National Policy for Rights-of-Way Bonding

United States Department of the Interior

BUREAU OF LAND MANAGEMENT
Washington, D.C.  20240
https://www.blm.gov

November 15, 2018

In Reply Refer To:

2805/2885/2920 (350) P

EMS Transmission 11/15/2018

Instruction Memorandum No. 2019-013      

Expires:  09/30/2022                                                                           

To:                   All Field Officials (Line Officers)

From:               Assistant Director, Energy, Minerals and Realty Management

Subject:           National Policy for Rights-of-Way Bonding

Program Area:  Lands and Realty Management.

Purpose:  This Washington Office Instruction Memorandum (IM) conveys policy and direction for requiring bonding determinations, and bonding where appropriate, on Bureau of Land Management (BLM) rights-of-way (ROW) grants, and leases or permits (land use authorizations) for authorized activities.  This is an interim measure, as the BLM considers options for revising the governing regulations.

Administrative or Mission Related: Mission Related.

Policy/Action:  The Federal Land Policy and Management Act (FLPMA) (43 U.S.C. 1764(i)) and Section 28 of the Mineral Leasing Act (MLA) (30 U.S.C. 185(m)) provide the BLM with authority to require bonding for ROW grants or land use authorizations.  The BLM also put into effect regulations (43 CFR 2805.12(b), 2805.20, 2885.11(b)(7) and 2920.7(g)) that authorize bonding associated with grants and land use authorizations.

Effective upon issuance of this IM, a bond will be required for all new commercial or non-commercial uses, ROW grants, and land use authorizations on the public lands, which are not specifically exempted below, and are likely to incur reclamation or maintenance costs.  An example for bond determination documentation is provided as Attachment 1.  The process for bond amount determination, recordkeeping, and review is provided in Attachment 2.  A Reclamation Cost Estimate (RCE) template is provided in Attachment 3, and the requirements for acceptable bond instruments are in Attachment 4.

The following categories of land uses do not require an RCE or bond: 

1. Federal, State, and County official (See 43 CFR 2806.14 for definition) governmental uses;
2. Typical residential uses (e.g., short ROWs for utility services or terminal access, roads to individual residences, outbuildings, water wells, etc.);
3. Federally administered or funded  public utilities (e.g., Western Area Power Administration (WAPA), Bonneville Power Administration (BPA), and Rural Utility Service (RUS) funded projects);
4. Oil and gas leases, and solar/wind and geothermal energy leases, which are covered by other policies; and,
5. Uses which require low to no reclamation, where the total cost of reclamation is anticipated to be below the construction micro-purchase limit of $2,000 (e.g., no or low-impact film permits, apiary sites, a power line crossing a property corner, temporary uses with no or minor surface disturbance).

Where a bond is not required, the Authorized Officer (AO) must provide and record the written rationale in the official case file.  Where a bond is required, the AO will determine the bond amount using the process established in Attachment 2 and document the written determination.  The written determination should be recorded in the official case file and a stipulation included in the grant or land use authorization.

The AO may offset the amount calculated in the RCE in limited circumstances and subject to the next higher line officer’s concurrence.  A reduction must only be allowed in cases where full reclamation is not anticipated or where reclamation is not determined to be necessary.  The rationale for any bond offset and the revised bond amount must be explained in writing by the AO and placed in the official case file.  Bond offset examples are provided below:

• A shared site where the holder may only be responsible for a proportional share of the total bond;
• A road or other industrial type linear or surface area where similar type uses are anticipated to continue after the grant (Note:  It would still be appropriate for the holder to be bonded for maintenance costs through the life of the grant.); or,
• Other situations or circumstances where partial reclamation is determined, by the AO, to be beneficial and in the best interests of the United States.

Where a proponent has multiple authorizations within a state, the proponent may elect to consolidate more than one authorization covered by this IM (i.e., several ROW grants and land use authorizations) into a single bond.  Where multiple BLM State Offices are involved, consolidation will be managed by the BLM State Office with the bulk of the bond value.  A consolidated bond must specifically identify each covered authorization by BLM case file serial number and the bond amount determined by the AO.  Recognizing the benefits of bond consolidation to both the proponent and the BLM, the AO may apply a discount of up to 15% for bond consolidation where the holder is in good financial standing with the BLM, has not had a bond default with the BLM or bankruptcy within the previous seven years, and is in compliance with the grant’s other terms and conditions.  The AO must document the rationale and the percentage discounted in the case records.  A bond for uses not covered by this IM (i.e., oil and gas leases, and solar, wind, or geothermal leases) may not be consolidated with ROW grant or land use authorization bonding.

If a holder disputes the bond amount, then the holder will have 15 days from receipt of the decision to file a protest with the AO.  The AO must provide the holder with an explanation of the holder’s opportunity to protest the bond determination and let the holder know that the AO will issue a final decision on a timely-received protest.  In the absence of a timely-received protest, the decision will become final without further notice.  The final decision would be appealable to the Interior Board of Land Appeals under 43 C.F.R. Part 4.

Timeframe:  Effective immediately for new applications, renewals, assignments, or amendments.

Budget Impact:  The application of this policy will have minimal budget impact, as it applies to new applications, and cost recovery regulations allow the BLM to collect cost recovery fees to cover the cost of processing an action, including those costs related to bonding.  The Washington Office will coordinate with State Office leads throughout the first year of implementation to identify budget and resource impacts and make necessary adjustments.

Background:  Historically, the BLM has not had a national policy for bonding ROW grants and land use authorizations.  This has resulted in inconsistent bonding requirements at the field level. 

Manual/Handbook Sections Affected:  This IM transmits interim policy that revises interim manual sections MS-2805 at Section 12 and MS-2885 at Section 11.

Coordination:  This IM was developed in coordination with the BLM’s State Land Leads, the National Renewable Energy Coordination Office Chief, the National Operations Center, and the Office of the Solicitor.

Contact:  If you have any questions concerning the content of this IM, please contact Michael Nedd at 202-208-4201, or your staff may contact Robert Jolley, Division Chief for Lands, Realty, and Cadastral Survey at 202-912-7350 or rbjolley@blm.gov.

Signed By:                                                                  Authenticated By:

Michael D. Nedd                                                        Ambyr Fowler

Assistant Director                                                       Division of Business Resources (WO-850)

Energy, Minerals, and Realty Management

Attachments

1 - Sample Bond Determination Documentation (1 p)

2 - Bond Amount Determination, Recordkeeping, and Review (5 pp)

3 - Reclamation Cost Estimate Template (17 pp)

4 - Bond Instruments (3 pp)

5 - Sample Personal Bond Form 2800-17 (1 p)

6 - Sample Surety Bond Form 2800-16 (1 p)

7 - EXAMPLE Template (Wyoming) - ROW Bond Processing Steps (21 pp)