​New Right-of-Way Rules For Indian Country Finalized by BIA

After considerable deliberation in response to comments, the Bureau of Indian Affairs (BIA) published its final rule on November 19, 2015, revising the process for securing right-of-way grants for utilities, pipelines, roads, and other linear projects across tribal lands. The BIA has substantially updated 25 CFR Part 169 for the first time since 1980. The new rules will go into effect on December 21, 2015.

The BIA explains that the changes “modernize the rights-of-way approval process while better supporting Tribal self-determination” and are “intended to streamline the procedures and conditions under which BIA will consider a request to approve (i.e., grant) a right-of-way over and across tribal lands . . . ” While the BIA must remain the grantor for rights-of-way on trust and restricted lands, tribal governments and residents will retain more control in certain respects, and linear project proponents can expect greater predictability and faster timelines.

The rulemaking is available here. Some of the most prominent components of the new rules include:

Surveys no longer require BIA approval, only the consent of the tribe or landowners (§ 169.101[b]). This is a major acceleration of the approval process under the rules, which previously required an application and BIA approval just to survey the potential right-of-way.

The BIA is under deadline to act on a right-of-way application within 60-days of receiving a complete application, with the option for a 30-day extension and a process for further escalation if these deadlines are not met (§ 169.123). The right-of-way will be granted if the application requirements are met, including tribal consent, unless there is “a compelling reason to withhold the grant.” (§ 169.124[a]) Still, there can be no situation in which a right-of-way application is “deemed approved” even if deadlines are not met, since the grant of an interest in real property in the form of a right-of-way cannot be accomplished by inaction.

While the rule imposes deadlines for the BIA to act on an application, the timeline starts to run only when the BIA determines that the application package is complete. A complete application must include “all of the information and supporting documents required under this subpart, including but not limited to, an accurate legal description for each affected tract, document of landowner consent, NEPA [National Environmental Policy Act] review documentation and valuation documentation, where applicable.” (§ 169.123[b]) To meet the requirement to provide “NEPA review documentation,” any required NEPA studies must be completed and submitted before the right-of-way application can be considered complete. The 60-day clock on approval will not start to run until all required NEPA studies and compliance documents are submitted.

Rights-of-way granted under these rules “are generally not subject to state law or the law of a political subdivision thereof,” and are not subject to state and local taxes (25 CFR § 169.009[c]; § 169.011[a][3]). They are, however, subject to tribal jurisdiction and taxation (§ 169.010; § 169.011[b]). The preamble addresses at great length the topic of state jurisdiction over rights-of-way on Indian land and concludes that the state generally has no ability to impose taxes or other regulations. The BIA confirms that project proponents can negotiate with tribes to apply state law in circumstances where “neither the tribe nor Federal law address a specific topic.” Otherwise, “rights-of-way are subject to tribal law except to the extent tribal law is inconsistent with applicable Federal law.” Jurisdiction over disputes would also presumptively be in the tribal courts, except as to the validity of the right-of-way, where any challenges must be heard in Federal court.

Service lines do not require a BIA right-of-way, but they do require a service line agreement that must be filed with the BIA. Before construction of a service line can begin, the utility “must execute a service line agreement” with the tribe, landowner, “or the legally authorized occupants or users.” (§§ 169.051 to 169.056) Service lines are defined narrowly in the new rules as “a utility line running from a main line, transmission line, or distribution line that is used only for supplying telephone, water, electricity, gas, internet service, or other utility service to a home, business, or other structure.” (§ 169.051) The BIA explains that “a service line can serve only one structure. . . . Once a service line serves multiple structures, it exceeds its scope, and becomes a distribution line” requiring a right-of-way.

There are bonding and security requirements under the new rules, but the tribe or Indian landowners can waive these requirements if they want to (§ 169.103). The rules offer additional streamlining to member-owned utility cooperatives and tribal utilities.

Tribal consent to the right-of-way is required “in the form of a tribal authorization and a written agreement with the tribe, if the tribe so requires, to a grant of right-of-way across tribal land. The consent document may impose restrictions or conditions . . . [which] automatically become conditions and restrictions in the grant.” (§ 169.107)

The grantee of a right-of-way must satisfy “any payment amount negotiated by the tribe,” and the tribe can waive valuation (§ 169.110). The process is a little more complicated for individually owned Indian land, where interests may be fractionated (§ 169.112). The BIA clarifies that the tribe can agree to accept “nominal compensation, no compensation, or alternative compensation” and that “BIA will defer to the tribe’s negotiated compensation amount, which may be an amount mutually agreed to with the applicant.”

The BIA “will generally consider a maximum duration of 20 years to be reasonable for the initial term for rights-of-of-way for oil and gas purposes” and 50 years for other purposes (§ 169.201[c]). But the preamble clarifies that BIA will “treat utility gas lines (a term of 50 years) separately from other gas pipelines (with a term of 20 years).” A gas line will be treated like a utility if it delivers “processed gas ready for use by the consumer.”

The preamble and new rules are extensive, covering many details and topics that will be applicable in various situations. If you are a tribe facing right-of-way applications or a project proponent who anticipates filing such an application and you want advice on the process, please contact Jeremy Lite at jeremy.lite@quarles.com/(520) 770-8739, or a member of our Tribal Law team.