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November 4, 2005
In Reply Refer To:
2800 (WO 350) P
Instruction Memorandum No. 2006-035
Expires:  09/30/2007
To:                All Field Officials
From:            Assistant Director, Minerals, Realty and Resource Protection
Subject:        Reduction or Waiver of Rent For A Right-Of-Way (ROW) Grant Associated With A Valid Federal Authorization For Which The United States is Already Receiving Compensation
Program Area: Right-of-Way Management
Issue:  This Instruction Memorandum (IM) provides BLM guidance on implementing Section 2806.15(b)(3) of the revised ROW regulations, published in the Federal Register on April 22, 2005. 
Background: Previous regulations at 43 CFR §2803.1-2(b)(2)(iii) allowed rent for (ROW) to be reduced or waived in certain instances where an applicant held an outstanding permit, lease, license, or contract for which the United States was already receiving compensation (except under an oil and gas lease where the lessee is required to secure a ROW or permit pursuant to 43 CFR part 2880). Thus, rent for a Mineral Leasing Act (MLA) ROW for a pipeline could not be reduced or waived, but rent for a ROW grant issued under the Federal Land Policy & Management Act (FLPMA) for roads, waste water pipelines, power lines, and other facilities serving an oil and gas lease could be reduced or waived under this provision. The new rule at 43 CFR §2806.15(b)(3) states that BLM may waive or reduce rent if a holder of a ROW grant shows BLM that they hold a valid Federal authorization in connection with their grant and the United States is already receiving compensation for this authorization. However, the new rule specifically states that oil and gas leases issued pursuant to 43 CFR parts 3100 do not qualify as valid Federal authorizations for purposes of ROW rent reductions or waivers.
Policy/Action: A “valid Federal authorization” for the purpose of 43 CFR §2806.15(b)(3) is defined as a document issued by the BLM pursuant to any authority now in effect other than an oil and gas lease issued under 43 CFR part 3100; a patent; or a ROW grant authorizing the use, occupancy, and/or development of public land. The phrase “already receiving compensation” means receiving the full payment required pursuant to any specific statutory and regulatory authority or a payment less than fair market value, not including free use, where such payment has been determined equitable and in the public interest by BLM.
To the extent possible, any needs for access to and/or for the development of public lands pursuant to a valid Federal authorization should be considered and included as part of that (valid Federal) authorization. BLM may reduce or waive rent for ROW grants which are issued for the use and/or development of public land, including ingress and egress, where specific ROW needs were not provided for as a part of the “valid Federal authorization”. To qualify for a reduction or waiver of rent under the provisions of 43 CFR §2806.15(b)(3), the ROW applicant or holder must also be the holder of the “valid Federal authorization”. Waiver of rent does not authorize a waiver of cost recovery fees.
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 December 1, 2005, 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.
Field office managers with Oil and Gas related ROW’s are directed to identify the cases that will be subject to rent as a result of the rule change and provide the affected grantees with a courtesy notification letter. Washington Office (WO-350) will supply each state lands program lead with LR2000 data showing cases that have rent waived or reduced. The field offices will then need to determine if the individual grants meet the criteria mentioned above. Additional case file searching will be necessary to identify cases that pre-date LR2000 or may not appear when the data was collected.  The LR2000 information will be provided under separate correspondence.
Once each field office has identified the cases requiring notification, the attached letter will be used by each Field Office to notify the grantees that their grant is now subject to rent. The attached letter should have a local BLM contact added and printed on local letterhead and signed by the Field Manager.
Budget Impact: Rental receipts may increase slightly; however, there should be no change in cost recovery or other fees.
Manual/Handbook Sections Impacted: This IM and policy affects BLM Manual 2800 Rights-of-Way, and 2880 Oil and Natural Gas Pipelines.
Coordination/Contacts: This IM has been coordinated through the BLM State Office Lands Program coordinators, National Business Center and the Washington Office Budget Group.
Any questions concerning the content of this IM should be directed to the, Lands and Realty Group WO-350 and the attention of Rick Stamm at (202) 452-5185 or by Email at rick_stamm@blm.gov.
Signed by:                                                   
Authenticated by:
Thomas P. Lonnie                                       
Robert M. Williams
Assistant Director                                         
Policy and Records Group,WO-560
Minerals, Realty and Resource Protection
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Last updated: 10-21-2009