1. NEW BIA RULE ON RIGHTS-OF-WAY ON INDIAN LAND
August 16, 2016
David A. Mullon Jr.
Venable LLP

2. The new BIA regulations on ROWs on Indian Land are lengthy and complex—
Old regulations: 28 sections
New regulations: 82 sections
Determining how the new regulations might apply to or affect a particular ROW requires careful analysis of all relevant ROW documents as well as various factual and legal considerations.
Caveat: This presentation is not legal advice. If you have questions regarding a ROW on your land, you should speak with your attorney!!

3. This is only an Overview of the New Rule. Looking for Nuts and Bolts?
Go to the BIA website for the new Regulations—
Links to key documents (Proposed & Final Rules, transcripts of tribal consultation meetings, FAQs)
Guidance on which provisions apply to pre-existing ROWs and which are prospective only
Templates for key ROW documents—ROW Application, Landowner Consent Forms, BIA’s ROW Checklist, and many more…
Link: IA/ORM/RightsofWay/index.htm

4. What’s in the New Rule? The Six Subparts
Purpose, Definitions, General Provisions
Subpart A
Service Line Agreements
Subpart B
Obtaining a Right-of-Way (Application, Consent, Compensations, and the Grant of a ROW)
Subpart C
Duration, Renewals, Amendments, Assignments, Mortgages
Subpart D
Effectiveness
Subpart E
Compliance and Enforcement
Subpart F

5. Overview of (Just) Some Key Provisions
What was the effective date?
What land do the regulations apply to?
Which Grantees and/or easements may be affected?
Do the regulations apply to preexisting ROWs?
Do the regulations address new uses of existing ROWs?
Do the regulations address applicable law, jurisdiction and/or taxation?
New bonding requirements
New landowner consent requirements
Are there new compensation rules?
Compliance and enforcement
Non-use and abandonment

6. What was the Effective Date?
APRIL 21, 2016

7. What Land Does the Final Rule Apply to? Section 169.003
Rule applies to “Indian land” and “BIA land”
Indian land: surface estate of a tract of land owned in trust or restricted status by –
Indian tribe
Tribal corporation organized under the Indian Reorganization Act
Individual Indian
BIA land: surface estate of tract owned by BIA (not Indian land)
Final Rule treats Indian land owned by Indian tribes vs. individual Indians differently in some important respects

8. Some of the Grantees and/or Easements Affected. Sections 169
Some of the Grantees and/or Easements Affected Sections and
Telecommunication Industry
Oil and gas producers and pipelines (Pipeline easements, pumping stations, access roads, etc.)
Some railroads
Federal, state, local political subdivisions (E.g., roads, highways, trails...)
Utility companies (Electrical, water supply, wastewater, storm sewer)
Electrical transmission
(Except lines licensed under the FPA)

9. Do the Regulations Apply to Preexisting ROWs? Section 169.7
Many provisions of Final Rule apply to both new and preexisting (i.e., pre- effective date) ROWs
Existing ROWs: Procedural provisions only
ROWs granted under Final Rule: Almost all provisions
Basic question: Is the provision “procedural” or “non-procedural”?
Special requirements for holders of ROWs who acquired ROWs by assignment before April 21, 2016

10. Special Rule For Documenting Pre-Effective Date Assignments Section 169.7(d) (as extended)
Documentation deadline: August 16, 2016:
Holders of ROWs acquired by assignments made prior to the effective date must provide BIA with “documentation” of assignment by August 16, 2016, or request an extension of time
Documentation: show chain of title from original grant, but BIA may accept other proof. See BIA FAQs at page 6:
Consequences of failing to comply? BIA says it may initiate an enforcement action (see FAQs, page 6)
Form ROW clause in BIA’s ROW Handbook: This ROW may be terminated for failure to comply with “any term or condition of the grant” or “applicable regulations”

11. How the New Rule May Affect Pre-Effective Date ROWs
Procedural vs. Non-procedural (section 169.7(b)):
Procedural provisions apply unless inconsistent with terms of the original grant or the law authorizing the grant
“Non-procedural” (i.e., substantive) provisions do not apply
What is procedural vs. substantive?
Some examples are in Preamble
BIA Guidance—“What are Procedural Provisions of the Final Rule?”— is helpful: pdf

12. What About New Uses Within or Overlapping An Existing ROW. Section 169
If the ROW grantee seeks a new use:
A new use “not specified in the original grant” and not within the “scope of use specified in the original grant”—grantee must amend the ROW or apply for a new ROW:
Amend if new use does not involve “ground disturbance”
Apply for new ROW if new use involves “ground disturbance”
If a third party seeks a new use:
New use specified in grant or within scope of use specified in grant is allowed if the grantee obtains an assignment to new user
If use is neither specified in grant nor within scope of specified use, an application for a new ROW is required
Section is “procedural” under the BIA Guidance

13. Applicable Law (Section 169.9)
Application of Tribal Law—
ROWs “approved under this part” are subject to Federal and Tribal law (unless latter is inconsistent with Federal law) but are “generally” not subject to State Law
BIA Guidance: Non-Procedural

14. Tribal Jurisdiction over ROW (Section 169.10)
Secretary’s grant of a ROW under the new regulations “will clarify that it does not diminish to any extent”—
Tribal jurisdiction over land, persons, activities
Tribal power to tax land, improvements, persons or activities
Tribe’s authority of general or particular application within ROW
Inherent tribal civil jurisdiction over non-members; or Indian Country status of the land
BIA Guidance: Non-Procedural

15. Tribal vs. State/Local Taxation (Section 169.11)
Taxation of ROW interest, improvements, and activities:
“Subject only to applicable Federal law”—
Permanent improvements and activities on ROW and ROW interests of a ROW “approved under this part” are not subject to State/political subdivision taxes, fees, assessment, etc., but may be subject to tribal taxation
BIA Guidance: “General Statement” (Non-Procedural) but preamble to Final Rule notes strong interest against state/local taxation and in support of tribal taxation

16. New Bonding Requirements Sections 169.103, 169.104, and 169.305
Bonding provisions much more detailed than corresponding security provisions of old rule
Application for a new ROW must include “bonds, insurance, or other forms of security” to cover:
Any periodic rentals required by grant
Damages caused by construction of permanent improvements
Estimated cost of remediation of damage caused by release of contaminants, explosives, hazardous waste
BIA Guidance: Non-Procedural (prospective application)

17. Landowner Consent Requirements
Landowner consent generally required for—
New ROWs ( and )
BIA Guidance: Non-Procedural (prospective application)
New uses within an existing ROW ( )
BIA Guidance: Procedural
Renewals ( and .204)
Amendments ( , except technical corrections)
Assignments ( )
Mortgages ( )

18. Compensation for Grant of Row Sections 169.110-169.122
Final Rule includes 13 separate sections addressing various compensation issues
Most of these sections deal with the initial application/grant of the ROW
Generally, Final Rule gives Indian tribes broad authority to negotiate compensation, but BIA retains more oversight for individual Indian lands
On individual Indian lands, generally not less than FMV, except under certain specified circumstances (see section )
Allocating compensation between life tenant and remainder interests: see section (generally, as specified in will or, if not so specified, by agreement between life tenant and remainder interest or, absent agreement, by 25 CFR Part 179)
BIA Guidance: Compensation provisions are Non-Procedural (prospective application). However, note consent requirements for renewals, amendments, assignments…

19. Duration, Renewal, Amendment, Assignment, Mortgage. 169. 201 et seq
Duration, Renewal, Amendment, Assignment, Mortgage et seq. (Subpart D)
As with compensation, the rule on duration of ROW gives deference to tribal determination and more oversight with individual Indian lands
Individual lands: Generally a maximum of 20 years for oil & gas purposes and 50 years (initial plus all renewals) for all other purposes
BIA will consider a different duration under specified circumstances (see section (c))
Guidelines: new ROW duration provisions of Final Rule ( ) are prospective only
Guidelines: Final Rule provisions relating to renewal, amendment, assignment & mortgaging ROWs are “procedural” and will generally apply to preexisting ROWs (when request to renew, amend, assign, or mortgage the ROW is made after effective date of Final Rule)
However, law authorizing or the terms of the original grant may control

20. Compliance and Enforcement 169.401 et seq. (Subpart F)
Subpart F sets forth the procedures that the BIA will follow “to address compliance and enforcement” of ROW requirements
BIA Guidelines: most operative provisions in Subpart F are “procedural” and therefore will apply to pre-effective date ROWs
Exception: “negotiated remedies” under section are prospective

21. Negotiated Remedies (169.403)
The Indian tribe and ROW grantee on tribal land may negotiate remedies for violations, abandonment, and non-use
Negotiated remedies are stated in the tribal consent document and then incorporated into the grant itself
Negotiated remedies are allowed on individual Indian land as well subject to additional requirements (see section (b))
These provisions only apply prospectively (not to pre-existing ROWs)

22. Non-Use and Abandonment (169.408(a) and (b))
BIA may cancel a ROW, “in whole or in part,” for non-use for a consecutive 2-year period for the purpose for which it was granted
Must give 30 days written notice
Grantee has an opportunity to “correct” the basis for cancellation within the 30 days
BIA Guidance says this is “Procedural” and therefore applies to pre-effective date ROWs (but old ROW rules were similar)

23. Abandonment (Section 169.408(b))
BIA may cancel a ROW granted under the regulations, in whole or in part, immediately upon abandonment of the ROW by the grantee
BIA Guidance states that this provision is Procedural and therefore applies to pre- effective date ROWs

24. Western Energy Alliance v. Department of the Interior U. S
Western Energy Alliance v. Department of the Interior U.S. District Court for N.D. (Filed March 2016)
WEA action was a broad “facial” challenge to the Final Rule
Alleged that Final Rule exceeds authority under 25 USC , is contrary to law and arbitrary/capricious, and violates NEPA
Court denied WEA’s request for a preliminary injunction:
A facial challenge must show “no set of circumstances under which the Final Rule would be valid”
Any harms must be addressed “when they actually occur”
Court footnote: Final Rule appears “ill-advised… will result in a never-ending invitation to future litigation.”

25. Consent Requirements Revisited
Landowner consent generally required for:
New ROWs: Section and (owners of remainder interest)
New uses: Within an existing ROW:
Renewals:
Amendments: (except technical corrections)
Assignments:
Mortgages:

26. Conclusion
New rule encourages tribal and individual Indian landowner participation
Tribal consultation and notice to landowners in key stages of ROW processes
Consent provisions of Final Rule require negotiation with landowners
When the ROW holder wants to renew, amend, assign, or mortgage a ROW (including a preexisting ROW), what will be on the negotiation table?
Answer: Probably everything—compensation, duration, right to inspect for compliance, non-user/abandonment, negotiated remedies, specific events of default, and more…

27. Thank you!
David A. Mullon Jr.
(202)