) and MW rate 
(see section 2806.52(b)(1)) in place when your grant is issued. For 
existing grants that are in place prior to the publication of this 
final rule, the BLM will use the per acre zone rate and MW rate in 
place prior to this rule's publication, as adjusted in paragraph (d)(6) 
of this section and discussed further in corresponding section 
2806.52(d)(6) of this preamble.
    Section 2806.52(d)(2) specifies that the per acre zone rate will be 
adjusted in two ways: Annually, the rate will adjust upward by the 
current average change in the IPD-GDP, as described in section 
2806.22(b); and every five years, the rate will adjust upward by an 
additional 20 percent. In other words, under the scheduled rate 
adjustment method, per acre zone rates will be adjusted in years 1 
through 5 by the IPD-GDP; in year 6, the BLM will apply a 20 percent 
increase to the year-5 rate. The same two-part adjustment process will 
then repeat itself in years 6-10 (IPD-GDP) and year 11 (20%); years 11-
15 (IPD-GDP) and year 16 (20%); years 16-20 (IPD-GDP) and year 21 
(20%); years 21-25 (IPD-GDP) and year 26 (20%); and finally, years 26-
30 (IPD-GDP). If the grant is renewed, the rates in place at the time 
of renewal, as identified in section 2806.52(d)(1), will be used to 
establish the initial rates for the term of the renewed right-of-way.
    As explained previously in connection with section 2806.51, the BLM 
developed the scheduled rate adjustment method in response to concerns 
that NASS values in certain areas have the potential to jump 
significantly. To address this concern while ensuring the BLM obtains 
fair market value for these uses of the public lands, the BLM reviewed 
changes in national per acre land values in NASS and determined that 
making fixed rate adjustments of 20 percent every 5 years would reflect 
historical trends.
    The BLM reached this conclusion as follows. The NASS values are 
released every 5 years, reflecting the increases and decreases in land 
values. Over a period of 10 years, land values could change drastically 
in some counties, but the national and western state average changes in 
land values over the 10-year period from 2003 and ending 2012 were an 
80 percent and a 65 percent increase, respectively. For the BLM lands 
in the west, the range in land value changes were increases of 33 to 
253 percent. The BLM determined from these findings that the scheduled 
rate adjustment method, including both the annual IPD-GDP adjustment 
and the every-five-year scheduled adjustment, should target an upwards 
adjustment of about 60 percent for every 10 year period.
    To achieve this outcome, over the term of a grant, the BLM will 
make five 20-percent adjustments to the per acre zone rates, in years 
6, 11, 16, 21, and 26. Compounded, these five 20-percent adjustments 
will result in a 150 percent increase in the per acre zone rate over 
the 30-year life of the grant (on top of whatever increases are 
dictated by the annual change in IPD-GDP). This adjustment is within 
the identified historic range of changes in land values from NASS, 
which reflect a change between 99 and 759 percent over a 30-year 
period, and is also in line with industry's recommended rate increase 
of 4 percent per year (which amounts to 324 percent over a 30 year 
period, if compounded annually).
    Section 2806.52(d)(3) specifies that the MW rate will also increase 
by 20 percent every 5 years. The BLM reviewed national changes in power 
pricing since 1960 and determined that adjusting the MW rate by 20 
percent every 5 years is appropriate. Since 1960, power pricing has 
increased by over 450 percent, but over the last 30 years, it has 
increased approximately 90 percent. Pricing trends show that power 
pricing seldom drops on an annual basis. The BLM will make 5 20-percent 
adjustments to the MW rate, which amounts to a 150 percent increase 
when compounded over the 30-year life of the grant. This 150 percent 
adjustment is in line with the 4 percent annual rate increase indicated 
by industry representatives. It is also in line with historical changes 
in power prices.
    Section 2806.52(d)(4) makes it clear that the scheduled rate 
adjustment option will enter into effect in year 1 of the rule, for 
both the acreage rent and MW capacity fee. The phase-in (see section 
2806.52(b)(4)) and initial implementation (see section 2806.52(c)) 
sections apply only for grants to which the standard rate adjustment 
applies. Grant holders that select the scheduled rate adjustment method 
choose a defined payment stream over the variable rates that may be 
applied with the standard rate adjustment method. As such, phase-ins 
are not included with the scheduled rate adjustment method.
    Section 2806.52(d)(5) explains that if the approved POD provides 
for staged development of the project, the BLM will calculate the MW 
capacity fee in each year using the MW capacity approved for that 
stage.
    Section 2806.52(d)(6) specifies that the existing rates for grant 
holders that select the scheduled rate adjustment method will be 
adjusted for year 1. The adjustment reflects the fact that, due to this 
rulemaking process, the BLM did not make the rate adjustments called 
for under existing policy in either 2008 (for wind energy) or 2010 (for 
solar energy). If the BLM does not update the rates for existing grant 
holders as specified in this section, it could be as long as 12 years 
between rate updates. Accordingly, in year 1 of this rule, the BLM will 
increase the per acre zone rate for these grant holders by 20 percent 
plus the annual change in the IPD-GDP, as described in section 
2806.22(b), and increase the MW rate by 20 percent. The scheduled rate 
adjustments will then be based off of these adjusted, year-1 rates.
    No additional comments were received, nor were other changes made 
to this section of the final rule, except for minor changes to improve 
readability.
Section 2806.54 Rents and Fees for Solar Energy Development Leases
    The title of this section is revised by removing ``inside 
designated leasing areas.'' In conjunction with a previous comment, the 
BLM has made various edits to the final rule to improve readability. 
The difference between grants and leases is explained earlier in this 
preamble, so this language is unnecessary and potentially confusing.
    The introductory paragraph to section 2806.54 requires a holder of 
a solar energy lease obtained through the competitive process under 
subpart 2809 to pay an annual acreage rent and MW capacity fee. The 
first-year of acreage rent must be paid in advance, prior to

[[Page 92175]]

BLM's issuance of a lease, and the MW capacity fee will be phased-in 
and calculated based on the total authorized MW capacity of the solar 
energy development. Rents or fees for solar authorizations will vary 
depending on the number of acres, technology employed by the solar 
development, and whether the right-of-way authorization is a grant or 
lease.
    There are many similarities in the rent and MW capacity fee for 
leases and grants for solar development. This section references the 
rent and MW capacity fee of grants under subpart 2804, as appropriate, 
and provides further discussion on how the rent MW capacity fee for a 
lease differs from that of a grant. Unlike grants, leases issued under 
subpart 2809 will be charged the full amount of the acreage rent and MW 
capacity fee schedules once this final rule is effective as there are 
no existing solar energy development leases. Although the BLM held a 
competitive offer relating to solar energy development in the Dry Lake 
SEZ, the successful bidders submitted applications and received right-
of-way grants.
    Paragraph (a) of this section identifies the acreage rent for a 
solar lease, which will be calculated in the same way as acreage rent 
for solar grants outside a DLA (see section 2806.52(a)). The acreage 
rent for the first year of a lease must be calculated and paid prior to 
BLM's issuance of a lease. Zone rates and payment of the acreage rent 
are the same for leases as they are for grants. For the per acre zone 
rates, see section 2806.52(a)(1). For the assignment of counties, see 
section 2806.52(a)(2) and (3). For the acreage rent payment, see 
section 2806.52(a)(4).
    Consistent with other revisions in this final rule, the BLM added 
``This acreage rent will be based on the following:'' at the end of 
section 2806.54(a). This revision makes it clear that the following 
paragraphs will be the basis for BLM's acreage rent for leases in DLAs.
    Section 2806.54(a)(4) describes the adjustments to the acreage rent 
that may be made for a lease. Once an acreage rent is determined for a 
lease under paragraph (a) of this section, any adjustments in the 
annual acreage rent will be made at 10-year intervals thereafter--the 
first adjustment would be made in year 11 of the lease term and the 
next in year 21. During the 10-year periods, the acreage rent for a 
lease will remain constant and not be adjusted.
    The BLM will, however, adjust the per acre zone rates of the 
acreage rent schedule each year based on the average annual change in 
the IPD-GDP, as described in section 2806.22(a). This annual adjustment 
will not be applied to the acreage rent payments for a lease until the 
next 10-year interval, where the payment will be recalculated using the 
current acreage rent schedule. The BLM will use the most current per 
acre zone rates to calculate the acreage rent when first determining a 
new lease's acreage rent or when recalculating the acreage rent for the 
next 10-year period of a lease, unless the holder selected the 
scheduled rate adjustment method under section 2806.54(d).
    Section 2806.54(b) identifies the MW capacity fee for solar 
development leases, which will be calculated in the same way as the MW 
capacity fee for solar grants outside of a DLA. The phase-in of the MW 
capacity fee is different from grants. For an explanation of when the 
BLM requires payment of the MW capacity fee, see section 2806.52(b). 
For the MW rate, see section 2806.52(b)(1). For the MW rate schedule, 
see section 2806.52(b)(2). For periodic adjustments in the MW rate, see 
section 2806.52(b)(3).
    Reference to section 2806.52(b) has been added to the final rule. 
In conjunction with a previous comment, the BLM has made various edits 
to the final rule to improve readability. The BLM has explained when 
and how it will require payment and adding this specific citation will 
make this section more understandable.
    Section 2806.54(c) describes the MW rate phase-in for solar energy 
development leases. Unless the holder selected the scheduled rate 
adjustment method under section 2806.54(d), the MW rate in effect at 
the time the lease is issued will be used for the first 20 years of the 
lease. The MW rate in effect in year 21 of the lease will be used for 
years 21-30 of the lease.
    In order to improve readability in this section, the BLM provided a 
more specific citation to section 2806.52(b)(2). This should help 
direct the reader to the appropriate section of this final rule.
    Section 2806.54(c)(1) provides for a 10-year phase-in of the MW 
capacity fee, plus the initial partial year, if any. For the first ten 
years of a lease, the MW capacity fee is calculated by multiplying the 
authorized MW capacity by 50 percent of the MW rate for the applicable 
type of solar technology employed by the project. The MW rate schedule 
is provided for under section 2806.52(b)(2). The phase-in applies to 
the MW rate for either solar or wind energy leases (see section 
2806.64(c)).
    Section 2806.54(c)(2) applies to the MW rate phase-in for years 11 
through 20 of a lease. The MW capacity fee for years 11 through 20 will 
be calculated by multiplying the MW capacity by 100 percent of the MW 
rate.
    Section 2806.54(c)(3) applies to the MW rate for years 21 through 
30 of a lease. The MW capacity fee for years 21 through 30 will be 
calculated by multiplying the MW capacity by 100 percent of the MW 
rate. If the POD requires that electricity generation will begin after 
year 10 of the lease, the MW capacity fee will be calculated using 
section 2806.54(c)(2) or (3), as appropriate.
    Comments: Some comments suggested establishing a low cost payment 
structure, which is different from that proposed. The suggested payment 
structure would include a phase-in during the first half of a project's 
life and then raise fees to regular (full) rates for all solar and wind 
leases. The payment structure could require an upfront cost payment, 
and then full costs only when financial costs are being incurred by the 
developer. An example would be to reduce payments to 10 percent of the 
gross lease rate for the first 15 years for a lease within a designated 
solar energy development leasing area.
    Response: The BLM did not change the payment structure as suggested 
by the commenter. FLPMA requires that the BLM generally receive fair 
market value for the use of the public lands. The suggested low cost 
payment structure may not provide fair market value.
    Comments: Some comments suggested removing the distinction between 
solar or wind technologies and their respective base rent or fees 
(i.e., wind is 30 percent and solar is 25 percent without 
differentiation between technologies). The comment also suggested that 
the BLM incentivize storage for solar facilities, to promote grid 
stability, by offering a reduced rate.
    Response: The BLM's methodology for collecting fair market value 
through rents and fees is similar to market comparable practices from 
non-Federal lands. Use of a technology-specific net capacity factor is 
appropriate for determining the MW rate for solar and wind energy 
development. Further, the BLM is not responsible for directing a 
technology's costs or its success in the energy market. Intentionally 
setting rates below market values or without market support, such as by 
establishing a net capacity factor, is not appropriate for this final 
rule. These suggestions have not been incorporated into the final rule, 
and the language in the proposed rule is carried forward to the final 
rule, with some revision as noted in the discussion of section 
2806.52(b).

[[Page 92176]]

    Comment: Another comment recommends that if a MW capacity fee is 
adopted in the final rule for leases (issued under subpart 2809), the 
MW rate should be phased-in at 50 percent for the life of the lease; 
for grants (issued under subpart 2804), the MW rate should be phased-in 
over a 5-year period. The comment also recommends using the MW rate in 
effect when the lease or grant is issued without adjustment. PPAs are 
generally fixed for a term, usually 20 years. A developer places a 
higher premium on certainty and stability of the MW capacity fee over 
the potential for reduced rates in the future in case of a long-term 
downward trend in prices.
    Response: The BLM is aware that certainty and stability are factors 
to consider when developing and establishing its rules. However, based 
on the BLM's experience, most solar and wind energy developments break 
even with the costs of constructing and operating a facility within 15 
to 20 years after the start of generation of electricity. The BLM has 
taken this into account as part of its formulation of the MW rate 
updates and phase-in.
    The MW rate is set when a lease is issued, and not updated until 
year 21 of the lease. The MW rate is phased-in for the first 10 years 
at 50 percent of the full rate, after which the MW rate is no longer 
phased-in. Any updates to the MW rate schedule will not result in an 
adjustment to leases during the 10-year phase-in or the first 20 years 
of the lease. Only at year 21 and each following 10-year interval will 
the MW rate adjust, using the currently established MW rate schedule.
    A grant's MW rate, however, is set each year, beginning when a 
project starts generating electricity. The MW rate is phased-in for the 
first 3 years at 25/50/100 percent of the MW rate, respectively. The 
BLM will recalculate the MW rate schedule once every 5 years, at which 
time the next year's payment by a developer will adjust consistent with 
the updated MW rate schedule.
    Section 2806.54(c)(4) describes the MW capacity fee of the lease if 
it were to be renewed. The MW capacity fee is calculated using the 
then-current MW rates at the beginning of the new lease period and 
remain at that rate through the initial 10-year period of the renewal 
term. The MW capacity fee will be adjusted using the then-current MW 
rate at the beginning of each subsequent 10-year period of the renewed 
lease term.
    Under section 2806.54(c)(5), the rule provides for the staged 
development of leases. Such staged development, consistent with section 
2805.12(c)(3)(iii), will have no more than three development stages, 
unless the BLM approved more development stages in advance. The MW 
capacity fee is calculated using the authorized MW capacity approved 
for that stage multiplied by the MW rate for that year of the phase-in, 
plus any previously approved stages multiplied by the MW rate as 
described in section 2806.54(c).
    Section 2806.54(d) is added to this final rule to establish the 
method by which the BLM will perform scheduled rate adjustments for 
leases, similar to the scheduled rate adjustments for grants in section 
2806.52(d). In order for scheduled rate adjustments to be applied to a 
lease, a lease holder must have selected the scheduled rate adjustment 
method, as required in section 2806.51.
    Section 2806.54(d)(1) specifies which rates will be used initially 
for the scheduled rate adjustments. The BLM will use the per acre zone 
rate (see section 2806.52(a)(1)) and MW rate (see Sec.  2806.52(b)(1)) 
that are in place when your lease is issued.
    Section 2806.54(d)(2) specifies that the per acre zone rate will be 
increased every 10 years by the change in the IPD-GDP for the preceding 
10-year period. (In contrast, the per acre zone rate for grants is 
adjusted every 5 years.) The 10-year average IPD-GDP change used for 
this increase is the same that is used to adjust the per acre rent 
schedule annually for linear rights-of-way under section 2806.22(b), 
except that it will be adjusted once cumulatively every ten years, 
rather than annually. For example, the current annual change in IPD-GDP 
is 2.1 percent, which would result in a roughly 21 percent change in 
year ten. In addition to the IPD-GDP change, a 40 percent increase 
every 10 years will be applied as part of the scheduled rate adjustment 
(in contrast to a 20 percent increase every 5 years for grants). The 
BLM will continue to apply this adjustment every 10 years (that is, in 
years 11 and 21 for the 30-year lease).
    Similar to the approach taken for grants, the BLM reviewed changes 
in national per acre land values in NASS when establishing the 40 
percent adjustment. Over the term of a lease, the BLM would make two 
adjustments to the per acre zone rates. These two adjustments would 
compound on each other, for a cumulative increase of 96% over the 30-
year life of the lease. This adjustment is within the identified change 
in land values from NASS and is also in line with industry's 
recommendation of an annual change in rates limited to no more than 4 
percent. (A 4 percent annual increase, compounded annually over 30 
years, amounts to a 324 percent increase over the life of the lease.) 
For further discussion on this, see the preamble discussion of section 
2806.52(d)(2).
    Section 2806.52(d)(3) specifies that likewise, the MW rate will 
increase by 40 percent every 10 years. The BLM reviewed national 
changes in power pricing since 1960 and determined that 40 percent 
adjustments to the MW rate every 10 years are appropriate. Over the 
term of the lease, the BLM would make 2 adjustments to the MW rate (in 
years 11 and 21). These 2 adjustments would compound on each other for 
a cumulative increase of 96% over the 30-year life of the lease. This 
adjustment is within the identified range of power pricing changes and 
is also in line with industry's recommendation of an annual change in 
rates limited to no more than 4 percent. (A 4 percent annual increase, 
compounded annually over 30 years, amounts to a 324 percent increase 
over the life of the lease.) For further discussion on this, see the 
preamble discussion of section 2806.52(d)(3).
    Section 2806.54(d)(4) specifies that the phase in of the MW rate 
for standard rate adjustments in section 2806.54(c) does not apply to 
authorizations that are using the scheduled rate adjustments. Instead, 
for years 1 through 5 of a lease, plus any initial partial year, the MW 
capacity fee is 50 percent of the otherwise applicable solar rate. This 
reduction is applied only to new leases and only during the initial 
term; the phase-in will not be applied to leases when renewed.
    Like the phase-in period under the standard rate adjustment method, 
the initial MW capacity is also subject to a phase-in; however, it is 
shorter (a 5-year period instead of a 10-year period). Again, the 
purpose of the phase-in period is to provide a financial incentive to 
developers to use the public lands within their grant earlier (since 
the clock on the phase-in starts running at lease issuance, even though 
the obligation to pay the MW capacity fee does not attach until power 
generation commences). The BLM selected a 5-year phase-in under the 
scheduled rate adjustment method instead of the 10-year phase-in from 
section 2806.54(c) because of the difference in rate structures. Under 
the standard rate adjustment, the MW capacity fee will not adjust for 
the first 20 years of a lease term, and that initial rate is phased-in 
for the first half of that period (10 years). Under the scheduled rate 
adjustments, the rate adjusts every 10 years and the phase-in is 
provided for half of the initial rate period (5 years). Both the 10-
year and 5-year phase-in are consistent with market practices.

[[Page 92177]]

    Section 2806.54(d)(5) explains that if the approved POD provides 
for staged development of the project, the BLM will calculate the MW 
capacity fee using the MW capacity approved for that stage. Only 
development stages in operation during the first 5 years of a lease 
will be phased-in.
    MW capacity fee-example 1: The MW capacity fee for a 400-MW 
photovoltaic solar energy right-of-way grant would be $1,145,200 per 
year (400 MWs x $2,863 per MW), implemented over a 3-year period after 
the start of electricity generation. In the first partial year after 
start of generation in July for a solar energy right-of-way, the MW 
capacity fee would be $143,150 (400 MWs x $2,863 per MW x 25 percent x 
0.5 year); in the second year after the start of electricity 
generation, the MW capacity fee would be $572,600 (400 MWs x $2,863 per 
MW x 50 percent x 1 year); and in the third year after the start of 
electricity generation, and each year thereafter, the MW capacity fee 
would be $1,145,200 per year (400 MWs x $2,863 per MW x 1 year).
    MW capacity fee-example 2: The MW capacity fee for a 400 MW 
concentrated PV or concentrated solar power right-of-way grant would be 
$1,431,200 per year (400 MWs x $3,578 per MW), implemented over a 3-
year period after the start of electricity generation. In the first 
partial year assuming the start of electricity generation in January 
for a solar energy right-of-way, the MW capacity fee would be $357,800 
(400 MWs x $3,578 per MW x 25 percent x 1 year); in the second year 
after the start of electricity generation, the MW capacity fee would be 
$715,600 (400 MWs x $3,578 per MW x 50 percent x 1 year); and in the 
third year after start of generation and each year thereafter, the MW 
capacity fee would be $1,431,200 per year (400 MWs x $3,578 per MW x 1 
year).
    MW capacity fee-example 3: The MW capacity fee for a 400 MW solar 
power right-of-way grant with a storage capacity of 3 hours or more 
would be $1,717,600 per year (400 MWs x $4,294 per MW), implemented 
over a 3-year period after the start of electricity generation. 
Assuming generation began in January, in the first partial year after 
the start of electricity generation, the MW capacity fee would be 
$429,400 for a solar energy right-of-way (400 MWs x $4,294 per MW x 25 
percent x 1 year); in the second year after the start of electricity 
generation, the MW capacity fee would be $858,800 (400 MW x $4,294 per 
MWs x 50 percent x 1 year); and in the third year after the start of 
electricity generation, and each year thereafter, the MW capacity fee 
would be $1,717,600 per year (400 MW x $4,294 per MWs x 1 year).
    Acreage rent and MW capacity fee example for a solar energy 
development grant: The annual acreage rent and MW capacity fee for 2016 
for a 400 MW photovoltaic solar energy development grant located on 
4,000 acres in Clark County, NV after the phase-in period would be 
approximately $2,231,480. (The acreage rent of $1,021,480 (4,000 acres 
x $255.37 per acre) plus the MW capacity fee of $1,261,600 (400 MWs x 
$3,154 per MW) equals $2,283,080).
    No comments were received and no changes are made from the proposed 
rule to the final rule.
Section 2806.56 Rent for Support Facilities Authorized Under Separate 
Grant(s)
    Under this section, support facilities for solar development will 
be authorized under a grant. Support facilities may include 
administration buildings, groundwater wells, and construction laydown 
and staging areas. Rent for support facilities authorized under 
separate grants is determined using the Per Acre Rent Schedule for 
linear facilities under existing section 2806.20(c). No comments were 
received and no changes are made from the proposed rule to the final 
rule.
Section 2806.58 Rent for Energy Development Testing Grant(s)
    Comments: Several comments suggested that site- and project-area 
testing should be allowed for both solar and wind energy.
    Response: The final rule now includes site- and project-area 
testing authorizations for both solar energy and wind energy. New 
section 2806.58 has been added in this final rule to incorporate this 
change. Changes in this section are consistent with section 2806.68, 
which did not receive any comments, but was modified to remove the word 
``wind'' from the naming of the type of grants to remain consistent 
with the types of authorizations that the BLM will issue.
    Section 2806.58(a) describes the rent for any energy site-specific 
testing grant. A minimum rent is established as $100 per year for each 
grant issued. Under this paragraph rent is set by incorporating into 
the final rule the site-specific rent amount found in the BLM's IM No. 
2009-043, as follows: Site-specific grants are authorized only for one 
site and do not allow multiple sites to be authorized under a single 
grant; however, a single entity may hold more than one site-area 
testing grant. If a BLM office has an approved small site rental 
schedule, that office may use the rents, so long as the rent exceeds 
the $100 minimum. Small site rental schedules are provided to the BLM 
from the Department's Office of Valuation Services and reflect accurate 
determination of market value. In lieu of annual payments for a site-
specific testing grant, a grant holder may pay for the entire 3-year 
term of the grant. See sections 2801.9(d)(1) and 2805.11(b)(2)(i) of 
this preamble for further discussion of site-specific energy testing 
grants.
    Section 2806.58(b) describes the rent for any energy project-area 
testing grant. A per-year minimum rent is established at $2,000 per 
authorization or $2 per acre for the lands authorized by the grant, 
whichever is greater. The appraisal consultation report by the Office 
of Valuation Services supports the rent established in this final rule. 
Project-area grants may authorize multiple meteorological or 
instrumentation testing sites. There is no additional charge or rent 
for an increased number of sites authorized under such grants. See 
sections 2801.9(d)(2) and 2805.11(b)(2)(ii) of this preamble for 
further discussion of project-area energy testing grants.
Section 2806.60 Rents and Fees for Wind Energy Rights-of-Way
    Section 2806.60 requires a holder of a wind energy right-of-way 
authorization to pay annual rent and MW capacity fees for right-of-way 
grants issued under subpart 2804 and leases issued under subpart 2809.
    As noted earlier in this preamble, there are similarities between 
rents and MW capacity fees for solar and wind energy, as well as 
between rents and MW capacity fees for authorizations issued under 
subparts 2804 and 2809. The BLM intentionally designed the rents and 
fees for solar and wind energy development projects to match as closely 
as possible in order to reduce the potential for confusion and 
misunderstanding of the requirements. The methodology for calculating 
rents, fees, phase-ins, adjustments, and rate proration is the same for 
wind as for solar. Many of the terms and conditions of a lease issued 
under this subpart will also be the same. No comments were received on 
this section, and no changes were made between the proposed and final 
versions of this section, other than those discussed in connection with 
section 2806.50 of this preamble.
Section 2806.61 Scheduled Rate Adjustment
    Section 2806.61 is added to the final rule, consistent with section 
2806.51 of this final rule. This section parallels

[[Page 92178]]

2806.51 with no substantive differences, except that this section 
applies to wind energy grants and leases instead of solar energy grants 
and leases. See section 2806.51 of this preamble for further 
discussion. Parallel changes are also made in sections 2806.62(d) and 
2806.64(d) of this preamble. See sections 2806.52(d) and 2806.54(d) of 
this preamble for further discussion of those sections.
Section 2806.62 Rents and Fees for Wind Energy Development Grants
    Section 2806.62 parallels section 2806.52, which discusses rents 
and MW capacity fees for solar energy development grants. The 
discussion on all components of the wind energy development grants 
duplicates the provisions for solar rents and fees, except for 
paragraph (a)(1) of this section which discusses the per acre zone 
rates and paragraphs (a)(6) and (7) and (b)(4)(iii) of this section, 
which discuss the BLM implementation of the new acreage rent and MW 
capacity fee. Revisions have been made to the requirements of this 
section consistent with comments on the proposed rule. See comments 
discussed under section 2806.52 for further information and details 
regarding the revisions made to the final rule.
    Section 2806.62(a) addresses the acreage rent for wind energy 
development. See section 2806.52(a) for a discussion of acreage rent. 
The acreage rent is calculated by multiplying the number of acres 
(rounded up to the nearest tenth of an acre) within the authorized area 
times the per acre zone rate in effect at the time the authorization is 
issued. The annual zone rate is derived from the wind energy acreage 
rent schedule in effect at the time the authorization is issued.
    Section 2806.62(a)(1) addresses per acre zone rates for wind energy 
development grants. The methodology for calculating the acreage rent is 
the same for wind as it is for solar, but wind and solar energy have 
different encumbrance factors. Solar energy projects encumber 
approximately 100 percent of the land, while wind energy projects 
encumber approximately 10 percent of the land. Therefore, for wind, the 
per acre zone rate is calculated using a 10 percent encumbrance factor 
instead of 100 percent encumbrance factor.
    Under section 2806.62(a)(1), the initial per acre zone rate for 
wind energy projects is now established by considering four factors: 
the per acre zone value multiplied by the encumbrance factor multiplied 
by the rate of return multiplied by the annual adjustment factor. This 
calculation is reflected in the following formula - A x B x C x D = E, 
where:
    ``A'' is the per acre zone value are the same per acre zone values 
described in the linear rent schedule in section 2806.20(c);
    ``B'' is the encumbrance equaling 10 percent;
    ``C'' is the rate of return equaling 5.27 percent;
    ``D'' is the annual adjustment factor equaling the average annual 
change in the IPD-GDP for the 10-year period immediately preceding the 
year that the NASS census data becomes available; and
    ``E'' is the annual per acre zone rate. The BLM will adjust the per 
acre zone rates each year, based on the average annual change in the 
IPD-GDP, as described in section 2806.22(a). Adjusted rates are 
effective each year on January first.
    Under section 2806.62(a)(2), counties (or other geographical areas) 
are assigned a Per Acre Zone Value on the wind energy acreage rent 
schedule, based on the State-specific percent of the average land and 
building value published in the NASS Census. The Per Acre Zone Value is 
a component of calculating the Per Acre Zone Rate under paragraph 
(a)(1) of this section. As specified in new section 2806.62(a)(3), the 
initial assignment of counties to the zones on the wind energy acreage 
rent schedule will be based upon the NASS Census data from 2012 and be 
established for calendar years 2016 through 2020. Subsequent 
reassignments of counties will occur every 5 years following the 
publication of the NASS Census, as described in section 2806.21. State-
specific percentage factors will be recalculated once every 10 years at 
the same time the linear rent schedule is updated, as described in 
section 2806.22(b).
    Section 2806.62(a)(2) provides the calculation to establish a 
State-specific percent factor that represents the difference between 
the improved agricultural land values provided by NASS and the 
unimproved rangeland values that represent BLM land. The calculation 
for determining the State-specific percent factor is (A/B) - (C/D) = E, 
where:
    ``A'' is the NASS Census statewide average per acre value of non-
irrigated acres;
    ``B'' is the NASS Census statewide average per acre land and 
building value;
    ``C'' is the NASS Census total statewide acres in farmsteads, 
homes, buildings, livestock facilities, ponds, roads, wasteland, etc.;
    ``D'' is the total statewide acres in farms; and
    ``E'' is the State-specific percent factor or 20 percent, whichever 
is greater.
    The county average per acre land and building values that exceed 
the 20 percent threshold for solar and wind energy development are as 
follows for the BLM managed lands:

                      Table of State-Specific Factors and Other Data for Applicable States
----------------------------------------------------------------------------------------------------------------
                                         Existing regulations
                                          and proposed rule:      Final rule state-by-      Final rule state-
                State                   nationwide 20 percent       state calculated      specific factors  (%)
                                             factors (%)              factors  (%)
----------------------------------------------------------------------------------------------------------------
Alaska...............................                       20                       12                       20
Arizona..............................                       20                       49                       49
California...........................                       20                       51                       51
Colorado.............................                       20                       24                       24
Idaho................................                       20                       29                       29
Montana..............................                       20                       12                       20
Nevada...............................                       20                       16                       20
New Mexico...........................                       20                       24                       24
North Dakota.........................                       20                        5                       20
South Dakota.........................                       20                        5                       20
Oregon...............................                       20                        2                       20
Texas................................                       20                       -1                       20
Utah.................................                       20                       54                       54

[[Page 92179]]

 
Washington...........................                       20                       21                       21
Wyoming..............................                       20                       16                       20
Average..............................                       20                       21                       27
----------------------------------------------------------------------------------------------------------------

    The following table lists the paragraphs where the wind energy 
grant provision parallels the solar energy provision for the same 
topic. The discussion for each relevant wind energy provision is found 
in this preamble under the associated solar energy provision.

----------------------------------------------------------------------------------------------------------------
                 Topic                              Wind                                Solar
----------------------------------------------------------------------------------------------------------------
Acreage Rent...........................  43 CFR 2806.62(a).........  43 CFR 2806.52(a).
Per acre Zone Rate.....................  43 CFR 2806.62(a)(1)......  43 CFR 2806.52(a)(1).
Assignment of Counties.................  43 CFR 2806.62(a)(2)......  43 CFR 2806.52(a)(2).
Initial Assignment of Counties.........  43 CFR 2806.62(a)(3)......  43 CFR 2806.52(a)(3).
Acreage Rent Payment...................  43 CFR 2806.62(a)(4)......  43 CFR 2806.52(a)(4).
Acreage Rent Adjustments...............  43 CFR 2806.62(a)(5)......  43 CFR 2806.52(a)(5).
Obtain a Copy of Rent Schedule.........  43 CFR 2806.62(a)(7)......  43 CFR 2806.52(a)(6).
MW Capacity Fee........................  43 CFR 2806.62(b).........  43 CFR 2806.52(b).
MW Rate................................  43 CFR 2806.62(b)(1)......  43 CFR 2806.52(b)(1).
MW Rate Schedule.......................  43 CFR 2806.62(b)(2)......  43 CFR 2806.52(b)(2).
MW Rate Adjustments....................  43 CFR 2806.62(b)(3)......  43 CFR 2806.52(b)(3).
MW Rate Formula........................  43 CFR 2806.62(b)(3)(i)...  43 CFR 2806.52(b)(3)(i).
Rate of Return.........................  43 CFR 2806.62(b(3)(ii)...  43 CFR 2806.52(b)(3)(ii).
MW Rate Phase-in.......................  43 CFR 2806.62(b)(4)......  43 CFR 2806.52(b)(4).
Scheduled Rate Adjustment..............  43 CFR 2806.62(d).........  43 CFR 2806.52(d).
Initial Rates Used.....................  43 CFR 2806.62(d)(1)......  43 CFR 2806.52(d)(1).
Acreage Rate Adjustment................  43 CFR 2806.62(d)(2)......  43 CFR 2806.52(d)(2).
MW Rate Adjustment.....................  43 CFR 2806.62(d)(3)......  43 CFR 2806.52(d)(3).
MW Rate Phase-in.......................  43 CFR 2806.62(d)(4)......  43 CFR 2806.52(d)(4).
Stage of Development...................  43 CFR 2806.62(d)(5)......  43 CFR 2806.52(d)(5).
Existing Grants........................  43 CFR 2806.62(d)(6)......  43 CFR 2806.52(d)(6).
----------------------------------------------------------------------------------------------------------------

    Section 2806.62(a)(6) is added to this final rule to explain that 
holders of wind energy development grants must pay acreage rent as 
described in section 2806.62(a), except that for holders of wind energy 
development grants, the acreage rent will be phased in as described in 
section 2806.62(c).
    Section 2806.62(b)(4)(i) addresses the term of the MW rate phase-
in. Paragraphs (b)(4)(i)(A), (B), and (C) of this section address the 
percentages of the phase-in. See section 2806.52(b)(4)(i) for a 
discussion of the term of the MW rate phase-in and paragraphs 
(b)(4)(i)(A), (B), and (C) for the percentages of the phase-in. No 
change is made to the final rule, other than the change made for 
consistency with section 2806.52(b)(4)(i).
    New section 2806.62(b)(4)(ii) addresses the MW rate phase-in for a 
staged development. Paragraph (b)(4)(ii)(A) of this section addresses 
the percentages of the phase-in and paragraph (b)(4)(ii)(B) addresses 
the calculation of the rent for the phase-in of a staged development. 
See section 2806.52(b)(4)(ii) for a discussion of the MW rate phase-in 
for a staged development, paragraph (b)(4)(ii)(A) for the percentages 
of the phase-in, and paragraph (b)(4)(ii)(B) for the calculation of the 
rent for the phase-in of a staged development.
    New section 2806.62(b)(4)(iii) states that the MW rate will be 
implemented as described in section 2806.62(c).
    Comment: A comment noted that the BLM has not yet designated any 
wind energy zones or other preferred wind energy development areas that 
would become a DLA. Without any such areas designated for wind energy, 
the BLM's rule would put wind energy at a disadvantage in comparison to 
solar energy since wind energy would not be able to benefit from the 
incentives available for development in such areas.
    Response: The BLM agrees that there are currently no wind energy 
development areas and that wind energy developers cannot yet benefit 
from the incentives provide for DLAs in subpart 2809 of this final 
rule. The BLM intends to establish wind energy DLAs in the future. 
However, this would be done through amending or revising a land use 
plan, which can take several years. Therefore, the BLM has added 
section 2806.62(c) to this final rule to explain how the BLM will 
implement the acreage rent and MW capacity fee for wind energy grants.
    Developers that submitted an application prior to the publication 
of the proposed rule would not have known the potential incentives for 
developing inside a DLA. This final rule provides a payment reduction 
to developers that had committed to a project on the public lands 
before this rule was proposed. However, developers that submitted 
applications after the publication of the proposed rule were aware of 
the BLM's proposed rule and incentives and knew that they did not 
qualify for these incentives.
    Section 2806.62(c) implements this payment reduction. Specifically, 
section 2806.62(c) applies to all wind energy development grants that 
have made a payment for billing year 2016, or for which an application 
to the BLM was filed before September 30, 2014. This is explained in 
the following paragraphs.

[[Page 92180]]

    Under paragraph 2806.62(c)(1) of this section, the BLM will reduce 
the acreage rent and the MW capacity fee. The BLM will compare the 
total annual payment of the acreage rent and MW capacity fee for 2017 
to the total annual payment currently required by policy for the 2016 
billing year. Any net increase in costs to a right-of-way holder will 
be reduced by 50 percent for 2017 billing year. This one-year reduction 
is intended to ease the transition for grant holders from the current 
policies to this final rule. If 2017 is the first year for which you 
make an annual payment, the phase-in described under section 
2806.52(b)(4) will apply without an implementation reduction of 50 
percent. The rates established by policy will remain in effect until 
2017 for rights-of-way that are not issued under subpart 2809 of this 
final rule in order to provide notice to existing holders of the 
adjusted rent and fees.
    Section 2806.62(c)(2) explains how the BLM will implement the 
acreage rent and MW capacity fee for wind energy grants for which an 
application to the BLM was filed before September 30, 2014. In addition 
to the timely filing requirement, a grant holder must also have an 
accepted POD and cost recovery agreement established before September 
30, 2014.
    The BLM intends for this section to apply to applications that were 
filed before the BLM issued the proposed rule on September 30, 2014. 
Anyone who submitted an application before this date would not have 
known about the proposed requirements of the final rule, including 
updates to the payment requirements and the incentives for developing 
inside a DLA.
    Under paragraph (c)(2)(i) of this section, the BLM will reduce the 
acreage rent of the grant for the first year by 50 percent. This 
reduction applies only to the first year's annual payment, even if it 
is for a partial year. If the BLM requires an upfront payment for the 
first partial year and next full calendar year, only the partial year 
will be reduced by 50 percent. The BLM may require such payment for the 
year in advance for rights-of-way authorized consistent with section 
2806.12 of this final rule. No reduction will be applied to the acreage 
rent for the subsequent years of the grant.
    Under paragraph (c)(2)(ii) of this section when the project has 
reached a point where the BLM requires a MW capacity fee payment, the 
MW capacity fee will be reduced by 75 percent for the first and second 
year and 50 percent for the third and fourth year of the grant. The 
first year is the initial partial year, if any, after electricity 
generation begins. The fifth and subsequent years will be charged at 
100 percent of the MW capacity fee. This reduction applies to each 
approved stage of development.
    No further comments were received and no other changes were made to 
this section, beyond those that were already discussed in this preamble 
in connection with section 2806.52.
Section 2806.64 Rents and Fees for Wind Energy Development Leases
    The title of this section was revised by adding ``and fees'' and 
removing ``inside designated leasing areas.'' This was done to be 
consistent with the title of section 2806.54.
    See section 2806.54 for a discussion of all components of rent for 
a wind energy development lease, except for section 2806.54(a)(1), 
which discusses the per acre zone rates. Section 2806.54(a)(1) does not 
apply to wind energy development grants and leases because solar and 
wind energy acreage rents are calculated using different encumbrance 
factors. Section 2806.64(a)(1) addresses the per acre zone rate for 
wind energy leases. See section 2806.54(a)(1) for a discussion of 
acreage rent.
    Section 2806.64(a)(1) addresses per acre zone rates for wind energy 
leases. See section 2806.62(a)(1) for a discussion of acreage rent, 
which differs from solar energy development. The per acre rents are 
calculated using the methodology discussed in section 2806.62(a)(1), 
which reflects the 10 percent encumbrance factor for wind energy 
development.
    The following chart lists the paragraphs where the wind energy 
lease provisions parallel the solar energy provisions for the same 
topic. The discussions for each relevant wind energy provision are 
found in the preamble under the associated solar energy provision.

----------------------------------------------------------------------------------------------------------------
                 Topic                              Wind                                Solar
----------------------------------------------------------------------------------------------------------------
Acreage Rent...........................  43 CFR 2806.64(a).........  43 CFR 2806.54(a)
Per acre Zone Rate.....................  43 CFR 2806.64(a)(1)......  43 CFR 2806.54(a)(1)
Assignment of Counties.................  43 CFR 2806.64(a)(2)......  43 CFR 2806.54(a)(2)
Acreage Rent Payments..................  43 CFR 2806.64(a)(3)......  43 CFR 2806.54(a)(3)
Acreage Rent Adjustments...............  43 CFR 2806.64(a)(4)......  43 CFR 2806.54(a)(4)
MW Capacity Fee........................  43 CFR 2806.64(b).........  43 CFR 2806.54(b)
MW Rate................................  43 CFR 2806.64(b)(1)......  43 CFR 2806.54(b)(1)
MW Rate Schedule.......................  43 CFR 2806.64(b)(2)......  43 CFR 2806.54(b)(2)
MW Rate Adjustments....................  43 CFR 2806.64(b)(3)......  43 CFR 2806.54(b)(3)
MW Rate Phase-in.......................  43 CFR 2806.64(c).........  43 CFR 2806.54(c)
Years 1-10.............................  43 CFR 2806.64(c)(1)......  43 CFR 2806.54(c)(1)
Years 11-20............................  43 CFR 2806.64(c)(2)......  43 CFR 2806.54(c)(2)
Years 21-30............................  43 CFR 2806.64(c)(3)......  43 CFR 2806.54(c)(3)
MW Capacity Fee if Renewed.............  43 CFR 2806.64(c)(4)......  43 CFR 2806.54(c)(4)
Scheduled Rate Adjustment..............  43 CFR 2806.64(d).........  43 CFR 2806.54(d)
Initial Rates Used.....................  43 CFR 2806.64(d)(1)......  43 CFR 2806.54(d)(1)
Acreage Rate Adjustment................  43 CFR 2806.64(d)(2)......  43 CFR 2806.54(d)(2)
MW Rate Adjustment.....................  43 CFR 2806.64(d)(3)......  43 CFR 2806.54(d)(3)
MW Rate Phase-in.......................  43 CFR 2806.64(d)(4)......  43 CFR 2806.54(d)(4)
Stage of Development...................  43 CFR 2806.64d)(5).......  43 CFR 2806.54(d)(5)
MW Capacity for a Staged Development...  43 CFR 2806.64(c)(5)......  43 CFR 2806.54(c)(5)
Rent for Support Facilities............  43 CFR 2806.66............  43 CFR 2806.56
----------------------------------------------------------------------------------------------------------------


[[Page 92181]]

    No comments were received on this section, and no changes were made 
from the proposed to the final version of this section, beyond those 
discussed in connection with section 2806.54.
Section 2806.66 Rent for Support Facilities Authorized Under Separate 
Grants
    This section states that if a wind energy development project 
includes separate right-of-way authorizations for support facilities 
such as wells, control structures, staging areas, or linear rights-of-
way (e.g., roads, pipelines, transmission lines, etc.), then the rent 
schedule will be determined using the Per Acre Rent Schedule for linear 
facilities found at section 2806.20(c). No comments were received on 
this section, and no changes were made from the proposed to the final 
version of this section, beyond those discussed in connection with 
section 2806.56.
Section 2806.68 Rent for Energy Development Testing Grant(s)
    Section 2806.68(a) describes the rent for any energy site-specific 
testing grant. A minimum rent is established as $100 per year for each 
grant issued. Under this section, rent is set by incorporating in this 
final rule the site-specific rent amount from IM 2009-043, Wind Energy 
Development Policy. Site-specific grants are authorized only for one 
site and do not allow multiple sites to be authorized under a single 
grant; however, a single entity may hold more than one grant. If a BLM 
office has an approved small site rental schedule, that office may use 
the rent amount established in the small site rental schedule, so long 
as the rent schedule charges more than the $100 minimum rent per year 
found in the regulations. Since small site rental schedules are 
provided to the BLM by the Department's Office of Valuation Services, 
they represent a third party determination of market value. In lieu of 
annual payments for a site-specific testing grant, a grant holder may 
pay for the entire 3-year term of the grant. See sections 2801.9(d)(1) 
and 2805.11(b)(2)(i) of this preamble for further discussion of site-
specific energy testing grants.
    Consistent with comments received and discussed under section 
2801.9 of this preamble, the title of this section is changed from the 
proposed rule to read as shown above. A similar change was made for the 
title of paragraphs (a) and (b) of this section. These changes are made 
in order to ensure the headings of the rule are consistent with 
revisions to the final rule that will allow site-specific and project-
area testing to be available for both solar and wind energy testing.
    Section 2806.68(b) describes the rent for a wind energy project-
area testing grant. A per-year minimum rent is established at $2,000 
per authorization or $2 per acre for the lands authorized by the grant, 
whichever is greater. The appraisal consultation report by the Office 
of Valuation Services supports the rent amounts established in this 
final rule. Project-area grants may authorize multiple meteorological 
or instrumentation testing sites. There is no additional charge or rent 
for an increased number of sites authorized under such grants. See 
sections 2801.9(d)(2) and 2805.11(b)(2)(ii) of this preamble for 
further discussion of project-area energy testing grants.
    No further comments were received on this section and no additional 
changes were made in the final rule.
Section 2806.70 How will the BLM determine the payment for a grant or 
lease when the linear, communication use, solar energy, or wind energy 
payment schedules do not apply?
    Section 2806.70 is redesignated from existing section 2806.50 and 
is retitled as shown above. This section provides guidance on how the 
BLM determines the payment for a grant or lease when the linear rent 
schedule, the communication use rent schedule, the solar acreage rent 
and MW capacity fee provisions, or the wind acreage rent and MW 
capacity fee provisions are not applicable.
    The title of this section is amended by replacing ``rent'' with 
``payment'' in two places. This final rule introduces the concept of MW 
capacity fees, which are a payment to the BLM for the commercial 
utilization value of the public lands, above the rural land values. The 
term ``payment'' includes both rents and fees, which is why it was 
selected. No other change is intended by this revision.
    The only other change to this redesignated section is that solar 
and wind energy rights-of-way are now included in the listed rent 
schedules. No comments were received and no other changes are made from 
the proposed rule to the final rule.

Subpart 2807--Grant Administration and Operation

Section 2807.11 When must I contact BLM during operations?
    This section is revised to make it clear that you must notify the 
BLM when your use requires a substantial deviation from the issued 
grant. Under the changes made to section 2807.11(b), ``substantial 
deviations'' from the right-of-way grant now require an amendment to 
the grant. ``Substantial deviations'' include changing the boundaries 
of the right-of-way, major improvements not previously approved by the 
BLM, or a change in use for the right-of-way. Substantial deviations to 
a grant may require adjustment to a grant or lease rent and fees under 
subpart 2806, or bonding requirements under subparts 2805 and 2809.
    Consistent with other revisions to the final rule intended to 
improve readability, the BLM revised paragraph (b) of this section to 
read as ``the BLM's'' instead of ``our.'' This revision is intended to 
improve understanding of who the BLM is referring to in the final rule.
    Comment: One comment asked the BLM to narrow the circumstances 
under which a right-of-way holder must notify the BLM, suggesting that 
these reporting requirements be limited to changes that necessitate an 
assignment under the standards identified in section 2807.21(h).
    Response: The requirement to report changes in partners, financial 
conditions, or business or corporate status is a requirement of the 
existing regulations found under section 2807.11(c). Section 2807.11(c) 
was not proposed for revision and is not revised or redesignated by 
this final rule. In addition, the BLM must have accurate and up-to-date 
information about right-of-way holders in order to facilitate its 
management of the public lands.
    Paragraph (d) of this section requires you to contact the BLM when 
site-specific circumstances or conditions result in the need for you to 
propose changes to an approved right-of-way grant, POD, site plan, or 
other procedures that are not substantial deviations in location or 
use. Examples of proposed ``minor deviations'' include changes in 
location of improvements in the POD or design of facilities that are 
all within the existing boundaries of an approved right-of-way. Other 
such proposed non-substantial deviations might include the modification 
of mitigation measures or project materials. For purposes of this 
provision, project materials include the POD, site plan, and other 
documents that are created or provided by a grant holder. These project 
materials are a basis for the BLM's inspection and monitoring 
activities and are often appended to a right-of-way grant, which is why 
the BLM needs to understand any changes to those materials. The 
requested changes may be considered as grant or lease modification 
requests. Proposals for non-substantial deviations

[[Page 92182]]

will require review and approval by the authorized officer or other 
appropriate personnel. The preliminary application review meetings 
found under section 2804.12 and public meetings found under section 
2804.25 are not required for an assignment.
    Paragraph (e) requires that right-of-way holders contact the BLM to 
correct discrepancies or inconsistencies.
Section 2807.17 Under what conditions may the BLM suspend or terminate 
my grant?
    Section 2807.17(d) contains the provisions formerly located at 
section 2809.10. This section was redesignated in order to make room 
for the renewable energy right-of-way leasing provisions. No comments 
were received and no changes are made from the proposed rule to the 
final rule.
Section 2807.21 May I assign or make other changes to my grant or 
lease?
    Some revisions were made to this section in response to comments, 
which are discussed in the following paragraphs. A summary of other 
revisions to this section is included after these comments and 
responses.
    Comments: Some comments noted confusion over the BLM's requirements 
for name changes and assignments, specifically, what constitutes a name 
change or assignment. Additionally, comments noted that mergers and 
acquisitions are not assignments and that a name change or assignment 
should not be the basis for or occasion on which the BLM redrafts the 
terms and conditions of right-of-way agreements.
    Response: Section 2807.21 is revised to provide clarity on the 
BLM's requirements for assignments and name changes. Section 2807.21(b) 
and (c) of the proposed rule have been combined into section 2807.21(b) 
in this final rule. As a result of these changes, several paragraphs 
are also redesignated in the final rule. The BLM agrees with commenters 
that name changes should not necessitate the rewriting of the terms and 
conditions of a right-of-way agreement.
    The BLM disagrees with the commenter equating mergers and 
acquisitions with name changes. A merger or acquisition is different in 
character as they can result in material changes to the corporate 
structure under which a right-of-way grantee or leaseholder operators. 
Such changes can affect financial positions or the technical capability 
of a parent company. As a result, the BLM determined that it was 
appropriate to expand the definition of assignment in both the final 
and proposed rules to include changes in ownership and other related 
change in control transactions, including ``mergers or acquisitions.'' 
However, recognizing that there are changes in corporate structure 
within the same corporate family that may technically constitute change 
in control transactions, but that do not implicate BLM's concern about 
technical and financial capability of a grant- or lease-holder's 
parent, the BLM has revised section 2807.21(a)(2) and (b)(2) to clarify 
that change in control transaction within the scope of that provision 
do not include transactions or restructurings within the same corporate 
family.
    When a right or interest in a right-of-way grant or lease is 
assigned from one party to another, the involved parties are identified 
as the assignor and assignee. The BLM generally evaluates the assignee, 
the party that is intended to receive the right or interest, as if they 
were a new applicant. The BLM may determine that additional terms and 
conditions are required when assigning the right or interest and would 
include them as a term or condition of the grant at the time of 
assignment. New terms and conditions could include the requirement to 
bond the authorized facility, such as in the case when a potential 
assignee of a grant has a poor history of meeting the terms and 
conditions of a BLM grant, that may have not applied to the assignor. 
The evaluation and determination of whether new terms and conditions 
should be applied would occur when the BLM considers the proposed 
conveyance of a right-of-way.
    Other revisions to the terms and conditions that may occur with 
assignments are those which the BLM retains authority to revise, such 
as rents, fees, bonding, and other revisions identified under section 
2805.15(e). Section 2805.15(e) allows the BLM to amend the terms and 
conditions of a right-of-way grant or lease as a result of changes in 
legislation, regulation, or as otherwise necessary to protect public 
health or safety or the environment. Because any changes to the terms 
and conditions of a right-of-way grant or lease would occur after the 
completion of the agency action (the BLM's decision to approve the 
right-of-way), the BLM anticipates doing so through a separate action, 
generally initiated at the BLM's discretion and requiring its own 
decision-making process.
    Updating corporate or individual filings within a State where only 
a name is changed, but the filing does not transfer a right or interest 
to another party, qualifies as a name change. Name changes for a right-
of-way grantee or lessee do not require a NEPA analysis and the right-
of-way would not be subject to revision. When changing a name, the BLM 
does not issue a new right-of-way grant or lease, but would re-issue 
the same right-of-way grant or lease with the new name on it. This is 
because the BLM would be dealing with the same entity to which it had 
originally authorized the right-of-way. Name changes are an 
administrative action taken by the BLM to update its records showing 
the proper name of the entity it has authorized. In the case of a name 
change, there is no assignment, in whole or part, of any right or 
interest in a grant or lease.
    A name change would occur if an entity had filed paperwork with a 
State for a name change. Re-issuing a grant or lease with the new name 
would only provide the BLM an opportunity to notify the right-of-way 
holder of updated rent, bonding, or other such revised provisions made 
under section 2805.15(e).
    Section 2807.21 is amended by revising the section heading and 
existing paragraphs (a), (d), and (f); adding paragraphs (b), (g), and 
(h); and making other appropriate redesignations of the remaining 
paragraphs. We are further revising this section with a few changes 
made in the final rule in response to comments, which will be explained 
in greater detail in the discussion of each specific paragraph. The 
heading for this section is changed from ``May I assign my grant?'' to 
read as ``May I assign or make other changes to my grant or lease?'' 
The existing regulations do not cover all instances where an assignment 
is necessary and the section is revised to address situations where 
assignments may not be required. The changes are necessary to: (1) Add 
and describe additional changes to a grant other than assignments; (2) 
Clarify what changes require an assignment; and (3) Specify that right-
of-way leases issued under part 2809 are subject to the regulations in 
this section.
    Without the BLM's approval of a right-of-way assignment, a private 
party's business transaction would not be recognized by the BLM and 
this lack of recognition could hinder a new holder's management and 
administration of the right-of-way. This rule also clarifies the 
responsibilities of a grant holder should such private party 
transactions occur.
    Paragraph (a) of this section is revised to describe two events 
that may necessitate an assignment: (1) A transfer by the holder of any 
right or interest in the right-of-way grant or lease to a third

[[Page 92183]]

party (e.g., a change in ownership); and (2) A change in control 
involving the right-of-way grant or lease holder such as a corporate 
merger or acquisition.
    Paragraph (a)(1) in this final rule is revised by removing the word 
``voluntary'' when describing a transfer. There are some situations, 
such as bankruptcy, when a transfer may be involuntary. The BLM did not 
intend to exclude those circumstances from this section.
    Paragraph (a)(2) is revised to remove reference to changes in 
status as a ``wholly owned subsidiary.'' That provision created 
confusion and was removed. No additional comments were received and no 
further changes were made to this paragraph.
    New paragraph (b) of this section is revised to clarify and remove 
ambiguities in this section of the rule that explains the circumstances 
that do not constitute an assignment, but may necessitate filing new or 
revised information. A change in the holder's name only does not 
require an assignment nor do changes in a holder's articles of 
incorporation. However, sometimes a change in a holder's name or 
articles of incorporation may indicate that an assignment occurred. The 
BLM will review the documentation filed with it in order to determine 
if a transfer in part or whole of the right-of-way has occurred or a 
change in control transaction of the grant-holder or lease holder has 
occurred.
    This section is revised from the proposed to the final rule to help 
further explain these situations more clearly to the public. The 
introductory text of paragraph (b) of this section is revised to 
clarify that even though an assignment may not be necessary, some 
circumstances may necessitate filing new or revised information. 
Paragraphs (b)(1), (2) and (3) of this section provide examples for 
when this filing may be necessary. Paragraph (b)(1) of this section is 
added to this final rule to explain that transactions within the same 
corporate family do not constitute an assignment. Paragraphs (b)(2) and 
(3) of this section contain the provisions of proposed paragraphs (b) 
and (c) of this section with some minor revisions.
    Existing paragraph (b) of this section is revised and redesignated 
as paragraph (c). As revised, this paragraph requires the payment of 
application filing fees in addition to processing fees. This revision 
promotes consistency between applications for assignments and other 
applications for rights-of-way. For example, the rule (at section 
2804.12(c)(2)) now requires an application filing fee for solar and 
wind energy applications. As revised, new paragraph (c) also provides 
that the BLM will not approve any assignment until the assignor makes 
any outstanding payments that are due. This paragraph is revised from 
the proposed to final rule by adding a provision stating that 
preliminary application review meetings are not required for an 
assignment.
    Comments: Some comments stated that the pre-application 
requirements for would be burdensome for an assignments, name changes 
or even renewals and suggested excluding those requirements for 
assignments, name changes and renewals.
    Response: Section 2807.21(c) and (h)(1) are revised to make clear 
that the pre-application (now known as preliminary application review) 
meetings are not required for assignments and name changes. No other 
revisions have been made to these paragraphs in response to this 
comment.
    Existing paragraph (c) of this section is redesignated, unchanged, 
as paragraph (d) and is included in the final rule. Existing paragraph 
(d) of this section is revised and redesignated as paragraph (e). As 
revised, new paragraph (e) will except leases issued under revised 43 
CFR subpart 2809 (i.e., right-of-way authorizations inside a DLA) from 
the BLM's authority to modify terms and conditions when it recognizes 
an assignment. This provision provides incentives for potential right-
of-way lessee to develop lands inside DLAs.
    The BLM revised the first sentence in paragraph (e) of this section 
from the proposed to final rule to clarify how an assignment is 
recognized. The BLM will approve an assignment in writing.
    Comment: A comment requested clarification of the BLM's right to 
modify terms of a lease issued under subpart 2809. As written, the 
proposed rule would have prohibited the BLM from modifying a lease 
issued under subpart 2809 when approving an assignment. In addition, 
the comment requested clarification of the relationship between section 
2805.15(e) and sections 2807.21 and 2887.11.
    Response: The BLM agrees with this suggestion and in the final rule 
further clarification has been provided to show the relationship 
between section 2805.15(e) and this provision for leases issued under 
subpart 2809. Revised section 2807.21(e) now includes an additional 
statement to make clear that a lease will not be modified to include 
additional terms and conditions when approving an assignment, unless a 
modification is required under section 2805.15(e).
    The BLM may, however, ``require that you obtain, or certify that 
you have obtained, a performance and reclamation bond or other 
acceptable bond instrument'' (see section 2805.20(a)) when approving an 
assignment. A bond is required for a right-of-way at the BLM's 
discretion and is always required for a solar or wind energy grant or 
lease. If a bond is required, the BLM must be certain that a bond is in 
place to ensure the protection of the public lands before approving an 
assignment.
    In addition, section 2809.18(f) has been modified to be consistent 
with this provision. The statement that a lease will not be modified to 
include additional terms and conditions is specific to when the BLM 
completes an assignment. Under a separate action which may occur at the 
same time an assignment is completed, the terms and conditions may be 
modified if requested by a lessee pursuant to section 2805.12(e).
    No revision has been made under section 2887.11 on this matter 
since leases issued under subpart 2809 cannot be assigned under section 
2887.11.
    Redesignated section 2807.21(f) provides that the BLM will process 
assignment applications according to the same time and conditions as in 
section 2804.25(d). This provision was formerly identified in the 
regulations as paragraph (e) of this same section. This provision 
applies the BLM's customer service standard to processing assignment 
applications. This paragraph has been revised to update the referenced 
citation, consistent with the revisions made to the final rule under 
section 2804.25.
    Section 2807.21(g) explains that only interests in right-of-way 
grants or leases are assignable. A pending right-of-way application 
cannot be assigned. A revision is made to the second sentence of this 
paragraph, to be consistent with changes made under section 2804.30(g), 
that clarifies that competitively gained applications held by a 
preferred applicant do provide a right and interest in the public 
lands. This revision is made here to be consistent with similar changes 
made under section 2804.30(g).
    Section 2807.21(h) addresses how a holder informs the BLM of a name 
change when the name change is not the result of an underlying change 
in control of a grant. These procedures are necessary to ensure that 
the BLM can send rent bills or other correspondence to the appropriate 
party. This new provision addresses several specific circumstances. For 
example, it requires any corporation requesting a name change to 
supply: (1) A copy of the

[[Page 92184]]

corporate resolution(s) proposing and approving the name change; (2) A 
copy of the acceptance of the change in name by the State or Territory 
in which it is incorporated; and (3) A copy of the appropriate 
resolution(s), order(s), or other documentation that shows the name 
change. Under this provision, the BLM could also modify a grant, or add 
bonding and other requirements, including additional terms and 
conditions when recognizing such changes. However, the only way that 
the BLM may modify a lease issued under subpart 2809 would be in 
accordance with section 2805.15(e), or as otherwise described in the 
regulations. Such modifications under section 2805.15(e) would be a 
result of changes in legislation, regulation, or to protect public 
health, safety, or the environment. Any such name change would be 
recognized in writing by the BLM.
    Section 2807.21(h)(1) was modified from the proposed to final rule 
to improve readability. The first and second sentences were combined 
and ``preliminary application review and public meetings'' were added 
to the list of exempted requirements during a name change only. This 
change was made to remain consistent with revisions made under section 
2807.21(b), which excludes applications for assignments from 
preliminary application review meetings and public meetings for solar 
or wind energy development projects and transmission lines with a 
capacity of 100 kV or more.
    The BLM revised paragraph (h)(2) of this section from the proposed 
to final rule in order to clarify the differences in how a grant and 
lease may be modified during a name change. The BLM added new 
paragraphs (h)(2)(i) and (ii) in order to more clearly separate these 
situations. Paragraph (h)(2)(i) of this section explains that the BLM 
may modify a grant to add bonding and other requirements when 
processing a name change only. However, under paragraph (h)(2)(ii) of 
this section, the BLM may modify a lease issued under subpart 2809 in 
accordance with section 2805.15(e). This is not a change from the 
requirements proposed rule, but it may not have been clear from the way 
it was phrased. The final rule is intended to prevent any possible 
confusion.
    Generally, the BLM intends to make changes to a grant or lease 
during a name change only to reflect relevant changes consistent with 
section 2805.15 (e). This existing section explains the BLM's right to 
``[c]hange 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.'' The BLM will not 
make any other changes to lease issued under subpart 2809 as part of a 
name change only.
    However, the BLM may take this opportunity to update other aspects 
of a grant, as appropriate. For example, under section 2805.20(a), the 
BLM will periodically review your bond for adequacy and may require a 
new 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 
lease. The BLM may determine that additional actions are necessary, 
such as updates to the bond (see section 2805.20(a)) or the 10-year 
updates to the payment provisions (see sections 2806.54 or 2806.64. If 
the BLM determines that these actions are necessary, they will be taken 
separate from the name change only as appropriate.
    Paragraph (h)(3) of this section is revised in this final rule to 
read: ``Your name change is not recognized until the BLM approves it in 
writing.'' As proposed, the rule was not clear whether a name change 
would be recognized if submitted in writing to the BLM, or if approved 
in writing by the BLM. This revision makes it clear to readers of the 
final rule that it must be the BLM's approval in writing to recognize a 
name change.
    Comments: Some comments recommend that the financial information of 
the original owner or its subsidiary may be used to meet financial 
qualification requirements of the grantee when assigning or changing 
the name on a grant or lease.
    Response: The BLM will only accept the financial or technical 
information of the holder of the authorization. The holder is the 
legally responsible party for the right-of-way and will be held as such 
under the regulations and any subsequent authorization. However, 
substitution of one entity's financial and technical capabilities may 
be acceptable, provided that documentation showing the two entities are 
linked, such as in the case of a subsidiary company where the parent 
company asserts the technical or financial responsibilities of the 
subsidiary. No revision to the rule was made in response to this 
comment. No other comments were received or changes made to the final 
rule.
Section 2807.22 How do I renew my grant or lease?
    The title for section 2807.22 is revised by adding ``or lease'' to 
the end of the sentence so that leases issued under subpart 2809 are 
covered by this section. Likewise, paragraphs (a), (b), and (d) of this 
section are revised to include leases. Paragraphs (c) and (e) remain 
unchanged. A new paragraph (f) is also added to this section.
    Paragraph (f) of this section explains how the BLM would ensure 
continued operations of a right-of-way during the renewal process. If a 
holder makes a timely and sufficient application for renewal, the grant 
or lease does not expire until the BLM acts upon the application for 
renewal.
    The second part of this paragraph describes the circumstances in 
which the BLM would ``reissue'' a grant or lease instead of ``renew'' 
it. Most of the authorizations managed by the BLM are issued under 
FLPMA's authority, but some remaining authorizations were issued before 
FLPMA was enacted. In this situation, the BLM would reissue the grant 
under FLPMA's authority. Minor revisions are made to paragraph (f) to 
improve readability of this new paragraph.
    This paragraph protects the interests of holders of rights-of-way 
who have timely and sufficiently made an application for the continued 
use of an authorization (see 5 U.S.C. 558(c)(1)), and is consistent 
with policy. In this situation, the authorized activity will not expire 
until the BLM evaluates the application and issues a decision. No 
comments were received and no other changes are made to the final rule.
Subpart 2809 Competitive Process for Leasing Public Lands for Solar and 
Wind Energy Development Inside Designated Leasing Areas
    Existing subpart 2809, which formerly consisted of a single 
regulation (section 2809.10) pertaining to Federal agency right-of-way 
grants, is revised and redesignated as new paragraph (d) of section 
2807.17. Existing section 2809.10(b) explains that Federal agencies are 
generally not required to pay rent for a grant. This paragraph is 
removed, not redesignated, since existing section 2806.14(a)(2) already 
addresses rental exemptions for Federal agencies and, therefore, 
section 2809.10(b) is no longer necessary.
    Revised subpart 2809 is now dedicated to the competitive process 
for leasing public lands for solar and wind energy development.
    Comment: Several comments raised concerns that the priority for 
handling solar or wind energy leases was unclear when compared to solar 
and wind grant applications under part 2804.
    Response: Application prioritization is discussed under section 
2804.35 of this rule, which specifically states that leases issued 
under this subpart having priority over grant applications. A new

[[Page 92185]]

section 2809.10(d) is added to the final rule, consistent with comments 
received and revisions made in section 2804.35, that clearly identifies 
the handling of leases issued under subpart 2809 have the highest 
priority with respect to solar and wind energy on the public lands.
    Comment: Several comments suggest that regional mitigation 
strategies should be used for every designated leasing area and should 
be part of the land use planning process.
    Response: BLM development of a regional mitigation strategy is not 
necessary prior to holding a competitive auction inside a DLA or 
otherwise authorizing solar or wind energy development. However, 
regional mitigation strategies further increase certainty to developers 
and stakeholders when considering a solar or wind energy development. 
The BLM believes that the regional mitigation strategies are a good 
tool to use when making decisions that would affect resources in 
certain areas, such as a DLA. Regional mitigations strategies provide a 
durable basis to evaluate mitigation for the impacted lands and the BLM 
may use such strategies when making land use planning decisions. The 
BLM is in the process of developing regional mitigation strategies for 
many SEZs, which qualify as DLAs under this final rule.
    The BLM is currently in the process of establishing its mitigation 
policies and guidance, which include guidance for regional mitigation 
strategies. Consistent with this guidance, the BLM generally intends to 
prepare regional mitigation strategies, with opportunities for public 
review and engagement, before authorizing wind or solar energy 
development in DLAs, potentially including when the BLM designates DLAs 
in the future through land use planning.
    Comment: One comment suggested that the BLM incorporate the FWS's 
Wind Energy Guidelines (WEG), which can be found on the Internet at 
http://www.fws.gov/ecological-services/es-library/pdfs/WEG_final.pdf, 
into the rule for pre-construction due diligence.
    Response: The BLM did not revise the rule as a result of this 
comment. The BLM has a different scope of authority and responsibility 
in administering the public lands than the FWS and must take into 
account biological resources, cultural resources, and land uses 
consistent with FLPMA's mandate that public lands be used for multiple 
use and sustained yield for current and future generations. This is 
different than the FWS's authority and objectives which do not have a 
multiple use mandate and generally require limited review for cultural 
resources. However, the BLM uses processes similar to the WEGs in the 
review and analysis of resources on the public lands. For wind energy 
site testing actions similar to steps 2 and 3 of the WEGs are completed 
prior to a BLM decision. Actions similar to steps 1 through 3 are 
incorporated into the BLM's processing of a development grant, as well 
as monitoring protocols that address similar issues as those in the 
steps of the WEGs.
    Comments: Some comments suggest that all final granted right-of-way 
instrument terms and conditions, regardless of location, should be 
substantially the same, unless sufficiently justified.
    Response: The BLM believes that it has adequate reason for 
differences in terms and conditions of the energy development projects 
issued as leases under subpart 2809, as compared to those issued as 
grants under subpart 2804. There are limited differences in leases and 
grants, which have been explained in great detail in this preamble. 
These differences are intended to incentivize development in DLAs, 
which the BLM has identified as preferred areas for solar or wind 
energy development, based on a high potential for energy development 
and lesser resource impacts. Consistent with SO 3285, which describes 
the need for strategic planning and a balanced approach to domestic 
resource development, the BLM believes that focusing solar and wind 
energy development in preferred areas would provide a benefit to the 
public by reducing potential resource conflicts.
    The BLM identifies DLAs through its land use planning process, 
which requires the BLM to consider the effects of solar or wind energy 
developments in the area. Due to this prior planning process, the BLM 
is able to issue a lease almost immediately after holding an auction, 
because that type of use has already been approved for the area. 
Subsequent tiered NEPA analysis will generally be necessary for the BLM 
to evaluate the lease-holder's POD to ensure that it fits within the 
BLM's decisions before allowing development of the land.
    Additionally, the rent and fee payment for leases issued under 
subpart 2809 are phased in over a longer period of time or updated less 
frequently than those issued under subpart 2804. The rent and fee 
payment structure is explained in more detail in sections 2806.50 
through 2806.68 of this preamble. This difference in payment of the 
rent and fee allows the BLM to collect the determined fair market value 
of the public lands while incentivizing solar and wind energy 
development in DLAs over other public lands.
    No other comments were received or changes made to the final rule 
for this section.
Section 2809.10 General
    Under section 2809.10, only lands inside DLAs will be available for 
solar and wind competitive leasing using the procedures under this 
subpart. Lands outside of DLAs may be offered competitively using the 
procedures under section 2804.35 of this rule. Under section 2809.10, 
the BLM may either include lands in a competitive offer on its own 
initiative or solicit nominations through a call for nominations (see 
section 2809.11).
    A new paragraph (d) is added to this section in the final rule in 
response to comments on the proposed rule. Paragraph (d) states that 
the processing of leases awarded under this part will generally be 
prioritized ahead of grant applications, consistent with revisions made 
to section 2804.35, clarifying that leases generally have priority over 
grant applications. This revision is to show how the BLM will 
prioritize its handling of solar and wind energy development on the 
public lands. The BLM will generally prioritize leases because they are 
issued inside DLAs, which are the BLM's preferred areas for solar and 
wind energy development. The BLM recognizes that only a few wind energy 
DLAs have been identified to date, and therefore there are only limited 
opportunities for project proponents to obtain wind energy leases as 
opposed to grants. The BLM intends to consider this when prioritizing 
wind energy applications during this transition period, as the BLM 
develops additional wind energy DLAs. No other changes are made to the 
final rule for this section and no other comments were received.
Section 2809.11 How will BLM solicit nominations?
    This section explains the process by which the BLM will request 
nominations for parcels of lands inside DLAs to be offered 
competitively for solar or wind energy development.
    Under paragraph (a) of this section, ``Call for nominations,'' the 
BLM requests expressions of interest and nominations for parcels of 
land located in a DLA. The BLM will publish a notice in the Federal 
Register for solar and wind energy development and may use other 
notification methods, such as a newspaper of general circulation in the 
area affected by a potential offer or the Internet. This final rule is 
revised to make notice in a newspaper an optional

[[Page 92186]]

form of public notice. This section's public notice requirements are 
consistent with revisions to other sections of this final rule and are 
described more fully in section 2804.23(c) of this preamble.
    Paragraph (b) of this section, ``Nomination submission,'' outlines 
the requirements for nominating a parcel of land for a competitive 
offer.
    Paragraph (b)(1) of this section requires a payment of $5 per acre 
for the parcel(s) nominated. This payment is nonrefundable, except when 
submitted by an individual or company that does not meet the 
qualifications identified in section 2809.11(d). The average area of 
solar and wind grant or lease ranges between 4,000 and 6,000 acres. The 
$5 per acre fee is derived from an appraisal consultation report 
prepared by the Department's Office of Valuation Services and will be 
adjusted for inflation once every 10 years, using the change in the 
IPD-GDP for the preceding 10-year period. The appraisal consultation 
report provided a range of $10-$27 per acre per year with the nominal 
range being $15-$17 per acre as the fair market value for these uses of 
the public lands. The BLM is establishing the nomination fee below the 
indicated range in the analysis since the submission of a nomination 
does not ensure that the nominator would be the successful bidder.
    The average annual change in the IPD-GDP from 2004-2013 is about 
2.1 percent, which will be applied through 2025. The fee will be 
required only with a nomination and not on a yearly basis and this is 
noted under section 2809.11(b)(1). The nomination fee is lower than an 
application filing fee for grants issued under subpart 2804 in order to 
increase interest and encourage nominators to propose efficient use of 
the public lands inside DLAs. Payment of fair market value will be 
received through a combination of the bids (not including Federal 
administrative costs) received during a competitive process and the 
rents and MW capacity fees described in sections 2806.50 through 
2806.68 of this final rule.
    Nomination fees are collected under Sections 304(b) and 504(g) of 
FLPMA as cost recovery fees. The nomination fees will reimburse the BLM 
for the expense of preparing and holding the competitive process for 
lands inside a DLA. Furthermore, the nomination allows the BLM to see 
specifically what parcel of land is of interest to a developer and 
would inform the BLM of parcel configurations for a competitive 
process. A variable offset may be offered for qualified bidders who 
submitted nominations. Variable offsets are discussed further in 
section 2809.16.
    The BLM revised paragraph (b) of this section from the proposed to 
final rule to prevent confusion over how the BLM uses the IPD-GDP to 
adjust the nomination fees. This revision is consistent with the 
revision to section 2804.12(c)(2), which describes application filing 
fees. Both application filing fees and nomination fees may be adjusted 
once every 10 years. See the preamble discussion for section 
2804.12(c)(2) for more information on this revision.
    Paragraph (b)(2) of this section requires the nomination to include 
the nominator's name and address of record. This information is 
necessary for the BLM to communicate with the nominator about future 
leasing issues.
    Paragraph (b)(3) of this section requires that a nomination be 
accompanied by a legal land description and map of the parcel of land 
in a DLA. This information will help the BLM in identifying parcels in 
the competitive offer.
    Under paragraph (c) of this section, the BLM may consider informal 
expressions of interest. An expression of interest is an informal 
submission to the BLM, suggesting that a parcel inside a designated 
leasing area be considered for a competitive offer. An expression of 
interest only provides a tentative bidder's interest in a parcel(s) of 
land located inside a DLA. If the expression of interest identifies a 
specific parcel, it must be submitted in writing, include the legal 
land description of the parcel, and a rationale for its inclusion in a 
competitive offer. There is no fee required to make an expression of 
interest, but submission does not qualify a potential bidder for a 
variable offset, as would formal nominations.
    Under paragraph (d) of this section, you must qualify to hold a 
grant or lease under section 2803.10 in order to submit a nomination.
    Under paragraph (e) of this section, a nomination cannot be 
withdrawn, except by the BLM for cause, in which case nomination monies 
would be refunded. This clause parallels language in the BLM's other 
competitive process regulations and encourages serious nominations for 
parcels on public lands.
    Comments: Some comments stated that nomination fees, as discussed 
under section 2809.11(b)(1), should reflect the cost for the BLM to 
plan and conduct a competitive lease process. In addition, one comment 
recommended that the nomination fee be set at $5 per acre and be 
adjusted downward to a minimum of $2 per acre for large parcels. In the 
event the entity that nominates the parcel is not the successful 
bidder, then the nomination should be refunded to that party and 
assessed to the successful bidder.
    Response: The BLM will maintain a flat rate fee for nominations. A 
tiered or sliding scale approach to such fees would create an 
unnecessarily complicated system. A flat fee ensures that such costs 
are consistent for each action and the expectation to meet the 
requirements are clear. In addition, nomination fees are kept as a non-
refundable fee because they are a cost recovery payment to the BLM for 
expenses the agency incurs. These fees would be used by the BLM to 
prepare and hold a competitive offer. Submission of a nomination 
demonstrates a developer's seriousness for use of an area. No other 
comments were received and nor changes are made from the proposed rule 
to the final rule.
Section 2809.12 How will BLM select and prepare parcels?
    This section provides that the BLM will identify parcels suitable 
for leasing based on either nominations, expressions of interest, or 
its own initiative. Before offering the selected lands competitively, 
the BLM and as appropriate, other Federal or State entities, will 
conduct studies, comply with NEPA and other applicable laws, and 
complete other necessary site preparation work. This work is necessary 
to ensure that the parcels are ready for competitive leasing, to 
provide appropriate terms and conditions for any issued lease, to 
appropriately protect valuable resources, and to be consistent with the 
BLM's plan(s) for the area.
    Paragraph (b) of this section is revised from the proposed to final 
rule by adding ``as applicable'' after ``other Federal agencies.'' This 
revision clarifies that other Federal agencies will be involved, as 
applicable, but may not be involved on all projects. It may not always 
be necessary to include other Federal agencies and those agencies may 
not want to participate.
    Comments: Some comments recommended that the BLM should include a 
procedural requirement in the regulation that a regional mitigation 
strategy must be completed before the initiation of a competitive 
leasing process. It is also suggested that this approach would benefit 
the project proponents with enhanced certainty regarding compensatory 
mitigation costs. One comment specifically recommended the addition of 
the following text, ``b) work, including applicable environmental 
reviews and public meetings and publish the

[[Page 92187]]

availability of a final regional mitigation strategy, before . . . .''
    Response: The BLM considered including a requirement to complete a 
regional mitigation strategy; however, the BLM did not revise the rule 
as a result of the comment because each competitive offer will vary 
based upon resource concerns, public, tribal, and developer issues, and 
government interests. The BLM is currently in the process of 
establishing its mitigation policies and guidance, which include 
guidance for regional mitigation strategies. Consistent with this 
guidance, the BLM intends to prepare regional mitigation strategies, 
with opportunities for public review and engagement, before authorizing 
wind or solar energy development in DLAs, potentially including when 
the BLM designates DLAs in the future through land use planning.
Section 2809.13 How will the BLM conduct competitive offers?
    Under this section, the BLM may use any type of competitive process 
or procedure to conduct its competitive offer. Several options, such as 
oral auctions, sealed bidding, a combination of oral and sealed 
bidding, and others are identified in section 2809.13(a). Oral auctions 
are planned events where bidders are asked to orally bid for a lease at 
a predetermined time and location. Sealed bidding would occur when 
bidders are asked to submit bids in writing by a certain date and time. 
Combination bidding is when sealed bids are first opened and then 
afterward an oral auction would occur, with oral bids having to exceed 
the highest sealed bid.
    Under paragraph (b) of this section, the BLM would publish a notice 
of competitive offer at least 30 days before bidding takes place in the 
Federal Register and through other notification methods, such as a 
newspaper of general circulation in the area affected by the potential 
right-of-way or the Internet. This section of the final rule is 
revised, consistent with revisions to other sections of this final 
rule, to make notice in a newspaper an optional method for public 
notice. See section 2804.23(c) of this preamble for further discussion 
of these revisions. Minor revisions are also made from the proposed to 
the final rule to paragraph (b)(5) of this section to improve 
readability. The word ``factor'' is added throughout paragraph (b)(6) 
of this section for the final rule. This is intended to help the reader 
understand that an offset factor is part of the variable offset that 
may be presented in the notice of competitive offer. A notice of 
competitive offer must include:
    1. The date, time, and location (if any) of the competitive offer;
    2. The legal land description of the parcel to be offered;
    3. The bidding methodology and procedures that will be used in 
conducting the competitive offer, including any of the applicable 
competitive procedures identified in section 2809.13(a);
    4. The required minimum bid (see section 2809.14(a));
    5. The qualification requirements for potential bidders (see 
section 2809.11(d));
    6. If applicable, the variable offset (see section 2809.16), 
including:
    i. The percent of each offset factor;
    ii. How bidders may pre-qualify for each offset factor; and
    iii. The documentation required to pre-qualify for each offset 
factor; and
    7. The terms and conditions to be contained in the lease, including 
requirements for the successful bidder to submit a POD for the lands 
involved in the competitive offer (see section 2809.18) and the lease 
mitigation requirements.
    Section 2809.13(b)(7) is revised in the final rule to include in 
the terms and conditions of a notice of competitive offer any 
mitigation requirements, including those for compensatory mitigation to 
address residual impacts associated with the right-of-way. This 
revision is made to clarify where the BLM will incorporate mitigation 
in its administrative processes. Including mitigation requirements in 
this final rule is discussed in greater detail in the general comment 
and responses portion of this preamble.
    Under paragraph (c) of this section, the BLM will notify you of its 
decision to conduct a competitive offer at least 30 days in advance of 
the bidding if you nominated lands and paid the nomination fees 
required by section 2809.11(b)(1). No comments were received and no 
other changes are made from the proposed rule to the final rule.
Section 2809.14 What types of bids are acceptable?
    Section 2809.14 explains the requirements for bids submitted under 
the competitive process outlined in this subpart.
    Paragraph (a) of this section provides that your bid submission 
will be accepted by the BLM only if it included the minimum bid 
established in the competitive offer, plus at least 20 percent of your 
bonus bid, and you are able to demonstrate that you are qualified to 
hold a right-of-way by meeting the requirements in section 2803.10. 
Consistent with comments received and revisions made to the final rule, 
the words, ``or lease'' are added to this paragraph of the final rule 
to help improve its clarity. As proposed, the rule only referenced a 
grant, which is defined in these regulations to include the term lease. 
For the final rule, language was added to make it clear that the 
qualifications to hold a lease are the same as to hold a grant.
    Paragraph (b) of this section provides that a minimum bid will 
consist of three components. The first component is the amount required 
for reimbursement of administrative costs incurred by the BLM and other 
Federal agencies in preparing and conducting the competitive offer. 
Administrative costs include all costs required for the BLM to comply 
with NEPA plus any other associated costs, including costs identified 
by other Federal agencies. As mentioned in the general discussion 
section of this preamble, administrative costs are not a component of 
fair market value, but are used to reimburse the Federal Government for 
its work in processing a competitive offer and performing other 
necessary work.
    The second component of the minimum bid is an amount determined by 
the authorized officer for each competitive offer. The BLM will 
consider known values of the parcel when determining this amount, which 
include, but are not limited to, the acreage rent and a megawatt 
capacity fee. The authorized officer will identify these factors and 
explain how they were used to determine this amount. The third 
component is a bonus bid submitted by the bidder as part of a bid 
package. This amount will be determined by the bidder.
    Consistent with section 2804.30(e)(2)(ii) for notice of competitive 
offers outside of DLAs, the BLM has removed the reference to mitigation 
costs from section 2809.14(b)(2). Please see section 2804.30 of this 
preamble for further discussion on this topic.
    In other BLM programs, the minimum bid is often a statutory 
requirement or is based on fair market value of the resource, but there 
are no statutory requirements for a minimum bid for the right-of-way 
renewable energy program. The acreage rent is based on the value of the 
land and the MW capacity fee is based on the value of the commercial 
use of the land. The BLM plans to base this minimum bid on factors such 
as these that are known values of the parcel. The minimum bid amount, 
how it was determined, and the factors used in this determination will 
be clearly

[[Page 92188]]

articulated in the notice of competitive offer for each parcel.
    A minimum bid is not a determination of fair market value, but a 
point at which bidding may start. Fair market value will be received 
through a combination of rent, MW capacity fees, and competitive 
bidding and this process will determine what the market is willing and 
able to pay for the parcel. Payment of cost recovery fees is also 
required, but is not considered a part of the minimum bid. The minimum 
bid is paid only by the successful bidder and is not prorated among all 
of the bidders.
    As described in paragraph (c) of this section, a bonus bid consists 
of any dollar amount that a bidder wishes to bid, beyond the minimum 
bid. The total bid equals the minimum bid plus any additional bonus bid 
amount offered. If you are not the successful bidder, as defined in 
section 2809.15(a), your bid will be refunded.
    Comments: Two comments were received pertaining to this section. 
The first comment states that the proposed rule does not provide an 
effective mechanism for incentivizing solar development in SEZs by 
eliminating or significantly reducing developer costs associated with 
NEPA compliance.
    Response: There are significant incentives to developers for leases 
issued under subpart 2809, including the up-front land use planning and 
other environmental work that the BLM will complete and the certainty 
that after winning a competitive auction inside a DLA, a successful 
bidder would be awarded a lease. In addition, the BLM offers variable 
offsets, longer phase-ins for MW capacity fees, and greater time 
between acreage rent and MW capacity fees rate updates for leases 
issued under subpart 2809 that are not available for grants issued 
under subpart 2804.
    Comment: The second comment stated that the BLM should not include 
the potential for lands to be developed for solar energy generation 
when determining the minimum bid for a competitive offer.
    Response: Section 2809.14(b)(2) describes how the BLM will consider 
known and potential land values. While other competitive processes, 
such as the BLM's coal program, include a statutory requirement for the 
minimum bid, the BLM has no such requirement for the solar or wind 
energy programs. Therefore, the BLM determined that it would be 
appropriate to tie the minimum bid to the known values of the parcel 
being auctioned. These known values, such as the acreage rent, would 
reflect the potential for lands to be developed for solar energy. This 
minimum bid component will be explained in each notice of competitive 
offer.
Section 2809.15 How will the BLM select the successful bidder?
    This section explains how the successful bidder is determined and 
what requirements they must meet in order to be offered a lease. The 
bidder with the highest total bid, prior to any variable offset, will 
be declared the successful bidder and may be offered a lease in 
accordance with section 2805.10. In paragraph (a) of this section, 
``will'' is changed to ``may.'' The BLM will not offer a lease if the 
successful bidder does not meet the requirements described in paragraph 
(d) of this section. As written, paragraphs (a) and (d) of this section 
were inconsistent with each other and this revision is intended to 
resolve this inconsistency.
    The BLM will determine the appropriate variable offset percentage 
by applying the appropriate factors identified in section 2809.16, 
before issuing final payment terms. The specific factors will be 
identified in the competitive offer. If you are the successful bidder, 
your payment must be submitted to the BLM by the close of official 
business hours on the day of the offer or at such other time as the BLM 
may have specified in the offer notice. Your payment must be made by 
personal check, cashier's check, certified check, bank draft, or money 
order, or by any other means the BLM deemed acceptable. Your remittance 
must be payable to the ``Department of the Interior--Bureau of Land 
Management.'' Your payment must include at least 20 percent of the 
bonus bid prior to application of the variable offset described in 
section 2809.16, and the total amount of the minimum bid specified in 
section 2809.14(b). Within 15 calendar days after the day of the offer, 
you must submit to the BLM the balance of the bonus bid less the 
variable offset (see section 2809.16) and the acreage rent for the 
first full year of the solar or wind energy lease as provided for in 
sections 2806.54(a) or 2806.64(a), respectively. Submit these payments 
to the BLM office conducting the offer or as otherwise directed by the 
BLM in the offer notice.
    In section 2809.15(d) of this final rule, the BLM revised ``will 
approve your right-of-way lease'' to ``will offer you a right-of-way-
lease.'' This change is for consistency in terminology with paragraphs 
(a) and (e) of this section, which refer to the offering of a lease and 
not its approval. Under paragraph (e) of this section, the BLM will not 
offer a lease if the requirements of section (d) are not met. The BLM 
does not intend for this revision to change how it offers a lease to 
successful bidders.
    Under section 2809.15(e), the BLM will not offer the successful 
bidder a lease, and will keep all money submitted, if the requirements 
of section 2809.15(d) are not met. In this circumstance, the BLM may 
offer the lease to the next highest bidder under section 2809.17(b) or 
re-offer the lands under section 2809.17(d). No comments were received 
and no changes are made from the proposed rule to the final rule.
Section 2809.16 When do variable offsets apply?
    Section 2809.16 provides that a successful bidder inside a DLA may 
be eligible for a variable offset of the bonus bid (in essence, a 
bidding credit), based on the factors identified in the notice of 
competitive offer. Variable offsets are not available outside of DLAs.
    In providing for these offsets, the BLM intends to promote 
thoughtful and reasonable development based upon known environmental 
factors and impacts of different technologies. The BLM believes 
providing these offsets will increase the likelihood that a project is 
developed, expedite the development of that project, and encourage 
development that will result in lesser resource impacts from the right-
of-way. Overall, the BLM believes the structure of these offsets will 
help encourage the production of clean renewable energy on public 
lands, which is a benefit to the general public.
    Pre-qualified bidders may be eligible for offsets limited to no 
more than 20 percent of the high bid. Factors for a bidder to pre-
qualify may vary from one competitive lease offer to another and may 
include offsets for bidders with an approved PPA or Interconnect 
Agreement, among other factors.
    For example, the BLM may apply a 5 percent offset factor to a 
bidder that has a PPA. This offset factor could encourage a bidder to 
secure an agreement before the offer, which could increase the 
likelihood of a project being developed and expedite the completion of 
such development. In the BLM's experience with solar and wind energy 
developments, a project is not always developed after a right-of-way is 
issued. Based on this experience, the BLM believes that it is 
appropriate to award an offset to a bidder with an agreement in place 
to sell power, because that bidder will be more likely to develop a 
project on the right-of-way. This could prevent the unnecessary 
encumbrance of a right-of-way being issued to a holder who never 
develops the intended project.

[[Page 92189]]

    The BLM may also identify as an offset factor the submission of a 
plan showing a reasonable development scenario. For example, the BLM 
may apply a 5 percent offset factor to a bidder that would use a 
particular technology. The BLM may identify a preferred technology type 
that would reduce impacts to identified environmental or cultural 
resources on the proposed parcel.
    The BLM anticipates selected factors for the offsets to be in 
increments of 5 percent. These will be reviewed at the BLM Washington 
Office for consistency and relevance prior to each competitive offer 
made in the first several years after publication of the final rule. 
The BLM intends to provide additional guidance on the use of these 
individual factors to ensure consistency between individual notices of 
competitive offer.
    The BLM may offer a different percentage for each offset factor 
based on how qualified the bidder is for a specific offset factor. For 
example, the BLM may offer a 3 percent offset for an interim step in 
the PPA process or a 5 percent offset for a signed PPA. The BLM 
acknowledges that in some circumstances qualifying for these offsets 
may be difficult. For this reason, the BLM may offer incremental offset 
percentages to bidders that are working toward such qualifications. 
These offset factors (and their various increments) will be identified 
in the notice of competitive offer (see section 2809.13(b)(6)).
    The notice of competitive offer will identify each factor for which 
BLM may grant a variable offset, and the corresponding maximum 
percentage offset that would be applied to a qualified bidder's bonus 
bid. The notice will also identify the documentation a bidder must 
submit to pre-qualify for the offset. The authorized officer will 
determine the total offset for each competitive offer, based on the 
parcel(s) to be offered and any associated environmental concerns or 
technological limitations.
    As identified under paragraph (c) of this section, the factors for 
which the BLM may grant a variable offset in a particular lease sale 
include:
    1. Power purchase agreement. This could be a signed agreement 
between the potential lessee and an entity that agrees to purchase the 
power generated from the solar or wind energy facility;
    2. Large generator interconnect agreement. This would consist of a 
signed agreement from the holder of an electrical transmission facility 
and the potential lessee that power would be accepted on the grid 
controlled by the holder to be transported to a power receiving source;
    3. Preferred solar or wind energy technologies. This would be an 
incentive to use technologies for generating or storing solar or wind 
energy that would efficiently use public lands or reduce impacts to 
identified resources such as water;
    4. Prior site testing and monitoring inside the DLA. This would 
consist of evidence that the potential lessee or others associated with 
the lessee had previously performed appropriate testing or monitoring 
to determine the suitability and capability of the site for 
establishment of a successful solar or wind energy generating facility;
    5. Pending applications inside the DLA. This would be a situation 
where the potential lessee had previously filed for authorization to 
construct facilities inside the DLA;
    6. Submission of nomination fees. These are required when 
submitting a formal nomination (see section 2809.11(b));
    7. Submission of biological opinions, strategies, or plans. This 
could include biological opinions, bird and bat conservation 
strategies, and habitat conservation plans;
    8. Environmental benefits. This factor would include any positive 
environmental considerations such as identifying and salvaging 
archaeological or historical artifacts, additional protection for 
protected plant or animal species, or similar factors;
    9. Holding a solar or wind energy grant or lease on adjacent or 
mixed land ownership. This could show the bidder's vested interest in 
developing the right-of-way;
    10. Public benefits. These could include documented commitments or 
agreements to provide jobs or other support for local communities or 
supporting local public purposes projects; or
    11. Other similar factors. These could include support for other 
Federal Government programs or national security by providing power for 
defense purposes or meeting government purchase contracts.
    The only changes made in the listed variable offset factors between 
the proposed and final rule is for Factor Number 7, and those made for 
clarity and consistency in the final rule, are described in greater 
detail in the response to comments.
    Comment: One comment requested that the BLM not use the variable 
offset concept, as it is unworkable and would result in appeals by 
rejected bidders.
    Response: Throughout the preambles to the proposed and final rules, 
the BLM has explained DLAs and the various aspects of the competitive 
process for solar and wind energy in these areas. By creating 
incentives for prospective developers and encouraging various 
conditions that would lead to environmental and other public benefits, 
the use of a variable offset is an integral aspect of this process.
    The BLM manages the public land under the principles of multiple 
use and sustained yield, but does not expect all interested 
stakeholders to agree with all of the BLM's decisions. This is, in 
part, the reason for the BLM's appeal process, allowing the public to 
seek an administrative remedy for the BLM's decisions by which they 
have been adversely affected. The BLM expects that there will be 
appeals or protests on decisions that are made regarding management of 
the public lands.
    For each notice of competitive offer, the BLM will include the 
factor(s) of a variable offset, as well as the requirements a bidder 
must meet to qualify for each incremental percentage. Bidders, as well 
as the public, will have this information made available to them 
through the notice of competitive offer and be able to act according to 
their interests or concerns over the proposed actions. The variable 
offset is carried forward in the final rule.
    Comment: A comment expressed confusion over how the BLM would 
implement the proposed factor Number 7 (Timeliness of project 
development, financing and economic factors), and if the potential for 
meeting project timelines was even possible as a variable offset factor 
since the reduction in bid money would precede the demonstration of 
meeting agreed-upon time frames. Acts of God and other such influences 
that are outside the bidder's control were noted as possible reasons a 
bidder that received such a factor offset may not be able to meet it.
    Response: Proposed factor number 7 for timeliness is removed from 
the final rule. The BLM agrees with the comment that implementing a 
timeliness factor would be difficult. There are many reasons outside of 
a winning bidder's control that may cause a delay to the development of 
a project. The proposed criteria for timeliness offset factor is a 
desired objective for an incentive, but was determined too difficult to 
enforce.
    Comment: Another comment stated that the BLM must not shortchange 
taxpayers or other landowners through a discount that unjustly 
encourages development of public lands rather than comparable private 
lands. The BLM must ensure fair market value for the use of public 
lands.

[[Page 92190]]

    Response: The variable offset is not a discount to a developer for 
the use of public lands. It is an incentive provided to a developer of 
the public lands, that accounts for certain steps a developer has 
already taken in a particular designated leasing area. Factors of the 
variable offset may also address the reduction of resource impacts, 
such as when a less water intensive technology is used. The variable 
offsets recognize these early developer steps that could increase the 
certainty of the successful development of a lease area and assist the 
BLM in its management of the public lands under the multiple use and 
sustained yield principles. This increased certainty benefits the 
public by not having public lands unnecessarily encumbered by a lease 
that may not be developed and increases the likelihood that solar or 
wind power generation would occur on public lands.
    Comment: A third comment believes that incentives for DLAs should 
be reached exclusively by reducing rents rather than a complicated 
structure of variable offsets, time limits, bonding provisions, 
authorization terms, and MW capacity fees, and that the BLM proposed 
incentives should be removed from the final rule. This comment 
specifically addressed some of the proposed factors as follows:
    Comment (1): Factors 1 (Power purchase agreement) and 2 (Large 
generator interconnect agreement) cannot be attained without 
demonstrated site control.
    Response (1): Although securing a PPA or large generator 
interconnect agreement (LGIA) may not be attainable without site 
control, the notice may identify interim steps toward meeting the 
requirements of the offset factor. The final rule allows for interim 
steps in each of these identified offset factors. The text of the rule 
cites that the ``variable offset may be based on any of the following 
factors.'' The notice of competitive offer would include the specific 
criteria required to qualify for a factor of the variable offset under 
paragraphs (c)(1) and (2) of this section, including any interim steps 
toward those factors.
    Comment (2): Factor 3 (Preferred solar or wind energy technologies) 
for preferred technologies should be removed as it could discriminate 
against certain technologies without having the expertise of an energy 
regulatory body (outside of the BLM's authority and expertise).
    Response (2): The BLM has expertise in many areas, including the 
impacts that a certain a technology type may have on the public lands 
and its resources. This may include technologies with fewer impacts to 
wildlife or visual resources, or technologies that consume less water. 
The BLM may choose to provide a variable offset factor for a preferred 
technology that reduces impacts to the public lands and resources. 
However, in some cases, the BLM may choose to consult with one of the 
national laboratories or State authorities for their expertise for some 
technologies which may be outside of the BLM's expertise to determine 
as a preferred technology.
    Comment (3): The comment asserts that under section 2809.19(a)(1), 
applications that are filed prior to the publication of the draft land 
use plan amendment that establishes a DLA should not make a bidder 
eligible for factors (4) (prior site testing in a DLA) and (5) (pending 
applications in a DLA). This would only encourage the strategic filing 
of speculative applications after publication of the draft land use 
plan amendment in order to qualify for factors (4) and (5).
    Response (3): Applications that are filed on public lands before 
the publication of a notice of intent or other form of public notice by 
the BLM for a land use plan amendment that are later designated as a 
DLA will continue to be processed by the BLM and not subject to the 
competitive offer process of subpart 2809. The filing of speculative 
applications will not prevent the BLM from holding competitive offers 
in a particular area.
    If the BLM elects to hold a competitive offer for the DLA, the 
applicant may qualify for offset factors (4) or (5) if they chose to 
participate. The BLM believes that submitting an application after a 
notice of intent or other public notice, paying the application filing 
fee, and waiting for the BLM to hold a competitive offer, should 
qualify an applicant for variable offset factor 4 or 5.
    Comment (4): Factor 6 (submission of nomination fees) is not an 
incentive if a bidder can submit an expression of interest, which 
requires no fee, and increase their bonus bid by the amount of the 
nomination fee that they would have paid, thereby increasing their 
chances of being the winning bidder.
    Response (4): Neither submitting an expression of interest nor 
submitting a nomination will guarantee that the BLM selects that parcel 
for a competitive offer. However, if a developer has a particular 
parcel in mind, the payment of a nomination fee may be preferable so 
that they may qualify for a variable offset factor. In addition, 5 
percent of the bonus bid may result in greater savings to the bidder 
than the amount submitted for the nomination fees.
    Comment (5): Factors 8 (environmental benefits) and 10 (public 
benefits) are open to distortion and variability across field offices.
    Response (5): The BLM intends that in each notice of competitive 
offer it will identify each applicable variable offset factor offered 
and specify how a bidder may qualify for each factor. The criteria 
listed in the final rule are intended to be broad and varied so that 
they can be adapted for each competitive offer.
    Factor 9 is revised from the proposed to the final rule to include 
grants. As proposed, the factor could appear to only apply for adjacent 
leases. In this final rule, the BLM may authorize a grant under subpart 
2804 inside a DLA, which may be adjacent to a parcel which is bid on. 
The parcel may also be adjacent to a grant that is outside the DLA. 
This revision clarifies that the BLM would consider the site control of 
adjacent lands, regardless of the instrument.
    Comment: One comment suggests the following variable offsets be 
added: (1) A bird and bat conservation strategy for the project site; 
(2) A commitment to a specific right-of-way lease condition to obtain a 
bald and golden eagle protection act permit; (3) A plan to employ best 
available operation minimization strategies; and (4) agreement to: (a) 
Conduct monitoring and research with land-based WEG and Eagle 
Conservation Plan Guidance; (b) Provide this monitoring data to the 
public to facilitate a greater understanding to the wildlife impacts; 
and (c) implement avoidance measures to avoid impacts.
    Response: A variable offset factor has been added in the final rule 
to account for biological opinions, strategies and plans. This factor 
has been added in the place of offset factor 7 which, as noted in an 
earlier response to comment, has been removed from this rule. New 
variable offset factor 7 reads as ``Submission of biological opinions, 
strategies, or plans.'' This will encourage the early and thoughtful 
development of the public lands. To have such a plan or opinion 
completed at this point could lead to fewer biological resource impacts 
and quicker NEPA review of the project POD. The BLM does not expect 
many projects to complete a biological opinion at this point in the 
process, but interim steps toward such a plan would demonstrate the 
developer's commitment to protecting resources on public lands. Such 
interim steps could qualify a developer for this factor of a variable 
offset, which would be described in the notice of competitive offer.

[[Page 92191]]

    No other comments were received and no other changes are made to 
this section.
Section 2809.17 Will the BLM ever reject bids or re-conduct a 
competitive offer?
    This section identifies situations where the BLM may reject a bid, 
offer a lease to another bidder, re-offer a parcel, and take other 
appropriate actions when no bids are received. Under section 
2809.17(a), the BLM could reject bids regardless of the amount offered. 
Bid rejection could be for various reasons, such as discovery of 
resource values that cannot adequately be mitigated through 
stipulations (e.g., the only known site of a rare or endangered plant 
or for security purposes). If this occurs, the bidder will be notified 
and the notice will explain the reason(s) for the rejection and whether 
you are entitled to any refunds. If the BLM rejects a bid, the bidder 
may appeal that decision under section 2801.10. Minor revisions are 
made from the proposed to the final rule to improve readability of this 
section's title by adding the word ``the'' before BLM.
    The BLM could offer the lease to the next highest qualified bidder 
if the first successful bidder is later disqualified or does not sign 
and accept the offered lease (see section 2809.17(b)).
    Under paragraph (c) of this section, the BLM could re-offer a 
parcel if it cannot determine a successful bidder. This may happen in 
the case of a tie or if a successful bidder is later determined to be 
unqualified to hold a lease.
    Under paragraph (d) of this section, if public lands offered 
competitively under this subpart receive no bids, the BLM could either 
reoffer the parcels through the competitive process under section 
2809.13 or make the lands available through the non-competitive process 
found in subparts 2803, 2804, and 2805. If the lands are offered on a 
noncompetitive basis, the successful applicant would receive a right-
of-way grant issued under subpart 2804, rather than a lease issued 
under subpart 2809, and the offsets described in section 2809.16 would 
not apply.
    Comment: A comment stated that the right to appeal a rejected bid 
must be qualified (i.e., not be a spurious appeal). The comment goes on 
to say that this may be remedied by the BLM: (1) Prohibiting the 
issuance of a stay against a lease award while there is a pending 
appeal filed under section 2801.10; and (2) Specifying that a 
successful appeal would not rescind a lease award, but instead result 
in an automatic 20 percent offset for the next DLA competitive process 
in which the successful appellant participates.
    Response: The BLM agrees that appeals should not be spurious or 
intended to disrupt the BLM's administration of the public lands. 
However, the BLM does not agree that it should prohibit the issuance of 
a stay in its regulations. The right to appeal a BLM decision, 
including the issuance of a stay, is an important part of the BLM's 
orderly administration of the public lands.
    Should an appeal be successful in the IBLA, the BLM would not award 
a 20 percent variable offset to the appellant. A successful appeal may 
be grounds for a re-offer of the parcels or other similar action that 
would be consistent with the administrative status of the BLM decision 
that was appealed. Also, should a variable offset be awarded to 
successful appellants, it would likely incite further appeals from 
other unsuccessful bidders in the hopes to secure such a future credit. 
Therefore, the BLM will not provide for such variable offset awards in 
the rule for successful appellants. No other comments were received or 
changes made to the final rule for this section.
Section 2809.18 What terms and conditions apply to leases?
    Section 2809.18 lists the terms and conditions of solar and wind 
energy leases issued inside DLAs.
    Under paragraph (a) of this section, the term of a lease issued 
under subpart 2809 will be 30 years and the lessee may apply for 
renewal under section 2805.14(g). While the BLM will issue grants under 
subpart 2804 for a term up to 30 years (see section 2805.11), leases 
issued under subpart 2809 are guaranteed a lease term of 30 years.
    Under paragraph (b) of this section, a lessee must pay rent and MW 
capacity fees as specified in section 2806.54, if the lease is for 
solar energy development or as specified in section 2806.64, if the 
lease is for wind energy development. Rent and MW capacity fees are 
discussed in greater detail in sections 2806.50 through 2806.68 of the 
section-by-section analysis. Minor revisions are made from the proposed 
to the final rule to improve readability, but any significant changes 
are discussed in detail in this preamble.
    Under paragraph (c) of this section, a lessee must submit, within 2 
years of the lease issuance date, a POD that: (1) Is consistent with 
the development schedule and other requirements in the POD template 
posted on the BLM's Web site http://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html; and (2) Addresses all pre-development and 
development activities. A POD is often required for rights-of-way under 
section 2804.25(c) of this final rule and is currently required for all 
renewable energy projects through policy. Due to their complexity, 
solar and wind energy development projects will always require a POD. 
The POD must provide site-specific information that will be reviewed by 
the BLM and other Federal agencies in accordance with NEPA and other 
relevant laws.
    Under paragraph (d) of this section, a lessee must pay the 
reasonable costs for the BLM or other Federal agencies to review and 
process the POD and to monitor the lease. The authority for collecting 
costs is derived from Sections 304(b) and 504(g) of FLPMA that 
authorize reimbursement to the United States of all reasonable and 
administrative costs associated with processing right-of-way 
applications and other documents relating to the public lands, and in 
the inspection and monitoring of construction, operation, and 
termination of right-of-way facilities. Such costs may be determined 
based on consideration of actual costs. A lessee may choose to pay full 
actual costs for the review of the POD and the monitoring activities of 
the lease. Through the BLM's experience, a lessee is more likely to 
choose payment of full actual costs as this expedites the BLM's review 
and monitoring actions by removing administrative steps in cost 
estimations and verifying estimated account balances.
    Under paragraph (e) of this section, a lessee must provide a 
performance and reclamation bond for a solar or wind energy project. 
Bond amounts for leases issued under subpart 2809 will be set at a 
standard dollar amount (per acre for solar, or per turbine for wind) 
for either solar or wind energy development. See section 2805.20 of 
this preamble for additional information on the determination of these 
bond amounts. As explained in the general discussion section of this 
preamble, the BLM does not intend to change the amount of a standard 
bond after the lease is issued unless there is a change in use. As 
previously discussed, these bond amounts were determined based on a 
review of recently bonded solar and wind energy projects.
    Comments: Several comments were received on paragraph (e) of this 
section. One comment suggested that the BLM should require bonds that 
are tied to the actual cost of reclamation and mitigation of the 
project, rather than an arbitrary per acre or per project figure.
    Response: It is the intent that these standard bond amounts would 
incentivize solar and wind energy

[[Page 92192]]

development in DLAs. Reclamation of the lands in these DLAs is 
anticipated to be less than other locations outside of DLAs as the 
resource impacts are not expected to be as great, and the land could, 
in turn, be used for solar or wind development again if a developer 
failed to complete their lease obligation in developing the land. 
Additionally, consistent with its interim policy guidance for offsite 
mitigation (IM 2013-142)consistent with the recently issued mitigation 
manual and handbook guidance, the BLM intends to prepare regional 
mitigation strategies before authorizing wind or solar energy 
development in DLAs. These plans may identify additional costs for 
mitigating residual impacts of the right-of-way.
    As noted in the preamble for section 2805.20, the minimum and 
standard bond amounts are the same. The BLM recently completed a review 
of existing bonded solar and wind energy projects and based the 
standard bond amounts provided in this final rule on the information 
found during this review. When determining these bond amounts, the BLM 
considered potential liabilities associated with the lands affected by 
the rights-of-way, such as cultural values, wildlife habitat, and 
scenic values, and the mitigation and reclamation of the project site. 
The BLM used this review to determine an appropriate standard bond 
amount to cover the potential liabilities associated with solar and 
wind energy projects.
    Comment: Another comment stated that both DLA and non-DLA bonding 
requirements should be the same. The BLM should use differences in rent 
to encourage development of DLAs.
    Response: Bonding requirements for both grants issued under subpart 
2804 and leases issued under subpart 2809 are established to protect 
the public lands. The requirements for leases are established using the 
same methodology as those minimum amounts established outside of a DLA. 
However, the standard bond amount recognizes that the impacts to 
resources and uses are likely to be less inside of a DLA than outside 
of a DLA, due to the BLM's effort to establish DLAs in areas where 
resource conflicts are expected to be lower. Furthermore, standard bond 
amounts increase the certainty for developers of costs when planning 
for and developing their project.
    Comment: A comment recommended that the BLM reevaluate the standard 
bond amounts and identify a range commensurate with actual costs of 
decommissioning. The comment noted that the preamble to the proposed 
rule stated the range of solar bonding costs of $10,000 to $20,000 and 
wind bonding costs of $22,000 to $60,000. This comment asked if the 
minimum and standard bond amounts chosen at the bottom or below the 
stated ranges were adequate.
    Response: The BLM has considered the recommendation to identify a 
range of standard bond amounts, but intends to keep these amounts as 
proposed. In order to accommodate the wind turbines that pose lesser 
risk to resources, and consistent with revisions made in section 
2805.20, the BLM is including in the final rule a $10,000 standard bond 
amount for projects utilizing smaller turbines. Turbines with a 
nameplate capacity of one MW or greater will have a standard bond 
amount of $20,000, consistent with the proposed rule. This is because 
these amounts represent bond figures that are representative of the 
impacts to the resources of the public lands and the intended 
management decisions of DLAs for solar or wind energy development. 
Should a developer default or fail to fulfill the lease terms, the BLM 
may pursue a competitive offer to lease those lands again. The full 
amount of the bond may not be used in this situation. The balance will 
be returned to the previous leaseholder upon the completion of 
reclamation activities. See section 2805.20(d) comment responses of 
this preamble for further discussion on the added $10,000 bond amount.
    BLM has determined that establishing the proposed standard bond 
amounts as proposed is appropriate. Using the proposed bond amounts 
reduces the potential for the BLM to secure bonds in amounts beyond 
what is necessary for the project. If a higher bond amount were 
selected, the BLM might over-bond the project, especially considering 
that the BLM has already identified these areas as having lower 
potential for resource impacts. Grant holders are still liable for 
damage done during the term of the grant or lease even if the bond 
amount does not cover the cost of reclamation.
    The bonds collected for a project issued under subpart 2809 
consider hazardous material liabilities, reclamation, and project site 
restoration. In addition to the required bond, BLM may require a 
mitigation fee to address adverse impacts resulting from the right-of-
way authorization. Between securing the bond and collection of 
mitigation fees, the BLM believes that the impacts to the public lands 
are adequately protected.
    A new provision (section 2809.18(e)(3)) has been added to this 
final rule to explain that lease holders for the testing sites that 
will be authorized under a lease in a DLA will provide a standard bond 
amount of $2,000 per site. This addition to the final rule is to make 
this section consistent with revisions to section 2801.9(d), which open 
up the site-specific and project-area testing authorizations to solar 
and wind energy. The standard bond amount for a lease issued under 
subpart 2809 is the same as a minimum bond amount in the proposed rule. 
Grants issued in a DLA for testing purposes will have a minimum bond 
amount as determined under section 2805.20. Testing and monitoring 
facilities include meteorological towers and instrumentation 
facilities.
    For a solar energy development project, a lessee must provide a 
bond in the amount of $10,000 per acre at the time the BLM approves the 
POD. See the discussion at section 2805.20(b) for additional 
information. For a wind energy development project, a lessee must 
provide a bond in the amount of $10,000 or $20,000 per authorized 
turbine before the BLM issues a Notice to Proceed or otherwise gives 
permission to begin construction on of the development. See section 
2805.20(c) and (d) of this preamble for additional information.
    The BLM will adjust the solar or wind energy development bond 
amounts for inflation every 10 years by the average annual change in 
the IPD-GDP for the preceding 10-year period, and round the bond amount 
to the nearest $100. This adjustment would be made at the same time 
that the Per Acre Rent Schedule for linear rights-of-way is adjusted 
under section 2806.22.
    The BLM revised paragraph (e)(4) of this section from the proposed 
to final rule for consistency with other sections of this final rule 
where the BLM uses the IPD-GDP to adjust an amount every 10 years. See 
the preamble discussion of section 2804.12(c)(2) for further 
information about this revision.
    Under paragraph (f) of this section, a lessee may assign a lease 
under section 2807.21, and if an assignment is approved, the BLM would 
not make any changes to the lease terms or conditions, as provided in 
section 2807.21(e). See section 2807.21(e) of this preamble for further 
discussion of this topic, in response to a comment asking that we 
clarify the BLM's right to modify the terms of a lease issued under 
subpart 2809. We added language in paragraph (e) of this section to be 
consistent with section 2807.21(e) to state that changes made to a 
lease issued under this subpart will be made only when there is a 
danger to the public health and safety, environment, or a change to the 
statutory authority and other

[[Page 92193]]

responsibilities of the BLM. These changes would only be made in 
coordination with the lessee.
    Under paragraph (g) of this section, a lessee must start 
construction of a project within 5 years and begin generating 
electricity no later than 7 years from the date of lease issuance, as 
specified in the approved POD. The approved POD will outline the 
specific development requirements for the project, but all PODs require 
a lessee to start generating electricity within 7 years. The 5 years to 
start construction and 7 years to begin generating electricity 
contained in the rule should allow leaseholders time to construct and 
start generation of electricity and give a leaseholder time to address 
any concerns that are outside of the BLM's authority. Such concerns 
include PPAs or private land permitting or site control transactions. A 
request for an extension may be granted for up to 3 years with a show 
of good cause and BLM approval. If a leaseholder is unable to meet this 
timeframe, and does not obtain an extension, the BLM may terminate the 
lease. No other comments were received or changes made to the final 
rule for this section.
Section 2809.19 Applications in DLAs or on Lands That Later Become DLAs
    Section 2809.19 explains how the BLM processes applications for 
lands located inside DLAs or on lands that later become DLAs. Under the 
rule, lands inside DLAs will be offered through the competitive bidding 
process described in this subpart, and applications may not be filed 
inside these areas after the lands have been offered for competitive 
bid.
    Section 2809.19 is revised from proposed to the final rule by 
adding a paragraph (a)(3) and redesignating proposed paragraphs (b) and 
(c) as paragraphs (c) and (d), respectively. The BLM also moved some 
provisions of proposed paragraph (a)(2) to a new paragraph (b). These 
changes are made to clarify how the BLM handles applications in areas 
that later become designated leasing areas. There is no change from the 
proposed requirements in the final rule.
    Paragraph (a) of this section explains how the BLM will process 
applications filed for solar or wind energy development on lands 
outside of DLAs that subsequently become DLAs.
    Under paragraph (a)(1) of this section, if an application is filed 
before the BLM publishes a notice of intent or other public 
announcement of intent for a land use plan amendment that considers 
designating an area for solar or wind energy, the BLM would continue to 
process the application, which would not be subject to the competitive 
leasing offer process found in this subpart. After publication of this 
notice, the public will have been notified of the BLM's intent to 
create a DLA.
    Under paragraph (a)(2) of this section, if an application is filed 
after the notice of the proposed land use plan amendment, the 
application will remain in a pending status, unless it is withdrawn by 
the applicant or the BLM denies it or issues a grant. The BLM made a 
minor revision to this section from the proposed rule by adding ``or 
issues a grant.'' This revision gives the BLM the option to approve a 
grant in pending status, if it chooses. This revision is made because 
the proposed rule inadvertently omitted the possibility that a pending 
application could be approved, instead of only being withdrawn or 
denied.
    New paragraph (a)(3) of this section is added in this final rule to 
explain that applications may resume being processed by the BLM if 
lands in a DLA later become available for application. Under paragraph 
2809.17(d)(2), the BLM may make the lands in a DLA available for 
application in some circumstances. For example, the BLM may hold a 
competitive offer and receive no bids. In this situation, the BLM may 
make these lands available for application and would resume processing 
any applications that are pending on these lands. This is consistent 
with the proposed rule but is added to the final rule to clarify how 
the BLM will handle such applications in these circumstances.
    Some provisions of proposed paragraph (a)(2) of this section are 
moved into new paragraph (b) in this final rule. These provisions 
remain mostly unchanged and are discussed as follows.
    Under new paragraph (b) of this section, if the subject lands 
become available for leasing under this subpart, an applicant could 
submit a bid for the lands. Under new paragraph (b)(1) of this section, 
any entity with an application pending on a parcel that submits a bid 
on such parcel may qualify for a variable offset as provided for under 
section 2809.16.
    Under paragraph (b)(2) of this section, the applicant may receive a 
refund for any unused application fees or processing costs if the lands 
described in the application are later leased to another entity under 
section 2809.15. This provision is revised consistent with changes made 
for application filing fees in this final rule, which are now a cost 
recovery payment. The BLM may use some of these fees in processing an 
application and will refund any unused fees to the applicant.
    Proposed paragraph (b) of this section is redesignated as paragraph 
(c) in this final rule. Under paragraph (c) of this section, the BLM 
will not accept a new application for solar or wind energy development 
inside DLAs after the effective date of this rule (see sections 
2804.12(b)(1) and 2804.23(e), except as provided for by section 
2809.17(d)(2).
    Proposed paragraph (c) of this section is redesignated as paragraph 
(d) in this final rule. Under paragraph (d) of this section, the BLM 
can authorize short term (3-year) grants for testing and monitoring 
purposes inside DLAs. These would be processed in accordance with 
sections 2805.11(b)(2)(i) or 2805.11(b)(2)(ii). These testing grants 
may qualify an entity for a variable offset under section 
2809.16(b)(4).
    Comment: One comment was received pertaining to paragraph (a)(1) of 
this section. The comment stated that the pending application exception 
in the paragraph requires clarification. A pending project exemption 
should be tied to a notice of intent rather than a notice of 
availability (NOA) to avoid a number of filings made immediately after 
publication of a notice of intent. Also, a pending project exemption 
should apply to the potential competitive leasing of non-DLA lands 
under section 2804.30. In addition, the BLM should clarify that the 
rule would not apply to applications accepted and serialized or a grant 
issued before the rule takes effect.
    Response: The BLM agrees in part with these suggestions. In this 
final rule, this section has been modified so that a notice of intent 
or other public notice will be the point at which the BLM determines 
that your application qualifies as a pending application. The notice of 
intent is specific to land use plan amendments that use an EIS for the 
analysis. Because a plan amendment may also be using an environmental 
assessment, which does not require a notice of intent, the BLM added 
the language, ``other public announcement'' into this section. The BLM 
believes that it is appropriate to continue processing applications 
that were submitted before the BLM provided public notice (e.g., 
through a notice of intent).
    The final rule will apply to applications that are accepted and 
serialized as well as grants that are issued before this rule is 
effective. There may be exceptions to whether the rule will fully apply 
to an application or right-of-way grant. For example, application 
filing fees and preliminary application review meetings may not be

[[Page 92194]]

required for some pending applications. Applications do not confer land 
use rights to an applicant, and other provisions of the rule such as 
rent and fees may be determined at the time a right-of-way is 
authorized, not at the time an application is submitted. Therefore, 
under the provisions of new sections 2804.40 and 2805.12(e), you may 
request alternative requirements, stipulations, terms, and conditions 
from the BLM with a showing of good cause, and an explanation or reason 
for an alternative requirements, stipulations, terms, and conditions.

V. Section-by-Section Analysis for Part 2880

    In addition to the revisions to its regulations governing rights-
of-way for solar and wind energy development, the BLM is also revising 
several subparts of part 2880. These revisions are necessary to make 
rights-of-way administered under part 2880 consistent, where possible, 
with the policies, processes, and procedures for those administered 
under part 2800. Specific areas where we are making consistency changes 
include: Bonding requirements; determination of initial rental payment 
periods; and when you must contact the BLM, including grant, lease, and 
temporary use permit (TUP) modification requests, assignments, and 
renewal requests. The BLM has removed the provision found in the 
proposed rule regarding pre application requirements and fees for any 
pipeline 10 inches or more in diameter from this final rule. This is 
because, based on further analysis and comments received, the use of a 
10-inch diameter pipeline was found not to be an appropriate measure 
that could readily provide a basis for additional requirements.
    This final rule adds Section 310 of FLPMA to the authority citation 
for this part to clarify that FLPMA authority may be used in processing 
a pipeline right-of-way. The MLA authorizes the Secretary to approve 
MLA pipeline rights-of-way that cross Federal lands when those pipeline 
rights-of-way are administered by the Secretary or by two or more 
Federal agencies. Where the Secretary authorizes a pipeline right-of-
way across lands managed by the Secretary, including any bureaus or 
offices of the Department, other authorities applicable to the 
management of those lands would generally apply to the authorization. 
We have cited FLPMA specifically because that authority, governing the 
management of the public lands generally, is the authority most 
commonly relied upon in such authorizations.

Subpart 2884--Applying for MLA Grants or TUPs

Section 2884.10 What should I do before I file my application?
    In the proposed rule, this section included requirements for pre-
application meetings when applying for a right-of-way for an oil or gas 
pipeline having a diameter exceeding 10 inches. Many comments were 
received concerning this proposal, including many comments stating that 
it was not a reasonable criterion to use in determining the need for 
pre-application meetings. After considering these comments and upon 
further evaluation of the proposal the BLM decided to not require these 
pre-application meetings. As a result, the proposed changes were not 
made to the regulations in this section.
Section 2884.11 What information must I submit with my application?
    Section 2884.11 includes requirements for submitting applications. 
This section has been retitled from ``What information must I submit in 
my application?'' to read as shown above. This revision is consistent 
with the title revision of section 2804.12. Proposed requirements for 
pipelines with a diameter of 10 inches or more have been removed from 
this section in the final rule.
    Section 2884.11(c)(5) is amended by adding a second sentence that 
further explains that your POD must be consistent with the development 
schedule and other requirements that are noted on the POD template for 
oil or gas pipelines at http://www.blm.gov.
    Comment: One comment suggested that paragraph (c)(5) of this 
section be revised to read as follows: ``The estimated schedule for 
constructing, operating, maintaining, and terminating the project (a 
POD). Your POD must address the elements specified on the POD template 
for oil and gas pipelines at http://www.blm.gov.'' This suggestion 
would remove the requirement for the POD to be consistent with the 
development schedule in the POD template.
    Response: The BLM did not make the suggested changes. The suggested 
revision to the rule would require that the applicant address each 
element of a POD, but would not require consistency with the POD 
template. This could allow a developer to acknowledge the development 
timeline, but not provide it to the BLM. It is important that 
applicants provide the necessary information to the BLM for the orderly 
administration of public lands, including the development schedule for 
the POD. No other comments were received and no changes are made from 
the proposed to the final rule.
Section 2884.12 What is the processing fee for a grant or TUP 
application?
    Section 2884.12 explains the fees associated with an application, 
including those that involve Federal agencies other than the BLM. The 
applicant may either pay the BLM for work done by those Federal 
agencies or pay those Federal agencies directly for their work. This 
authority was recently delegated to the BLM by the Secretary by 
Secretarial Order 3327.
    Paragraph (b) of this section revises the processing fee schedule 
to remove the 2005 category fees. Paragraph (c) of this section 
provides instructions on where you may obtain a copy of the current 
processing fee schedule. These changes parallel those made to section 
2804.14, which describe processing fees for grant applications. A 
further analysis of these changes can be found in that part of the 
section-by-section analysis. No comments were received and no, changes 
are made from the proposed rule to the final rule.
Section 2884.16 What provisions do Master Agreements contain and what 
are their limitations?
    Section 2884.16 is revised to require that Master Agreements 
describe existing agreements with other Federal agencies for cost 
reimbursement associated with the application. This change parallels 
changes made in section 2804.18, which describes Master Agreements for 
all other rights-of-way. With the authority recently delegated by 
Secretarial Order 3327 to collect costs for other Federal agencies, it 
is important for the applicant, the BLM, and other Federal agencies to 
coordinate and be consistent regarding cost reimbursement. No comments 
were received and no changes are made from the proposed rule to the 
final rule.
Section 2884.17 How will BLM process my Processing Category 6 
Application?
    Section 2884.17 explains how the BLM processes Category 6 
applications and these changes parallel changes in section 2804.19. 
Under paragraph (e) of this section, the BLM may collect reimbursement 
for the United States for actual costs with respect to right-of-way 
applications and other document processing relating to Federal lands. 
No comments were received and no changes are made from the proposed 
rule to the final rule.

[[Page 92195]]

Section 2884.18 What if there are two or more competing applications 
for the same pipeline?
    Section 2884.18 parallels section 2804.23. Under paragraph (a)(1) 
of this section, the requirement to reimburse the BLM is expanded to 
allow for cost reimbursement from all Federal agencies for the 
processing of these right-of-way authorizations.
    Under paragraph (c) of this section, the BLM may offer lands 
through a competitive process on its own initiative. Language is added 
to this paragraph to include ``other notification methods, such as a 
newspaper of general circulation in the area affected by the potential 
right-of-way or the Internet.'' This revision is consistent with other 
public notice sections of this rule. See section 2804.23(c) of this 
preamble for further discussion. No comments were received and no other 
changes are made from the proposed rule to the final rule.
Section 2884.20 What are the public notification requirements for my 
application?
    Under section 2884.20, the phrase ``and may use other notification 
methods, such as a newspaper of general circulation in the vicinity of 
the lands involved or the Internet'' is added to paragraphs (a) and (d) 
to provide for additional methods to notify the public of a pending 
application or to announce any public hearings or meetings. This final 
rule is revised, consistent with changes made to other notification 
language throughout this rule, to make notice in a newspaper an 
optional method of notice. See section 2804.23(c) of this preamble for 
further discussion. No comments were received and no changes are made 
from the proposed rule to the final rule.
Section 2884.21 How will BLM process my application?
    Under section 2884.21, the BLM will not process your application if 
you have any trespass action pending for any activity on BLM 
administered lands (see section 2888.11) or have any unpaid debts owed 
to the Federal Government. The only application the BLM will process to 
resolve the trespass is for a right-of-way as authorized in this part, 
or a lease or permit under the regulations found at 43 CFR part 2920, 
but only after all outstanding debts are paid. This provision is added 
to provide incentives for the applicant to resolve outstanding debts or 
other infractions involving the Federal Government and parallels 
section 2804.25.
    New language is added to paragraph (b) of this section stating that 
outstanding debts are those currently unpaid debts owed to the Federal 
Government after all administrative collection actions have occurred, 
including administrative appeal proceedings under applicable Federal 
regulations and review under the APA. This language is added to be 
consistent with section 2804.25(d). No comments were received for 
section 2884.21, but comments were received and addressed under section 
2804.25. The notification language contained in paragraph (d)(4) of 
this section is amended by adding the phrase ``and may use other 
notification methods, such as a newspaper of general circulation in the 
vicinity of the lands involved or the Internet.'' This section is 
revised, consistent with changes made to other notification language 
throughout this rule, to make notice in a newspaper an optional method 
of notice. See section 2804.23(c) of this preamble for further 
discussion.
Section 2884.22 Can BLM ask me for additional information?
    Section 2884.22 describes what information the BLM may require in 
processing an application. This section was revised by changing the 
reference found in paragraph (a) from section 2804.25(b) to section 
2804.25(c). This change was not proposed, but is made to be consistent 
with other changes made in this final rule. No other changes were made 
to this section.
Section 2884.23 Under what circumstances may BLM deny my application?
    Section 2884.23 describes the circumstances when the BLM may deny 
an application. In the proposed rule, section 2884.23(a)(6), stated 
that the BLM may deny an application if the required POD fails to meet 
the development schedule and other requirements for oil and gas 
pipelines.
    Comment: Several comments suggested that the BLM remove the 10-inch 
pipeline threshold requirement in the proposed rule.
    Response: As noted previously in the preamble, the BLM removed the 
proposed requirements for pipelines ``10 inch or larger in diameter'' 
from the final rule. This includes requirements such as the pre-
application meetings, the POD timeline, and other such requirements 
that are specific to pipelines 10 inches in diameter or larger. The 
timeliness requirement, among others associated with the large-scale 
pipeline projects description has been removed from the final rule.
    Comment: One comment stated that the BLM should account for 
instances when a developer does not meet the timeframe due to reasons 
outside of their control.
    Response: The final rule adds a new section 2884.30 that parallels 
section 2804.40, both of which address situations in which a developer 
misses a timeframe or is unable to meet a requirement because of 
circumstances beyond its control. The preamble for section 2804.40 
explains in greater detail the circumstances when an applicant may be 
unable to meet a requirement.
    No other comments were received and no other changes made from the 
proposed rule to the final rule.
Section 2884.24 What fees do I owe if BLM denies my application or if I 
withdraw my application?
    In the proposed rule, this section was consistent with section 
2804.27. The proposed section would have required an applicant to pay 
any pre-application costs submitted under section 2884.10(b)(4). The 
BLM removed the ``10 inches or larger in diameter'' criteria used for 
determining large-scale pipeline projects from the final rule and as a 
result, requirements that are specific to large-scale pipeline projects 
are not carried forward in the final rule. This includes requirements 
such as the pre-application meetings, application submission, POD and 
other such requirements.
Section 2884.30 Showing of Good Cause
    This section was not in the proposed rule. It is added here to 
clarify that if you cannot meet one or more of the right-of-way process 
requirements for a MLA application, then you may: (a) Show good cause 
as to why you cannot meet a requirement; and (b) Suggest an alternative 
requirement and explain why that requirement is appropriate. This 
request must be in writing and received by the BLM before your deadline 
to meet a requirement(s) has passed. This section is added to respond 
to comments requesting a way to meet the intent of the regulation if an 
applicant believes that a requirement(s) cannot be met. Additional 
discussion can be found in section 2804.40 of this preamble.

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

Section 2885.11 What terms and conditions must I comply with?
    Section 2885.11 explains the terms and conditions of a grant. 
Paragraph (a) of this section is revised by adding the phrase ``with 
the initial year of the grant considered to be the first year of the

[[Page 92196]]

term.'' This revision clarifies what BLM considers to be the first year 
of a grant. For example, a 30-year grant issued on September 1, 2015, 
will expire on December 31, 2044, and have an effective term of 29 
years and 4 months. This is consistent with law, policy, and 
procedures. For all grants issued under parts 2800 and 2880 with terms 
greater than 3 years, the actual term will include the number of full 
years, including any partial year. The term for a MLA grant differs 
from the term for rights-of-way authorized under FLPMA, as FLPMA 
rights-of-way may be issued for periods greater than 30 years, while a 
MLA right-of-way may be issued for a maximum period of 30 years. If a 
30 year FLPMA grant is issued on a date other than the first of a 
calendar year, that partial year will count as additional time of the 
grant (see discussion of section 2805.11 earlier in this preamble 
section).
    A new sentence is added to the end of section 2885.11(b)(7) 
referencing new section 2805.20 that explains the bonding requirements 
for all rights-of-way. The introduction of this paragraph is revised 
consistent with the introduction made to paragraph 2805.20(a) that has 
the similar provision by which the BLM may require a bond. The 
introduction of this paragraph now reads: ``The BLM may require that 
you obtain,'' instead of ``If we require it. . . .'' This revision is 
for consistency within the final rule and its regulations.
    Comments: Several concerns were raised about bonding requirements. 
One comment suggested that bonding should focus only on large scale 
operations (e.g., use a 60 acre or greater criterion), that right-of-
way holders should be able to use liability insurance to satisfy 
bonding requirements, and asked that the rule make it clear that the 
new requirements would not affect existing operations.
    Response: This final rule does not require bonding for any rights-
of-way, except for solar and wind energy developments. As previously 
noted, the BLM has removed the criteria for large scale projects from 
this final rule. The BLM will continue to determine whether a bond is 
necessary and what the bond amount will be on a case-by-case basis.
    In this final rule, the BLM accepts many bond instruments, 
including insurance policies. Insurance policies would include those 
that are issued for general liabilities of a company, individual, or 
organization.
    The bonding provisions in the final rule apply to the grants that 
were issued before the effective date of this rule. The existing 
regulations require that a holder obtain or certify that they have 
obtained a bond or other acceptable security to cover any losses, 
damages, or injury to human health, the environment, and property 
incurred in connection with the use and occupancy of the right-of-way 
or TUP area. The current regulations allow the BLM to adjust the bond 
requirements for any right-of-way grant or lease when a situation 
warrants it. These requirements in the existing rule are incorporated 
in this final rule and will continue to apply to existing and future 
grant holders.
    Comments: Another comment suggested copying the bonding 
requirements from part 2800 into part 2880, instead of referring to the 
relevant requirements.
    Response: The BLM intends to maintain the continuity of the 
regulations, as they currently exist. Section 2885.11(b)(7) refers to 
the terms and conditions in section 2805.12. This creates a consistent 
use of the regulations for the public as well as the BLM in its 
administration of the public lands. It is not necessary to duplicate 
the subpart 2805 regulations in part 2880. No other comments were 
received and no other changes made from the proposed rule to the final 
rule.
Section 2885.15 How will BLM charge me rent?
    Section 2885.15 discusses how the BLM will prorate and charge rent 
for rights-of-way. Revisions to section 2885.15 clarify that there are 
no reductions of rents for grants or TUPs, except as provided under 
section 2885.20(b). Section 2885.20(b) is an existing provision under 
which a grant holder can qualify for phased-in rent. This section is 
revised to clarify existing requirements and add a cross-reference to 
another section of these regulations. No comments were received and no 
changes are made from the proposed rule to the final rule.
Section 2885.16 When do I pay rent?
    Revisions to section 2885.16 clarify that the BLM prorates the 
initial rental amount based on the number of full months left in the 
calendar year after the effective date of the grant or TUP. If your 
grant qualifies for annual payments, the initial rent bill consists of 
the beginning partial year plus the next full year. For example, the 
initial rent payment required for a 10-year grant issued on September 1 
would be for 1 year and 3 months if the grant qualifies for annual 
billing. The initial rental bill for the same grant would be for 9 
years and 3months if the grant does not qualify for annual billing. 
This is a new provision that parallels section 2806.24(c) and creates 
consistency in how all rights-of-way are prorated. No comments were 
received and no changes are made from the proposed rule to the final 
rule.
Section 2885.17 What happens if I do not pay rents and fees or if I pay 
the rents or fees late?
    Section 2885.17(e) parallels section 2806.13(e), which identifies 
when the BLM would retroactively bill for uncollected or under-
collected rent, late payments, and administrative fees. The BLM will 
collect such rents if: (1) A clerical error is identified; (2) A rental 
schedule adjustment is not applied; or (3) An omission or error in 
complying with the terms and conditions of the authorized right-of-way 
is identified.
    Comment: One comment pointed out that the titles of sections 
2806.13(e) and 2885.17(e) were not consistent and also questioned the 
location of the new subject matter within these paragraphs.
    Response: The BLM agrees with the comment that the titles of the 
two paragraphs identified are not consistent, therefore we revised the 
section heading to read as above. However, we did not revise the 
placement of the subject matter within the final regulations. After 
revisions to this section heading, the provisions for retroactive 
billing and unpaid or under collected rents are appropriately placed in 
this section. No other comments were received and no other changes made 
from the proposed rule to the final rule.
Section 2885.19 What is the rent for a linear right-of-way grant?
    Section 2885.19 is revised by updating the addresses in paragraph 
(b). No comments were received and no changes are made from the 
proposed rule to the final rule.
Section 2885.20 How will the BLM calculate my rent for linear rights-
of-way the Per Acre Rent Schedule covers?
    Section 2885.20 is amended by removing paragraph (b)(1) that 
discussed the phase-in of the Per Acre Rent Schedule and the 2009 per 
acre rent, because this provision is no longer applicable. Paragraph 
(b) now consists of the language formerly found at paragraph (b)(2). No 
comments were received and no changes are made from the proposed rule 
to the final rule.
Section 2885.24 If I hold a grant or TUP what monitoring fees must I 
pay?
    The changes in section 2885.24 parallel the changes made to other 
sections of this rule that contained tables with outdated numbers. 
Specific numbers are removed from the table.

[[Page 92197]]

However, the monitoring fee amounts are available to the public either 
from BLM offices or on the BLM Web site. The rule adds the methodology 
for adjusting these fees on an annual basis to paragraph (a) of this 
section. Since this methodology has been added to paragraph (a), a 
description of how the BLM updates the schedule has been removed from 
paragraph (b) of this section.
    Consistent with revisions made under section 2805.16, the BLM is 
adding the words ``inspecting and'' to section 2885.24. This additional 
language codifies current practice or policy. It will allow the BLM to 
inspect and monitor the right-of-way to ensure a project's compliance 
with the terms and conditions of an authorization. Under this 
provision, if a project is out of compliance, the BLM could inspect the 
project to ensure that the required actions are completed to the 
satisfaction of the BLM, such as continued maintenance of the required 
activity. No comments were received and no other changes are made from 
the proposed rule to the final rule.

Subpart 2886--Operations on MLA Grants and TUPs

Section 2886.12 When must I contact BLM during operations?
    Section 2886.12 describes when a right-of-way grant holder must 
contact the BLM during operations. The changes in this section parallel 
the changes made to section 2807.11. A grant holder is required to 
contact the BLM when site-specific circumstances require changes to an 
approved right-of-way grant, POD, site plan, or other procedures, even 
when the changes are not substantial deviations in location or use. 
These types of changes are considered to be grant or TUP modification 
requests. Paragraph (e) is added to conform to similar provisions found 
at section 2807.11(e), which requires you to contact the BLM if your 
authorization requires submission of a certificate of construction. See 
section 2807.11 for further discussion of these topics.
    Comment: One comment stated that requiring grant holders to contact 
the BLM prior to making non-substantial deviations in location or use, 
including operational changes, project materials, and mitigation 
measures, is overly burdensome.
    Response: Unless a grant provides for non-substantial deviations, a 
grant holder must contact the BLM and request approval of non-
substantial deviations for an authorization. Should a holder not 
receive approval from the BLM, they could be found to be in 
noncompliance with the terms and conditions of the grant. The 
requirements of this section are required in order for the BLM to 
review and approve a non-substantial deviation and to ensure that the 
BLM is meeting its responsibilities under the MLA and any other 
applicable authorities, including FLPMA. It is the BLM's responsibility 
to determine if a deviation is substantial, not a grant holder's. No 
other comments were received and nor changes are made from the proposed 
rule to the final rule.

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

Section 2887.11 May I assign or make other changes to my grant or TUP?
    The final rule revises section 2887.11 to parallel the revisions 
made to section 2807.21, which describes assigning or making other 
changes to a FLPMA grant or lease. We received comments to sections 
2807.21 and 2887.11 that apply to both sections. Sections 2807.21 and 
2887.11 are consistent with each other in formatting and content, 
except where cross-references are made to their respective regulatory 
provisions.
    The section heading for section 2887.11 is changed to be consistent 
with the section heading for section 2807.21 and the text in the final 
section. The existing regulations do not cover all instances when an 
assignment is necessary and also do not address situations when 
assignments are not required. The revisions to this section are 
necessary to: (1) Add and describe additional changes to a grant other 
than assignments; (2) Clarify what changes require an assignment; and 
(3) Make right-of-way grants or TUPs subject to the regulations in this 
section.
    Paragraph (a) is revised to include two events that may require the 
filing of an assignment: (1) The transfer by the holder of any right or 
interest in the right-of-way grant to a third party, e.g., a change in 
ownership; and (2) A change in control transactions involving the 
right-of-way grantee. See section 2807.21 of this preamble for further 
discussion.
    Revised paragraph (b) clarifies that a change in the holder's name 
only does not require an assignment. It also clarifies that changes in 
a holder's articles of incorporation do not trigger an assignment.
    Revised paragraph (c) pertains to payments for assignments and adds 
a requirement to pay application fees in addition to processing fees. 
Also, the BLM may now condition a grant assignment on payment of 
outstanding cost recovery fees to the BLM.
    Added paragraph (g) clarifies that only interests in right-of-way 
grants or TUPs are assignable. A pending right-of-way application is 
not a property right or other interest that can be assigned. No 
comments were received and no other changes made from the proposed rule 
to the final rule.
Section 2887.12 How do I renew my grant?
    Section 2887.12 adds paragraph (d), to be consistent with the 
revisions made to section 2807.22, explaining that if a holder makes a 
timely and sufficient application for renewal, the existing grant or 
lease does not expire until BLM issues a decision on the application 
for renewal. This provision is derived from the APA (5 U.S.C. 
558(c)(1)), and it protects the interests of existing right-of-way 
holders who have timely and sufficiently made an application for the 
continued use of an existing authorization. In this situation, the 
authorized activity does not expire until the application for continued 
use has been evaluated and a decision on the extension is made by the 
agency. This reiterates and clarifies existing policy and procedures.
    Under section 2887.12(e), you may appeal the BLM's decision to deny 
your application under section 2881.10. This paragraph parallels the 
language under proposed section 2807.22(f), which is redesignated as 
section 2807.22(g). No comments were received and no changes are made 
from the proposed rule to the final rule.

VI. Procedural Matters

Regulatory Planning and Review (Executive Orders 12866 and 13563)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs (OIRA) will review all significant rules. OIRA has 
determined that this rule is significant because it could raise novel 
legal or policy issues.
    Executive Order 13563 reaffirms the principles of Executive Order 
12866 while calling for improvements in the nation's regulatory system 
to promote predictability, to reduce uncertainty, and to use the best, 
most innovative, and least burdensome tools for achieving regulatory 
ends. This Executive Order directs agencies to consider regulatory 
approaches that reduce burdens and maintain flexibility and freedom of 
choice for the public where these approaches are relevant, feasible and 
consistent with regulatory objectives. Executive Order 13563 emphasizes 
further that regulations must be based on the best available science 
and that the rulemaking process

[[Page 92198]]

must allow for public participation and an open exchange of ideas. We 
have developed this rule in a manner consistent with these 
requirements.
    This rule includes provisions intended to facilitate responsible 
solar and wind energy development and to receive fair market value for 
such development. These provisions are designed to:
    1. Promote the use of preferred areas for solar and wind energy 
development (i.e., DLAs); and
    2. Establish competitive processes, terms, and conditions 
(including rental and bonding requirements) for solar and wind energy 
development rights-of-way both inside and outside of DLAs.
    These provisions also will assist the BLM in: (a) Meeting goals 
established in Section 211 of the EPAct of 2005, Secretarial Order 
3285A1, and the President's Climate Action Plan; and (b) Implementing 
recommendations from the GAO and OIG regarding renewable energy 
development.
    In addition to provisions that would affect renewable energy 
specifically, this rule also includes some provisions that affect all 
rights-of-way, and some that affect only transmission lines with a 
capacity of 100 kV or more. These provisions clarify existing 
regulations and codify existing policies.

Economic Impacts

    The rule does not have an annual effect on the economy of $100 
million or more or adversely affect in a material way the economy, a 
sector of the economy, productivity, competition, jobs, the 
environment, public health or safety, or State, local, or tribal 
governments or communities. The BLM anticipates this rule will reduce 
total costs to all applicants, lessees, and operators by up to 
approximately 17.9 million per year. The change in rents and fees from 
those currently set by policy primarily reflect changing market 
conditions. Increases in the minimum bond amounts also reflect 
increases in estimated reclamation costs. These impacts are discussed 
in detail in the Economic and Threshold Analysis for the rule.

Other Agencies

    This rule does not create a serious inconsistency or otherwise 
interfere with another agency's actions or plans. The BLM is the only 
agency that may promulgate regulations for rights-of-way on public 
lands.

Budgetary Impacts

    This rule does not materially alter the budgetary effects of 
entitlements, grants, user fees, loan programs, or the rights or 
obligations of their recipients.

Novel Legal or Policy Issues

    This rule may raise novel legal or policy issues. It codifies 
existing BLM policies and provides additional detail about submitting 
applications for solar or wind energy development grants, and for 
transmission lines with a capacity of 100 kV or more. In addition, the 
rule provides for a competitive process for those entities seeking 
solar and wind energy development leases inside of DLAs.

National Environmental Policy Act (NEPA)

    These regulatory amendments are of an administrative or procedural 
nature and thus are eligible to be categorically excluded from the 
requirement to prepare an environmental assessment (EA) or EIS. See 43 
CFR 46.205 and 46.210(i). They do not present any of the extraordinary 
circumstances listed at 43 CFR 46.215.
    Nonetheless, the BLM prepared an EA and Finding of No Significant 
Impact (FONSI) analyzing the final rule to inform agency decision-
makers and the public. The EA/FONSI incorporates by reference the Final 
Solar Energy Development Programmatic Environmental Impact Statement 
(July 2012) and the Final Programmatic Environmental Impact Statement 
on Wind Energy Development on BLM-Administered Lands in the Western 
United States (June 2005). The EA concludes that this rule does not 
constitute a major Federal action significantly affecting the quality 
of the human environment under Section 102(2)(C) of NEPA (42 U.S.C. 
4332(2)(C)). A detailed statement under NEPA is not required. To obtain 
single copies of the Programmatic EISs or the EA/FONSI, you may contact 
the person listed under the section of this rule titled, FOR FURTHER 
INFORMATION CONTACT. You may also view the EA/FONSI and Programmatic 
Environmental Impact Statements at, respectively, http://windeis.anl.gov/, http://solareis.anl.gov/, and http://www.blm.gov/wo/st/en/prog/energy/renewable_energy.html.

Regulatory Flexibility Act

    Congress enacted the Regulatory Flexibility Act of 1980 (RFA), as 
amended, 5 U.S.C. 601-612, to ensure that Government regulations do not 
unnecessarily or disproportionately burden small entities. The RFA 
requires a regulatory flexibility analysis if a rule would have a 
significant economic impact, either detrimental or beneficial, on a 
substantial number of small entities. For the purposes of this 
analysis, the BLM assumes that all entities (all grant holders, 
lessees, and applicants for rights-of-way for solar or wind energy 
projects, pipelines, or transmission lines with a capacity of 100 kV or 
more) that may be affected by this rule are small entities, even though 
that is not actually the case.
    This rule does not have a significant economic effect on a 
substantial number of small entities under the RFA.
    The rule does affect new applicants or bidders for authorizations 
of solar or wind energy development and transmission lines with a 
capacity of 100 kV or more. The BLM reviewed current holders of such 
authorizations to determine whether they are small businesses as 
defined by the SBA. The BLM was unable to find financial reports or 
other information for all potentially affected entities, so this 
analysis assumes that the rule could potentially affect a substantial 
number of small entities.
    To determine the extent to which this rule will impact these small 
entities, we took two approaches. First, we attempted to measure the 
direct costs of the rule as a portion of the net incomes of affected 
small entities. However, we were unable to obtain the financial records 
for a representative sample. Next, we estimated the direct costs of the 
rule as a portion of the total costs of a project.
    The analysis showed that a range of potential impacts on the total 
cost of a project varied from a savings of 0.08 percent to a cost of 
1.45 percent of the total project cost. The BLM determined that this 
was an insignificant impact in the context of developing a project and, 
therefore, not a significant economic impact on a substantial number of 
small businesses. For a more detailed discussion, please see the 
economic analysis.

Small Business Regulatory Enforcement Fairness Act

    For the same reasons as discussed under the Executive Order 12866, 
Regulatory Planning and Review section of this preamble, this rule is 
not a ``major rule'' as defined at 5 U.S.C. 804(2). That is, it would 
not have an annual effect on the economy of $100 million or more; it 
would not result in major cost or price increases for consumers, 
industries, government agencies, or regions; and it would 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.

[[Page 92199]]

Unfunded Mandates Reform Act

    This rule does not impose an unfunded mandate on State, local, or 
tribal governments, or on the private sector of $100 million or more 
per year; nor would it have a significant or unique effect on State, 
local, or tribal governments. This rule amends portions of the 
regulations found at 43 CFR parts 2800 and 2880, redesignates existing 
43 CFR part 2809 in its entirety to a new paragraph found at 
2801.6(a)(2), adds new 43 CFR part 2809, and modifies the MLA pipeline 
regulations in 43 CFR part 2880, but does not result in any unfunded 
mandates. Therefore, the BLM does not need to prepare a statement 
containing the information required by Sections 202 or 205 of the 
Unfunded Mandates Reform Act (UMRA), 2 U.S.C. 1531 et seq. The rule is 
also not subject to the requirements of Section 203 of UMRA because it 
contains no regulatory requirements that might uniquely affect small 
governments, nor does it contain requirements that either apply to such 
governments or impose obligations upon them.

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

    This rule is not a government action that interferes with 
constitutionally protected property rights. This rule sets out 
competitive processes for solar and wind energy development and revises 
some requirements for pipelines and electric transmission facilities on 
BLM-managed public lands. It establishes rent and fee schedules for 
various components of the development of such facilities inside DLAs 
that are conducive to competitive right-of-way leasing and clarifies a 
process that would rely on the BLM's existing land use planning system 
to allow for these types of uses. Because any land use authorizations 
and resulting development of facilities under this rule are subject to 
valid existing rights, it does not interfere with constitutionally 
protected property rights. Therefore, the Department determined that 
this rule does not have significant takings implications and does not 
require further discussion of takings implications under this Executive 
Order.

Executive Order 13132, Federalism

    The BLM determined that this rule does not have a substantial 
direct effect on the States, or the relationship between the national 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of government. It does not 
apply to State or local governments or State or local government 
entities. Therefore, in accordance with Executive Order 13132, the BLM 
determined that this rule does not have sufficient Federalism 
implications to warrant preparation of a Federalism Assessment.

Executive Order 12988, Civil Justice Reform

    Under Executive Order 12988, the Department determined that this 
rule does not unduly burden the judicial system and that it meets the 
requirements of sections 3(a) and 3(b)(2) of the Order. The 
Department's Office of the Solicitor has reviewed this rule to 
eliminate drafting errors and ambiguity. It has been written to 
minimize litigation, provide clear legal standards for affected conduct 
rather than general standards, promote simplification, and avoid 
unnecessary burdens.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    In accordance with Executive Order 13175, the BLM found that this 
rule does not have significant tribal implications. Additionally, 
because the rulemaking itself is administrative in nature and does not 
establish any DLAs or approve any specific projects, the BLM has 
determined that it does not require tribal consultation.
    Moreover, in the future when additional DLAs are established or 
projects are approved, the rule calls for further tribal consultation 
by the BLM and right-of-way applicants. Specifically, DLAs will be 
identified through the BLM's land use planning process. Tribal 
consultation is an important component of that process and will be 
undertaken when DLAs are identified. In addition to the preliminary 
review covered in the planning process, existing BLM regulations 
require site-specific analysis for specific projects. As part of that 
site-specific analysis, right-of-way applicants must consult with 
affected tribes to discuss the proposed action and other aspects of the 
proposed project. For example, site-specific requirements for 
applications for a grant issued under subpart 2804 include application 
review, public meetings, and tribal consultation. The BLM would be able 
to deny an application after these meetings based on a variety of 
criteria, including tribal concerns.

Data Quality Act

    In promulgating this rule, the BLM did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Section 515 of Public Law 106-554). In accordance with the Data 
Quality Act, the Department has issued guidance regarding the quality 
of information that it relies upon for regulatory decisions. This 
guidance is available at the Department's Web site at: http://www.doi.gov/archive/ocio/iq.html.

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

    Executive Order 13211 requires Federal agencies to prepare and 
submit to OMB a Statement of Energy Effects for any proposed 
significant energy action. A ``significant energy action'' is defined 
as any action by an agency that: (1) Is a significant regulatory action 
under Executive Order 12866, or any successor order; (2) Is likely to 
have a significant adverse effect on the supply, distribution, or use 
of energy; or (3) Is designated by the Administrator of OIRA as a 
significant energy action.
    This rule could raise novel legal or policy issues within the 
meaning of Executive Order 12866 or any successor order. However, the 
BLM believes this rule is unlikely to have a significant adverse effect 
on the supply, distribution, or use of energy, and may in fact have a 
positive impact on energy supply, distribution, or use. In fact, its 
intent is to facilitate such development. The rule codifies BLM 
policies and provides additional detail about the process for 
submitting applications for solar or wind energy development grants 
issued under subpart 2804, or for solar or wind energy development 
leases issued under subpart 2809.

Executive Order 13352, Facilitation of Cooperative Conservation

    In accordance with Executive Order 13352, the BLM determined that 
this rule will not impede the facilitation of cooperative conservation. 
The rule takes appropriate account of and respects the interests of 
persons with ownership or other legally recognized interests in land or 
other natural resources; properly accommodates local participation in 
the Federal decision-making process; and provides that the programs, 
projects, and activities are consistent with protecting public health 
and safety.

Paperwork Reduction Act

    The Paperwork Reduction Act (PRA) (44 U.S.C. 3501-3521) provides 
that an agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information, unless it displays a 
currently valid OMB control number. Collections of information include 
requests and requirements that

[[Page 92200]]

an individual, partnership, or corporation obtain information, and 
report it to a Federal agency. See 44 U.S.C. 3502(3); 5 CFR 1320.3(c) 
and (k).
    This rule contains information collection activities that require 
approval by the OMB under the Paperwork Reduction Act. The BLM included 
an information collection request in the proposed rule. OMB has 
approved the information collection for the final rule under control 
number 1004-0206.
    Some of the information collection activities in the final rule 
require the use of Standard Form 299 (SF-299), Application for 
Transportation and Utility Systems and Facilities on Federal Lands. SF-
299 is approved for use by the BLM and other Federal agencies under 
control number 0596-0082. The U.S. Forest Service administers control 
number 0596-0082. The OMB has approved the information collection 
activities in this final rule under control number 1004-0206.
    The information collection activities in this rule are described 
below along with estimates of the annual burdens. Included in the 
burden estimates are the time for reviewing instruction, searching 
existing data sources, gathering and maintaining the data needed, and 
completing and reviewing each component of the proposed information 
collection.
    The following features of the final rule pertain to more than one 
information collection activity.
    Designated leasing areas: As defined in an amendment to 43 CFR 
2801.5, a designated leasing area is a parcel of land identified in a 
BLM land use plan as a preferred location for solar or wind energy 
development. Regulations at 43 CFR subpart 2809 provide for the 
issuance of solar or wind right-of-way development ``leases'' inside a 
designated leasing area. Regulations at subpart 2804 provide for right-
of-way development ``grants'' for solar or wind energy projects outside 
of any designated leasing area. Regulations at subpart 2804 also 
provide for testing grants for solar or wind energy inside or outside 
designated leasing areas.
    Competitive process for solar or wind energy outside any designated 
leasing area: Section 2804.30 provides that the BLM may invite bids for 
land outside any designated leasing area for solar or wind energy 
testing and development. Section 2804.30(g) allows only one applicant 
(i.e., a ``preferred applicant'') to apply for a right-of-way grant for 
solar or wind energy testing or development outside any designated 
leasing area. The preferred applicant is the successful bidder in the 
competitive process outlined in subpart 2804.
    Competitive process for solar or wind energy inside a designated 
leasing area: Subpart 2809 outlines a competitive process for land 
inside a designated leasing area, which provides for a parcel 
nomination and competitive offer instead of an application process.
    Application filing fees: Section 2804.12(c)(2) requires an 
``application filing fee'' as follows:
    (1) $15 per acre for applications for solar or wind energy 
development outside any designated leasing area; and
    (2) $2 per acre for applications for energy project-area testing 
inside or outside designated leasing areas.
    As defined in an amendment to section 2801.5, an application filing 
fee is specific to solar and wind energy right-of-way applications. 
Section 2804.30(e)(4) provides that the BLM will refund the fee, except 
for the reasonable costs incurred on behalf of the applicant, if the 
applicant is not a successful bidder under subpart 2804 or subpart 
2809. The proposed rule would have required an application filing fee 
for energy site-specific testing grants. On consideration of comments 
questioning whether site-specific testing should be subject to an 
application filing fee, the BLM has removed that requirement from the 
final rule. The $2 per acre filing fee applies to applications for 
energy project-area testing, but not to energy site-specific testing.
    Applications: Section 2804.12(b) refers to applications in the 
context of large-scale projects. In the BLM's experience, most 
applications and plans of development for large-scale projects evolve 
from several iterations of the first application that is submitted. 
Some requirements in the final rule (for example, application filing 
fees) apply to the first time an application is submitted but not to 
subsequent submissions of an application for the same project.
    The information collection activities in the final rule are 
discussed below.
Application for a Solar or Wind Energy Development Project Outside Any 
Designated Leasing Area (43 CFR 2804.12 and 2804.30(g)); and
Application for an Electric Transmission Line with a Capacity of 100 kV 
or More (43 CFR 2804.12)
    New requirements at section 2804.12(b) apply to the following types 
of applications:
     Solar and wind energy development grants outside any 
designated leasing area; and
     Electric transmission lines with a capacity of 100 kV or 
more.
    In addition to these categories of applications, the proposed rule 
would have made these new requirements applicable to applications for 
pipelines 10 inches or greater. The rationale was that these 
applications, as well as the other 2 types of applications, were for 
large-scale operations that warrant their own procedures. Some comments 
questioned the BLM's description of pipelines 10 inches or greater in 
diameter as a measure for large-scale pipeline projects, and suggested 
that the scale of pipeline projects is better measured by acreage than 
pipeline diameter. The BLM agrees. Rights-of-way for pipelines 10 
inches or greater in diameter are not subject to section 2804.12 of the 
final rule.
    Section 2804.12(b) includes the following requirements for 
applications for a solar or wind energy development project outside a 
designated leasing area, and to applications for a transmission line 
project with a capacity of 100 kV or more:
     A discussion of all known potential resource conflicts 
with sensitive resources and values, including special designations or 
protections; and
     Applicant-proposed measures to avoid, minimize, and 
compensate for such resource conflicts, if any.
    Section 2804.12(b) also requires applicants to initiate early 
discussions with any grazing permittees that may be affected by the 
proposed project. This requirement stems from FLPMA Section 402(g) (43 
U.S.C. 1752(g)) and a BLM grazing regulation (43 CFR 4110.4-2(b)) that 
require 2 years' prior notice to grazing permittees and lessees before 
cancellation of their grazing privileges.
    In addition to the information listed at 43 CFR 2804.12(b), an 
application for a solar or wind project, or for a transmission line of 
at least 100 kV, must include the information listed at 43 CFR 
2804.12(a)(1) through (7). These provisions are not amended in the 
final rule. The requirements at section 2804.12(e) (formerly section 
2804.12(b)) apply to applicants that are business entities. These 
requirements are not amended substantively in the final rule. The 
burdens for all of these regulations are already included in the 
burdens associated with the BLM for SF-299 and control number 0596-
0082, and therefore are not included in the burdens for the final rule.
    Applications for solar or wind energy development outside any 
designated leasing area, but not applications for large-scale 
transmission lines, are subject to a requirement (at 43 CFR 
2804.12(c)(2)) to submit an ``application

[[Page 92201]]

filing fee'' of $15 per acre. As defined in an amendment to section 
2801.5, an application filing fee is specific to solar and wind energy 
right-of-way applications. Section 2804.30(e)(4) provides that the BLM 
will refund the fee, except for the reasonable costs incurred on behalf 
of the applicant, if the applicant is not a successful bidder in the 
competitive process outlined in subpart 2804.
General Description of a Proposed Project and Schedule for Submittal of 
a POD (2804.12(b)(1) and (2))
    Paragraph 2804.12(b)(1) and (2) require applicants for a solar or 
wind development project outside a designated leasing area to submit 
the following information, using Form SF-299:
     A general description of the proposed project and a 
schedule for the submission of a POD conforming to the POD template at 
http://www.blm.gov;
     A discussion of all known potential resource conflicts 
with sensitive resources and values, including special designations or 
protections; and
     Proposals to avoid, minimize, and compensate for such 
resource conflicts, if any.
Preliminary Application Review Meetings for a Large-Scale Right-of-Way 
(43 CFR 2804.12 (b)(4))
    The proposed rule would have required pre-application meetings for 
each large-scale project (defined in the proposed rule as an 
application for a solar or wind energy development project outside a 
designated leasing area, a transmission line project with a capacity of 
100 kV or more, or a pipeline 10 inches or more in diameter). Several 
comments suggested that the BLM lacks authority to impose requirements 
on a developer before submission of an application without an 
application being submitted to the BLM.
    The BLM agrees with these comments and has revised the proposed 
rule. Instead of pre-application meetings, the final rule requires 
``preliminary application review meetings'' that will be held after an 
application for a large-scale right-of-way has been filed with the BLM. 
As discussed above, the BLM also has decided to remove 10-inch 
pipelines from the final rule, in response to comments questioning the 
characterization of pipelines 10 inches or greater in diameter as 
large-scale projects.
    Within 6 months from the time the BLM receives the cost recovery 
fee for an application for a large-scale project (i.e., for solar or 
wind energy development outside a designated leasing area or for a 
transmission line with a capacity of 100 kV or more), the applicant 
must schedule and hold at least two preliminary application review 
meetings.
    In the first meeting, the BLM will collect information from the 
applicant to supplement the application on subjects such as the general 
project proposal. The BLM will also discuss with the applicant subjects 
such as the status of BLM land use planning for the lands involved, 
potential siting issues or concerns, potential environmental issues or 
concerns, potential alternative site locations, and the right-of-way 
application process.
    In the second meeting, the applicant and the BLM will meet with 
appropriate Federal and State agencies and tribal and local governments 
to facilitate coordination of potential environmental and siting issues 
and concerns.
    The applicant and the BLM may agree to hold additional preliminary 
application review meetings.
Application for an Energy Site-Specific Testing Grant (43 CFR 2804.30, 
2805.11(b)(2)(i), and 2809.19(c));
Application for an Energy Project-Area Testing Grant (43 CFR 2804.30, 
2805.11(b)(2)(ii), and 2809.19(c)); and
Application for a Short-Term Grant (43 CFR 2805.11(b)(2)(iii))
    Section 2804.30(g) authorizes only one applicant (i.e., a 
``preferred applicant'') to apply for an energy project-area testing 
grant or an energy site-specific testing grant for land outside any 
designated leasing area. Section 2809.19(c) authorizes only one 
applicant (i.e., the successful bidder in the competitive process 
outlined at 43 CFR subpart 2809) to apply for an energy project-area 
testing grant or an energy site-specific testing grant for land inside 
a designated leasing area. Section 2805.11(b) authorizes applications 
for short-term grants for other purposes (such as geotechnical testing 
and temporary land-disturbing activities) either inside or outside a 
designated leasing area.
    Each of these grants is for 3 years or less. All of these 
applications must be submitted on an SF-299. Applications for project-
area grants (but not site-specific grants) are subject to a $2 per-acre 
application filing fee in accordance with section 2804.12(c)(2). 
Applicants for short-term grants for other purposes (such as 
geotechnical testing and temporary land-disturbing activities) are 
subject to a processing fee in accordance with section 2804.14.
    The proposed rule would have limited testing grants to wind energy. 
Some comments suggested that these authorizations should be made 
available for solar energy. The BLM has adopted this suggestion in the 
final rule.
Showing of Good Cause (43 CFR 2805.12(c)(6))
    Any authorization for a solar and wind energy right-of-way requires 
due diligence in development. In accordance with section 2805.12(c)(6), 
the BLM will notify the holder before suspending or terminating a 
right-of-way for lack of due diligence. This notice will provide the 
holder with a reasonable opportunity to correct any noncompliance or to 
start or resume use of the right-of-way. A showing of good cause will 
be required in response. That showing must include:
     Reasonable justification for any delays in construction 
(for example, delays in equipment delivery, legal challenges, and acts 
of God);
     The anticipated date for the completion of construction 
and evidence of progress toward the start or resumption of 
construction; and
     A request for extension of the timelines in the approved 
POD.
    The BLM will use the information to determine whether or not to 
suspend or terminate the right-of-way for failure to comply with due 
diligence requirements.
Reclamation Cost Estimate for Lands Outside Any Designated Leasing Area 
(43 CFR 2805.20(a)(3) and (5))
    New section 2805.20(a)(3) provides that the bond amount for 
projects other than a solar or wind energy lease under subpart 2809 
(i.e., inside a designated leasing area) will be determined based on 
the preparation of a reclamation cost estimate that includes the cost 
to the BLM to administer a reclamation contract and review it 
periodically for adequacy.
    New section 2805.20(a)(5) provides that reclamation cost estimate 
must include at minimum:
     Remediation of environmental liabilities such as use of 
hazardous materials waste and hazardous substances, herbicide use, the 
use of petroleum-based fluids, and dust control or soil stabilization 
materials;
     The decommissioning, removal, and proper disposal, as 
appropriate, of any improvements and facilities; and
     Interim and final reclamation, re-vegetation, 
recontouring, and soil stabilization. This component must address the 
potential for flood events and downstream sedimentation from the site 
that may result in offsite impacts.

[[Page 92202]]

Request To Assign a Solar or Wind Energy Development Right-of-Way (43 
CFR 2807.21)
    Section 2807.21, as amended, provides for assignment, in whole or 
in part, of any right or interest in a grant or lease for a solar or 
wind development right-of-way. Actions that may require an assignment 
include the transfer by the holder (assignor) of any right or interest 
in the grant or lease to a third party (assignee) or any change in 
control transaction involving the grant holder or lease holder, 
including corporate mergers or acquisitions.
    The proposed assignee must file an assignment application, using 
SF-299, and pay application and processing fees. No preliminary 
application review meetings and or public meetings are required.
    The assignment application must include:
     Documentation that the assignor agrees to the assignment; 
and
     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.
Application for Renewal of an Energy Project-Area Testing Grant or 
Short-Term Grant (43 CFR 2805.11(b)(2), 2805.14(h), and 2807.22)
    Section 2805.11(b)(2), as amended, provides that holders of some 
types of grants may seek renewal of those grants. For an energy site-
specific testing grant, the term is 3 years or less, without the option 
of renewal. However, for an energy project-area testing grant, the 
initial term is 3 years or less, with the option to renew for one 
additional 3-year period when the renewal application is also 
accompanied by a solar or wind energy development application and a 
POD. For short-term grants, such as for geotechnical testing and 
temporary land-disturbing activities, the term is 3 years or less with 
an option for renewal.
    Applications for renewal of testing grants (except site-specific 
testing grants) may be filed, using SF-299, under sections 2805.14(h) 
and 2807.22. Processing fees in accordance with section 2804.14, as 
amended, apply to these renewal applications.
    Section 2807.22 provides that an application for renewal of any 
right-of-way grant or lease must be submitted at least 120 calendar 
days before the grant or lease expires. The application must show that 
the grantee or lessee is in compliance with the renewal terms and 
conditions (if any), with the other terms, conditions, and stipulations 
of the grant or lease, and with other applicable laws and regulations. 
The application also must explain why a renewal of the grant or lease 
is necessary.
Environmental, Technical, and Financial Records, Reports, and Other 
Information (43 CFR 2805.12(a)(15))
    Section 2805.12(a)(15) authorizes the BLM to require a holder of 
any type of right-of-way to provide, or give the BLM access to, any 
pertinent environmental, technical, and financial records, reports, and 
other information. The use of SF-299 is required. The BLM will use the 
information for monitoring and inspection activities.
Application for Renewal of a Solar or Wind Energy Development Grant or 
Lease (43 CFR 2805.14(g) and 2807.22)
    Amendments to sections 2805.14 and 2807.22 authorize holders of 
leases and grants to apply for renewal of their rights-of-way. A 
renewal requires submission of the same information, on SF-299, that is 
necessary for a new application. Processing fees, in accordance with 43 
CFR 2804.14, as amended, will apply to these renewal applications. The 
BLM will use the information submitted by the applicant to decide 
whether or not to renew the right-of-way.
Request for an Amendment or Name Change, Amendment, or Assignment 
(FLPMA) (43 CFR 2807.11(b) and (d)) and 2807.21)
    New section 2807.11(b) requires a holder of any type of right-of-
way grant to contact the BLM, seek an amendment to the grant under 
section 2807.20 (a regulation that is not amended in this final rule), 
and obtain the BLM's approval before beginning any activity that is a 
``substantial deviation'' from what is authorized.
    New section 2807.11(d) requires contact with the BLM, a request for 
an amendment to the pertinent right-of-way grant or lease, and prior 
approval whenever site-specific circumstances or conditions result in 
the need for changes to an approved right-of-way grant or lease, plan 
of development, site plan, mitigation measures, or construction, 
operation, or termination procedures that are not ``substantial 
deviations.''
    New section 2807.21 authorizes assignment of a grant or leased with 
the BLM's approval. It also authorizes the BLM to require a grant or 
lease holder to file new or revised information in circumstances that 
include, but are not limited to:
     Transactions within the same corporate family;
     Changes in the holder's name only; and
     Changes in the holder's articles of incorporation.
    A request for an amendment of a right-of-way, using SF-299, is 
required in cases of a substantial deviation (for example, a change in 
the boundaries of the right-of-way, major improvements not previously 
approved by the BLM, or a change in the use of the right-of-way). Other 
changes, such as changes in project materials, or changes in mitigation 
measures within the existing, approved right-of-way area, must be 
submitted to the BLM for review and approval. In order to assign a 
grant, the proposed assignee must file an assignment application and 
follow the same procedures and standards as for a new grant or lease, 
as well as pay application and processing fees. In order to request a 
name change, the holder will be required to file an application and 
follow the same procedures and standards as for a new grant or lease 
and pay processing fees, but no application fee is required. The 
following documents are also required in the case of a name change:
     A copy of the court order or legal document effectuating 
the name change of an individual; or
     If the name change is for a corporation, a copy of the 
corporate resolution proposing and approving the name change, a copy of 
a document showing acceptance of the name change by the State in which 
incorporated, and a copy of the appropriate resolution, order, or other 
document showing the name change.
    In all these cases, the BLM will use the information to monitor and 
inspect rights-of-way, and to maintain current data.
Nomination of a Parcel of Land Inside a Designated Leasing Area (43 CFR 
2809.10 and 2809.11)
    Sections 2809.10 and 2809.11 authorize the BLM to offer land 
competitively inside a designated leasing area for solar or wind energy 
development on its own initiative. These regulations also authorize the 
BLM to solicit nominations for such development. In order to nominate a 
parcel under this process, the nominator must be qualified to hold a 
right-of-way under 43 CFR 2803.10. After publication of a notice by the 
BLM, anyone meeting the qualifications may submit a nomination for a 
specific parcel of land to be developed for solar or wind energy. There 
is a fee of $5 per acre for

[[Page 92203]]

each nomination. The following information is required:
     The nominator's name and personal or business address;
     The legal land description; and
     A map of the nominated lands.
    The BLM will use the information to communicate with the nominator 
and to determine whether or not to proceed with a competitive offer.
Expression of Interest in Parcel of Land Inside a Designated Leasing 
Area (43 CFR 2809.11(c))
    Section 2809.11(c) authorizes the BLM to consider informal 
expressions of interest suggesting specific lands inside a designated 
leasing area to be included in a competitive offer. The expression of 
interest must include a description of the suggested lands and a 
rationale for their inclusion in a competitive offer. The information 
will assist the BLM in determining whether or not to proceed with a 
competitive offer.
Plan of Development for a Solar or Wind Energy Development Lease Inside 
a Designated Leasing Area (43 CFR 2809.18)
    Section 2809.18(c) requires the holder of a solar or wind energy 
development lease for land inside a designated leasing area to submit a 
plan of development, using SF-299, within 2 years of the lease issuance 
date. The plan must address all pre-development and development 
activities. This collection activity is necessary to ensure diligent 
development.
    This new provision will be a new use of Item #7 of SF-299, which 
calls for the following information:

    Project description (describe in detail): (a) Type of system or 
facility (e.g., canal, pipeline, road); (b) related structures and 
facilities; (c) physical specifications (length, width, grading, 
etc.); (d) term of years needed; (e) time of year of use or 
operation; (f) volume or amount of product to be transported; (g) 
duration and timing of construction; and (h) temporary work areas 
needed for construction.

    This collection has been justified and authorized under control 
number 0596-0082. In addition, section 2809.18(c) provides that the 
minimum requirements for either a ``Wind Energy Plan of Development'' 
or ``Solar Energy Plan of Development'' can be found at a link to a 
template at www.blm.gov. To some extent, that template duplicates the 
information required by Item #7 of SF-299. The following requirements 
do not duplicate the elements listed in SF-299:
     Financial Operations and maintenance. This information 
will assist the BLM in verifying the right-of-way holder's compliance 
with terms and conditions regarding all aspects of operations and 
maintenance, including road maintenance and workplace safety;
     Environmental considerations. This information will assist 
the BLM in monitoring compliance with terms and conditions regarding 
mitigation measures and site-specific issues such as protection of 
sensitive species and avoidance of conflicts with recreation uses of 
nearby lands;
     Maps and drawings. This information will assist the BLM in 
monitoring compliance with all terms and conditions; and
     Supplementary information. This information, which will be 
required after submission of the holder's initial POD, will assist the 
BLM in reviewing possible alternative designs and mitigation measures 
for a final POD.
    Section 2809.18(d) requires the holder of a solar or wind energy 
development lease for land inside a designated leasing area to pay 
reasonable costs for the BLM or other Federal agencies to review and 
approve the plan of development and to monitor the lease. To expedite 
review and monitoring, the holder may notify BLM in writing of an 
intention to pay the full actual costs incurred by the BLM.
Request for an Amendment, Assignment, or Name Change (MLA) (43 CFR 
2886.12(b) and (d) and 2887.11)
    Sections 2886.12 and 2887.11 pertain to holders of rights-of-way 
and temporary use permits authorized under the Mineral Leasing Act 
(MLA). A temporary use permit authorizes a holder of a MLA right-of-way 
to use land temporarily in order to construct, operate, maintain, or 
terminate a pipeline, or for purposes of environmental protection or 
public safety. See 43 CFR 2881.12. The regulations require these 
holders to contact the BLM:
     Before engaging in any activity that is a ``substantial 
deviation'' from what is authorized;
     Whenever site-specific circumstances or conditions arise 
that result in the need for changes that are not substantial 
deviations;
     When the holder submits a certification of construction;
     Before assigning, in whole or in part, any right or 
interest in a grant or lease;
     Before any change in control transaction involving the 
grant- or lease- holder; and
     Before changing the name of a holder (i.e., when the name 
change is not the result of an underlying change in control of the 
right-of-way).
    A request for an amendment of a right-of-way or temporary use 
permit is required in cases of a substantial deviation (e.g., a change 
in the boundaries of the right-of-way, major improvements not 
previously approved by the BLM, or a change in the use of the right-of-
way). Other changes, such as changes in project materials, or changes 
in mitigation measures within the existing, approved right-of-way area, 
are required to be submitted to the BLM for review and approval. In 
order to assign a grant, the proposed assignee must file an assignment 
application and follow the same procedures and standards as for a new 
grant or lease, as well as pay processing fees. In order to request a 
name change, the holder will be required to file an application and 
follow the same procedures and standards as for a new grant or lease 
and pay processing fees, but no application fee is required. The 
following documents are also required in the case of a name change:
     A copy of the court order or legal document effectuating 
the name change of an individual; or
     If the name change is for a corporation, a copy of the 
corporate resolution proposing and approving the name change, a copy of 
a document showing acceptance of the name change by the State in which 
incorporated, and a copy of the appropriate resolution, order, or other 
document showing the name change.
    The use of SF-299 is required. In all these cases, the BLM will use 
the information for monitoring and inspection purposes, and to maintain 
current data on rights-of-way.
Certification of Construction (43 CFR 2886.12(f))
    A certification of construction is a document a holder of an MLA 
right-of-way must submit, using SF-299, to the BLM after finishing 
construction of a facility, but before operations begin. The BLM will 
use the information to verify that the holder has constructed and 
tested the facility to ensure that it complies with the terms of the 
right-of-way and is in accordance with applicable Federal and State 
laws and regulations.
Estimated Hour Burdens
    The estimated hour burdens of the proposed supplemental collection 
requirements are shown in the following table.

[[Page 92204]]



                       Information Collection Requirements: Estimated Annual Hour Burdens
----------------------------------------------------------------------------------------------------------------
                                                                                                    Total hours
                        Type of response                             Number of       Hours per      (column B x
                                                                     responses       response        column C)
A.                                                                            B.              C.              D.
----------------------------------------------------------------------------------------------------------------
Application for a Solar or Wind Energy Development Project                    10               8              80
 Outside Any Designated Leasing Area............................
43 CFR 2804.12 and 2804.30(g)...................................
Form SF-299.....................................................
Application for an Electric Transmission Line with a Capacity of              10               8              80
 100 kV or More.................................................
43 CFR 2804.12..................................................
Form SF-299.....................................................
General Description of a Proposed Project and Schedule for                    20               2              40
 Submittal of a Plan of Development.............................
43 CFR 2804.12(b)(1) and (2)....................................
Form SF-299.....................................................
Preliminary Application Review Meetings for a Large-Scale Right-              20               2              40
 of-Way.........................................................
43 CFR 2804.12(b)(4)............................................
Application for an Energy Site-Specific Testing Grant...........              20               8             160
43 CFR 2804.30, 2805.11(b)(2)(i), and 2809.19(c)................
Form SF-299.....................................................
Application for an Energy Project-Area Testing Grant............              20               8             160
43 CFR 2804.30, 2805.11(b)(2)(ii), and 2809.19(c)...............
Form SF-299.....................................................
Application for a Short-Term Grant..............................               1               8               8
43 CFR 2805.11(b)(2)(iii).......................................
Form SF-299.....................................................
Showing of good cause...........................................               1               2               2
43 CFR 2805.12(c)(6)............................................
Reclamation Cost Estimate for Lands Outside Any Designated                     1              10              10
 Leasing Area...................................................
43 CFR 2805.20(a)(3) and (a)(5).................................
Request to Assign a Solar or Wind Energy Development Right-of-                11               8              88
 Way............................................................
43 CFR 2807.21..................................................
Form SF-299.....................................................
Application for Renewal of an Energy Project-Area Testing Grant                6               6              36
 or Short-Term Grant............................................
43 CFR 2805.11(b)(2), 2805.14(h), and 2807.22...................
Form SF-299.....................................................
Environmental, Technical, and Financial Records, Reports, and                 20               4              80
 Other Information..............................................
43 CFR 2805.12(a)(15)...........................................
Form SF-299.....................................................
Application for Renewal of a Solar or Wind Energy Development                  1              12              12
 Grant or Lease.................................................
43 CFR 2805.14(g) and 2807.22...................................
Form SF-299.....................................................
Request for an Amendment or Name Change (FLPMA).................              30              16             480
43 CFR 2807.11(b) and (d) and 2807.21...........................
Form SF-299.....................................................
Nomination of a Parcel of Land Inside a Designated Leasing Area.               1               4               4
43 CFR 2809.10 and 2809.11......................................
Expression of Interest in a Parcel of Land Inside a Designated                 1               4               4
 Leasing Area...................................................
43 CFR 2809.11(c)...............................................
Plan of Development for a Solar or Wind Energy Development Lease               2               8              16
 Inside a Designated Leasing Area...............................
43 CFR 2809.18(c)...............................................
Form SF-299.....................................................
Request for an Amendment, Assignment, or Name Change (MLA)......           2,862              16          45,792
43 CFR 2886.12(b) and (d) and 2887.11...........................
Form SF-299.....................................................
Certification of Construction...................................               5               4              20
43 CFR 2886.12(f)...............................................
Form SF-299.....................................................
                                                                 -----------------------------------------------
    Totals......................................................           3,042             130          47,112
----------------------------------------------------------------------------------------------------------------

Estimated Non-Hour Burdens
    The non-hour burdens of this final rule consist of fees authorized 
by Sections 304 and 504(g) of FLPMA (43 U.S.C. 1734 and 1764(g)). 
Section 1734 authorizes the Secretary of the Interior to establish 
reasonable filing and service fees and reasonable charges with respect 
to applications and other documents relating to the public lands. 
Section 504(g) authorizes the Secretary to promulgate regulations that 
require, as a condition of a right-of-way, that an applicant for or 
holder of a right-of-way reimburse the United States for all reasonable 
administrative and other costs incurred with respect to right-of-way 
applications and with respect to inspection and monitoring of 
construction, operation, and termination

[[Page 92205]]

of a facility pursuant to such right-of-way.
    The fees (i.e., non-hour burdens) are itemized in the following 
table.

                     Information Collection Requirements--Estimated Annual Non-Hour Burdens
----------------------------------------------------------------------------------------------------------------
                                                                                                   Total amount
                                                                  Number of    Amount of fee per      of fees
        Type of response         Regulatory authority for fee     responses         response        (column C x
                                                                                                     column D)
A.                               B...........................              C.  D................              E.
----------------------------------------------------------------------------------------------------------------
Application for a Solar or Wind  43 CFR 2804.12(c)(2)........              10  $15 per acre x           $900,000
 Energy Development Project                                                     average of 6,000
 Outside Any Designated Leasing                                                 acres per
 Area.                                                                          application =
43 CFR 2804.12 and 2804.30(g)..                                                 $90,000.
Form SF-299....................
Application for an Electric      43 CFR 2804.14..............              10  $1,156 \1\.......          11,560
 Transmission Line with a
 Capacity of 100 kV or More.
43 CFR 2804.12.................
Form SF-299....................
Application for an Energy        43 CFR 2804.12(c)(2)........              20  $2 per acre x             240,000
 Project-Area Testing Grant.                                                    average of 6,000
43 CFR 2804.30,                                                                 acres per
 2805.11(b)(2)(ii), and                                                         application =
 2809.19(c).                                                                    $12,000.
Form SF-299....................
Application for a Short-Term     43 CFR 2804.14..............               1  $1,156 \2\.......           1,156
 Grant.
43 CFR 2805.11(b)(2)(iii)......
Form SF-299....................
Request to Assign a Solar or     43 CFR 2804.14..............              11  $15 per acre x            990,000
 Wind Energy Development Right-                                                 average of 6,000
 of-Way.                                                                        acres per
43 CFR 2807.21.................                                                 application =
Form SF-299....................                                                 $90,000.
Application for Renewal of an    43 CFR 2804.14..............               6  $1,156 \3\.......           6,936
 Energy Project-Area Testing
 Grant or Short-Term Grant.
43 CFR 2805.11(b)(2),
 2805.14(h), and 2807.22.
Form SF-299....................
Application for Renewal of a     43 CFR 2804.14..............               1  $1,156 \4\.......           1,156
 Solar or Wind Energy
 Development Grant or Lease.
43 CFR 2805.14(g) and 2807.22..
Form SF-299....................
Nomination of a Parcel of Land   43 CFR 2809.11(b)(1)........               1  $5 per acre x              30,000
 Inside a Designated Leasing                                                    average of 6,000
 Area.                                                                          acres per
43 CFR 2809.10 and 2809.11.....                                                 nomination =
                                                                                $30,000.
                                                                                                 ---------------
    Total......................  ............................  ..............  .................       2,180,808
----------------------------------------------------------------------------------------------------------------

Authors
    The  principal author of this rule is Jayme Lopez, Program Lead, 
National Renewable Energy Coordination Office Washington Office, Bureau 
of Land Management, Department of the Interior, assisted by Charles 
Yudson, Jean Sonneman and Ian Senio, Office of Regulatory Affairs, BLM 
Washington Office; Michael Ford, Economist, BLM Washington Office; 
Michael Hildner, Planning and Environmental Analyst; Dylan Fuge, 
Counselor to the Director, BLM Washington Office; and Gregory Russell, 
Attorney Advisor, Office of the Solicitor, Department of the Interior.
---------------------------------------------------------------------------

    \1\ In the BLM's experience, this collection activity usually 
falls under Category Four of the Processing Fee Schedule at 43 CFR 
2804.14. The amount shown is for Processing Category Four for 
calendar year 2016, at IM 2016-025 (Dec. 1, 2015) (``Rights-of-Way 
Management and Land Use Authorization Management'').
    \2\ In the BLM's experience, this collection activity usually 
falls under Category Four of the Processing Fee Schedule at 43 CFR 
2804.14. The amount shown is for Processing Category Four for 
calendar year 2016, at IM 2016-025 (Dec. 1, 2015) (``Rights-of-Way 
Management and Land Use Authorization Management'').
    \3\ In the BLM's experience, this collection activity usually 
falls under Category Four of the Processing Fee Schedule at 43 CFR 
2804.14. The amount shown is for Processing Category Four for 
calendar year 2016, at IM 2016-025 (Dec. 1, 2015) (``Rights-of-Way 
Management and Land Use Authorization Management'').
    \4\ In the BLM's experience, this collection activity usually 
falls under Category Four of the Processing Fee Schedule at 43 CFR 
2804.14. The amount shown is for Processing Category Four for 
calendar year 2016, at IM 2016-025 (Dec. 1, 2015) (``Rights-of-Way 
Management and Land Use Authorization Management'').
---------------------------------------------------------------------------

List of Subjects

43 CFR Part 2800

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

43 CFR Part 2880

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

0
Accordingly, for the reasons stated in the preamble, the BLM amends 43 
CFR parts 2800 and 2880 as set forth below:

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

0
1. The authority citation for part 2800 continues to read as follows:

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


0
2. Revise the heading of part 2800 to read as set forth above.

Subpart 2801--General Information

0
3. Amend Sec.  2801.5(b) by:

[[Page 92206]]

0
a. Adding, in alphabetical order, definitions of ``Acreage rent,'' 
``Application filing fee,'' ``Assignment,'' ``Designated leasing 
area,'' ``Megawatt (MW) capacity fee,'' ``Megawatt rate,'' 
``Performance and reclamation bond,'' ``Reclamation cost estimate 
(RCE),'' ``Screening criteria for solar and wind energy development,'' 
and ``Short-term right-of-way grant;'' and
0
b. Revising the definitions of ``Designated right-of-way corridor,'' 
``Management overhead costs,'' and ``Right-of-way.''
    The additions and revisions read as follows:


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

    (b) * * *
    Acreage rent means rent assessed for solar and wind energy 
development grants and leases that is determined by the number of acres 
authorized for the grant or lease.
* * * * *
    Application filing fee means a filing fee specific to solar and 
wind energy applications. This fee is an initial payment for the 
reasonable costs for processing, inspecting, and monitoring a right-of-
way.
    Assignment means the transfer, in whole or in part, of any right or 
interest in a right-of-way grant or lease from the holder (assignor) to 
a subsequent party (assignee) with the BLM's written approval. A change 
in ownership of the grant or lease, or other related change-in-control 
transaction involving the holder, including a merger or acquisition, 
also constitutes an assignment for purposes of these regulations 
requiring the BLM's written approval, unless applicable statutory 
authority provides otherwise.
* * * * *
    Designated leasing area means a parcel of land with specific 
boundaries identified by the BLM land use planning process as being a 
preferred location for solar or wind energy development that may be 
offered competitively.
    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 linear rights-of-way and facilities. 
The corridor may be suitable to accommodate more than one right-of-way 
use or facility, provided that they are compatible with one another and 
the corridor designation.
* * * * *
    Management overhead costs means Federal expenditures associated 
with a particular Federal agency's directorate. The BLM's directorate 
includes all 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.
    Megawatt (MW) capacity fee means the fee paid in addition to the 
acreage rent for solar and wind energy development grants and leases. 
The MW capacity fee is the approved MW capacity of the solar or wind 
energy grant or lease multiplied by the appropriate MW rate. A grant or 
lease may provide for stages of development, and the grantee or lessee 
will be charged a fee for each stage by multiplying the MW rate by the 
approved MW capacity for the stage of the project.
    Megawatt rate means the price of each MW of capacity for various 
solar and wind energy technologies as determined by the MW rate 
formula. Current MW rates are found on the BLM's MW rate schedule, 
which can be obtained at any BLM office or at http://www.blm.gov. The 
MW rate is calculated by multiplying the total hours per year by the 
net capacity factor, by the MW hour (MWh) price, and by the rate of 
return, where:
    (1) Net capacity factor means the average operational time divided 
by the average potential operational time of a solar or wind energy 
development, multiplied by the current technology efficiency rates. The 
BLM establishes net capacity factors for different technology types but 
may determine another net capacity factor to be more appropriate, on a 
case-by-case or regional basis, to reflect changes in technology, such 
as a solar or wind project that employs energy storage technologies, or 
if a grant or lease holder or applicant is able to demonstrate that 
another net capacity factor is appropriate for a particular project or 
region. The net capacity factor for each technology type is:
    (i) Photovoltaic (PV)--20 percent;
    (ii) Concentrated photovoltaic (CPV) and concentrated solar power 
(CSP)--25 percent;
    (iii) CSP with storage capacity of 3 hours or more--30 percent; and
    (iv) Wind energy--35 percent;
    (2) Megawatt hour (MWh) price means the 5 calendar-year average of 
the annual weighted average wholesale prices per MWh for the major 
trading hubs serving the 11 western States of the continental United 
States (U.S.);
    (3) Rate of return means the relationship of income (to the 
property owner) to revenue generated from authorized solar and wind 
energy development facilities based on the 10-year average of the 20-
year U.S. Treasury bond yield rounded to the nearest one-tenth percent; 
and
    (4) Hours per year means the total number of hours in a year, 
which, for purposes of this part, means 8,760 hours.
* * * * *
    Performance and reclamation bond means the document provided by the 
holder of a right-of-way grant or lease that provides the appropriate 
financial guarantees, including cash, to cover potential liabilities or 
specific requirements identified by the BLM for the construction, 
operation, decommissioning, and reclamation of an authorized right-of-
way on public lands.
    (1) Acceptable bond instruments. The BLM will accept cash, 
cashier's or certified check, certificate or book entry deposits, 
negotiable U.S. Treasury securities, and surety bonds from the approved 
list of sureties (U.S. Treasury Circular 570) payable to the BLM. 
Irrevocable letters of credit payable to the BLM and issued by banks or 
financial institutions organized or authorized to transact business in 
the United States are also acceptable bond instruments. An insurance 
policy can also qualify as an acceptable bond instrument, provided that 
the BLM is a named beneficiary of the policy, and the BLM determines 
that the insurance policy will guarantee performance of financial 
obligations and was issued by an insurance carrier that has the 
authority to issue policies in the applicable jurisdiction and whose 
insurance operations are organized or authorized to transact business 
in the United States.
    (2) Unacceptable bond instruments. The BLM will not accept a 
corporate guarantee as an acceptable form of bond instrument.
* * * * *
    Reclamation cost estimate (RCE) means the estimate of costs to 
restore the land to a condition that will support pre-disturbance land 
uses. This includes the cost to remove all improvements made under the 
right-of-way authorization, return the land to approximate original 
contour, and establish a sustainable vegetative community, as required 
by the BLM. The RCE will be used to establish the appropriate amount 
for financial guarantees of land uses on the public lands, including 
those uses authorized by right-of-way grants or leases issued under 
this part.
* * * * *
    Right-of-way means the public lands that the BLM authorizes a 
holder to use

[[Page 92207]]

or occupy under a particular grant or lease.
    Screening criteria for solar and wind energy development refers to 
the policies and procedures that the BLM uses to prioritize how it 
processes solar and wind energy development right-of-way applications 
to facilitate the environmentally responsible development of such 
facilities through the consideration of resource conflicts, land use 
plans, and applicable statutory and regulatory requirements. 
Applications for projects with lesser resource conflicts are 
anticipated to be less costly and time-consuming for the BLM to process 
and will be prioritized over those with greater resource conflicts.
    Short-term right-of-way grant means any grant issued for a term of 
3 years or less for such uses as storage sites, construction areas, and 
site testing and monitoring activities, including site characterization 
studies and environmental monitoring.
* * * * *

0
4. In Sec.  2801.6, revise paragraph (a)(2) to read as follows:


Sec.  2801.6  Scope.

    (a) * * *
    (2) Grants to Federal departments or agencies for all systems and 
facilities identified in Sec.  2801.9(a), including grants for 
transporting by pipeline and related facilities, commodities such as 
oil, natural gas, synthetic liquid or gaseous fuels, and any refined 
products produced from them; and
* * * * *

0
5. Amend Sec.  2801.9 by revising paragraphs (a)(4) and (7) and adding 
paragraph (d) to read as follows:


Sec.  2801.9  When do I need a grant?

    (a) * * *
    (4) Systems for generating, transmitting, and distributing 
electricity, including solar and wind energy development facilities and 
associated short-term actions, such as site and geotechnical testing 
for solar and wind energy projects;
* * * * *
    (7) Such other necessary transportation or other systems or 
facilities, including any temporary or short-term surface disturbing 
activities associated with approved systems or facilities, which are in 
the public interest and which require rights-of-way.
* * * * *
    (d) All systems, facilities, and related activities for solar and 
wind energy projects are specifically authorized as follows:
    (1) Energy site-specific testing activities, including those with 
individual meteorological towers and instrumentation facilities, are 
authorized with a short-term right-of-way grant issued for 3 years or 
less;
    (2) Energy project-area testing activities are authorized with a 
short-term right-of-way grant for an initial term of 3 years or less 
with the option to renew for one additional 3-year period under Sec.  
2805.14(h) when the renewal application is accompanied by an energy 
development application;
    (3) Solar and wind energy development facilities located outside 
designated leasing areas, and those facilities located inside 
designated leasing areas under Sec.  2809.17(d)(2), are authorized with 
a right-of-way grant issued for up to 30 years (plus the initial 
partial year of issuance). An application for renewal of the grant may 
be submitted under Sec.  2805.14(g);
    (4) Solar and wind energy development facilities located inside 
designated leasing areas are authorized with a solar or wind energy 
development lease when issued competitively under subpart 2809. The 
term is fixed for 30 years (plus the initial partial year of issuance). 
An application for renewal of the lease may be submitted under Sec.  
2805.14(g); and
    (5) Other associated actions not specifically included in Sec.  
2801.9(d)(1) through (4), such as geotechnical testing and other 
temporary land disturbing activities, are authorized with a short-term 
right-of-way grant issued for 3 years or less.

Subpart 2802--Lands Available for FLPMA Grants

0
6. In Sec.  2802.11, revise the section heading and paragraphs (a), (b) 
introductory text, (b)(3), (4), (6), and (7), and (d) to read as 
follows:


Sec.  2802.11  How does the BLM designate right-of-way corridors and 
designated leasing areas?

    (a) The BLM may determine the locations and boundaries of right-of-
way corridors or designated leasing areas during the land use planning 
process described in part 1600 of this chapter. During this process, 
the 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 the extent to which you may use 
public lands and resources for specific purposes.
    (b) When determining which lands may be suitable for right-of-way 
corridors or designated leasing areas, the factors the BLM considers 
include, but are not limited to, the following:
* * * * *
    (3) Physical effects and constraints on corridor placement or 
leasing areas 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 or designated leasing area (i.e., the economic efficiency of 
placing a right-of-way within a proposed corridor or providing a lease 
inside a designated leasing area);
* * * * *
    (6) Potential health and safety hazards imposed on the public by 
facilities or activities located within the proposed right-of-way 
corridor or designated leasing area;
    (7) Social and economic impacts of the right-of-way corridor or 
designated leasing area on public land users, adjacent landowners, and 
other groups or individuals;
* * * * *
    (d) The resource management plan or plan amendment may also 
identify areas where the BLM will not allow right-of-way corridors or 
designated leasing areas for environmental, safety, or other reasons.

Subpart 2804--Applying for FLPMA Grants

0
7. Amend Sec.  2804.10 by revising paragraph (a)(2) to read as follows:


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

    (a) * * *
    (2) Determine whether the lands are located inside a designated or 
existing right-of-way corridor or a designated leasing area;
* * * * *

0
8. Revise Sec.  2804.12 to read as follows:


Sec.  2804.12  What must I do when submitting my application?

    (a) File your application on Standard Form 299, available from any 
BLM office or at http://www.blm.gov, and fill in the required 
information as completely as possible. Your completed application must 
include the following:
    (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;

[[Page 92208]]

    (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;
    (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; and
    (8) A schedule for the submission of a plan of development (POD) 
conforming to the POD template at http://www.blm.gov, should the BLM 
require you to submit a POD under Sec.  2804.25(c).
    (b) When submitting an application for a solar or wind energy 
development project or for a transmission line project with a capacity 
of 100 kV or more, in addition to the information required in paragraph 
(a) of this section, you must:
    (1) Include a general description of the proposed project and a 
schedule for the submission of a POD conforming to the POD template at 
http://www.blm.gov;
    (2) Address all known potential resource conflicts with sensitive 
resources and values, including special designations or protections, 
and include applicant-proposed measures to avoid, minimize, and 
compensate for such resource conflicts, if any;
    (3) Initiate early discussions with any grazing permittees that may 
be affected by the proposed project in accordance with 43 CFR 4110.4-
2(b); and
    (4) Within 6 months from the time the BLM receives the cost 
recovery fee under Sec.  2804.14, schedule and hold two preliminary 
application review meetings as follows:
    (i) The first meeting will be with the BLM to discuss the general 
project proposal, the status of BLM land use planning for the lands 
involved, potential siting issues or concerns, potential environmental 
issues or concerns, potential alternative site locations and the right-
of-way application process;
    (ii) The second meeting will be with appropriate Federal and State 
agencies and tribal and local governments to facilitate coordination of 
potential environmental and siting issues and concerns; and
    (iii) You and the BLM may agree to hold additional preliminary 
application review meetings.
    (c) When submitting an application for a solar or wind energy 
project under this subpart rather than subpart 2809, you must:
    (1) Propose a project sited on lands outside a designated leasing 
area, except as provided for by Sec.  2809.19; and
    (2) Pay an application filing fee of $15 per acre for solar or wind 
energy development applications and $2 per acre for energy project-area 
testing applications. The BLM will refund your fee, except for the 
reasonable costs incurred on your behalf, if you are the unsuccessful 
bidder in a competitive offer held under Sec.  2804.30 or subpart 2809. 
The BLM will adjust the application filing fee at least once every 10 
years using the change in the Implicit Price Deflator, Gross Domestic 
Product (IPD-GDP) for the preceding 10-year period and round it to the 
nearest one-half dollar. This 10-year average will be adjusted at the 
same time as the Per Acre Rent Schedule for linear rights-of-way under 
Sec.  2806.22.
    (d) If you are unable to meet a requirement of the application 
outlined in this section, you may submit a request for an alternative 
requirement under Sec.  2804.40.
    (e) 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 the BLM and the information 
remains accurate, you need only reference the BLM serial number under 
which you previously filed it.
    (f) The 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.
    (g) 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.
    (h) 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 the BLM for a grant. Include a copy of the 
materials, or reference all the information, you filed with the other 
Federal agency.
    (i) Inter-agency coordination. You may request, in writing, an 
exemption from the requirements of this section if you can demonstrate 
to the BLM that you have satisfied similar requirements by 
participating in an inter-agency coordination process with another 
Federal, State, local, or Tribal authority. No exemption is approved 
until you receive BLM approval in writing.

0
9. In Sec.  2804.14, revise paragraphs (a), (b), and (c) to read as 
follows:


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

    (a) Unless you are exempt under Sec.  2804.16, you must pay a fee 
to the BLM for the reasonable costs of processing your application. 
Subject to applicable laws and regulations, if processing your 
application involves Federal agencies other than the BLM, your fee may 
also include the reasonable costs estimated to be incurred by those 
Federal agencies. Instead of paying the BLM a fee for the reasonable 
costs incurred by other Federal agencies in processing your 
application, you may pay other Federal agencies directly for such 
costs. Reasonable costs are those costs as defined in Section 304(b) of 
FLPMA (43 U.S.C. 1734(b)). 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 the Federal Government's work is 
estimated to take 1 hour or less. Processing fees are based on 
categories. The BLM will update the processing fees for Categories 1 
through 4 in the schedule each calendar year, based on the previous

[[Page 92209]]

year's change in the IPD-GDP, as measured second quarter to second 
quarter, rounded to the nearest dollar. The BLM will update Category 5 
processing fees as specified in the Master Agreement. These categories 
and the estimated range of Federal work hours for each category are:

                          Processing Categories
------------------------------------------------------------------------
            Processing category              Federal work hours involved
------------------------------------------------------------------------
(1) Applications for new grants,             Estimated Federal work
 assignments, renewals, and amendments to     hours are >1 <= 8
 existing grants.
(2) Applications for new grants,             Estimated Federal work
 assignments, renewals, and amendments to     hours are >8 <= 24
 existing grants.
(3) Applications for new grants,             Estimated Federal work
 assignments, renewals, and amendments to     hours are >24 <= 36
 existing grants.
(4) Applications for new grants,             Estimated Federal work
 assignments, renewals, and amendments to     hours are >36 <= 50
 existing grants.
(5) Master agreements......................  Varies
(6) Applications for new grants,             Estimated Federal work
 assignments, renewals, and amendments to     hours are >50
 existing grants.
------------------------------------------------------------------------

    (c) You may obtain a copy of the current year's processing fee 
schedule from any BLM State, district, or field office or by writing: 
U.S. Department of the Interior, Bureau of Land Management, 20 M Street 
SE., Room 2134LM, Washington, DC 20003. The BLM also posts the current 
processing fee schedule at http://www.blm.gov.
* * * * *

0
10. Amend Sec.  2804.18 by redesignating paragraphs (a)(6) through (8) 
as paragraphs (a)(7) through (9) and adding new paragraph (a)(6) to 
read as follows:


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

    (a) * * *
    (6) Describes existing agreements between the BLM and other Federal 
agencies for cost reimbursement;
* * * * *

0
11. Amend Sec.  2804.19 by revising paragraph (a) and adding paragraph 
(e) to read as follows:


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

    (a) For Processing Category 6 applications, you and the BLM must 
enter into a written agreement that describes how the BLM will process 
your application. The final agreement consists of a work plan, a 
financial plan, and a description of any existing agreements you have 
with other Federal agencies for cost reimbursement associated with your 
application.
* * * * *
    (e) We may collect reimbursement for reasonable costs to the United 
States for processing applications and other documents under this part 
relating to the public lands.

0
12. Amend Sec.  2804.20 by revising paragraphs (a)(1) and (5), 
redesignating paragraph (a)(6) as paragraph (a)(7), and adding new 
paragraph (a)(6) to read as follows:


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

* * * * *
    (a) * * *
    (1) Actual costs to the Federal Government (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;
* * * * *
    (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 facility;
    (6) Existing agreements between the BLM and other Federal agencies 
for cost reimbursement associated with such application; and
* * * * *

0
13. Amend Sec.  2804.23 by revising the section heading and paragraphs 
(a)(1) and (c) and adding paragraphs (d) and (e) to read as follows:


Sec.  2804.23  When will the BLM use a competitive process?

    (a) * * *
    (1) Processing Category 1 through 4. You must reimburse the Federal 
Government for processing costs as if the other application or 
applications had not been filed.
* * * * *
    (c) If we determine that competition exists, we will describe the 
procedures for a competitive bid through a bid announcement in the 
Federal Register. We may also provide notice by other methods, such as 
a newspaper of general circulation in the area affected by the 
potential right-of-way, or the Internet. We may offer lands through a 
competitive process on our own initiative. The BLM will not 
competitively offer lands for which the BLM has accepted an application 
and received a plan of development and cost recovery agreement.
    (d) Competitive process for solar and wind energy development 
outside designated leasing areas. Lands outside designated leasing 
areas may be made available for solar and wind energy applications 
through a competitive application process established by the BLM under 
Sec.  2804.30.
    (e) Competitive process for solar and wind energy development 
inside designated leasing areas. Lands inside designated leasing areas 
may be offered competitively under subpart 2809.

0
14. Amend Sec.  2804.24 by revising paragraph (a), redesignating 
paragraph (b) as paragraph (c), and adding new paragraph (b) to read as 
follows:


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

* * * * *
    (a) The BLM offers lands competitively under Sec.  2804.23(c) and 
you have already submitted an application for the facility or system;
    (b) The BLM offers lands for competitive lease under subpart 2809 
of this part; or
* * * * *

0
15. Revise Sec.  2804.25 to read as follows:


Sec.  2804.25  How will BLM process my application?

    (a) The BLM will notify you in writing when it receives your 
application. This notification will also:
    (1) Identify your processing fee described at Sec.  2804.14; and
    (2) Inform you of any other grant applications which involve all or 
part of the lands for which you applied.

[[Page 92210]]

    (b) The BLM will not process your application if you have any:
    (1) Outstanding unpaid debts owed to the Federal Government. 
Outstanding debts are those currently unpaid debts owed to the Federal 
Government after all administrative collection actions have occurred, 
including any appeal proceedings under applicable Federal regulations 
and the Administrative Procedure Act; or
    (2) Trespass action pending against you for any activity on BLM-
administered lands (see Sec.  2808.12), except those to resolve the 
trespass with a right-of-way as authorized in this part, or a lease or 
permit under the regulations found at 43 CFR part 2920, but only after 
outstanding unpaid debts are paid.
    (c) The 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 POD), and any needed cultural resource surveys 
or inventories for threatened or endangered species. If the BLM needs 
more information, the BLM will identify this information in a written 
deficiency notice asking you to provide the additional information 
within a specified period of time.
    (1) For solar or wind energy development projects, and transmission 
lines with a capacity of 100 kV or more, you must commence any required 
resource surveys or inventories within one year of the request date, 
unless otherwise specified by the BLM; or
    (2) If you are unable to meet any of the requirements of this 
section, you must show good cause and submit a request for an 
alternative under Sec.  2804.40.
    (d) Customer service standard. The 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, the
                                                    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
                                 the Master         applications as
                                 Agreement.         specified in the
                                                    Agreement.
6.............................  Over 60 calendar   The BLM will notify
                                 days.              you in writing
                                                    within the initial
                                                    60-day processing
                                                    period of the
                                                    estimated processing
                                                    time.
------------------------------------------------------------------------

    (e) In processing an application, the BLM will:
    (1) Hold public meetings if sufficient public interest exists to 
warrant their time and expense. The BLM will publish a notice in the 
Federal Register and may use other notification methods, such as a 
newspaper of general circulation in the vicinity of the lands involved 
in the area affected by the potential right-of-way or the Internet, to 
announce in advance any public hearings or meetings;
    (2) If your application is for solar or wind energy development:
    (i) Hold a public meeting in the area affected by the potential 
right-of-way;
    (ii) Apply screening criteria to prioritize processing applications 
with lesser resource conflicts over applications with greater resource 
conflicts and categorize screened applications according to the 
criteria listed in Sec.  2804.35; and
    (iii) Evaluate the application based on the information provided by 
the applicant and input from other parties, such as Federal, State, and 
local government agencies, and tribes, as well as comments received in 
preliminary application review meetings held under Sec.  2804.12(b)(4) 
and the public meeting held under paragraph (e)(2)(i) of this section. 
The BLM will also evaluate your application based on whether you 
propose to site the development appropriately (e.g. outside of a 
designated leasing area or exclusion area) and whether you address 
known resource values discussed in the preliminary application review 
meetings. Based on these evaluations, the BLM will either deny your 
application or continue processing it.
    (3) Determine whether a POD schedule submitted with your 
application meets the development schedule or other requirements 
described by the BLM, such as in Sec.  2804.12(b);
    (4) Complete appropriate National Environmental Policy Act (NEPA) 
compliance for the application, as required by 43 CFR part 46 and 40 
CFR parts 1500 through 1508;
    (5) Determine whether your proposed use complies with applicable 
Federal and State laws;
    (6) 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;
    (7) Consult, as necessary, on a government-to-government basis with 
tribes and other governmental entities; and
    (8) Take any other action necessary to fully evaluate and decide 
whether to approve or deny your application.
    (f)(1) The BLM may segregate, if it finds it necessary for the 
orderly administration of the public lands, lands included in a right-
of-way application under this subpart for the generation of electrical 
energy from wind or solar sources. In addition, the BLM may also 
segregate lands that it identifies for potential rights-of-way for 
electricity generation from wind or solar sources when initiating a 
competitive process for solar or wind development on particular lands. 
Upon segregation, such lands would not be subject to appropriation 
under the public land laws, including location under the Mining Law of 
1872 (30 U.S.C. 22 et seq.), but would remain open under the Mineral 
Leasing Act of 1920 (30 U.S.C. 181 et seq.) or the Materials Act of 
1947 (30 U.S.C. 601 et seq.). The BLM would effect a segregation by 
publishing a Federal Register notice that includes a description of the 
lands being segregated. The BLM may effect segregation in this way for 
both pending and new right-of-way applications.
    (2) The effective date of segregation is the date of publication of 
the notice in the Federal Register. Consistent with 43 CFR 2091-3.2, 
the segregation terminates and the lands automatically open on the date 
that is the earliest of the following:
    (i) When the BLM issues a decision granting, granting with 
modifications, or denying the application for a right-of-way;
    (ii) Automatically at the end of the segregation period stated in 
the Federal Register notice initiating the segregation; or
    (iii) Upon publication of a Federal Register notice terminating the 
segregation and opening the lands.
    (3) The segregation period may not exceed 2 years from the date of 
publication in the Federal Register of the notice initiating the 
segregation, unless the State Director determines and documents in 
writing, prior to the

[[Page 92211]]

expiration of the segregation period, that an extension is necessary 
for the orderly administration of the public lands. If the State 
Director determines an extension is necessary, the BLM will extend the 
segregation for up to 2 years by publishing a notice in the Federal 
Register, prior to the expiration of the initial segregation period. 
Segregations under this part may only be extended once and the total 
segregation period may not exceed 4 years.

0
16. Amend Sec.  2804.26 by revising paragraph (a)(5), redesignating 
paragraph (a)(6) as paragraph (a)(8), revising newly redesignated 
paragraph (a)(8), and adding new paragraphs (a)(6), (a)(7), and (c) to 
read as follows:


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

    (a) * * *
    (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.
    (i) Applicants must have or be able to demonstrate technical and 
financial capability to construct, operate, maintain, and terminate a 
project throughout the application process and authorization period. 
You can demonstrate your financial and technical capability to 
construct, operate, maintain, and terminate a project by:
    (A) Documenting any previous successful experience in construction, 
operation, and maintenance of similar facilities on either public or 
non-public lands;
    (B) Providing information on the availability of sufficient 
capitalization to carry out development, including the preliminary 
study stage of the project and the environmental review and clearance 
process; or
    (C) Providing written copies of conditional commitments of Federal 
and other loan guarantees; confirmed power purchase agreements; 
engineering, procurement, and construction contracts; and supply 
contracts with credible third-party vendors for the manufacture or 
supply of key components for the project facilities.
    (ii) Failure to demonstrate and sustain technical and financial 
capability is grounds for denying an application or terminating an 
authorization;
    (6) The PODs required by Sec. Sec.  2804.25(e)(3) and 2804.12(a)(8) 
and (c)(1) do not meet the development schedule or other requirements 
in the POD template and the applicant is unable to demonstrate why the 
POD should be approved;
    (7) Failure to commence necessary surveys and studies, or plans for 
permit processing as required by Sec.  2804.25(c); or
    (8) The BLM's evaluation of your solar or wind application made 
under Sec.  2804.25(e)(2)(iii) provides a basis for a denial.
* * * * *
    (c) If you are unable to meet any of the requirements in this 
section you may request an alternative from the BLM (see Sec.  
2804.40).

0
17. In Sec.  2804.27, revise the section heading and introductory text 
to read as follows:


Sec.  2804.27  What fees must I pay if BLM denies my application or if 
I withdraw my application?

    If the BLM denies your application or you withdraw it, you must 
still pay any application filing fees under Sec.  2804.12(b)(2), and 
any processing fee set forth at Sec.  2804.14, unless you have a 
Processing Category 5 or 6 application. Then, the following conditions 
apply:
* * * * *

0
18. Add Sec.  2804.30 to subpart 2804 to read as follows:


Sec.  2804.30  What is the competitive process for solar or wind energy 
development for lands outside of designated leasing areas?

    (a) Available land. The BLM may offer through a competitive process 
any land not inside a designated leasing area and open to right-of-way 
applications under Sec.  2802.10.
    (b) Variety of competitive procedures available. The BLM may use 
any type of competitive process or procedure to conduct its competitive 
offer and any method, including the use of the Internet, to conduct the 
actual auction or competitive bid procedure. Possible bid procedures 
could include, but are not limited to: Sealed bidding, oral auctions, 
modified competitive bidding, electronic bidding, and any combination 
thereof.
    (c) Competitive offer. The BLM may identify a parcel for 
competitive offer if competition exists or may include land in a 
competitive offer on its own initiative.
    (d) Notice of competitive offer. The BLM will publish a notice in 
the Federal Register at least 30 days prior to the competitive offer 
and may use other notification methods, such as a newspaper of general 
circulation in the area affected by the potential right-of-way or the 
Internet. The notice would explain that the successful bidder would 
become the preferred applicant (see paragraph (g) of this section) and 
may then apply for a grant. The Federal Register and other notices must 
also include:
    (1) The date, time, and location, if any, of the competitive offer;
    (2) The legal land description of the parcel to be offered;
    (3) The bidding methodology and procedures to be used in conducting 
the competitive offer, which may include any of the competitive 
procedures identified in Sec.  2804.30(b);
    (4) The minimum bid required (see Sec.  2804.30(e)(2));
    (5) The qualification requirements for potential bidders (see Sec.  
2803.10); and
    (6) The requirements for the successful bidder to submit a schedule 
for the submission of a POD for the lands involved in the competitive 
offer (see Sec.  2804.12(c)(1)).
    (e) Bidding--(1) Bid submissions. The BLM will accept your bid only 
if it includes payment for the minimum bid and at least 20 percent of 
the bonus bid.
    (2) Minimum bid. The minimum bid is not prorated among all bidders, 
but paid entirely by the successful bidder. The minimum bid consists 
of:
    (i) The administrative costs incurred by the BLM and other Federal 
agencies in preparing for and conducting the competitive offer, 
including required environmental reviews; and
    (ii) An amount determined by the authorizing officer and disclosed 
in the notice of competitive offer. This amount will be based on known 
or potential values of the parcel. In setting this amount, the BLM will 
consider factors that include, but are not limited to, the acreage rent 
and megawatt capacity fee.
    (3) Bonus bid. The bonus bid consists of any dollar amount that a 
bidder wishes to bid in addition to the minimum bid.
    (4) If you are not the successful bidder, as defined in paragraph 
(f) of this section, the BLM will refund your bid and any application 
filing fees, less the reasonable costs incurred by the United States in 
connection with your application, under Sec.  2804.12(c)(2).
    (f) Successful bidder. The successful bidder is determined by the 
highest total bid. If you are the successful bidder, you become the 
preferred applicant only if, within 15 calendar days after the day of 
the offer, you submit the balance of the bonus bid to the BLM office 
conducting the competitive offer. You must make payments by personal 
check, cashier's check, certified check, bank draft, money order, or by 
other means deemed acceptable by the BLM, payable to the ``Department 
of the Interior--Bureau of Land Management.''
    (g) Preferred applicant. The preferred applicant may apply for an 
energy project-area testing grant, an energy site-

[[Page 92212]]

specific testing grant, or a solar or wind energy development grant for 
the parcel identified in the offer. Grant approval is not guaranteed by 
winning the subject bid and is solely at the BLM's discretion. The BLM 
will not accept applications on lands where a preferred applicant has 
been identified, unless allowed by the preferred applicant.
    (h) Reservations. (1) The BLM may reject bids regardless of the 
amount offered. If the BLM rejects your bid under this provision, you 
will be notified in writing and such notice will include the reasons 
for the rejection and any refunds to which you are entitled.
    (2) The BLM may make the next highest bidder the preferred 
applicant if the first successful bidder fails to satisfy the 
requirements under paragraph (f) of this section.
    (3) If the BLM is unable to determine the successful bidder, such 
as in the case of a tie, the BLM may re-offer the lands competitively 
to the tied bidders, or to all bidders.
    (4) If lands offered under this section receive no bids the BLM 
may:
    (i) Re-offer the lands through the competitive process under this 
section; or
    (ii) Make the lands available through the non-competitive 
application process found in subparts 2803, 2804, and 2805 of this 
part, if the BLM determines that doing so is in the public interest.

0
19. Add Sec.  2804.31 to subpart 2804 to read as follows:


Sec.  2804.31  How will the BLM call for site testing for solar and 
wind energy?

    (a) Call for site testing. The BLM may, at its own discretion, 
initiate a call for site testing. The BLM will publish this call for 
site testing in the Federal Register and may also use other 
notification methods, such as a newspaper of general circulation in the 
area affected by the potential right-of-way, or the Internet. The 
Federal Register and any other notices will include:
    (1) The date, time, and location that site testing applications 
identified under Sec.  2801.9(d)(1) of this part may be submitted;
    (2) The date by which applicants will be notified of the BLM's 
decision on timely submitted site testing applications;
    (3) The legal land description of the area for which site testing 
applications are being requested; and
    (4) The qualification requirements for applicants (see Sec.  
2803.10).
    (b) You may request that the BLM hold a call for site testing for 
certain public lands. The BLM may proceed with a call for site testing 
at its own discretion.
    (c) The BLM may identify lands surrounding the site testing as 
designated leasing areas under Sec.  2802.11. If a designated leasing 
area is established, a competitive offer for a development lease under 
subpart 2809 may be held at the discretion of the BLM.

0
20. Add Sec.  2804.35 to subpart 2804 to read as follows:


Sec.  2804.35  How will the BLM prioritize my solar or wind energy 
application?

    The BLM will prioritize your application by placing it into one of 
three categories and may re-categorize your application based on new 
information received through surveys, public meetings, or other data 
collection, or after any changes to the application. The BLM will 
generally prioritize the processing of leases awarded under subpart 
2809 before applications submitted under subpart 2804. For applications 
submitted under subpart 2804, the BLM will categorize your application 
based on the following screening criteria.
    (a) High-priority applications are given processing priority over 
medium- and low-priority applications and may include lands that meet 
the following criteria:
    (1) Lands specifically identified as appropriate for solar or wind 
energy development, other than designated leasing areas;
    (2) Previously disturbed sites or areas adjacent to previously 
disturbed or developed sites;
    (3) Lands currently designated as Visual Resource Management Class 
IV; or
    (4) Lands identified as suitable for disposal in BLM land use 
plans.
    (b) Medium-priority applications are given priority over low-
priority applications and may include lands that meet the following 
criteria:
    (1) BLM special management areas that provide for limited 
development, including recreation sites and facilities;
    (2) Areas where a project may adversely affect conservation lands, 
including lands with wilderness characteristics that have been 
identified in an updated wilderness characteristics inventory;
    (3) Right-of-way avoidance areas;
    (4) Areas where project development may adversely affect resources 
and properties listed nationally such as the National Register of 
Historic Places, National Natural Landmarks, or National Historic 
Landmarks;
    (5) Sensitive habitat areas, including important species use areas, 
riparian areas, or areas of importance for Federal or State sensitive 
species;
    (6) Lands currently designated as Visual Resource Management Class 
III;
    (7) Department of Defense operating areas with land use or 
operational mission conflicts; or
    (8) Projects with proposed groundwater uses within groundwater 
basins that have been allocated by State water resource agencies.
    (c) Low-priority applications may not be feasible to authorize. 
These applications may include lands that meet the following criteria:
    (1) Lands near or adjacent to lands designated by Congress, the 
President, or the Secretary for the protection of sensitive viewsheds, 
resources, and values (e.g., units of the National Park System, Fish 
and Wildlife Service Refuge System, some National Forest System units, 
and the BLM National Landscape Conservation System), which may be 
adversely affected by development;
    (2) Lands near or adjacent to Wild, Scenic, and Recreational Rivers 
and river segments determined suitable for Wild or Scenic River status, 
if project development may have significant adverse effects on 
sensitive viewsheds, resources, and values;
    (3) Designated critical habitat for federally threatened or 
endangered species, if project development may result in the 
destruction or adverse modification of that critical habitat;
    (4) Lands currently designated as Visual Resource Management Class 
I or Class II;
    (5) Right-of-way exclusion areas; or
    (6) Lands currently designated as no surface occupancy for oil and 
gas development in BLM land use plans.

0
21. Add Sec.  2804.40 to subpart 2804 to read as follows:


Sec.  2804.40  Alternative requirements.

    If you are unable to meet any of the requirements in this subpart 
you may request approval for an alternative requirement from the BLM. 
Any such request is not approved until you receive BLM approval in 
writing. Your request to the BLM must:
    (a) Show good cause for your inability to meet a requirement;
    (b) Suggest an alternative requirement and explain why that 
requirement is appropriate; and
    (c) Be received in writing by the BLM in a timely manner, before 
the deadline to meet a particular requirement has passed.

Subpart 2805--Terms and Conditions of Grants

0
22. Amend Sec.  2805.10 as follows:
0
a. Revise the section heading and paragraph (a);

[[Page 92213]]

0
b. Redesignate paragraph (b) and (c) as paragraphs (c) and (d), 
respectively; and
0
c. Add new paragraph (b).
    The revisions and addition read as follows:


Sec.  2805.10  How will I know whether the BLM has approved or denied 
my application or if my bid for a solar or wind energy development 
grant or lease is successful or unsuccessful?

    (a) The BLM will send you a written response when it has made a 
decision on your application or if you are the successful bidder for a 
solar or wind energy development grant or lease. If we approve your 
application, we will send you an unsigned grant for your review and 
signature. If you are the successful bidder for a solar or wind energy 
lease inside a designated leasing area under Sec.  2809.15, we may send 
you an unsigned lease for your review and signature. If your bid is 
unsuccessful, it will be refunded under Sec.  2804.30(e)(4) or Sec.  
2809.14(d) and you will receive written notice from us.
    (b) Your unsigned grant or lease document:
    (1) Will include any terms, conditions, and stipulations that we 
determine to be in the public interest, such as 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 (POD) and BLM has issued 
a Notice to Proceed; and
    (3) Will impose a specific term for the grant or lease. Each grant 
or lease that we issue 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. We may change the terms and 
conditions of the grant or lease, including leases issued under subpart 
2809, as a result of these reviews in accordance with Sec.  2805.15(e).
* * * * *

0
23. Amend Sec.  2805.11 by redesignating paragraph (b)(2) as paragraph 
(b)(3), adding new paragraph (b)(2), and revising newly redesignated 
paragraph (b)(3) to read as follows:


Sec.  2805.11  What does a grant contain?

* * * * *
    (b) * * *
    (2) Specific terms for solar and wind energy grants and leases are 
as follows:
    (i) For an energy site-specific testing grant, the term is 3 years 
or less, without the option of renewal;
    (ii) For an energy project-area testing grant, the initial term is 
3 years or less, with the option to renew for one additional 3-year 
period when the renewal application is also accompanied by a solar or 
wind energy development application and a POD as required by Sec.  
2804.25(e)(3);
    (iii) For a short-term grant for all other associated actions not 
specifically included in paragraphs (b)(2)(i) and (ii) of this section, 
such as geotechnical testing and other temporary land disturbing 
activities, the term is 3 years or less;
    (iv) For solar and wind energy development grants, the term is up 
to 30 years (plus the initial partial year of issuance) with adjustable 
terms and conditions. The grantee may submit an application for renewal 
under Sec.  2805.14(g); and
    (v) For solar and wind energy development leases located inside 
designated leasing areas, the term is fixed for 30 years (plus the 
initial partial year of issuance). The lessee may submit an application 
for renewal under Sec.  2805.14(g).
    (3) All grants and leases, except those issued for a term of 3 
years or less and those issued in perpetuity, will expire on December 
31 of the final year of the grant or lease. For grants and leases with 
terms greater than 3 years, the actual term includes the number of full 
years specified, plus the initial partial year, if any.
* * * * *

0
24. Revise Sec.  2805.12 to read as follows:


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

    (a) By accepting a grant or lease, 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:
    (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 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 wildfires on 
or in the immediate vicinity of the right-of-way area;
    (5) Not discriminate against any employee or applicant for 
employment during any stage of the project because of race, creed, 
color, sex, sexual orientation, or national origin. You must also 
require subcontractors to not discriminate;
    (6) Pay monitoring fees and rent described in Sec.  2805.16 and 
subpart 2806;
    (7) Assume full liability if third parties are injured or damages 
occur to property on or near the right-of-way (see Sec.  2807.12);
    (8) Comply with project-specific terms, conditions, and 
stipulations, including requirements to:
    (i) Restore, revegetate, and curtail erosion or conduct any other 
rehabilitation measure the BLM determines necessary;
    (ii) 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;
    (iii) Control or prevent damage to:
    (A) Scenic, aesthetic, cultural, and environmental values, 
including fish and wildlife habitat;
    (B) Public and private property; and
    (C) Public health and safety;
    (iv) Provide for compensatory mitigation for residual impacts 
associated with the right-of-way;
    (v) 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.);
    (vi) 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 or lease, including the approved POD, if one was 
required;
    (vii) 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
    (viii) Grant the BLM an equivalent authorization for an access road 
across your land if the BLM determines that a reciprocal authorization 
is needed in the public interest and the authorization the BLM issues 
to you is also for road access;
    (9) 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 the BLM at 
the same time and send the BLM a copy of any written notification you 
prepared;
    (10) Not dispose of or store hazardous material on your right-of-
way, except as provided by the terms, conditions, and stipulations of 
your grant;

[[Page 92214]]

    (11) 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;
    (12) 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 the 
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;
    (13) Comply with all liability and indemnification provisions and 
stipulations in the grant;
    (14) As the BLM directs, provide diagrams or maps showing the 
location of any constructed facility;
    (15) As the BLM directs, provide, or give access to, any pertinent 
environmental, technical, and financial records, reports, and other 
information, such as Power Purchase and Interconnection Agreements or 
the production and sale data for electricity generated from the 
approved facilities on public lands. Failure to comply with such 
requirements may, at the discretion of the BLM, result in suspension or 
termination of the right-of-way authorization. The BLM may use this and 
similar information for the purpose of monitoring your authorization 
and for periodic evaluation of financial obligations under the 
authorization, as appropriate. Any records the BLM obtains will be made 
available to the public subject to all applicable legal requirements 
and limitations for inspection and duplication under the Freedom of 
Information Act. Any information marked confidential or proprietary 
will be kept confidential to the extent allowed by law; and
    (16) Comply with all other stipulations that the BLM may require.
    (b) You must comply with the bonding requirements under Sec.  
2805.20. The BLM will not issue a Notice to Proceed or give written 
approval to proceed with ground disturbing activities until you comply 
with this requirement.
    (c) By accepting a grant or lease for solar or wind energy 
development, you also agree to comply with and be bound by the 
following terms and conditions. You must:
    (1) Not begin any ground disturbing activities until the BLM issues 
a Notice to Proceed (see Sec.  2807.10) or written approval to proceed 
with ground disturbing activities;
    (2) Complete construction within the timeframes in the approved 
POD, but no later than 24 months after the start of construction, 
unless the project has been approved for staged development, or as 
otherwise authorized by the BLM;
    (3) If an approved POD provides for staged development, unless 
otherwise approved by the BLM:
    (i) Begin construction of the initial phase of development within 
12 months after issuance of the Notice to Proceed, but no later than 24 
months after the effective date of the right-of-way authorization;
    (ii) Begin construction of each stage of development (following the 
first) within 3 years of the start of construction of the previous 
stage of development, and complete construction of that stage no later 
than 24 months after the start of construction of that stage, unless 
otherwise authorized by the BLM; and
    (iii) Have no more than 3 development stages, unless otherwise 
authorized by the BLM;
    (4) Maintain all onsite electrical generation equipment and 
facilities in accordance with the design standards in the approved POD;
    (5) Repair and place into service, or remove from the site, damaged 
or abandoned facilities that have been inoperative for any continuous 
period of 3 months and that present an unnecessary hazard to the public 
lands. You must take appropriate remedial action within 30 days after 
receipt of a written noncompliance notice, unless you have been 
provided an extension of time by the BLM. Alternatively, you must show 
good cause for any delays in repairs, use, or removal; estimate when 
corrective action will be completed; provide evidence of diligent 
operation of the facilities; and submit a written request for an 
extension of the 30-day deadline. If you do not comply with this 
provision, the BLM may suspend or terminate the authorization under 
Sec. Sec.  2807.17 through 2807.19; and
    (6) Comply with the diligent development provisions of the 
authorization or the BLM may suspend or terminate your grant or lease 
under Sec. Sec.  2807.17 through 2807.19. Before suspending or 
terminating the authorization, the BLM will send you a notice that 
gives you a reasonable opportunity to correct any noncompliance or to 
start or resume use of the right-of-way (see Sec.  2807.18). In 
response to this notice, you must:
    (i) Provide reasonable justification for any delays in construction 
(for example, delays in equipment delivery, legal challenges, and acts 
of God);
    (ii) Provide the anticipated date of completion of construction and 
evidence of progress toward the start or resumption of construction; 
and
    (iii) Submit a written request under paragraph (e) of this section 
for extension of the timelines in the approved POD. If you do not 
comply with the requirements of paragraph (c)(7) of this section, the 
BLM may deny your request for an extension of the timelines in the 
approved POD.
    (7) In addition to the RCE requirements of Sec.  2805.20(a)(5) for 
a grant, the bond secured for a grant or lease must cover the estimated 
costs of cultural resource and Indian cultural resource identification, 
protection, and mitigation for project impacts.
    (d) For energy site or project testing grants:
    (1) You must install all monitoring facilities within 12 months 
after the effective date of the grant or other authorization. If 
monitoring facilities under a site testing and monitoring right-of-way 
authorization have not been installed within 12 months after the 
effective date of the authorization or consistent with the timeframe of 
the approved POD, you must request an extension pursuant to paragraph 
(e) of this section;
    (2) You must maintain all onsite equipment and facilities in 
accordance with the approved design standards;
    (3) You must repair and place into service, or remove from the 
site, damaged or abandoned facilities that have been inoperative for 
any continuous period of 3 months and that present an unnecessary 
hazard to the public lands; and
    (4) If you do not comply with the diligent development provisions 
of either the site testing and monitoring authorization or the project 
testing and monitoring authorization, the BLM may terminate your 
authorization under Sec.  2807.17.
    (e) Notification of noncompliance and request for alternative 
requirements. (1) As soon as you anticipate that you will not meet any 
stipulation, term, or condition of the approved right-of-way grant or 
lease, or in the event of your noncompliance with any such stipulation, 
term, or condition, you must notify the BLM in writing and show good 
cause for the noncompliance, including an explanation of the reasons 
for the failure.
    (2) You may also request that the BLM consider alternative 
stipulations, terms, or conditions. Any request for an alternative 
stipulation, term, or

[[Page 92215]]

condition must comply with applicable law in order to be considered. 
Any proposed alternative to applicable bonding requirements must 
provide the United States with adequate financial assurance for 
potential liabilities associated with your right-of-way grant or lease. 
Any such request is not approved until you receive BLM approval in 
writing.

0
25. Amend Sec.  2805.14 by removing ``and'' from the end of paragraph 
(e), removing the period from the end of paragraph (f) and adding ``; 
and'' in its place, and adding paragraphs (g) and (h) to read as 
follows:


Sec.  2805.14  What rights does a grant convey?

* * * * *
    (g) Apply to renew your solar or wind energy development grant or 
lease, under Sec.  2807.22; and
    (h) Apply to renew your energy project-area testing grant for one 
additional term of 3 years or less when the renewal application also 
includes an energy development application under Sec.  2801.9(d)(2).

0
26. In Sec.  2805.15, revise the first sentence of paragraph (b) to 
read as follows:


Sec.  2805.15  What rights does the United States retain?

* * * * *
    (b) Require common use of your right-of-way, including facilities 
(see Sec.  2805.14(b)), subsurface, and air space, and authorize use of 
the right-of-way for compatible uses. * * *
* * * * *

0
27. Revise Sec.  2805.16 to read as follows:


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

    (a) You must pay a fee to the BLM for the reasonable costs the 
Federal Government incurs in inspecting and monitoring the 
construction, operation, maintenance, and termination of the project 
and protection and rehabilitation of the public lands your grant 
covers. Instead of paying the BLM a fee for the reasonable costs 
incurred by other Federal agencies in monitoring your grant, you may 
pay the other Federal agencies directly for such costs. The BLM will 
annually adjust the Category 1 through 4 monitoring fees in the manner 
described at Sec.  2804.14(b). The BLM will update Category 5 
monitoring fees as specified in the Master Agreement. Category 6 
monitoring fees are addressed at Sec.  2805.17(c). The BLM categorizes 
the monitoring fees based on the estimated number of work hours 
necessary to monitor your grant. Category 1 through 4 monitoring fees 
are one-time fees and are not refundable. The monitoring categories and 
work hours are as follows:

                          Monitoring Categories
------------------------------------------------------------------------
                                                    Federal work hours
               Monitoring category                       involved
------------------------------------------------------------------------
(1) Inspecting and monitoring of new grants,      Estimated Federal work
 assignments, renewals, and amendments to          hours are >1 <=8.
 existing grants.
(2) Inspecting and monitoring of new grants,      Estimated Federal work
 assignments, renewals, and amendments to          hours are >8 <=24.
 existing grants.
(3) Inspecting and monitoring of new grants,      Estimated Federal work
 assignments, renewals, and amendments to          hours are >24 <=36.
 existing grants.
(4) Inspecting and monitoring of new grants,      Estimated Federal work
 assignments, renewals, and amendments to          hours are >36 <=50.
 existing grants.
(5) Master Agreements...........................  Varies.
(6) Inspecting and monitoring of new grants,      Estimated Federal work
 assignments, renewals, and amendments to          hours are >50.
 existing grants.
------------------------------------------------------------------------

    (b) The monitoring cost schedule is available from any BLM State, 
district, or field office or by writing: U.S. Department of the 
Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, 
Washington, DC 20003. The BLM also posts the current schedule at http://www.blm.gov.

0
28. Add Sec.  2805.20 to subpart 2805 to read as follows:


Sec.  2805.20  Bonding requirements.

    If you hold a grant or lease under this part, you must comply with 
the following bonding requirements:
    (a) The BLM may require that you obtain, or certify that you have 
obtained, a performance and reclamation bond or other acceptable bond 
instrument to cover any losses, damages, or injury to human health, the 
environment, or property in connection with your use and occupancy of 
the right-of-way, including costs associated with 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. The BLM will periodically review your bond for 
adequacy and may require a new 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 lease.
    (1) The BLM must be listed as an additionally named insured on the 
bond instrument if a State regulatory authority requires a bond to 
cover some portion of environmental liabilities, such as hazardous 
material damages or releases, reclamation, or other requirements for 
the project. The bond must:
    (i) Be redeemable by the BLM;
    (ii) Be held or approved by a State agency for the same reclamation 
requirements as specified by our right-of-way authorization; and
    (iii) Provide the same or greater financial guarantee that we 
require for the portion of environmental liabilities covered by the 
State's bond.
    (2) Bond acceptance. The BLM authorized officer must review and 
approve all bonds, including any State bonds, prior to acceptance, and 
at the time of any right-of-way assignment, amendment, or renewal.
    (3) Bond amount. Unless you hold a solar or wind energy lease under 
subpart 2809, the bond amount will be determined based on the 
preparation of a RCE, which the BLM may require you to prepare and 
submit. The estimate must include our cost to administer a reclamation 
contract and will be reviewed periodically for adequacy. The BLM may 
also consider other factors, such as salvage value, when determining 
the bond amount.
    (4) You must post a bond on or before the deadline that we give 
you.

[[Page 92216]]

    (5) Bond components that must be addressed when determining the RCE 
amount include, but are not limited to:
    (i) Environmental liabilities such as use of hazardous materials 
waste and hazardous substances, herbicide use, the use of petroleum-
based fluids, and dust control or soil stabilization materials;
    (ii) The decommissioning, removal, and proper disposal, as 
appropriate, of any improvements and facilities; and
    (iii) Interim and final reclamation, re-vegetation, recontouring, 
and soil stabilization. This component must address the potential for 
flood events and downstream sedimentation from the site that may result 
in offsite impacts.
    (6) You may ask us to accept a replacement performance and 
reclamation bond at any time after the approval of the initial bond. We 
will review the replacement bond for adequacy. A surety company is not 
released from obligations that accrued while the surety bond was in 
effect unless the replacement bond covers those obligations to our 
satisfaction.
    (7) You must notify us that reclamation has occurred and you may 
request that the BLM reevaluate your bond. If we determine that you 
have completed reclamation, we may release all or part of your bond.
    (8) If you hold a grant, you are still liable under Sec.  2807.12 
if:
    (i) We release all or part of your bond;
    (ii) The bond amount does not cover the cost of reclamation; or
    (iii) There is no bond in place;
    (b) If you hold a grant for solar energy development outside of 
designated leasing areas, you must provide a performance and 
reclamation bond (see paragraph (a) of this section) prior to the BLM 
issuing a Notice to Proceed (see Sec.  2805.12(c)(1)). We will 
determine the bond amount based on the RCE (see paragraph (a)(3) of 
this section) and it must be no less than $10,000 per acre that will be 
disturbed;
    (c) If you hold a grant for wind energy development outside of 
designated leasing areas, you must provide a performance and 
reclamation bond (see paragraph (a) of this section) prior to the BLM 
issuing a Notice to Proceed (see Sec.  2805.12(c)(1)). We will 
determine the bond amount based on the RCE (see paragraph (a)(3) of 
this section) and it must be no less than $10,000 per authorized 
turbine less than 1 MW in nameplate capacity or $20,000 per authorized 
turbine equal to or greater than 1 MW in nameplate capacity; and
    (d) For short-term right-of-way grants for energy site or project-
area testing, the bond amount must be no less than $2,000 per 
authorized meteorological tower or instrumentation facility location 
and must be provided before the written approval to proceed with ground 
disturbing activities (see Sec.  2805.12(c)(1)).

0
29. Revise the heading for subpart 2806 to read as follows:

Subpart 2806--Annual Rents and Payments

0
30. Amend Sec.  2806.12 by revising the section heading and paragraphs 
(a) and (b) and adding paragraph (d) to read as follows:


Sec.  2806.12  When and where do I pay rent?

    (a) You must pay rent for the initial rental period before the BLM 
issues you a grant or lease.
    (1) If your non-linear grant or lease is effective on:
    (i) January 1 through September 30 and qualifies for annual 
payments, your initial rent bill is pro-rated to include only the 
remaining full months in the initial year; or
    (ii) October 1 through December 31 and qualifies for annual 
payments, your initial rent bill is pro-rated to include the remaining 
full months in the initial year plus the next full year.
    (2) If your non-linear grant allows for multi-year payments, such 
as a short term grant issued for energy site-specific testing, you may 
request that your initial rent bill be for the full term of the grant 
instead of the initial rent bill periods provided under paragraph 
(a)(1)(i) or (ii) of this section.
    (b) You must make all rental payments for linear rights-of-way 
according to the payment plan described in Sec.  2806.24.
* * * * *
    (d) You must make all rental payments as instructed by us or as 
provided for by Secretarial order or legislative authority.

0
31. Amend Sec.  2806.13 by:
0
a. Revising the section heading and paragraph (a);
0
b. Redesignating paragraph (e) as paragraph (f); and
0
c. Adding new paragraphs (e) and (g).
    The revisions and additions read as follows:


Sec.  2806.13  What happens if I do not pay rents and fees or if I pay 
the rents or fees late?

    (a) If the BLM does not receive the rent or fee payment required in 
subpart 2806 within 15 calendar days after the payment was due under 
Sec.  2806.12, we will charge you a late payment fee of $25 or 10 
percent of the amount you owe, whichever is greater, per authorization.
* * * * *
    (e) Subject to applicable laws and regulations, we will 
retroactively bill for uncollected or under-collected rent, fees, and 
late payments, if:
    (1) A clerical error is identified;
    (2) An adjustment to rental schedules is not applied; or
    (3) An omission or error in complying with the terms and conditions 
of the authorized right-of-way is identified.
* * * * *
    (g) We will not approve any further activities associated with your 
right-of-way until we receive any outstanding payments that are due.

0
32. In Sec.  2806.20, revise paragraph (c) to read as follows:


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

* * * * *
    (c) You may obtain a copy of the current Per Acre Rent Schedule 
from any BLM State, district, or field office or by writing: U.S. 
Department of the Interior, Bureau of Land Management, 20 M Street SE., 
Room 2134LM, Washington, DC 20003. We also post the current rent 
schedule at http://www.blm.gov.

0
33. In Sec.  2806.22, revise the second sentence of paragraph (a) to 
read as follows:


Sec.  2806.22  When and how does the Per Acre Rent Schedule change?

    (a) * * * For example, the average annual change in the IPD-GDP 
from 1994 to 2003 (the 10-year period immediately preceding the year 
(2004) that the 2002 National Agricultural Statistics Service Census 
data became available) was 1.9 percent. * * *
* * * * *


Sec.  2806.23   [Amended]

0
34. Amend Sec.  2806.23 by removing paragraph (b) and redesignating 
paragraph (c) as paragraph (b).

0
35. In Sec.  2806.24, revise paragraph (c) to read as follows:


Sec.  2806.24  How must I make rental payments for a linear grant?

* * * * *
    (c) Proration of payments. The 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. If your grant requires, or you chose a 
10-year payment term, or multiples thereof, the initial rent bill 
consists of the remaining partial year plus the next 10 years, or 
multiple thereof.

0
36. Amend Sec.  2806.30 by:
0
a. Revising paragraphs (a)(1) and (2);
0
b. Removing paragraph (b); and
0
c. Redesignating paragraph (c) as paragraph (b).

[[Page 92217]]

    The revisions read as follows:


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

    (a) Rent schedule. (1) The BLM uses a rent schedule 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 (RMA) Population Ranking, and 
the type of communication use or uses for which we normally grant 
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). You may obtain a copy of the current schedule from any BLM 
State, district, or field office or by writing: U.S. Department of the 
Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, 
Washington, DC 20003. We also post the current communication use rent 
schedule at http://www.blm.gov.
    (2) We update the schedule annually 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.
* * * * *

0
37. In Sec.  2806.34, revise the second sentence of paragraph (b)(4) to 
read as follows:


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

* * * * *
    (b) * * *
    (4) * * * This paragraph (b)(4) does not apply to facilities exempt 
from rent under Sec.  2806.14(a)(4) except when the facility also 
includes ineligible facilities.

0
38. In Sec.  2806.43, revise the third sentence of paragraph (a) to 
read as follows:


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

    (a) * * * For passive reflectors and local exchange networks not 
covered by a Forest Service regional schedule, we use the provisions in 
Sec.  2806.70 to determine rent. * * *
* * * * *

0
39. Amend Sec.  2806.44 by revising the section heading, adding 
introductory text, and revising paragraph (a) to read as follows:


Sec.  2806.44  How will BLM calculate rent for a facility owner's or 
facility manager's grant or lease which authorizes communication uses?

    This section applies to a grant or lease that authorizes a mixture 
of communication uses, some of which are subject to the communication 
use rent schedule and some of which are not. We will determine rent for 
these leases under the provisions of this section.
    (a) The BLM establishes the rent for each of the uses in the 
facility that are not covered by the communication use rent schedule 
using Sec.  2806.70.
* * * * *

0
40. Remove the undesignated centered heading preceding Sec.  2806.50.


Sec.  2806.50   [Redesignated as Sec.  2806.70]

0
41. Redesignate Sec.  2806.50 as Sec.  2806.70.

0
42. Add an undesignated centered heading and Sec. Sec.  2806.50, 
2806.51, 2806.52, 2806.54, 2806.56, and 2806.58 to read as follows:

Solar Energy Rights-of-Way

Sec.
2806.50 Rents and fees for solar energy rights-of-way.
2806.51 Scheduled Rate Adjustment.
2806.52 Rents and fees for solar energy development grants.
2806.54 Rents and fees for solar energy development leases.
2806.56 Rent for support facilities authorized under separate 
grant(s).
2806.58 Rent for energy development testing grants.


Sec.  2806.50  Rents and fees for solar energy rights-of-way.

    If you hold a right-of-way authorizing solar energy site-specific 
or project-area testing, or solar energy development, you must pay an 
annual rent and fee in accordance with this section and subpart. Your 
solar energy right-of-way authorization will either be a grant (if 
issued under subpart 2804) or a lease (if issued under subpart 2809). 
Rents and fees for either type of authorization consist of an acreage 
rent that must be paid prior to issuance of the authorization and a 
phased-in MW capacity fee. Both the acreage rent and the phased-in MW 
capacity fee are charged and calculated consistent with Sec.  2806.11 
and prorated consistent with Sec.  2806.12(a). The MW capacity fee will 
vary depending on the size and technology of the solar energy 
development project.


Sec.  2806.51  Scheduled Rate Adjustment.

    (a) The BLM will adjust your acreage rent and MW capacity fee over 
the course of your authorization as described in these regulations. For 
new grants or leases, you may choose either the standard rate 
adjustment method (see Sec.  2806.52(a)(5) and (b)(3) for grants; see 
Sec.  2806.54(a)(4) or (c) for leases) or the scheduled rate adjustment 
method (see Sec.  2806.52(d) for grants; see Sec.  2806.54(d) for 
leases). Once you select a rate adjustment method, that method will be 
fixed until you renew your grant or lease (see Sec.  2807.22).
    (b) For new grants or leases, if you select the scheduled rate 
adjustment method you must notify the BLM of your decision in writing. 
Your decision must be received by the BLM before your grant or lease is 
issued. If you do not select the scheduled rate adjustment method, the 
standard rate adjustment method will apply.
    (c) If you hold a grant that is in effect prior to January 18, 
2017, you may either accept the standard rate adjustment method or 
request in writing that the BLM apply the scheduled rate adjustment 
method, as set forth in Sec.  2806.52(d), to your grant. To take 
advantage of the scheduled rate adjustment option, your request must be 
received by the BLM before December 19, 2018. The BLM will continue to 
apply the standard rate adjustment method to adjust your rates unless 
and until it receives your request to use the scheduled rate adjustment 
method.


Sec.  2806.52  Rents and fees for solar energy development grants.

    You must pay an annual acreage rent and MW capacity fee for your 
solar energy development grant as follows:
    (a) Acreage rent. The BLM will calculate the acreage rent by 
multiplying the number of acres (rounded up to the nearest tenth of an 
acre) within the authorized area times the annual per acre zone rate 
from the solar energy acreage rent schedule in effect at the time the 
authorization is issued.
    (1) Per acre zone rate. The annual per acre zone rate from the 
solar energy acreage rent schedule is calculated using the per acre 
zone value (as assigned under paragraph (a)(2) of this section), 
encumbrance factor, rate of return, and the annual adjustment factor. 
The calculation for determining the annual per acre zone rate is A x B 
x C x D = E where:
    (i) A is the per acre zone value = the same per acre zone values 
described in the linear rent schedule in Sec.  2806.20(c);
    (ii) B is the encumbrance factor = 100 percent;
    (iii) C is the rate of return = 5.27 percent;
    (iv) D is the annual adjustment factor = the average annual change 
in the IPD-GDP for the 10-year period immediately preceding the year 
that the NASS

[[Page 92218]]

Census data becomes available (see Sec.  2806.22(a)). The BLM will 
adjust the per acre zone rates each year based on the average annual 
change in the IPD-GDP as determined under Sec.  2806.22(a). Adjusted 
rates are effective each year on January 1; and
    (v) E is the annual per acre zone rate.
    (2) Assignment of counties. The BLM will calculate the per acre 
zone rate in paragraph (a)(1) of this section by using a State-specific 
factor to assign a county to a zone in the solar energy acreage rent 
schedule. The BLM will calculate a State-specific factor and apply it 
to the NASS data (county average per acre land and building value) to 
determine the per acre value and assign a county (or other geographical 
area) to a zone. The State-specific factor represents the percent 
difference between improved agricultural land and unimproved rangeland 
values, using NASS data. The calculation for determining the State-
specific factor is (A/B)-(C/D) = E where:
    (i) A = the NASS Census statewide average per acre value of non-
irrigated acres;
    (ii) B = the NASS Census statewide average per acre land and 
building value;
    (iii) C = the NASS Census total statewide acres in farmsteads, 
homes, buildings, livestock facilities, ponds, roads, wasteland, etc.;
    (iv) D = the total statewide acres in farms; and
    (v) E = the State-specific percent factor or 20 percent, whichever 
is greater.
    (3) The initial assignment of counties to the zones on the solar 
energy acreage rent schedule will be based upon the most recent NASS 
Census data (2012) for years 2016 through 2020. The BLM may on its own 
or in response to requests consider making regional adjustments to 
those initial assignments, based on evidence that the NASS Census 
values do not accurately reflect the value of the BLM-managed lands in 
a given area. The BLM will update this rent schedule once every 5 years 
by re-assigning counties to reflect the updated NASS Census values as 
described in Sec.  2806.21 and recalculate the State-specific percent 
factor once every 10 years as described in Sec.  2806.22(b).
    (4) Acreage rent payment. You must pay the acreage rent regardless 
of the stage of development or operations on the entire public land 
acreage described in the right-of-way authorization. The BLM State 
Director may approve a rental payment plan consistent with Sec.  
2806.15(c).
    (5) Acreage rent adjustments. This paragraph (a)(5) applies unless 
you selected the scheduled rate adjustment method (see Sec.  2806.51). 
The BLM will adjust the acreage rent annually to reflect the change in 
the per acre zone rates as specified in paragraph (a)(1) of this 
section. The BLM will use the most current per acre zone rates to 
calculate the acreage rent for each year of the grant term.
    (6) You may obtain a copy of the current per acre zone rates for 
solar energy development (solar energy acreage rent schedule) from any 
BLM State, district, or field office or by writing: U.S. Department of 
the Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, 
Attention: Renewable Energy Coordination Office, Washington, DC 20003. 
The BLM also posts the current solar energy acreage rent schedule for 
solar energy development at http://www.blm.gov.
    (b) MW capacity fee. The MW capacity fee is calculated by 
multiplying the approved MW capacity by the MW rate (for the applicable 
type of technology employed by the project) from the MW rate schedule 
(see paragraph (b)(2) of this section). You must pay the MW capacity 
fee annually when electricity generation begins or is scheduled to 
begin in the approved POD, whichever comes first:
    (1) MW rate. The MW rate is calculated by multiplying the total 
hours per year, by the net capacity factor, by the MWh price, by the 
rate of return. For an explanation of each of these terms, see the 
definition of MW rate in Sec.  2801.5(b).
    (2) MW rate schedule. You may obtain a copy of the current MW rate 
schedule for solar energy development from any BLM State, district, or 
field office or by writing: U.S. Department of the Interior, Bureau of 
Land Management, 20 M Street SE., Room 2134LM, Attention: Renewable 
Energy Coordination Office, Washington, DC 20003. The BLM also posts 
the current MW rate schedule for solar energy development at http://www.blm.gov.
    (3) Periodic adjustments in the MW rate. This paragraph (b)(3) 
applies unless you selected the scheduled rate adjustment method (see 
Sec.  2806.51). The BLM will adjust the MW rate applicable to your 
grant every 5 years, beginning in 2021, by recalculating the following 
two components of the MW rate formula:
    (i) The adjusted MWh price is the average of the annual weighted 
average wholesale price per MWh for the major trading hubs serving the 
11 Western States of the continental United States for the full 5 
calendar-year period preceding the adjustment, rounded to the nearest 
dollar increment; and
    (ii) The adjusted rate of return is the 10-year average of the 20-
year U.S. Treasury bond yield for the full 10 calendar-year period 
preceding the adjustment, rounded to the nearest one-tenth percent, 
with a minimum rate of return of 4 percent.
    (4) MW rate phase-in. This paragraph (b)(4) applies unless you 
selected the scheduled rate adjustment method (see Sec.  2806.51). If 
you hold a solar energy development grant, the MW rate will be phased 
in as follows:
    (i) There is a 3-year phase-in of the MW rate when electricity 
generation begins or is scheduled to begin in the approved POD, 
whichever comes first, at the rates of:
    (A) 25 percent for the first year. This rate applies for the first 
partial calendar year of operations, from the date electricity 
generation begins until Dec. 31 of that year;
    (B) 50 percent for the second year; and
    (C) 100 percent for the third and subsequent years of operations.
    (ii) After generation of electricity starts and an approved POD 
provides for staged development:
    (A) The 3-year phase-in of the MW rate applies to each stage of 
development; and
    (B) The MW capacity fee is calculated using the authorized MW 
capacity approved for that stage plus any previously approved stages, 
multiplied by the MW rate.
    (5) The general payment provisions for rents described in this 
subpart, except for Sec.  2806.14(a)(4), also apply to the MW capacity 
fee.
    (c) Initial implementation of the acreage rent and MW capacity fee. 
This paragraph (c) applies unless you selected the scheduled rate 
adjustment method (see Sec.  2806.51). If you hold a solar energy grant 
and made payments for billing year 2016, the BLM will reduce by 50 
percent the net increase in annual costs between billing year 2017 and 
billing year 2016. The net increase will be calculated based on a full 
calendar year.
    (d) Scheduled rate adjustment. Under the scheduled rate adjustment 
method (see Sec.  2806.51), the BLM will update your per acre zone rate 
and MW rate as follows:
    (1) The BLM will calculate your payments using the per acre zone 
rate (see Sec.  2806.52(a)(1)) and MW rate (see Sec.  2806.52(b)(1)) in 
place when your grant is issued, or for existing grants, the per acre 
zone rate and MW rate in place prior to December 19, 2016, as adjusted 
under paragraph (d)(6) of this section;
    (2) The per acre zone rate will increase:

[[Page 92219]]

    (i) Annually, beginning after the first full calendar year plus any 
initial partial year following issuance of your grant, by the average 
annual change in the IPD-GDP as described in Sec.  2806.22(b); and
    (ii) Every 5 years, beginning after the first 5 calendar years, 
plus any initial partial year, following issuance of your grant, by 20 
percent;
    (3) The MW rate will increase by 20 percent every 5 years, 
beginning after the first 5 years, plus the initial partial year, if 
any, your grant is in effect;
    (4) The BLM will not apply the phase-in to your MW rate under Sec.  
2806.52(b)(4) or the reduction under Sec.  2806.52(c);
    (5) If the approved POD for your project provides for staged 
development, the BLM will calculate the MW capacity fee using the MW 
capacity approved for the current stage plus any previously approved 
stages, multiplied by the MW rate, as described under this section.
    (6) For grants in place prior to January 18, 2017 that select the 
scheduled rate adjustment method offered under Sec.  2806.51(c), the 
per acre zone rate and the MW rate in place prior to December 19, 2016 
will be adjusted for the first year's payment using the scheduled rate 
adjustment method as follows:
    (i) The per acre zone rate will increase by the average annual 
change in the IPD-GDP as described in Sec.  2806.22(b) plus 20 percent;
    (ii) The MW rate will increase by 20 percent; and
    (iii) Subsequent increases will be performed as set forth in 
paragraphs (d)(2) and (3) of this section from the date of the initial 
adjustment under this paragraph (d).


Sec.  2806.54  Rents and fees for solar energy development leases.

    If you hold a solar energy development lease obtained through 
competitive bidding under subpart 2809 of this part, you must make 
annual payments in accordance with this section and subpart, in 
addition to the one-time, upfront bonus bid you paid to obtain the 
lease. The annual payment includes an acreage rent for the number of 
acres included within the solar energy lease and an additional MW 
capacity fee based on the total authorized MW capacity for the approved 
solar energy project on the public lands.
    (a) Acreage rent. The BLM will calculate and bill you an acreage 
rent that must be paid prior to issuance of your lease as described in 
Sec.  2806.52(a). This acreage rent will be based on the following:
    (1) Per acre zone rate. See Sec.  2806.52(a)(1).
    (2) Assignment of counties. See Sec.  2806.52(a)(2) and (3).
    (3) Acreage rent payment. See Sec.  2806.52(a)(4).
    (4) Acreage rent adjustments. This paragraph (a)(4) applies unless 
you selected the scheduled rate adjustment method (see Sec.  2806.51). 
Once the acreage rent is determined under Sec.  2806.52(a), no further 
adjustments in the annual acreage rent will be made until year 11 of 
the lease term and each subsequent 10-year period thereafter. The BLM 
will use the per acre zone rates in effect when it adjusts the annual 
acreage rent at those 10-year intervals,
    (b) MW capacity fee. See Sec.  2806.52(b) introductory text and 
(b)(1), (2), and (3).
    (c) MW rate phase-in. This paragraph (c) applies unless you 
selected the scheduled rate adjustment method (see Sec.  2806.51). If 
you hold a solar energy development lease, the MW capacity fee will be 
phased in, starting when electricity begins to be generated. The MW 
capacity fee for years 1-20 will be calculated using the MW rate in 
effect when the lease is issued. The MW capacity fee for years 21-30 
will be calculated using the MW rate in effect in year 21 of the lease. 
These rates will be phased-in as follows:
    (1) For years 1 through 10 of the lease, plus any initial partial 
year, the MW capacity fee is calculated by multiplying the project's 
authorized MW capacity by 50 percent of the applicable solar technology 
MW rate, as described in Sec.  2806.52(b)(2).
    (2) For years 11 through 20 of the lease, the MW capacity fee is 
calculated by multiplying the project's authorized MW capacity by 100 
percent of the applicable solar technology MW rate, as described in 
Sec.  2806.52(b)(2).
    (3) For years 21 through 30 of the lease, the MW capacity fee is 
calculated by multiplying the project's authorized MW capacity by 100 
percent of the applicable solar technology MW rate, as described in 
Sec.  2806.52(b)(2).
    (4) If the lease is renewed, the MW capacity fee is calculated 
using the MW rates at the beginning of the renewed lease period and 
will remain at that rate through the initial 10-year period of the 
renewal term. The MW capacity fee will be adjusted using the MW rate at 
the beginning of each subsequent 10-year period of the renewed lease 
term.
    (5) If an approved POD provides for staged development, the MW 
capacity fee is calculated using the MW capacity approved for that 
stage plus any previously approved stages, multiplied by the MW rate as 
described under this section.
    (d) Scheduled rate adjustment. Under the scheduled rate adjustment 
(see Sec.  2806.51), the BLM will update your per acre zone rate and MW 
rate as follows:
    (1) The BLM will calculate your payments using the per acre zone 
rate (see Sec.  2806.52(a)(1)) and MW rate (see Sec.  2806.52(b)(1)) in 
place when your lease is issued;
    (2) The per acre zone rate will increase every 10 years, beginning 
after the first 10 years, plus the initial partial year, if any, your 
lease is in effect, by the average annual change in the IPD-GDP for the 
preceding 10-year period as described in Sec.  2806.22(b) plus 40 
percent;
    (3) The MW rate will increase by 40 percent every 10 years, 
beginning after the first 10 years, plus the initial partial year, if 
any, your lease is in effect;
    (4) The BLM will not apply the phase-in to your MW rate under Sec.  
2806.52(c). Instead, for years 1 through 5, plus any initial partial 
year, the BLM will calculate the MW capacity fee by multiplying the 
project's authorized MW capacity by 50 percent of the applicable solar 
technology MW rate. This phase-in will not be applied to renewed 
leases; and
    (5) If the approved POD for your project provides for staged 
development, the BLM will calculate the MW capacity fee using the MW 
capacity approved for the current stage plus any previously approved 
stages, multiplied by the MW rate, as described under this section.


Sec.  2806.56  Rent for support facilities authorized under separate 
grant(s).

    If a solar energy development project includes separate right-of-
way authorizations issued for support facilities only (administration 
building, groundwater wells, construction lay down and staging areas, 
surface water management and control structures, etc.) or linear right-
of-way facilities (pipelines, roads, power lines, etc.), rent is 
determined using the Per Acre Rent Schedule for linear facilities (see 
Sec.  2806.20(c)).


Sec.  2806.58  Rent for energy development testing grants.

    (a) Grants for energy site-specific testing. You must pay $100 per 
year for each meteorological tower or instrumentation facility 
location. BLM offices with approved small site rental schedules may use 
those fee structures if the fees in those schedules charge more than 
$100 per meteorological tower per year. In lieu of annual payments, you 
may instead pay for the entire term of the grant (3 years or less).

[[Page 92220]]

    (b) Grants for energy project-area testing. You must pay $2,000 per 
year or $2 per acre per year for the lands authorized by the grant, 
whichever is greater. There is no additional rent for the installation 
of each meteorological tower or instrumentation facility located within 
the site testing and monitoring project-area.

0
43. Add an undesignated centered heading and Sec. Sec.  2806.60, 
2806.61, 2806.62, 2806.64, 2806.66, and 2806.68 to read as follows:

Wind Energy Rights-of-Way

Sec.
2806.60 Rents and fees for wind energy rights-of-way.
2806.61 Scheduled Rate Adjustment.
2806.62 Rents and fees for wind energy development grants.
2806.64 Rents and fees for wind energy development leases.
2806.66 Rent for support facilities authorized under separate 
grant(s).
2806.68 Rent for energy development testing grants.


Sec.  2806.60  Rents and fees for wind energy rights-of-way.

    If you hold a right-of-way authorizing wind energy site-specific 
testing or project-area testing or wind energy development, you must 
pay an annual rent and fee in accordance with this section and subpart. 
Your wind energy development right-of-way authorization will either be 
a grant (if issued under subpart 2804) or a lease (if issued under 
subpart 2809). Rents and fees for either type of authorization consist 
of an acreage rent that must be paid prior to issuance of the 
authorization and a phased-in MW capacity fee. Both the acreage rent 
and the phased-in MW capacity fee are charged and calculated consistent 
with Sec.  2806.11 and prorated consistent with Sec.  2806.12(a). The 
MW capacity fee will vary depending on the size of the wind energy 
development project.


Sec.  2806.61  Scheduled Rate Adjustment.

    (a) The BLM will adjust your acreage rent and MW capacity fee over 
the course of your authorization as described in these regulations. For 
new grants or leases, you may choose either the standard rate 
adjustment method (see Sec.  2806.52(a)(5) and (b)(3) for grants; see 
Sec.  2806.54(a)(4) or (c) for leases) or the scheduled rate adjustment 
method (see Sec.  2806.52(d) for grants; see Sec.  2806.54(d) for 
leases). Once you select a rate adjustment method, that method will be 
fixed until you renew your grant or lease (see Sec.  2807.22).
    (b) For new grants or leases, if you select the scheduled rate 
adjustment method you must notify the BLM of your decision in writing. 
Your decision must be received by the BLM before your grant or lease is 
issued. If you do not select the scheduled rate adjustment method, the 
standard rate adjustment method will apply.
    (c) If you hold a grant that is in effect prior to January 18, 
2017, you may either accept the standard rate adjustment method or 
request in writing that the BLM apply the scheduled rate adjustment 
method, as set forth in Sec.  2806.52(d), to your grant. To take 
advantage of the scheduled rate adjustment option, your request must be 
received by the BLM before December 19, 2018. The BLM will continue to 
apply the standard rate adjustment method to adjust your rates unless 
and until it receives your request to use the scheduled rate adjustment 
method.


Sec.  2806.62  Rents and fees for wind energy development grants.

    You must pay an annual acreage rent and MW capacity fee for your 
wind energy development grant as follows:
    (a) Acreage rent. The BLM will calculate the acreage rent by 
multiplying the number of acres (rounded up to the nearest tenth of an 
acre) within the authorized area times the per acre zone rate from the 
wind energy acreage rent schedule in effect at the time the 
authorization is issued.
    (1) Per acre zone rate. The annual per acre zone rate from the wind 
energy acreage rent schedule is calculated using the per acre zone 
value (as assigned in accordance with paragraph (a)(2) of this 
section), encumbrance factor, rate of return, and the annual adjustment 
factor. The calculation for determining the annual per acre zone rate 
is A x B x C x D = E where:

(i) A is the per acre zone value = the same per- acre zone values 
described in the linear rent schedule in Sec.  2806.20(c);
(ii) B is the encumbrance factor = 10 percent;
(iii) C is the rate of return = 5.27 percent;
(iv) D is the annual adjustment factor = the average annual change 
in the IPD-GDP for the 10-year period immediately preceding the year 
that the NASS Census data becomes available (see Sec.  2806.22(a)). 
The BLM will adjust the per acre rates each year based on the 
average annual change in the IPD-GDP as determined under Sec.  
2806.22(a). Adjusted rates are effective each year on January 1; and
(v) E is the annual per acre zone rate.

    (2) Assignment of counties. The BLM will calculate the per acre 
zone rate in paragraph (a)(1) of this section by using a State-specific 
factor to assign a county to a zone in the wind energy acreage rent 
schedule. The BLM will calculate a State-specific factor and apply it 
to the NASS data (county average per acre land and building value) to 
determine the per acre value and assign a county (or other geographical 
area) to a zone. The State-specific factor represents the percent 
difference between improved agricultural land and unimproved rangeland 
values, using NASS data. The calculation per acre for determining the 
State-specific factor is (A/B)-(C/D) = E where:

(i) A = the NASS Census statewide average per acre value of non-
irrigated acres;
(ii) B = the NASS Census statewide average per acre land and 
building value;
(iii) C = the NASS Census total statewide acres in farmsteads, 
homes, buildings, livestock facilities, ponds, roads, wasteland, 
etc.;
(iv) D = the total statewide acres in farms; and
(v) E = the State-specific percent factor or 20 percent, whichever 
is greater.

    (3) The initial assignment of counties to the zones on the wind 
energy acreage rent schedule will be based upon the most recent NASS 
Census data (2012) for years 2016 through 2020. The BLM may on its own 
or in response to requests consider making regional adjustments to 
those initial assignments, based on evidence that the NASS Census 
values do not accurately reflect those of the BLM-managed lands. The 
BLM will update this rent schedule once every 5 years by re-assigning 
counties to reflect the updated NASS Census values as described in 
Sec.  2806.21 and recalculate the State-specific percent factor once 
every 10 years as described in Sec.  2806.22(b).
    (4) Acreage rent payment. You must pay the acreage rent regardless 
of the stage of development or operations on the entire public land 
acreage described in the right-of-way authorization. The BLM State 
Director may approve a rental payment plan consistent with Sec.  
2806.15(c).
    (5) Acreage rent adjustments. This paragraph (a)(5) applies unless 
you selected the scheduled rate adjustment method (see Sec.  2806.61). 
The BLM will adjust the acreage rent annually to reflect the change in 
the per acre zone rates as specified in paragraph (a)(1) of this 
section. The BLM will use the most current per acre zone rates to 
calculate the acreage rent for each year of the grant term.
    (6) The acreage rent must be paid as described in Sec.  2806.62(a) 
except for the initial implementation of the wind energy acreage rent 
schedule of section Sec.  2806.62(c).
    (7) You may obtain a copy of the current per acre zone rates for 
wind energy development (wind energy acreage rent schedule) from any 
BLM State, district, or field office or by writing: U.S. Department of 
the Interior,

[[Page 92221]]

Bureau of Land Management, 20 M Street SE., Room 2134LM, Attention: 
Renewable Energy Coordination Office, Washington, DC 20003. The BLM 
also posts the current wind energy acreage rent schedule for wind 
energy development at http://www.blm.gov.
    (b) MW capacity fee. The MW capacity fee is calculated by 
multiplying the approved MW capacity by the MW rate. You must pay the 
MW capacity fee annually when electricity generation begins or is 
scheduled to begin in the approved POD, whichever comes first.
    (1) MW rate. The MW rate is calculated by multiplying the total 
hours per year by the net capacity factor, by the MWh price, by the 
rate of return. For an explanation of each of these terms, see the 
definition of MW rate in Sec.  2801.5(b).
    (2) MW rate schedule. You may obtain a copy of the current MW rate 
schedule for wind energy development from any BLM State, district, or 
field office or by writing: U.S. Department of the Interior, Bureau of 
Land Management, 20 M Street SE., Room 2134LM, Attention: Renewable 
Energy Coordination Office, Washington, DC 20003. The BLM also posts 
the current MW rate schedule for wind energy development at http://www.blm.gov.
    (3) Periodic adjustments in the MW rate. This paragraph (b)(3) 
applies unless you selected the scheduled rate adjustment method (see 
Sec.  2806.61). We will adjust the MW rate every 5 years, beginning in 
2021, by recalculating the following two components of the MW rate 
formula:
    (i) The adjusted MWh price is the average of the annual weighted 
average wholesale price per MWh for the major trading hubs serving the 
11 Western States of the continental United States for the full 5 
calendar-year period preceding the adjustment, rounded to the nearest 
dollar increment; and
    (ii) The adjusted rate of return is the 10-year average of the 20-
year U.S. Treasury bond yield for the full 10 calendar-year period 
preceding the adjustment, rounded to the nearest one-tenth percent, 
with a minimum rate of return of 4 percent.
    (4) MW rate phase-in. This paragraph (b)(4) applies unless you 
selected the scheduled rate adjustment method (see Sec.  2806.61). If 
you hold a wind energy development grant, the MW rate will be phased in 
as follows:
    (i) There is a 3-year phase-in of the MW rate when electricity 
generation begins or is scheduled to begin in the approved POD, 
whichever comes first, at the rates of:
    (A) 25 percent for the first year. This rate applies for the first 
partial calendar year of operations;
    (B) 50 percent for the second year; and
    (C) 100 percent for the third and subsequent years of operations.
    (ii) After generation of electricity starts and an approved POD 
provides for staged development:
    (A) The 3-year phase-in of the MW rate applies to each stage of 
development; and
    (B) The MW capacity fee is calculated using the authorized MW 
capacity approved for that stage, plus any previously approved stages, 
multiplied by the MW rate.
    (iii) The MW rate may be phased in further, as described in 
paragraph (c) of this section.
    (5) The general payment provisions for rents described in this 
subpart, except for Sec.  2806.14(a)(4), also apply to the MW capacity 
fee.
    (c) Initial implementation of the acreage rent and MW capacity fee. 
This paragraph (c) applies unless you selected the scheduled rate 
adjustment method (see Sec.  2806.61).
    (1) If you hold a wind energy grant and made payments for billing 
year 2016, the BLM will reduce by 50 percent the net increase in annual 
costs between billing year 2017 and billing year 2016. The net increase 
will be calculated based on a full calendar year.
    (2) If the BLM accepted your application for a wind energy 
development grant, including a plan of development and cost recovery 
agreement, prior to September 30, 2014, the BLM will phase in your 
payment of the acreage rent and MW capacity fee by reducing the:
    (i) Acreage rent of the grant by 50 percent for the initial partial 
year of the grant; and
    (ii) MW capacity fee by 75 percent for the first (initial partial) 
and second years and by 50 percent for the third and fourth years for 
which the BLM requires payment of the MW capacity fee. This reduction 
to the MW capacity fee applies to each stage of development.
    (d) Scheduled rate adjustment. Under the scheduled rate adjustment 
(see Sec.  2806.61), the BLM will update your per acre zone rate and MW 
rate as follows:
    (1) The BLM will calculate your payments using the per acre zone 
rate (see Sec.  2806.62(a)(1)) and MW rate (see Sec.  2806.62(b)(1)) in 
place when your grant is issued, or for existing grants, the per acre 
zone rate and MW rate in place prior to December 19, 2016, as adjusted 
under paragraph (d)(6) of this section;
    (2) The per acre zone rate will increase:
    (i) Annually, beginning after the first full year plus the initial 
partial year, if any, your grant is in effect by the average annual 
change in the IPD-GDP as described in Sec.  2806.22(b); and
    (ii) Every 5 years, beginning after the first 5 years, plus the 
initial partial year, if any, your grant is in effect, by 20 percent;
    (3) The MW rate will increase by 20 percent every 5 years, 
beginning after the first 5 years, plus the initial partial year, if 
any, your grant is in effect;
    (4) The BLM will not apply the phase-in to your MW rate under Sec.  
2806.62(b)(4) or the reduction under Sec.  2806.62(c); and
    (5) If the approved POD for your project provides for staged 
development, the BLM will calculate the MW capacity fee using the MW 
capacity approved for that stage in question plus any previously 
approved stages, multiplied by the MW rate as described under this 
section.
    (6) For grants in place prior to January 18, 2017 that select the 
scheduled rate adjustment method offered under Sec.  2806.61(c), the 
per acre zone rate and the MW rate in place prior to December 19, 2016 
will be adjusted for the first year's payment using the scheduled rate 
adjustment method as follows:
    (i) The per acre zone rate will increase by the average annual 
change in the IPD-GDP as described in Sec.  2806.22(b) plus 20 percent;
    (ii) The MW rate will increase by 20 percent; and
    (iii) Subsequent increases will be performed as set forth in 
paragraphs (d)(2) and (3) of this section from the date of the initial 
adjustment under paragraph (d)(6) of this section.


Sec.  2806.64  Rents and fees for wind energy development leases.

    If you hold a wind energy development lease obtained through 
competitive bidding under subpart 2809 of this part, you must make 
annual payments in accordance with this section and subpart, in 
addition to the one-time, up front bonus bid you paid to obtain the 
lease. The annual payment includes an acreage rent for the number of 
acres included within the wind energy lease and an additional MW 
capacity fee based on the total authorized MW capacity for the approved 
wind energy project on the public lands.
    (a) Acreage rent. The BLM will calculate and bill you an acreage 
rent that must be paid prior to issuance of your lease as described in 
Sec.  2806.62(a).

[[Page 92222]]

This acreage rent will be based on the following:
    (1) Per acre zone rate. See Sec.  2806.62(a)(1).
    (2) Assignment of counties. See Sec.  2806.62(a)(2) and (3).
    (3) Acreage rent payment. See Sec.  2806.62(a)(4).
    (4) Acreage rent adjustments. This paragraph (a)(4) applies unless 
you selected the scheduled rate adjustment method (see Sec.  2806.61). 
Once the acreage rent is determined under Sec.  2806.62(a), no further 
adjustments in the annual acreage rent will be made until year 11 of 
the lease term and each subsequent 10-year period thereafter. We will 
use the per acre zone rates in effect at the time the acreage rent is 
due (at the beginning of each 10-year period) to calculate the annual 
acreage rent for each of the subsequent 10-year periods.
    (b) MW capacity fee. See Sec.  2806.62(b) introductory text and 
(b)(1), (2), and (3).
    (c) MW rate phase-in. This paragraph (c) applies unless you 
selected the scheduled rate adjustment method (see Sec.  2806.61). If 
you hold a wind energy development lease, the MW capacity fee will be 
phased in, starting when electricity begins to be generated. The MW 
capacity fee for years 1-20 will be calculated using the MW rate in 
effect when the lease is issued. The MW capacity fee for years 21-30 
will be calculated using the MW rate in effect in year 21 of the lease. 
These rates will be phased-in as follows:
    (1) For years 1 through 10 of the lease, plus any initial partial 
year, the MW capacity fee is calculated by multiplying the project's 
authorized MW capacity by 50 percent of the wind energy technology MW 
rate, as described in Sec.  2806.62(b)(2);
    (2) For years 11 through 20 of the lease, the MW capacity fee is 
calculated by multiplying the project's authorized MW capacity by 100 
percent of the wind energy technology MW rate described in Sec.  
2806.62(b)(2);
    (3) For years 21 through 30 of the lease, the MW capacity fee is 
calculated by multiplying the project's authorized MW capacity by 100 
percent of the wind energy technology MW rate as described in Sec.  
2806.62(b)(2);
    (4) If the lease is renewed, the MW capacity fee is calculated 
using the MW rates at the beginning of the renewed lease period and 
will remain at that rate through the initial 10 year period of the 
renewal term. The MW capacity fee will continue to adjust at the 
beginning of each subsequent 10 year period of the renewed lease term 
to reflect the then currently applicable MW rates; and
    (5) If an approved POD provides for staged development, the MW 
capacity fee is calculated using the MW capacity approved for that 
stage plus any previously approved stage, multiplied by the MW rate, as 
described in this section.
    (d) Scheduled rate adjustment. Under the scheduled rate adjustment 
(see Sec.  2806.61), the BLM will update your per acre zone rate and MW 
rate as follows:
    (1) The BLM will calculate your payments using the per acre zone 
rate (see Sec.  2806.62(a)(1)) and MW rate (see Sec.  2806.62(b)(1)) in 
place when your lease is issued;
    (2) The per acre zone rate will increase every 10 years, beginning 
after the first 10 years, plus the initial partial year, if any, your 
lease is in effect, by the average annual change in the IPD-GDP for the 
preceding 10-year period as described in Sec.  2806.22(b) plus 40 
percent;
    (3) The MW rate will increase by 40 percent every 10 years, 
beginning after the first 10 years, plus the initial partial year, if 
any, your lease is in effect;
    (4) The BLM will not apply the phase-in to your MW rate under Sec.  
2806.62(c). Instead, for years 1 through 5, plus any initial partial 
year, the BLM will calculate the MW capacity fee by multiplying the 
project's authorized MW capacity by 50 percent of the applicable solar 
technology MW rate. This phase-in will not be applied to renewed 
leases; and
    (5) If the approved POD for your project provides for staged 
development, the BLM will calculate the MW capacity fee using the MW 
capacity approved for that stage in question plus any previously 
approved stages, multiplied by the MW rate as described under this 
section.


 Sec.  2806.66  Rent for support facilities authorized under separate 
grant(s).

    If a wind energy development project includes separate right-of-way 
authorizations issued for support facilities only (administration 
building, groundwater wells, construction lay down and staging areas, 
surface water management, and control structures, etc.) or linear 
right-of-way facilities (pipelines, roads, power lines, etc.), rent is 
determined using the Per Acre Rent Schedule for linear facilities (see 
Sec.  2806.20(c)).


Sec.  2806.68  Rent for energy development testing grants.

    (a) Grant for energy site-specific testing. You must pay $100 per 
year for each meteorological tower or instrumentation facility 
location. BLM offices with approved small site rental schedules may use 
those fee structures if the fees in those schedules charge more than 
$100 per meteorological tower per year. In lieu of annual payments, you 
may instead pay for the entire term of the grant (3 years or less).
    (b) Grant for energy project-area testing. You must pay $2,000 per 
year or $2 per acre per year for the lands authorized by the grant, 
whichever is greater. There is no additional rent for the installation 
of each meteorological tower or instrumentation facility located within 
the site testing and monitoring project area.

0
44. Add an undesignated centered heading immediately preceding newly 
redesignated Sec.  2806.70 to read as follows:

Other Rights-of-Way

0
45. Revise newly redesignated Sec.  2806.70 to read as follows:


Sec.  2806.70  How will the BLM determine the payment for a grant or 
lease when the linear, communication use, solar energy, or wind energy 
payment schedules do not apply?

    When we determine that the linear, communication use, solar, or 
wind energy payment schedules do not apply, we may determine your 
payment through a process based on comparable commercial practices, 
appraisals, competitive bids, or other reasonable methods. We will 
notify you in writing of the payment determination. If you disagree 
with the payment determination, you may appeal our final determination 
under Sec.  2801.10.

Subpart 2807--Grant Administration and Operation

0
46. Amend Sec.  2807.11 by:
0
a. Revising paragraph (b);
0
b. Redesignating paragraphs (d) and (e) as paragraphs (f) and (g); and
0
c. Adding new paragraphs (d) and (e).
    The revisions and additions read as follows:


Sec.  2807.11  When must I contact BLM during operations?

* * * * *
    (b) When your use requires a substantial deviation from the grant. 
You must seek an amendment to your grant under Sec.  2807.20 and obtain 
the BLM's approval before you begin any activity that is a substantial 
deviation;
* * * * *
    (d) Whenever site-specific circumstances or conditions result in 
the need for changes to an approved right-of-way grant or lease, POD, 
site plan, mitigation measures, or construction, operation, or 
termination procedures that are not substantial deviations in location 
or use authorized

[[Page 92223]]

by a right-of-way grant or lease. Changes for authorized actions, 
project materials, or adopted mitigation measures within the existing, 
approved right-of-way area must be submitted to us for review and 
approval;
    (e) To identify and correct discrepancies or inconsistencies;
* * * * *

0
47. Amend Sec.  2807.17 by redesignating paragraph (d) as paragraph (e) 
and adding new paragraph (d) to read as follows:


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

* * * * *
    (d) The BLM may suspend or terminate another 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.
* * * * *

0
48. Revise Sec.  2807.21 to read as follows:


Sec.  2807.21  May I assign or make other changes to my grant or lease?

    (a) With the BLM's approval, you may assign, in whole or in part, 
any right or interest in a grant or lease. Assignment actions that may 
require BLM approval include, but are not limited to, the following:
    (1) The transfer by the holder (assignor) of any right or interest 
in the grant or lease to a third party (assignee); and
    (2) Changes in ownership or other related change in control 
transactions involving the BLM right-of-way holder and another business 
entity (assignee), including corporate mergers or acquisitions, but not 
transactions within the same corporate family.
    (b) The BLM may require a grant or lease holder to file new or 
revised information in some circumstances that do not constitute an 
assignment (see subpart 2803 and Sec. Sec.  2804.12(e) and 2807.11). 
Circumstances that would not constitute an assignment but may 
necessitate this filing include, but are not limited to:
    (1) Transactions within the same corporate family;
    (2) Changes in the holder's name only (see paragraph (h) of this 
section); and
    (3) Changes in the holder's articles of incorporation.
    (c) In order to assign a grant or lease, the proposed assignee must 
file an assignment application and follow the same procedures and 
standards as for a new grant or lease, including paying application and 
processing fees, and the grant must be in compliance with the terms and 
conditions of Sec.  2805.12. The preliminary application review 
meetings and public meeting under Sec. Sec.  2804.12 and 2804.25 are 
not required for an assignment. We will not approve any assignment 
until the assignor makes any outstanding payments that are due (see 
Sec.  2806.13(g)).
    (d) 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.
    (e) Your assignment is not recognized until the BLM approves it in 
writing. We will approve the assignment if doing so is in the public 
interest. Except for leases issued under subpart 2809 of this part, we 
may modify the grant or lease or add bonding and other requirements, 
including additional terms and conditions, to the grant or lease when 
approving the assignment, unless a modification to a lease issued under 
subpart 2809 of this part is required under Sec.  2805.15(e). We may 
decrease rents if the new holder qualifies for an exemption (see Sec.  
2806.14) or waiver or reduction (see Sec.  2806.15) and the previous 
holder did not. Similarly, we may increase rents if the previous holder 
qualified for an exemption or waiver or reduction and the new holder 
does not. If we approve the assignment, the benefits and liabilities of 
the grant or lease apply to the new grant or lease holder.
    (f) The processing time and conditions described at Sec.  
2804.25(d) of this part apply to assignment applications.
    (g) Only interests in issued right-of-way grants and leases are 
assignable. Except for applications submitted by a preferred applicant 
under Sec.  2804.30(g), pending right-of-way applications do not create 
any property rights or other interest and may not be assigned from one 
entity to another, except that an entity with a pending application may 
continue to pursue that application even if that entity becomes a 
wholly owned subsidiary of a new third party.
    (h) To complete a change in name only, (i.e., when the name change 
in question is not the result of an underlying change in control of the 
right-of-way grant), the following requirements must be met:
    (1) The holder must file an application requesting a name change 
and follow the same procedures as for a new grant, including paying 
processing fees. However, the application fees (see subpart 2804 of 
this part) and the preliminary application review and public meetings 
(see Sec. Sec.  2804.12 and 2804.25) are not required. The name change 
request must include:
    (i) If the name change is for an individual, a copy of the court 
order or other legal document effectuating the name change; or
    (ii) If the name change is for a corporation, a copy of the 
corporate resolution(s) proposing and approving the name change, a copy 
of the acceptance of the change in name by the State or Territory in 
which it is incorporated, and a copy of the appropriate resolution, 
order or other documentation showing the name change.
    (2) When reviewing a proposed name change only, we may determine it 
is necessary to:
    (i) Modify a grant issued under subpart 2804 to add bonding and 
other requirements, including additional terms and conditions to the 
grant; or
    (ii) Modify a lease issued under subpart 2809 in accordance with 
Sec.  2805.15(e).
    (3) Your name change is not recognized until the BLM approves it in 
writing.

0
49. Amend Sec.  2807.22 by:
0
a. Revising the section heading and paragraphs (a), (b), and (d);
0
b. Redesignating paragraph (f) as paragraph (g); and
0
c. Adding new paragraph (f).
    The revisions and addition read as follows:


Sec.  2807.22  How do I renew my grant or lease?

    (a) If your grant or lease specifies the terms and conditions for 
its renewal, and you choose to renew it, you must request a renewal 
from the BLM at least 120 calendar days before your grant or lease 
expires consistent with the renewal terms and conditions specified in 
your grant or lease. We will renew the grant or lease if you are in 
compliance with the renewal terms and conditions; the other terms, 
conditions, and stipulations of the grant or lease; and other 
applicable laws and regulations.
    (b) If your grant or lease does not specify the terms and 
conditions for its renewal, you may apply to us to renew the grant or 
lease. You must send us your application at least 120 calendar days 
before your grant or lease expires. In your application you must show 
that you are in compliance with the terms, conditions, and stipulations 
of the grant or lease and other applicable laws and regulations, and 
explain why a renewal

[[Page 92224]]

of your grant or lease is necessary. We may approve or deny your 
application to renew your grant or lease.
* * * * *
    (d) We will review your application and determine the applicable 
terms and conditions of any renewed grant or lease.
* * * * *
    (f) If you make a timely and sufficient application for a renewal 
of your existing grant or lease, or for a new grant or lease, in 
accordance with this section, the existing grant does not expire until 
we have issued a decision to approve or deny the application.
* * * * *

0
50. Revise subpart 2809 to read as follows:
Subpart 2809--Competitive Process for Leasing Public Lands for Solar 
and Wind Energy Development Inside Designated Leasing Areas
Sec.
2809.10 General.
2809.11 How will the BLM solicit nominations?
2809.12 How will the BLM select and prepare parcels?
2809.13 How will the BLM conduct competitive offers?
2809.14 What types of bids are acceptable?
2809.15 How will the BLM select the successful bidder?
2809.16 When do variable offsets apply?
2809.17 Will the BLM ever reject bids or re-conduct a competitive 
offer?
2809.18 What terms and conditions apply to leases?
2809.19 Applications in designated leasing areas or on lands that 
later become designated leasing areas.

Subpart 2809--Competitive Process for Leasing Public Lands for 
Solar and Wind Energy Development Inside Designated Leasing Areas


Sec.  2809.10  General.

    (a) Lands inside designated leasing areas may be made available for 
solar and wind energy development through a competitive leasing offer 
process established by the BLM under this subpart.
    (b) The BLM may include lands in a competitive offer on its own 
initiative.
    (c) The BLM may solicit nominations by publishing a call for 
nominations under Sec.  2809.11(a).
    (d) The BLM will generally prioritize the processing of ``leases'' 
awarded under this subpart over the processing of non-competitive 
``grant'' applications under subpart 2804, including those that are 
``high priority'' under Sec.  2804.35.


Sec.  2809.11  How will the BLM solicit nominations?

    (a) Call for nominations. The BLM will publish a notice in the 
Federal Register and may use other notification methods, such as a 
newspaper of general circulation in the area affected by the potential 
offer of public land for solar and wind energy development or the 
Internet; to solicit nominations and expressions of interest for 
parcels of land inside designated leasing areas for solar or wind 
energy development.
    (b) Nomination submission. A nomination must be in writing and must 
include the following:
    (1) Nomination fee. If you nominate a specific parcel of land under 
paragraph (a) of this section, you must also include a non-refundable 
nomination fee of $5 per acre. We will adjust the nomination fee once 
every 10 years using the change in the IPD-GDP for the preceding 10-
year period and round it to the nearest half dollar. This 10 year 
average will be adjusted at the same time as the per acre rent schedule 
for linear rights-of-way under Sec.  2806.22;
    (2) Nominator's name and personal or business address. The name of 
only one citizen, association, partnership, corporation, or 
municipality may appear as the nominator. All communications relating 
to leasing will be sent to that name and address, which constitutes the 
nominator's name and address of record; and
    (3) The legal land description and a map of the nominated lands.
    (c) We may consider informal expressions of interest suggesting 
lands to be included in a competitive offer. If you submit a written 
expression of interest, you must provide a description of the suggested 
lands and rationale for their inclusion in a competitive offer.
    (d) In order to submit a nomination, you must be qualified to hold 
a grant or lease under


Sec.  2803.10.  

    (e) Nomination withdrawals. A nomination cannot be withdrawn, 
except by the BLM for cause, in which case all nomination monies will 
be refunded to the nominator.


Sec.  2809.12  How will the BLM select and prepare parcels?

    (a) The BLM will identify parcels for competitive offer based on 
nominations and expressions of interest or on its own initiative.
    (b) The BLM and other Federal agencies, as applicable, will conduct 
necessary studies and site evaluation work, including applicable 
environmental reviews and public meetings, before offering lands 
competitively.


Sec.  2809.13  How will the BLM conduct competitive offers?

    (a) Variety of competitive procedures available. The BLM may use 
any type of competitive process or procedure to conduct its competitive 
offer, and any method, including the use of the Internet, to conduct 
the actual auction or competitive bid procedure. Possible bid 
procedures could include, but are not limited to: Sealed bidding, oral 
auctions, modified competitive bidding, electronic bidding, and any 
combination thereof.
    (b) Notice of competitive offer. We will publish a notice in the 
Federal Register at least 30 days prior to the competitive offer and 
may use other notification methods, such as a newspaper of general 
circulation in the area affected by the potential right-of-way or the 
Internet. The Federal Register and other notices will include:
    (1) The date, time, and location, if any, of the competitive offer;
    (2) The legal land description of the parcel to be offered;
    (3) The bidding methodology and procedures to be used in conducting 
the competitive offer, which may include any of the competitive 
procedures identified in paragraph (a) of this section;
    (4) The minimum bid required (see Sec.  2809.14(a)), including an 
explanation of how we determined this amount;
    (5) The qualification requirements for potential bidders (see Sec.  
2803.10);
    (6) If a variable offset (see Sec.  2809.16) is offered:
    (i) The percent of each offset factor;
    (ii) How bidders may pre-qualify for each offset factor; and
    (iii) The documentation required to pre-qualify for each offset 
factor; and
    (7) The terms and conditions of the lease, including the 
requirements for the successful bidder to submit a POD for the lands 
involved in the competitive offer (see Sec.  2809.18) and any lease 
mitigation requirements, including compensatory mitigation for residual 
impacts associated with the right-of-way.
    (c) We will notify you in writing of our decision to conduct a 
competitive offer at least 30 days prior to the competitive offer if 
you nominated lands and paid the nomination fees required by Sec.  
2809.11(b)(1).


Sec.  2809.14  What types of bids are acceptable?

    (a) Bid submissions. The BLM will accept your bid only if:
    (1) It includes the minimum bid and at least 20 percent of the 
bonus bid; and
    (2) The BLM determines that you are qualified to hold a grant or 
lease under

[[Page 92225]]

Sec.  2803.10. You must include documentation of your qualifications 
with your bid, unless we have previously approved your qualifications 
under Sec.  2809.10(d) or Sec.  2809.11(d).
    (b) Minimum bid. The minimum bid is not prorated among all bidders, 
but must be paid entirely by the successful bidder. The minimum bid 
consists of:
    (1) The administrative costs incurred by the BLM and other Federal 
agencies in preparing for and conducting the competitive offer, 
including required environmental reviews; and
    (2) An amount determined by the authorized officer and disclosed in 
the notice of competitive offer. This amount will be based on known or 
potential values of the parcel. In setting this amount, the BLM will 
consider factors that include, but are not limited to, the acreage rent 
and megawatt capacity fee.
    (c) Bonus bid. The bonus bid consists of any dollar amount that a 
bidder wishes to bid in addition to the minimum bid.
    (d) If you are not the successful bidder, as defined in Sec.  
2809.15(a), the BLM will refund your bid.


Sec.  2809.15  How will the BLM select the successful bidder?

    (a) The bidder with the highest total bid, prior to any variable 
offset, is the successful bidder and may be offered a lease in 
accordance with Sec.  2805.10.
    (b) The BLM will determine the variable offsets for the successful 
bidder in accordance with Sec.  2809.16 before issuing final payment 
terms.
    (c) Payment terms. If you are the successful bidder, you must:
    (1) Make payments by personal check, cashier's check, certified 
check, bank draft, or money order, or by other means deemed acceptable 
by the BLM, payable to the Department of the Interior--Bureau of Land 
Management;
    (2) By the close of official business hours on the day of the offer 
or such other time as the BLM may have specified in the offer notices, 
submit for each parcel:
    (i) Twenty percent of the bonus bid (before the offsets are applied 
under paragraph (b) of this section); and
    (ii) The total amount of the minimum bid specified in Sec.  
2809.14(b);
    (3) Within 15 calendar days after the day of the offer, submit the 
balance of the bonus bid (after the variable offsets are applied under 
paragraph (b) of this section) to the BLM office conducting the offer; 
and
    (4) Within 15 calendar days after the day of the offer, submit the 
acreage rent for the first full year of the solar or wind energy 
development lease as provided in Sec.  2806.54(a) or Sec.  2806.64(a), 
respectively. This amount will be applied toward the first 12 months 
acreage rent, if the successful bidder becomes the lessee.
    (d) The BLM will offer you a right-of-way lease if you are the 
successful bidder and:
    (1) Satisfy the qualifications in Sec.  2803.10;
    (2) Make the payments required under paragraph (c) of this section; 
and
    (3) Do not have any trespass action pending against you for any 
activity on BLM-administered lands (see Sec.  2808.12) or have any 
unpaid debts owed to the Federal Government.
    (e) The BLM will not offer a lease to the successful bidder and 
will keep all money that has been submitted, if the successful bidder 
does not satisfy the requirements of paragraph (d) of this section. In 
this case, the BLM may offer the lease to the next highest bidder under 
Sec.  2809.17(b) or re-offer the lands under Sec.  2809.17(d).


Sec.  2809.16  When do variable offsets apply?

    (a) The successful bidder may be eligible for an offset of up to 20 
percent of the bonus bid based on the factors identified in the notice 
of competitive offer.
    (b) The BLM may apply a variable offset to the bonus bid of the 
successful bidder. The notice of competitive offer will identify each 
factor of the variable offset, the specific percentage for each factor 
that would be applied to the bonus bid, and the documentation required 
to be provided to the BLM prior to the day of the offer to qualify for 
the offset. The total variable offset cannot be greater than 20 percent 
of the bonus bid.
    (c) The variable offset may be based on any of the following 
factors:
    (1) Power purchase agreement;
    (2) Large generator interconnect agreement;
    (3) Preferred solar or wind energy technologies;
    (4) Prior site testing and monitoring inside the designated leasing 
area;
    (5) Pending applications inside the designated leasing area;
    (6) Submission of nomination fees;
    (7) Submission of biological opinions, strategies, or plans;
    (8) Environmental benefits;
    (9) Holding a solar or wind energy grant or lease on adjacent or 
mixed land ownership;
    (10) Public benefits; and
    (11) Other similar factors.
    (d) The BLM will determine your variable offset prior to the 
competitive offer.


Sec.  2809.17  Will the BLM ever reject bids or re-conduct a 
competitive offer?

    (a) The BLM may reject bids regardless of the amount offered. If 
the BLM rejects your bid under this provision, you will be notified in 
writing and such notice will include the reason(s) for the rejection 
and what refunds to which you are entitled. If the BLM rejects a bid, 
the bidder may appeal that decision under Sec.  2801.10.
    (b) We may offer the lease to the next highest qualified bidder if 
the successful bidder does not execute the lease or is for any reason 
disqualified from holding the lease.
    (c) If we are unable to determine the successful bidder, such as in 
the case of a tie, we may re-offer the lands competitively (under Sec.  
2809.13) to the tied bidders or to all prospective bidders.
    (d) If lands offered under Sec.  2809.13 receive no bids, we may:
    (1) Re-offer the lands through the competitive process under Sec.  
2809.13; or
    (2) Make the lands available through the non-competitive 
application process found in subparts 2803, 2804, and 2805 of this 
part, if we determine that doing so is in the public interest.


Sec.  2809.18  What terms and conditions apply to leases?

    The lease will be issued subject to the following terms and 
conditions:
    (a) Lease term. The term of your lease includes the initial partial 
year in which it is issued, plus 30 additional full years. The lease 
will terminate on December 31 of the final year of the lease term. You 
may submit an application for renewal under Sec.  2805.14(g).
    (b) Rent. You must pay rent as specified in:
    (1) Section 2806.54, if your lease is for solar energy development; 
or
    (2) Section 2806.64, if your lease is for wind energy development.
    (c) POD. You must submit, within 2 years of the lease issuance 
date, a POD that:
    (1) Is consistent with the development schedule and other 
requirements in the POD template posted at http://www.blm.gov; and
    (2) Addresses all pre-development and development activities.
    (d) Cost recovery. You must pay the reasonable costs for the BLM or 
other Federal agencies to review and approve your POD and to monitor 
your lease. To expedite review of your POD and monitoring of your 
lease, you may notify BLM in writing that you are waiving paying 
reasonable costs and are electing to pay the full actual costs incurred 
by the BLM.

[[Page 92226]]

    (e) Performance and reclamation bond. (1) For Solar Energy 
Development, you must provide a bond in the amount of $10,000 per acre 
prior to written approval to proceed with ground disturbing activities.
    (2) For Wind Energy Development, you must provide a bond in the 
amount of $10,000 per authorized turbine less than 1 MW in nameplate 
capacity or $20,000 per authorized turbine equal or greater than 1 MW 
in nameplate capacity prior to written approval to proceed with ground 
disturbing activities.
    (3) For testing and monitoring sites authorized under a development 
lease, you must provide a bond in the amount of $2,000 per site prior 
to receiving written approval to proceed with ground disturbing 
activities.
    (4) The BLM will adjust the solar and wind energy development bond 
amounts every 10 years using the change in the IPD-GDP for the 
preceding 10-year period rounded to the nearest $100. This 10-year 
average will be adjusted at the same time as the Per Acre Rent Schedule 
for linear rights-of-way under Sec.  2806.22.
    (f) Assignments. You may assign your lease under Sec.  2807.21, and 
if an assignment is approved, the BLM will not make any changes to the 
lease terms or conditions, as provided for by Sec.  2807.21(e) except 
for modifications required under Sec.  2805.15(e).
    (g) Due diligence of operations. You must start construction within 
5 years and begin generation of electricity no later than 7 years from 
the date of lease issuance, as specified in your approved POD. A 
request for an extension may be granted for up to 3 years with a show 
of good cause and approval by the BLM.


Sec.  2809.19  Applications in designated leasing areas or on lands 
that later become designated leasing areas.

    (a) Applications for solar or wind energy development filed on 
lands outside of designated leasing areas, which subsequently become 
designated leasing areas will:
    (1) Continue to be processed by the BLM and are not subject to the 
competitive leasing offer process of this subpart, if such applications 
are filed prior to the publication of the notice of intent or other 
public announcement from the BLM of the proposed land use plan 
amendment to designate the solar or wind leasing area; or
    (2) Remain in pending status unless withdrawn by the applicant, 
denied, or issued a grant by the BLM, or the subject lands become 
available for application or leasing under this part, if such 
applications are filed on or after the date of publication of the 
notice of intent or other public announcement from the BLM of the 
proposed land use plan amendment to designate the solar or wind leasing 
area.
    (3) Resume being processed by the BLM if your application is 
pending under paragraph (a)(2) of this section and the lands become 
available for application under Sec.  2809.17(d)(2).
    (b) An applicant that submits a bid on a parcel of land for which 
an application is pending under paragraph (a)(2) of this section may:
    (1) Qualify for a variable offset under Sec.  2809.16; and
    (2) Receive a refund for any unused application fees or processing 
costs if the lands identified in the application are subsequently 
leased to another entity under Sec.  2809.13.
    (c) After the effective date of this regulation, the BLM will not 
accept a new application for solar or wind energy development inside 
designated leasing areas (see Sec. Sec.  2804.12(b)(1) and 2804.23(e)), 
except as provided by Sec.  2809.17(d)(2).
    (d) You may file a new application under part 2804 for testing and 
monitoring purposes inside designated leasing areas. If the BLM 
approves your application, you will receive a short term grant in 
accordance with Sec.  2805.11(b)(2)(i) or (ii), which may qualify you 
for an offset under Sec.  2809.16.

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

0
51. Revise the authority citation for part 2880 to read as follows:

    Authority: 30 U.S.C. 185 and 189, and 43 U.S.C. 1732(b), 1733, 
and 1740.

Subpart 2884--Applying for MLA Grants or TUPs

0
52. In Sec.  2884.11, revise paragraph (c)(5) to read as follows:


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

* * * * *
    (c) * * *
    (5) The estimated schedule for constructing, operating, 
maintaining, and terminating the project (a POD). Your POD must be 
consistent with the development schedule and other requirements as 
noted on the POD template for oil and gas pipelines at http://www.blm.gov;
* * * * *
    53. In Sec.  2884.12, revise paragraphs (a), (b), and (c) to read 
as follows:


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

    (a) You must pay a processing fee with the application to cover the 
costs to the Federal Government of processing your application before 
the Federal Government incurs them. Subject to applicable laws and 
regulations, if processing your application will involve Federal 
agencies other than the BLM, your fee may also include the reasonable 
costs estimated to be incurred by those Federal agencies. Instead of 
paying the BLM a fee for the estimated work of other Federal agencies 
in processing your application, you may pay other Federal agencies 
directly for the costs estimated to be incurred by them in processing 
your application. The fees for Processing Categories 1 through 4 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 1 hour 
or less. Processing fees are based on categories. We 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. We will round these changes 
to the nearest dollar. We will update Category 5 processing fees as 
specified in the Master Agreement. These processing categories and the 
estimated range of Federal work hours for each category are:

                          Processing Categories
------------------------------------------------------------------------
            Processing category              Federal work hours involved
------------------------------------------------------------------------
(1) Applications for new grants or TUPs,    Estimated Federal work hours
 assignments, renewals, and amendments to    are >1 <=8.
 existing grants or TUPs.
(2) Applications for new grants or TUPs,    Estimated Federal work hours
 assignments, renewals, and amendments to    are >8 <=24.
 existing grants or TUPs.
(3) Applications for new grants or TUPs,    Estimated Federal work hours
 assignments, renewals, and amendments to    are >24 <=36.
 existing grants or TUPs.
(4) Applications for new grants or TUPs,    Estimated Federal work hours
 assignments, renewals, and amendments to    are >36 <=50.
 existing grants or TUPs.
(5) Master Agreements.....................  Varies.

[[Page 92227]]

 
(6) Applications for new grants or TUPs,    Estimated Federal work hours
 assignments, renewals, and amendments to    are >50.
 existing grants or TUPs.
------------------------------------------------------------------------

    (c) You may obtain a copy of the current schedule from any BLM 
State, district, or field office or by writing: U.S. Department of the 
Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, 
Washington, DC 20003. The BLM also posts the current schedule at http://www.blm.gov.
* * * * *

0
54. Amend Sec.  2884.16 by redesignating paragraphs (a)(6), (7), and 
(8) as paragraphs (a)(7), (8), and (9), and adding new paragraph (a)(6) 
to read as follows:


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

    (a) * * *
    (6) Describes existing agreements between the BLM and other Federal 
agencies for cost reimbursement;
* * * * *

0
55. Amend Sec.  2884.17 by revising paragraph (a) and adding paragraph 
(e) to read as follows:


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

    (a) For Processing Category 6 applications, you and the BLM must 
enter into a written agreement that describes how we will process your 
application. The final agreement consists of a work plan, a financial 
plan, and a description of any existing agreements you have with other 
Federal agencies for cost reimbursement associated with such 
application.
* * * * *
    (e) We may collect funds to reimburse the Federal Government for 
reasonable costs for processing applications and other documents under 
this part relating to the Federal lands.

0
56. In Sec.  2884.18, revise paragraphs (a)(1) and (c) to read as 
follows:


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

    (a) * * *
    (1) Processing Categories 1 through 4. You must reimburse the 
Federal Government for processing costs as if the other application or 
applications had not been filed.
* * * * *
    (c) If we determine that competition exists, we will describe the 
procedures for a competitive bid through a bid announcement in the 
Federal Register and may use other notification methods, such as a 
newspaper of general circulation or the Internet. We may offer lands 
through a competitive process on our own initiative.

0
57. Amend Sec.  2884.20 by revising paragraphs (a) introductory text 
and (d) to read as follows:


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

    (a) When the BLM receives your application, it will publish a 
notice in the Federal Register and may use other notification methods, 
such as a newspaper of general circulation in the vicinity of the lands 
involved or the Internet. If we determine the pipeline(s) will have 
only minor environmental impacts, we are not required to publish this 
notice. The notice will, at a minimum, contain:
* * * * *
    (d) We may hold public hearings or meetings on your application if 
we determine that there is sufficient interest to warrant the time and 
expense of such hearings or meetings. We will publish a notice in the 
Federal Register and may use other notification methods, such as a 
newspaper of general circulation in the vicinity of the lands involved 
or the Internet, to announce in advance any public hearings or 
meetings.

0
58. Amend Sec.  2884.21 by:
0
a. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d);
0
b. Adding new paragraph (b); and
0
c. Revising newly redesignated paragraph (d)(4).
    The revisions and addition read as follows:


Sec.  2884.21  How will BLM process my application?

* * * * *
    (b) The BLM will not process your application if you have any 
trespass action pending against you for any activity on BLM-
administered lands (see Sec.  2888.11) or have any unpaid debts owed to 
the Federal Government. The only applications the BLM would process are 
those to resolve the trespass with a right-of-way as authorized in this 
part, or a lease or permit under the regulations found at 43 CFR part 
2920, but only after outstanding debts are paid. Outstanding debts are 
those currently unpaid debts owed to the Federal Government after all 
administrative collection actions have occurred, including any appeal 
proceedings under applicable Federal regulations and the Administrative 
Procedure Act.
* * * * *
    (d) * * *
    (4) Hold public meetings, if sufficient public interest exists to 
warrant their time and expense. The BLM will publish a notice in the 
Federal Register and may use other methods, such as a newspaper of 
general circulation in the vicinity of the lands involved or the 
Internet, to announce in advance any public hearings or meetings; and
* * * * *

0
59. Amend Sec.  2884.22 by revising paragraph (a) to read as follows:


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(c) of this chapter.
* * * * *

0
60. Amend Sec.  2884.23 by revising paragraph (a)(6), redesignating 
paragraph (b) as paragraph (c), and adding new paragraph (b) to read as 
follows:


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

    (a) * * *
    (6) You do not adequately comply with a deficiency notice (see 
Sec.  2804.25(c) of this chapter) or with any requests from the BLM for 
additional information needed to process the application.
    (b) If you are unable to meet any of the requirements in this 
section you may request an alternative from the BLM (see Sec.  
2884.30).
* * * * *

0
61. Add Sec.  2884.30 to read as follows:


Sec.  2884.30  Showing of good cause.

    If you are unable to meet any of the processing requirements in 
this subpart, you may request approval for an alternative requirement 
from the BLM. Any such request is not approved until you receive BLM 
approval in writing. Your request to the BLM must:
    (a) Show good cause for your inability to meet a requirement;
    (b) Suggest an alternative requirement and explain why that 
requirement is appropriate; and
    (c) Be received in writing by the BLM in a timely manner, before 
the deadline to meet a particular requirement has passed.

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

0
62. Amend Sec.  2885.11 by revising paragraphs (a) introductory text 
and (b)(7) to read as follows:

[[Page 92228]]

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

    (a) Duration. All grants, except those issued for a term of 3 years 
or less, will expire on December 31 of the final year of the grant. The 
term of a grant may not exceed 30 years, with the initial partial year 
of the grant considered to be the first year of the term. The term of a 
TUP may not exceed 3 years. The BLM will consider the following factors 
in establishing a reasonable term:
* * * * *
    (b) * * *
    (7) The BLM may require that you obtain, or certify that you have 
obtained, a performance and reclamation 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. We 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. All other provisions inSec.  2805.12(b) of this chapter regarding 
bond requirements for grants and leases issued under FLPMA also apply 
to grants or TUPs for oil and gas pipelines issued under this part;
* * * * *

0
63. Amend Sec.  2885.15 by revising paragraph (b) to read as follows:


Sec.  2885.15  How will BLM charge me rent?

* * * * *
    (b) There are no reductions or waivers of rent for grants or TUPs, 
except as provided under Sec.  2885.20(b).
* * * * *

0
64. Amend Sec.  2885.16 by revising paragraph (a) to read as follows:


Sec.  2885.16  When do I pay rent?

    (a) You must pay rent for the initial rental period before we issue 
you a grant or TUP. We prorate the initial rental amount based on the 
number of full months left in the calendar year after the effective 
date of the grant or TUP. If your grant qualifies for annual payments, 
the initial rent consists of the remaining partial year plus the next 
full year. If your grant or TUP allows for multi-year payments, your 
initial rent payment may be for the full term of the grant or TUP. See 
Sec.  2885.21 for additional information on payment of rent.
* * * * *

0
65. Amend Sec.  2885.17 by revising the section heading, redesignating 
paragraph (e) as paragraph (f), and adding new paragraph (e) to read as 
follows:


Sec.  2885.17  What happens if I do not pay rents and fees or if I pay 
the rents or fees late?

* * * * *
    (e) We will retroactively bill for uncollected or under-collected 
rent, including late payment and administrative fees, upon discovery 
if:
    (1) A clerical error is identified;
    (2) An adjustment to rental schedules is not applied; or
    (3) An omission or error in complying with the terms and conditions 
of the authorized right-of-way is identified.
* * * * *

0
66. In Sec.  2885.19, revise paragraph (b) to read as follows:


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

* * * * *
    (b) You may obtain a copy of the current Per Acre Rent Schedule 
from any BLM State, district, or field office or by writing: U.S. 
Department of the Interior, Bureau of Land Management, 20 M Street SE., 
Room 2134LM, Washington, DC 20003. The BLM also posts the current rent 
schedule at http://www.blm.gov.

0
67. In Sec.  2885.20, revise paragraph (b) to read as follows:


Sec.  2885.20  How will the BLM calculate my rent for linear rights-of-
way the Per Acre Rent Schedule covers?

* * * * *
    (b) Phase-in provisions. If, as the result of any revisions made to 
the Per Acre Rent Schedule under Sec.  2885.19(a)(2), the payment of 
your new annual rental amount would cause you undue hardship, you may 
qualify for a 2-year phase-in period if you are a small business entity 
as that term is defined in Small Business Administration regulations 
and if it is in the public interest. We will require you to submit 
information to support your claim. If approved by the BLM State 
Director, payment of the amount in excess of the previous year's rent 
may be phased-in by equal increments over a 2-year period. In addition, 
the BLM will adjust the total calculated rent for year 2 of the phase-
in period by the annual index provided by Sec.  2885.19(a)(1).
* * * * *

0
68. Revise Sec.  2885.24 to read as follows:


Sec.  2885.24  If I hold a grant or TUP, what monitoring fees must I 
pay?

    (a) Monitoring fees. Subject to Sec.  2886.11, you must pay a fee 
to the BLM for any costs the Federal Government incurs in inspecting 
and monitoring the construction, operation, maintenance, and 
termination of the pipeline and protection and rehabilitation of the 
affected public lands your grant or TUP covers. We update the 
monitoring 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. We will round these changes 
to the nearest dollar. We will update Category 5 monitoring fees as 
specified in the Master Agreement. We categorize the monitoring fees 
based on the estimated number of work hours necessary to monitor your 
grant or TUP. Monitoring fees for Categories 1 through 4 are one-time 
fees and are not refundable. These monitoring categories and the 
estimated range of Federal work hours for each category are:

                          Monitoring Categories
------------------------------------------------------------------------
        Monitoring category              Federal work hours involved
------------------------------------------------------------------------
(1) Inspecting and monitoring of    Estimated Federal work hours are >1
 new grants and TUPs, assignments,   <=8.
 renewals, and amendments to
 existing grants and TUPs.
(2) Inspecting and monitoring of    Estimated Federal work hours are >8
 new grants and TUPs, assignments,   <=24.
 renewals, and amendments to
 existing grants and TUPs.
(3) Inspecting and monitoring of    Estimated Federal work hours are >24
 new grants and TUPs, assignments,   <=36.
 renewals, and amendments to
 existing grants and TUPs.

[[Page 92229]]

 
(4) Inspecting and monitoring of    Estimated Federal work hours are >36
 new grants and TUPs, assignments,   <=50.
 renewals, and amendments to
 existing grants and TUPS.
(5) Master Agreements.............  Varies.
(6) Inspecting and monitoring of    Estimated Federal work hours >50.
 new grants and TUPs, assignments,
 renewals, and amendments to
 existing grants and TUPs.
------------------------------------------------------------------------

    (b) The current monitoring cost schedule is available from any BLM 
State, district, or field office or by writing: U.S. Department of the 
Interior, Bureau of Land Management, 20 M Street SE., Room 2134LM, 
Washington, DC 20003. The BLM also posts the current schedule at http://www.blm.gov.

0
69. Amend Sec.  2886.12 by:
0
a. Revising paragraph (b);
0
b. Redesignating paragraph (d) as paragraph (g); and
0
c. Adding new paragraphs (d), (e), and (f).
    The revisions and additions read as follows:


Sec.  2886.12  When must I contact BLM during operations?

* * * * *
    (b) When your use requires a substantial deviation from the grant 
or TUP. You must seek an amendment to your grant or TUP under Sec.  
2887.10 and obtain our approval before you begin any activity that is a 
substantial deviation;
* * * * *
    (d) Whenever site-specific circumstances or conditions arise that 
result in the need for changes to an approved right-of-way grant or 
TUP, POD, site plan, mitigation measures, or construction, operation, 
or termination procedures that are not substantial deviations in 
location or use authorized by a right-of-way grant or TUP. Changes for 
authorized actions, project materials, or adopted mitigation measures 
within the existing, approved right-of-way or TUP area must be 
submitted to the BLM for review and approval;
    (e) To identify and correct discrepancies or inconsistencies;
    (f) 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 the 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; 
and
* * * * *

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

0
70. Revise Sec.  2887.11 to read as follows:


Sec.  2887.11  May I assign or make other changes to my grant or TUP?

    (a) With the BLM's approval, you may assign, in whole or in part, 
any right or interest in a grant or TUP. Assignment actions that may 
require BLM approval include, but are not limited to, the following:
    (1) The transfer by the holder (assignor) of any right or interest 
in the grant or TUP to a third party (assignee); and
    (2) Changes in ownership or other related change in control 
transactions involving the BLM right-of-way grant holder or TUP holder 
and another business entity (assignee), including corporate mergers or 
acquisitions, but not transactions within the same corporate family.
    (b) The BLM may require a grant or lease holder to file new or 
revised information in some circumstances that do not constitute an 
assignment (see subpart 2883 and Sec. Sec.  2884.11(c) and 2886.12). 
Circumstances that would not constitute an assignment but may 
necessitate this filing include, but are not limited to:
    (1) Transactions within the same corporate family;
    (2) Changes in the holder's name only (see paragraph (h) of this 
section); and
    (3) Changes in the holder's articles of incorporation.
    (c) In order to assign a grant or TUP, the proposed assignee, 
subject to Sec.  2886.11, must file an application and follow the same 
procedures and standards as for a new grant or TUP, including paying 
processing fees (see Sec.  2884.12).
    (d) 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.
    (e) Your assignment is not recognized until the BLM approves it in 
writing. We will approve the assignment if doing so is in the public 
interest. The 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 we approve the assignment, the benefits 
and liabilities of the grant or TUP apply to the new grant or TUP 
holder.
    (f) The processing time and conditions described at Sec.  2884.21 
apply to assignment applications.
    (g) Only interests in issued right-of-way grants and TUPs are 
assignable. Pending right-of-way and TUP applications do not create any 
property rights or other interest and may not be assigned from one 
entity to another, except that an entity with a pending application may 
continue to pursue that application even if that entity becomes a 
wholly owned subsidiary of a new third party.
    (h) Change in name only of holder. Name-only changes are made by 
individuals, partnerships, corporations, and other right-of-way and TUP 
holders for a variety of business or legal reasons. To complete a 
change in name only, (i.e., when the name change in question is not the 
result of an underlying change in control of the right-of-way grant or 
TUP), the following requirements must be met:
    (1) The holder must file an application requesting a name change 
and follow the same procedures as for a new grant or TUP, including 
paying processing fees (see subpart 2884 of this part). The name change 
request must include:
    (i) If the name change is for an individual, a copy of the court 
order or other legal document effectuating the name change; or
    (ii) If the name change is for a corporation, a copy of the 
corporate resolution(s) proposing and approving the name change, a copy 
of the filing/acceptance of the change in name by the State or 
territory in which it is incorporated, and a copy of the appropriate 
resolution(s), order(s), or

[[Page 92230]]

other documentation showing the name change.
    (2) In connection with processing of a name change only, the BLM 
retains the authority under Sec.  2885.13(e) to modify the grant or 
TUP, or add bonding and other requirements, including additional terms 
and conditions, to the grant or TUP.
    (3) Your name change is not recognized until the BLM approves it in 
writing.

0
71. In Sec.  2887.12, add paragraphs (d) and (e) to read as follows:


Sec.  2887.12  How do I renew my grant?

* * * * *
    (d) If you make a timely and sufficient application for a renewal 
of your existing grant or for a new grant in accordance with this 
section, the existing grant does not expire until we have issued a 
decision to approve or deny the application.
    (e) If we deny your application, you may appeal the decision under 
Sec.  2881.10.

    Dated: November 10, 2016.
Amanda C. Leiter,
Acting Assistant Secretary for Land and Minerals Management, Department 
of the Interior.
[FR Doc. 2016-27551 Filed 12-16-16; 8:45 am]
 BILLING CODE 4310-84-P