Company Update – Congressional Efforts to Clarify the Scope of 1875 Act Railroad Right-of-Ways

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Company Update – Congressional Efforts to Clarify the Scope of 1875 Act Railroad Right-of-Ways

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For the first time, last week, the United States House Committee on Appropriations has included language in the Interior, Environment & Related Agencies Appropriations Bill that would clarify the scope of railroad rights-of-way.   In October 2015, the Director of the U.S. Department of the Interior’s (DOI) Bureau of Land Management (BLM) California Office issued a summary evaluation, indicating that Cadiz’s proposed use of 43-miles of the Arizona & California Railroad Company’s (ARZC) 1875 Act railroad right-of-way (ROW) for a water conveyance pipeline was outside the scope of the original ROW grant to the ARZC.  The evaluation was made necessary by a “policy rider” that Senator Feinstein has succeeded in annually inserting into the federal appropriations bill.   The House Interior Appropriations Bill, expected to go to the House floor later this summer, would establish and clarify a standard for such reviews.

While the BLM has stated it does not have the legal authority to adjudicate property rights, the October 2015 letter advised Cadiz and the ARZC that they would need a new, separate ROW grant from the BLM, subject to federal National Environmental Policy Act (NEPA) processing, to proceed with pipeline construction. BLM CA summarized that even though the pipeline would substantially further a number of railroad purposes, the primary purpose of the pipeline is to provide water to the public which they found this to be outside the scope of the original ROW grant.

Cadiz, ARZC and several Congressional representatives strongly disagreed with this finding. The October evaluation is also contrary to the law that isbinding on BLM, as set forth in a November 2011 Solicitor’s Opinion.  That Opinion provides that an 1875 Act ROW may be used—without the need for an additional BLM permit—for any activity that furthers railroad purposes, even if the primary purpose of the activity is to serve a non-railroad purpose.

BLM’s October 2015 summary evaluation is  inconsistent with the historical BLM practice of allowing railroads to use their ROWs for any activities that do not interfere with railroad operations and also contrary to national law and policy encouraging the co-location of utilities within existing transportation corridors.  BLM has identified 3,500 separate incidents of third party use within thousands of miles of 1875 Act ROWs that must be reviewed to determine whether they are within the scope of the ROW.   These ROWs have been routinely used for fiber optics and communications lines, energy, electricity, water, wastewater, sewer, and natural gas lines nationwide.  If BLM applies the primary purpose test that was used in the Cadiz determination to this review, many of these activities are likely to be found outside the scope of ROWs in which they are located.

After learning of BLM’s conclusion, numerous United States congressional representatives called upon BLM’s national office to review and reverse its position. They also began to work to clarify the scope of the congressionally granted ROWs for all who rely on them for necessary infrastructure.  Inquiries to BLM/DOI by Congressional representatives have confirmed that BLM/DOI is evaluating third party uses of all existing routes, subjecting railroads and infrastructure operators to an onerous bureaucratic task and creating a cloud on their property rights.

Earlier this year, 23 bi-partisan members of the U.S. House of Representatives from ten states wrote to the House’s Appropriations Subcommittee on Interior, Environment and Related Agencies requesting language be added to the fiscal year 2017 (FY17) House Interior Appropriations bill to clarify the scope of railroad ROW grants.

In May, the Subcommittee issued its FY17 House Interior Appropriations bill including language responsive to this request, stating in relevant part…

“…Provided further, That the Secretary shall approve any use of a right-of-way granted pursuant to the General Railroad Right-of-Way Act of 1875 (43 U.S.C. 934–939) if authorization of the use would have been considered under Department policy to be within the scope of a railroad’s authority as of the day before the effective date of the Department’s Solicitor’s Opinion M–37025, issued on November 4, 2011.

SEC. 115. None of the funds made available by this or any other Act may be used by the Secretary of the Interior to review, require approval of, or withhold approval for use of a right-of-way granted pursuant to the General Railroad Right-of-Way Act of 1875 (43 U.S.C. 934–939) if authorization of the use would have been considered under Department policy to be within the scope of a railroad’s authority as of the day before the effective date of the Department’s Solicitor’s Opinion M–37025, issued on November 4, 2011.” – (Page 8 & 60, FY2017 House Interior Appropriations Bill)

The FY2017 House Interior Appropriations bill was passed on June 15th by the House’s full Committee on Appropriations and reported to the floor of the House of Representatives for consideration. We join with the railroad and utility industries in supporting the House efforts to clarify federal law and policy in a manner that it is permissive of third party use of railroad ROWs.

Also last week, the Senate Appropriations Committee on Interior and Environment issued its own version of the FY17 Interior spending bill.  Regarding this issue, the bill report expresses a sentiment similar to the House bill and states the following:

“Railroad Rights-of-Way.—The Committee notes with concern thebroad ramifications of the Bureau’s treatment of acceptable uses of railroad rights of way as re-interpreted in the Department’s Solicitor’s Opinion M–37025, issued on November 4, 2011. The Committee believes the Department should amend its policies to ensure any use of a right-of-way granted pursuant to the General Railroad Right-of-Way Act of 1875 by the railroad holding title to the right of way, or authorized by such railroad, is within the scope of the railroad’s authority to use, or authorize others to use, the right of way received pursuant to the act, if authorization of the use would have been considered under Department policy to be within the scope of a railroad’s authority as of the day before the effective date of the Opinion M–37025. In the interim, the Bureau should refrain from engaging in unnecessary and costly new permitting activities for existing uses.”

–        Page 13 & 14, Senate Interior Appropriations Bill Report.

The bill text, however,  does not adopt the House’s language and simply uses language modified from earlier riders from Senator Dianne Feinstein (D-CA) maintaining the certification requirement for the ARZC ROW.

“Sec. 118. (a) Any proposed new use of the Arizona & California Railroad Company’s Right of Way for conveyance of water shall not proceed unless the Secretary of the Interior certifies that the proposed new use is within the scope of the Right of Way.

(b) No funds appropriated or otherwise made available to the Department of the Interior may be used, in relation to any proposal to export groundwater for municipal use, for approval of any right-of-way or similar authorization on the Mojave National Preserve or lands managed by the Needles Field Office of the Bureau of Land Management, or for carrying out any activities associated with such right-of-way or similar approval.” – Page 64, FY2017 Senate Interior Appropriations Bill

This language is similar to language that Feinstein has included in previous Senate Interior Appropriations bills over the last several years and is reflective of her continuing refusal to accept independent peer review of the Project, environmental review, the approval actions of two California public agencies and the validation of these approvals in California’s Superior and Appellate Courts.    She has stated that the decisions of public agencies and the Courts are of no consequence.  Nevertheless, bi-partisan support for the Project remains high.

On June 16th, the Senate Interior Appropriations bill was passed by the Senate Appropriations Committee.  No timetable has been announced for the bill to be considered by the full Senate.  

We will continue to monitor both bills as they advance in the Congress.  Language reconciliation between the two bills must occur before an Interior Appropriations Bill for FY2017 may be signed into law by the President. Fiscal Year 2017 begins on October 1, 2016.

 

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