BLM proposes changing Right-of-Way rental fees
To better reflect Fair Market Value
by Bureau of Land Management
December 11, 2007
The Bureau of Land Management today proposed revising the rental fees it charges companies or individuals for rights-of-way so that these fees more adequately reflect changes in land values over the past two decades. The BLM, which published its proposed regulatory revision in today’s Federal Register, is undertaking this effort in accordance with Section 367 of the Energy Policy Act of 2005, which directs the Department of the Interior to revise the existing rental fee schedule for linear rights-of-way to reflect current land values. A 60-day public comment period on the regulatory proposal starts today.
The rent schedule covers most linear rights-of-way granted under the Mineral Leasing Act and the Federal Land Policy and Management Act. Both laws require the holder of a right-of-way to pay fair-market value to occupy, use, or traverse public lands for such facilities as power lines, fiber-optic lines, pipelines, roads, and ditches. The proposed revised rental fee schedule would also be adopted by the U.S. Forest Service for uses on National Forest lands, consistent with existing practices and as required by the Energy Policy Act.
Since 1987, when rental fees for linear rights-of-way were last updated, there have been substantial changes in public land values. The result is that the Federal government may be receiving inadequate compensation for the use of these lands. The proposed regulations would update the fee schedule based on current land values and would adjust these values, whether up or down, every five years.
“The American taxpayer deserves to be compensated fairly for the use of public lands for commercial enterprises,” said BLM Director Jim Caswell. “This proposed new rule would ensure that the Federal government receives an adequate return for right-of-way rentals now and into the future.”
The proposed set of regulations also contains provisions not directly related to the rent schedule. These cover such topics as flexible rental payment periods and reimbursements of processing and monitoring fees for leases and permits.
The BLM published an Advance Notice of Proposed Rulemaking describing these proposed changes in the Federal Register on April 27, 2006. The BLM received 10 responses from the public to the Advance Notice, which were generally supportive of the rule proposal.
There are currently more than 96,000 right-of-way grants on BLM lands, of which about half are subject to rent, generating more than $20 million annually in revenue. Revenue from right-of-way rentals goes to the Treasury, along with a share to the states, as required by the Mineral Leasing Act and the Federal Land Policy and Management Act.
The BLM manages more land – 258 million surface acres – than any other Federal agency. Most of this public land is located in 12 Western states, including Alaska. The Bureau, with a budget of about $1.8 billion, also administers 700 million acres of sub-surface mineral estate throughout the nation. The BLM’s multiple-use mission is to sustain the health and productivity of the public lands for the use and enjoyment of present and future generations. The Bureau accomplishes this by managing such activities as outdoor recreation, livestock grazing, mineral development, and energy production, and by conserving natural, historical, and cultural resources on the public lands.
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