U.S. DEPARTMENT OF THE INTERIORBUREAU OF LAND MANAGEMENT
EMS TRANSMISSION 10/25/2005
Information Bulletin No. 2006-006
To: All Field Officials, except Alaska
From: Group Manager, Lands and Realty
Subject: Calendar Year (CY) 2006 Linear Right-of-Way (ROW) Rental Schedule
Program Area: Rights-of-Way
Attached for your use is the calendar year 2006 linear (ROW) rental schedule (Attachment 1).
The schedule provides linear ROW rental rates by State and county and reflects the annual adjustment based upon the change in the Gross Domestic Product Implicit Price Deflator (IPD) Index, up 3.2 percent from the second quarter of 2004 to the second quarter of 2005. The revised ROW Regulations at 43 CFR 2806.21 state that the schedule will be adjusted annually according to this index.
Also attached are rental determination worksheets reflecting the adjustment and the IPD Index percent change (Attachments 2 and 3). Please note Footnote 1 on the worksheets regarding use of the schedule for CY2007 and beyond. In addition, all rental calculations are rounded to the nearest cent. Round acreage figures to hundredths of an acre, i.e., 12.34. Locally produced versions of the worksheets (electronic or otherwise) should be revised to reflect the new rates. The use of these worksheets is optional.
BLM’s new ROW regulations, which became effective June 21, 2005, did not alter the linear rent schedule, but did revise or add several provisions relative to the determination, billing, and collection of rent for linear ROW authorizations. General rent provisions are contained in Sections 2806.10 through 2806.16 for FLPMA authorizations and Sections 2885.15 through 2885.18 for MLA authorizations. Specific rent provisions are located in Sections 2806.20 through 2806.23 for FLPMA linear grants and in Sections 2885.19 through 2885.22 for MLA linear grants. Please be aware of the following provisions contained in the new regulations as you process new ROW applications and administer existing and new ROW grants, including the billing and collection of rent:
· Term of authorizations – the term for a MLA ROW grant and TUP must not exceed thirty (30) years and three (3) years, respectively. The term of a FLPMA ROW grant should be based on the factors contained in Section 2805.11(b)(1), but in general should not exceed 30 years. However, major ROW systems, such as a 500 kV power transmission line, may be authorized for a term of 50 years. As a matter of policy, the term of a FLPMA authorization should not exceed 50 years, and no grant should be issued in perpetuity unless the land subject to the ROW is being transferred out of BLM ownership, or a perpetual term is necessary to conform to a legal mandate or to mitigate a financial hardship, i.e., the holder can not obtain mortgage financing without legal and perpetual access to the holder’s property. All authorizations greater than one year (except grants issued in perpetuity) must end on December 31 of the final year of the grant (2805.11(b)(2)). The initial year is considered to be year one of the grant term. For new authorizations, the initial month is always excluded from rent, while the ending month is always included (2806.11(a)). For this reason, the term of a TUP or short term ROW grant should never be less than 32 days. The holder must pay for the initial rental period before BLM issues the grant. After the initial bill is paid, subsequent billings, if any, would always be based on a 12 month year times the number of years in the rent period (either the remaining term of the grant or ten years, except for individuals (see the rent payment periods discussed below) and due on January 1 of the first year of each succeeding rental period for the term of the grant (2806.12(c)).
· Billing Periods for existing authorizations – ROW grants issued prior to June 21, 2005 may have a term that ends on the anniversary date instead of ending on December 31 of the final year of the grant. While it is not necessary to change the termination date to December 31, it is mandatory that the billing period be based on a full calendar year (January 1 – December 31) period, times the number of years in the rent payment term. Rent for the final year would be prorated based on 12 months. The final month is always included as a full month, regardless of the actual day of the month that the grant actually terminates (for example, if a grant terminates on June 10, BLM would bill for a six month period). The partial year in which a grant terminates (for grants issued prior to June 21, 2005 and which terminate on any date other than December 31) should be included as part of the final billing period.
· Late Payment Fee (2806.13) - a late fee of $25.00 or 10% of the rent owed, whichever is greater, not to exceed $500.00 per authorization, will automatically be assessed by CBS for rent payments not received within 15 days of the due date. Additional information on the payment of late fees can be found by clicking on the following BLM Internal web site: http://web.blm.gov/internal/wo-300/wo-350/wo350cr/admin.htm
· Entities exempt from rent – Federal, state, and local government agencies (including their agent or instrumentality, are exempt from the payment of rent, unless they are (1) using the facility, system, space, or any part of the ROW area for commercial purposes; or (2) a municipal utility or cooperative whose principal source of revenue is customer charges (2806.14(b)).
· BLM also exempts from rent any other entity that has been granted an exemption under a statute providing for such.
· Facilities exempt from rent (2806.14(d)) – Electric or telephone facilities are exempt from rent if they are financed in whole or in part, or eligible for financing, under the Rural Electrification Act of 1936 (REA), as amended, or are extensions of such facilities. In this case it is not the entity, but the facility, which must qualify before BLM exempts the facility from rent. BLM must have appropriate documentation, from the Rural Utility Service (RUS), and provided to the BLM by the applicant or holder, that clearly shows that the facility is being financed under the REA, or is clearly eligible for financing under the REA. Two standards must be obtained: (1) the facility must be either an electric or telephone facility as defined by the REA, and (2) the facility must serve a rural area of less than 5,000 people. For example, a 69kV electric distribution line serving a rural area of less than 5,000 people likely would qualify for financing under the REA and BLM should exempt such a facility from rent if the applicant/holder provides the necessary documentation from the RUS that supports the exemption. However, a 500 kV transmission line that takes power from a plant in Wyoming and transports it for use by cities or areas with populations in excess of 5,000 people would not be eligible for the rent exemption, even though a majority of the facility is located in a rural area. BLM is working with the RUS to develop the appropriate contacts, procedures, forms and/or other tools that could be provided to the applicant/holder to facilitate the documentation process for this rent exemption.
· Waivers from rent (2806.15) – BLM may waive or reduce rent payments in appropriate circumstances. Any waiver or reduction must be supported and documented in the case file.
o Waiver for non-profit organizations (2806.15(b)(1)) – rent for non-profit organizations should not be waived or reduced solely on the basis of its non-profit status. To qualify for a waiver or reduction, a non-profit organization must show that its facility or project will provide a benefit or special service to the general public or to a program of the Secretary of the Interior. Please refer to the discussion in the preamble to the ROW regulations (70 FR 21008) for further information regarding potential rent reductions to non-profit organizations.
o Please note in the preamble discussions at 70 FR 21008 that Section 2806.15(b)(2) is not appropriate justification by either BLM or a holder to avoid the payment of rent in exchange for BLM’s free use of an authorized facility. Prior to 1995, it was not uncommon for BLM to require that an applicant reserve a percent of the space in a ROW facility for use by the agency as a condition of the authorization. This practice is no longer acceptable.
o Please note that the waiver provision at 2806.15(b)(3) does not apply to oil and gas leases issued under part 3100. ROW authorizations issued under Title V of FLPMA for roads, waste water pipelines, power lines, and other facilities serving an oil and gas lease whose rent had been previously reduced or waived under BLM’s old regulations (43 CFR §2803.1-2(b)(2)(iii)), no longer qualify for such waivers/reductions under 43 CFR §2806.15(b)(3). As such, holders of these authorizations are to be notified no later than January 2006 of this change in policy and be informed that BLM will begin assessing rent beginning January 1, 2007. Rent will not be assessed for the period from the effective date of the regulations (June 21, 2005) to December 31, 2006. Field Offices should not issue actual rental decisions to these holders until the linear rent schedule or other rental information for calendar year 2007 is available. Additional guidance and direction, including a sample notification letter, will be issued to all Field Offices in the immediate future.
o A waiver or reduction of rent may be approved by the State Director for reasons of undue hardship and it is in the public interest to do so. This waiver may consist of an alternative rent payment plan or an actual reduction or waiver of the rent due. Such waivers or reductions must be supported by appropriate documentation and should be for only the initial rent payment period. The holder should provide a timeframe for resuming full rental payments.
· Rent Payment Options (2806.23) - The new regulations provide that nonrefundable rent shall be paid for a minimum period of 10 years, not to exceed the remaining term of the ROW. The regulations also allow all Holders an option to pay nonrefundable rent for the entire remaining term of the ROW. Individuals whose annual rent exceeds $100.00 may continue to pay nonrefundable rent annually or may opt to pay rent for a number of years, including the remaining term. An “Individual” is considered to be either a single person or a husband and wife.
o Please note that the BLM is providing a transition period (6/21/05 to 12/31/08) for all holders of linear ROW grants issued prior to June 21, 2005 to plan and budget for these new rent payment options. During this transition period the BLM will continue to bill and accept payments in accordance with the previously established annual or 5 year billing periods. In late June 2005, BLM WO-350 mailed a notification letter to all rent paying ROW grant holders outlining the rent payment options and the transition period. The 10 year billing period will be instituted for all rent due on and after January 1, 2009.
o All ROW grants (except those grants issued to Individuals with an annual rent in excess of $100.00) issued on or after June 21, 2005, will be billed either for 10 year periods (not to exceed the term of the ROW) or, at the Holder’s option, for the entire term of the ROW. These new billing periods will also apply to assignment, amendment and renewal actions completed on or after June 21, 2005.
The Lands and Realty Authorizations Module (LRAM) has entirely replaced the Automated Lease Management System (ALMS - see WO IM No. 2004-240) as of September 30, 2005 for all Field Offices except those in the Eastern States and Alaska. Once holders pay their initial rentals that are then receipted in the Collections and Billing System (CBS), the LRAM must be utilized to generate any subsequent bills for all rights-of-way and other lands and realty authorization rentals. Currently, LRAM processes only accounts receivable bills and cannot be used for courtesy statements, billing for actual road use and maintenance, concessionaire and other types of fees for all case types. The capability for these excepted functions is forecast to be in an LRAM release during CY2006. The LRAM interfaces with both LR2000 Case Recordation and the CBS, which is the system where the rental bills processed through LRAM must be actually printed. It is essential that LR2000 be kept up-to-date with current Holder information. CBS should not be used for issuing adhoc rental bills for lands and realty authorizations except for transactions from Eastern States and Alaska FOs.
If you have any questions, contact Rick Stamm at (202) 452-5185.
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