QUESTIONS AND ANSWERS

1. What is a BLM right-of-way?

A BLM right-of-way is an authorization to use a specific piece of public land for a specific purpose, such as electrical power transmission and distribution systems, highways, systems for transmitting and receiving electronic signals, and pipelines. Types of right-of-way users include federal agencies and state and local governments, the mining industry, the telecommunications industry, electrical utilities, and oil and gas transmission companies.

2. What do these regulations propose to do?

The proposed regulations would:

Revise and update policies and procedures for recovering the costs of processing and monitoring right-of-way grants across public lands;

Adjust the fees charged for processing applications for right-of-way grants and for monitoring existing grants to better approximate BLM's processing and monitoring costs;

Add a processing cost for grant renewals and increase the costs of processing assignments and transfers of grants;

Eliminate automatic exemptions and reductions from cost recovery for federal agencies;

Establish a regulatory processing time (30 working days) for non-complex applications and require BLM to notify applicants when processing times for these applications exceed 60 working days; and

Change the organization and presentation of the regulation to simplify understandability and better reflect the sequence in which BLM processes applications and issues and administers grants.

3. Why are these changes needed?

These changes are needed to:

Update the regulations to reflect changes in laws and policies affecting rights-of-way since July 1987, including policies about customer service and plain language;

Allow BLM to better approximate the costs of processing applications for grants and monitoring issued grants;

Clarify confusions about how BLM calculates rents for communication site grants; and

Organize the regulations to increase understanding and readability.

4. Whom do these regulations affect?

The regulations affect:

-- Other federal agencies,

-- State and local governments,

-- Individuals, and

-- Groups who have or are interested in getting a right-of-way across lands that BLM administers.

Customer groups include state and local governments (for roads, highways, and electrical power generation), the mining industry (for access roads and oil and gas pipelines), the telecommunications industry (for radio and television stations, microwave relay stations, fiber optic cables, and telephone lines), private utilities (for electrical power generation, transmission lines and reservoirs), private citizens (for access roads), and railroad companies. Interested groups include the environmental community, private citizens, and various public interest groups.

5. Where are existing rights-of-way located?

There were, as of September 30, 1998, 87,511 right-of-way grants, as shown below:

6. How many rights-of-way does BLM authorize each year?

During Fiscal Years 1997 and 1998 BLM processed 9,302 applications and issued 5,743 grants, as follows:

7. How will these regulations affect the cost of applying for a right-of-way?

These regulations will increase the cost of applying for a right-of-way. The exact income depends on the category of the grant applied for (see Question # 12) and the law under which BLM issues the grant, either the Federal Land Policy and Management Act (FLPMA) or the Mineral Leasing Act (MLA) (see Question # 8).

8. What authority does BLM have to charge me for processing my right-of-way application? What authority does BLM have to charge me for the cost of monitoring and inspecting my grant?

BLM has authority under two different statutes. Section 504(g) of the Federal Land Policy and Management Act of 1976 (FLPMA) authorizes BLM to recover the administrative costs of processing and monitoring the right-of-way grants we issue. Section 28(f) of the Mineral Leasing Act (MLA) provides that applicants for pipeline rights-of-way reimburse the federal government for administrative costs of processing their applications. The same section provides for reimbursement of monitoring costs.

9. What are BLM's current revenues from processing applications and monitoring grants?

In Fiscal Years 1996 through 1998, BLM recovered approximately $2.6 million for both FLPMA and MLA processing and monitoring activities per the cost recovery schedule, as follows:

During FY's 1996 through 1998 BLM collected an additional $13.9 for processing and monitoring applications for the full actual and reasonable costs categories. Thus, the total for the three FY's is $16.5 million.

10. Why increase the costs of processing applications?

There are several reasons:

(1) The costs to administer the program have risen, but BLM does not have a regulatory mechanism for raising processing costs, short of revising the regulations,

(2) BLM underestimated both processing and monitoring costs when we set the cost schedules in July 1987, and

(3) Studies by BLM in 1986 and 1995 and an audit conducted by the Inspector General (IG) in 1995 indicated that BLM is not recovering the full costs of processing right-of-way applications.

BLM concluded in its 1986 study that there was no way, short of revising the regulations, to adjust processing costs to account for inflation and other factors. The IG sampled 75 cases and estimated that BLM was losing $640,000 each year through inadequate cost recovery. The IG recommended that BLM revise its regulations to recover all processing costs.

11. Will BLM make a profit?

No. By law BLM can only recover reasonable or actual processing costs. Reasonable costs, which apply to grants issued under FLPMA, are less than the actual costs because the actual costs are adjusted for management overhead and other factors. Actual costs, which apply to grants issued under the MLA, represent the real processing costs but do not include a profit.

12. Who is exempt from paying processing and monitoring fees?

You are exempt from paying processing and monitoring fees if you:

- Are a state or local government or agency of such a government and use the right-of-way for a purpose benefitting the general public, or

- Participate in a cost-share road or reciprocal right-of-way agreement.

13. How are processing and monitoring fees determined?

The BLM determines processing and monitoring fees by category. Currently there are five categories for grants issued under FLPMA and six for grants issued under the MLA. Monitoring categories are the same as application processing categories. We propose to reduce the FLPMA categories to four and the MLA categories to four because Category IV for FLPMA grants and Categories V and VI for MLA grants are seldom used. The categories are based on the number of hours and other costs, including field trips to the right-of-way site, that are required to process applications. The proposed regulations define the cost categories as follows:

Category I - The data necessary to comply with all relevant statutes is available, no land use plan or field examination is needed, and the estimated processing time is no more than 24 work hours.

Category II - The data necessary to comply with all relevant statutes is available, no and use plan is needed, one field examination is required, and the estimated processing time is no more than 36 work hours.

Category III - The data necessary to comply with all relevant statutes is available, no land use plan is needed, two field examinations are required, and the estimated processing time is no more than 50 work hours.

Category IV - Original data must be collected, a plan amendment may or may not be needed, two or more field examinations are required, and the estimated processing time is more than 80 work hours.

Master agreement - Instead of one of the categories listed above, this is an agreement between BLM and the applicant to fully reimburse BLM for reasonable processing costs.

BLM collectively refers to Categories I, II, and III as "minor categories."

14. How much are the proposed increases?

The increases vary by cost recovery category. For those applications processed under FLPMA, the proposed increases are:

These fees will change each year based on changes in the Implicit Price Deflator, Gross Domestic Product.

For oil and gas pipelines (MLA rights-of-way), the proposed increases are:

These fees will change each year based on changes in the Implicit Price Deflator, Gross Domestic Product.

15. Will fees go up for monitoring as well?

Yes. In its 1986 study, BLM concluded that monitoring costs were also insufficient. For grants issued under FLPMA, the proposed increases are:

These fees will change each year based on changes in the Implicit Price Deflator, Gross Domestic Product.

For oil and gas pipeline rights-of-way, monitoring costs would increase as follows:

These fees will change each year, based on changes in the Implicit Price Deflator, Gross Domestic Product.

16. How much revenue will the proposed fee increases bring in?

The proposed increases are estimated at a maximum of $2.7 million per year.

17. How will BLM use the revenue?

BLM returns the money that you pay it for processing and monitoring your applications to the BLM field office that collected the money. The processing and monitoring fees can only be used to process or monitor right-of-way actions. We believe that this gives the field offices an incentive to expedite processing applications and to provide better customer service.

18. What is the difference between processing and monitoring?

"Processing" refers to those activities which are connected with deciding whether or not to issue a grant. These activities may include: preparing a land-use plan amendment, collecting or verifying data, preparing an environmental document (either an environmental assessment or an environmental impact statement), and issuing the grant, amendment or renewal or rejecting the application.

"Monitoring" refers to those activities which are connected with determining whether or not grantees are complying with the terms and conditions of their grants. These activities may include: field examinations to check on the progress of facility construction or maintenance or land reclamation, communicating with grantees either in person or by phone or letter, and issuing decisions or notices of non-compliance.

19. Are these one-time increases?

No. The regulations propose to peg changes in the processing and monitoring fees to changes in the economic indicator called the "Implicit Price Deflator, Gross Domestic Product." Fees will increase or decrease annually when this indicator causes changes in the fees of $1 or more. The BLM proposes to use this economic indicator rather than the Consumer Price Index (CPI) because the CPI does not reflect a sufficiently high labor intensiveness to be used to adjust processing and monitoring costs.

If you have a computer and Internet connection, you can find out about changes in the fee schedule by way of the BLM National Homepage on the World Wide Web at http://www. blm.gov, or, if not, by contacting any BLM field office.

20. Can the fees be reduced?

Yes. The current regulations establish criteria for fee reduction. The BLM does not propose to change the existing criteria. The criteria include: payment of the entire fee would result in undue financial hardship, the processing costs grossly exceed the costs of constructing the project, a federal agency or a federal project needs the lands on which your project is located. (See the proposed regulations at 43 CFR 2804.15 for the full list.)

21. Now that BLM is raising the fees, will it more efficiently process applications?

We intend to. Since December 1995, the right-of-way program has made a number of changes to improve efficiency. Customers with "minor" category applications can now fax them in, and pay by credit card or phone; and MLA customers can file applications for rights-of-way as part of their applications for permits to drill. The proposed regulations would set a processing time for "minor category" applications of 30 working days. If BLM could not process the application within 60 working days, we will send applicants a written explanation of the delay and an estimated completion time.

For "major category" applications (Category IV), BLM will continue to develop project-specific financial and management plans. BLM developed master agreements to speed processing of multiple applications in a restricted geographic area. As part of the negotiation process, BLM and the applicant will discuss ways to process applications most efficiently.

22. How does the proposed rule link processing categories and monitoring categories?

Current and proposed regulations set the fee for monitoring the grant from the application category under which BLM processes the grant application. Once BLM issues a grant, the situation may change. The presence of an endangered species or of an archaeological site may require numerous field observations by BLM or the grant holder, even though processing the application did not require more than one visit. As part of the proposed regulations, BLM is requesting comments on whether or not to establish a separate cost recovery schedule for monitoring costs and on what criteria the schedule should be based.

23. Why does the proposed rule decrease the number of cost categories?

Because several of the categories are seldom used. The BLM rarely uses Category IV for applications that it processes under FLPMA or Categories IV and V for oil and gas pipeline rights-of-way. In place of these categories, BLM proposes to establish a "master" application category for both types of applications and to specify what project agreements must include.

24. Why is BLM proposing to eliminate the automatic exemptions and reductions from cost recovery (but not rents) for federal agencies?

The reasons are primarily economic. The BLM considered eliminating the automatic exemptions and reductions for all applicants except those exempted by statute. A brief analysis indicated that the increased fees from no-longer-exempted applicants would not substantially offset processing and monitoring costs, primarily because of the significantly increased resources that BLM would have to devote to processing applications for cost reductions. Federal agencies are a special case, however. They usually enter into interagency agreements with BLM for work done on their applications. Negotiating these agreements may take many months. Assigning each federal project to a category will enable other federal agencies to determine their costs in advance and will also reduce the administrative paperwork involved in federal transactions.

25. Is BLM making any effort to reduce the impact of the fee increases?

No. Individuals and groups who want their applications processed must pay the fees, unless their projects qualify for fee reductions under the limited circumstances of reasonability or hardship. The proposed regulations at section 2804.15 list the criteria for determining whether entities should consider applying for fee reductions.

26. Does the proposed rule affect the rental rates?

The proposed rule does not affect rental rates. It does, however:

Make clear BLM's policies on communication site rents by:

- Adding or amending various definitions related to communication site rents,

- Clarifying procedures promulgated in November 1995 as to how BLM will apply the communication site rent schedule in various circumstances, and

- Adding a provision that explains how BLM will determine the "population served," and

Allow BLM to charge a fee to grant holders who pay their rents late.

27. What other changes are proposed?

Other changes proposed include:

Increasing the maximum liability amount for individual grants from $1 million to $5 million, and

Eliminating temporary use permits for rights-of-way issued under FLPMA because they follow the same procedures and take the same amount of time to process as regular right-of-way grants. These permits would be replaced by short-term right-of-way grants.

28. Are there any special areas in which BLM would like comments? What are they?

Your comments on all aspects of the proposed rule are welcome. The BLM would especially appreciate comments in the following areas:

Whether or not BLM should continue to issue temporary use permits for FLPMA rights-of-way;

Whether or not there should be separate category and decision processes for processing and monitoring costs. The time that it takes to process an application may not correspond to the time that it takes to monitor the ensuing grant;

Whether or not BLM should charge for grant assignments and renewals;

Whether or not Federal agencies should continue to be exempt from cost recovery charges; and

Any specific organizational changes that would speed the processing of right-of-way actions.

29. How do I comment on the proposed rule?

You may respond by letter or e-mail. If you respond by letter, send your comments to:

Bureau of Land Management
U.S. Department of the Interior
Administrative Record, Mail Stop 401 LS
1849 C St., N.W.
Washington, D.C. 20240

If you respond by e-mail, send your comments by means of the Internet to: WoComment@blm.gov.