[Federal Register Volume 76, Number 229 (Tuesday, November 29, 2011)]
[Proposed Rules]
[Pages 73783-73827]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29991]
[[Page 73783]]
Vol. 76
Tuesday,
No. 229
November 29, 2011
Part II
Department of the Interior
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Bureau of Indian Affairs
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25 CFR Part 162
Residential, Business, and Wind and Solar Resource Leases on Indian
Land; Proposed Rule
Federal Register / Vol. 76 , No. 229 / Tuesday, November 29, 2011 /
Proposed Rules
[[Page 73784]]
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DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
25 CFR Part 162
[Docket ID BIA-2011-0001]
RIN 1076-AE73
Residential, Business, and Wind and Solar Resource Leases on
Indian Land
AGENCY: Bureau of Indian Affairs, Interior.
ACTION: Proposed rule.
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SUMMARY: The Bureau of Indian Affairs (BIA) is proposing to revise the
regulations addressing non-agricultural leasing of Indian land. This
rule would add new subparts to address residential leases, business
leases, wind resource evaluation and development leases, and solar
resource development leases on Indian land, and would therefore remove
the existing subpart for non-agricultural leases.
DATES: Comments on this proposed rule must be received by January 30,
2012. Comments on the information collections contained in this
proposed regulation are separate from those on the substance of the
rule. Comments on the information collection burden should be received
by December 29, 2011 to ensure consideration, but must be received no
later than January 30, 2012.
ADDRESSES: You may submit comments by any of the following methods:
Federal rulemaking portal: http://www.regulations.gov. The rule is
listed under the agency name ``Bureau of Indian Affairs.'' The rule has
been assigned Docket ID: BIA-2011-0001. If you would like to submit
comments through the Federal e-Rulemaking Portal, go to http://www.regulations.gov and do the following. Go to the box entitled
``Enter Keyword or ID,'' type in ``BIA-2011-0001,'' and click the
``Search'' button. The next screen will display the Docket Search
Results for the rulemaking. If you click on BIA-2011-0001, you can view
this rule and submit a comment. You can also view any supporting
material and any comments submitted by others.
--Email: consultation@bia.gov. Include the number 1076-AE73 in the
subject line of the message.
--Mail: Del Laverdure, Principal Deputy Assistant Secretary--Indian
Affairs, U.S. Department of the Interior, Mail Stop 4141, 1849 C Street
NW., Washington, DC 20240. Include the number 1076-AE73 on the outer
envelope.
--Hand delivery: Del Laverdure, Principal Deputy Assistant Secretary--
Indian Affairs, U.S. Department of the Interior, Room 4141, 1849 C
Street NW., Washington, DC 20240. Include the number 1076-AE73 on the
outer envelope.
We cannot ensure that comments received after the close of the
comment period (see DATES) will be included in the docket for this
rulemaking and considered. Comments sent to an address other than those
listed above will not be included in the docket for this rulemaking.
Comments on the information collections contained in this proposed
regulation are separate from those on the substance of the rule. Send
comments on the information collection burden to OMB by facsimile to
(202) 395-5806 or email to the OMB Desk Officer for the Department of
the Interior at omb.eop.gov">OIRA_DOCKET@omb.eop.gov. Please send a copy of your
comments to the person listed in the FOR FURTHER INFORMATION CONTACT
section of this notice.
FOR FURTHER INFORMATION CONTACT: Elizabeth Appel, Office of Regulatory
Affairs & Collaborative Action, (202) 273-4680;
Elizabeth.appel@bia.gov.
SUPPLEMENTARY INFORMATION:
I. Background
This proposed rule would revise the current 25 CFR part 162, Leases
and Permits, to establish subparts specifically addressing the
following categories of leasing on Indian land: residential; business;
wind resource evaluation and development; and solar resource
development. Specifically, this rule would:
Revise Subpart A, General Provisions
Create a new Subpart C, Residential Leases
Create a new Subpart D, Business Leases
Create a new Subpart E, Wind Energy Evaluation Leases
(WEELs) and Wind and Solar Resource (WSR) Leases
Delete Subpart F, Non-agricultural Leases (because that
subpart was intended to address residential and business leasing, which
this proposed rule addresses specifically in subparts C and D,
respectively)
Move the current Subpart E, Special Requirements for
Certain Indian Reservations, to Subpart F
Create a new Subpart G, Records.
The proposed rule does not affect Subpart B, Agricultural Leases.
Subpart B may be revised at a later time. In addition, to ensure that
changes to the General Provisions do not affect agricultural lease
regulations, the current General Provisions sections are being moved to
Subpart B, where they apply only to agricultural leases. Minor edits
were made to these General Provisions to delete redundancies and
clarify that they now apply only to agricultural leases.
II. Summary of Substantive Revisions
This rule makes the procedures for leasing as explicit and
transparent as possible. The consent requirements in the proposed
regulations are consistent with the Indian Land Consolidation Act of
2000 (ILCA), as amended by the American Indian Probate Reform Act
(AIPRA). Because this statute does not apply to tribes in Alaska, the
consent requirements for Alaska remain the same as the previous
regulations governing leasing. The proposed regulations provide
procedures for approval of lease amendments, assignments, subleases and
leasehold mortgages. The current regulations provide for the approval
of such instruments, but do not specify the procedure for such
approval, leading to the possibility of inconsistencies nationwide, to
the detriment of lessees and lenders.
This rule provides that leases on tribal land may be approved for
the compensation established in the lease. Leases for less than fair
market rental may be approved on individually owned Indian land under
certain circumstances.
Subpart C, Residential Leases, addresses leasing for single-family
homes and housing for public purposes on Indian land. The proposed
regulations provide for a 30-day time frame within which BIA must issue
a decision on a complete residential lease application. Bonds are not
required for leases for housing for public purposes and otherwise may
be waived by BIA upon a determination that it is in the best interest
of the landowner(s). Subpart C also includes provisions for enforcement
of lease violations.
Subpart D, Business Leases, addresses leasing for business
purposes, including: (1) Leases for residential purposes that are not
covered in Subpart C; (2) leases for business purposes not covered by
Subpart E (wind energy evaluation and wind and solar resource
development); (3) leases for religious, educational, recreational,
cultural, and other public purposes; and (4) commercial or industrial
leases for retail, office, manufacturing, storage, biomass, waste-to-
energy, and/or other business purposes. The proposed regulations
provide for a 60-day time frame within which BIA must issue a
[[Page 73785]]
decision on a complete business lease application.
Subpart E, WEELs and WSR Leases, establishes procedures for
obtaining BIA review and approval of wind energy evaluation leases
(WEELs) and wind and solar resource (WSR) development leases. For wind
energy, this proposed rule establishes a two-part process whereby
developers obtain BIA approval of a short-term lease for possession of
Indian land for the purposes of installation and maintenance of wind
evaluation equipment, such as meteorological towers. The WEEL may
provide the developer with an option to lease the Indian land for wind
energy development purposes. The environmental reviews conducted for
the short-term lease, which would only evaluate the impacts of the
evaluation equipment, not the full development of the wind project, may
be rolled into environmental reviews conducted for a lease for full
development of the wind project. This two-part process is not necessary
for solar resource development because solar evaluation does not
require possession of the land.
Some of the more notable cross-cutting substantive changes include:
BIA Approval Process
Eliminating the requirement for BIA approval of permits of
Indian land;
Eliminating the requirement for BIA approval of subleases
and assignments where certain conditions are met;
Imposing time limits on BIA to act on requests to approve
lease amendments, lease assignments, subleases, and leasehold
mortgages;
Establishing that BIA has 30 days to act on a request to
approve a lease amendment or sublease, or the document will be deemed
approved;
Establishing that BIA must approve amendments,
assignments, leasehold mortgages, and subleases unless it finds a
compelling reason not to, based on certain specified findings.
Compensation and Valuations
Providing that BIA will defer to the tribe's negotiated
value for a lease of tribal land and will not require valuation of
tribal land;
Allowing for waivers of valuation for residential leases
of individually owned land if the individual landowners provide 100
percent consent and a waiver and BIA determines it is in the best
interest of the landowners (100 percent consent is necessary because
non-consenting owners receive fair market value, so a valuation will be
necessary if any individual does not consent);
Allowing short-term leases for wind resource evaluation
purposes at the value negotiated by the Indian landowners (whether
tribal or individual Indians);
Allowing alternative forms of rental (other than monetary
compensation) if BIA determines it is in the best interest of the
Indian landowners;
Allowing other types of valuation (other than appraisals)
under certain circumstances;
Allowing for automatic rental adjustments and restricting
the need for reviews of the lease compensation (to determine if an
adjustment is needed) to certain circumstances.
Improvements
Requiring plans of development and schedules for
construction of improvements to assist the BIA and Indian landowners in
enforcement of diligent development of the leased premises.
Clarifying that improvements on trust or restricted land
are not taxable by States or localities, without regard to ownership.
The purposes of residential, business, and WSR leasing on Indian land
are to promote Indian housing and to allow Indian landowners to use
their land profitably for economic development. These regulations are
intended to preempt the field of leasing of Indian lands. The Federal
statutory and regulatory scheme for leasing, including the regulation
of improvements, is so pervasive as to preclude the additional burden
of State taxation. The assessment of State taxes would obstruct Federal
policies supporting tribal economic development and self-determination,
and tribal interests in effective tribal government and economic self-
sufficiency.
Direct Pay
Allowing for direct pay only where there are 10 or fewer
landowners, and all landowners consent to direct pay;
Continuing direct pay unless and until 100 percent of the
owners agree to discontinue direct pay, but suspending direct pay for
any one Indian landowner who dies, is declared non compos mentis, or
whose whereabouts become unknown.
These changes are intended to increase the efficiency and
transparency of the BIA approval process for leasing of Indian land,
support tribal decisions regarding the use of their land, increase
flexibility in compensation and valuations, and facilitate management
of direct pay.
III. Procedural Requirements
A. Regulatory Planning and Review (E.O. 12866)
B. Regulatory Flexibility Act
C. Small Business Regulatory Enforcement Fairness Act
D. Unfunded Mandates Reform Act
E. Takings (E.O. 12630)
F. Federalism (E.O. 13132)
G. Civil Justice Reform (E.O. 12988)
H. Consultation With Indian Tribes (E.O. 13175)
I. Paperwork Reduction Act
J. National Environmental Policy Act
K. Effects on the Energy Supply (E.O. 13211)
L. Clarity of This Regulation
M. Public Availability of Comments
III. Procedural Requirements
A. Regulatory Planning and Review (E.O. 12866)
The Office of Management and Budget (OMB) has determined that this
rule is significant under Executive Order 12866. This rule replaces
provisions that apply to non-agricultural leasing of Indian land,
generally, with provisions that apply specifically to the different
types of non-agricultural leasing: Residential, business, and wind and
solar resource leasing of Indian land. This rule describes how the BIA
will administer residential, business, and wind and solar resource
leases on trust and restricted land. Thus, the impact of the rule is
confined to the Federal Government and individual Indian and tribal
landowners and does not impose a compliance burden on the economy
generally or create any inconsistencies or budgetary impacts to any
other agency or Federal program.
(1) This rule will not have an annual effect of $100 million or
more on the economy or adversely affect in a material way the economy,
productivity, competition, jobs, the environment, public health or
safety, or State, local, or tribal governments or communities. This
rule makes changes to promote economic development on Indian land
through, for example, providing greater transparency to procedures for
obtaining BIA approval, imposing timelines on BIA to act on certain
lease requests, and establishing that BIA will defer to tribes'
negotiated values. The rule's changes will not have direct effects on
the economy as a whole; however, the changes should result in increased
leasing of Indian land, which will have a beneficial effect on tribal
economies and communities.
(2) This rule will not create a serious inconsistency or otherwise
interfere with an action taken or planned by another agency because the
Department is the only agency with authority for approving leases on
Indian land. We
[[Page 73786]]
have coordinated with the Department of Housing and Urban Development
(HUD) to ensure that the leasing procedures will not impede Indian
landowners' ability to obtain HUD-funding for residences.
(3) This rule does involve entitlements, grants, user fees, or loan
programs or the rights or obligations of their recipients. The
revisions have no budgetary effects and do not affect the rights or
obligations of any recipients.
(4) This rule may raise novel legal or policy issues because it
alters established procedures for reviewing and approving leases of
Indian land.
B. Regulatory Flexibility Act
The Department of the Interior certifies that this proposed rule
will not have a significant economic effect on a substantial number of
small entities under the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.). Small entities are not likely to enter into residential leases
on Indian land because tribal housing authorities and tribal members
usually enter into such leases. It is possible that small entities may
enter into business leases or wind or solar resources leases but this
rule does not impose any new requirements in obtaining or complying
with a lease that would have a significant economic effect on those
entities.
C. Small Business Regulatory Enforcement Fairness Act
This rule is not a major rule under 5 U.S.C. 804(2), the Small
Business Regulatory Enforcement Fairness Act. It will not result in the
expenditure by State, local, or tribal governments, in the aggregate,
or by the private sector of $100 million or more in any one year. The
rule's requirements will not result in a major increase in costs or
prices for consumers, individual industries, Federal, State, or local
government agencies, or geographic regions. The rule continues to
require lessees to pay at least fair market rental, with certain
exceptions, and adds that lessees agree to some other amount negotiated
by the Indian tribe under certain circumstances. Nor will this rule
have significant adverse effects on competition, employment,
investment, productivity, innovation, or the ability of the U.S.-based
enterprises to compete with foreign-based enterprises because the rule
is limited to Indian land and is intended to promote economic
development.
D. Unfunded Mandates Reform Act
This rule does not impose an unfunded mandate on State, local, or
tribal governments or the private sector of more than $100 million per
year. The rule does not have a significant or unique effect on State,
local, or tribal governments or the private sector. A statement
containing the information required by the Unfunded Mandates Reform Act
(2 U.S.C. 1531 et seq.) is not required.
E. Takings (E.O. 12630)
Under the criteria in Executive Order 12630, this rule does not
affect individual property rights protected by the Fifth Amendment nor
does it involve a compensable ``taking.'' A takings implication
assessment is not required.
F. Federalism (E.O. 13132)
Under the criteria in Executive Order 13132, this rule has no
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government. This rule
governs leasing on Indian land, which is land held by the Federal
Government in trust or restricted status for individual Indians or
Indian tribes. Such land is subject to tribal law and Federal law,
only, except in limited circumstances and areas where Congress or a
Federal court has made State law applicable. This rule therefore does
not affect the relationship between the Federal Government and States
or among the various levels of government.
G. Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of Executive Order 12988.
Specifically, this rule has been reviewed to eliminate errors and
ambiguity and written to minimize litigation; and is written in clear
language and contains clear legal standards.
H. Consultation With Indian Tribes (E.O. 13175)
In accordance with the President's memorandum of April 29, 1994,
``Government-to-Government Relations with Native American Tribal
Governments,'' Executive Order 13175 (59 FR 22951, November 6, 2000),
and 512 DM 2, we have evaluated the potential effects on federally
recognized Indian tribes and Indian trust assets. During the
development of this proposed rule, the Department discussed the rule
with tribal representatives at several consultation sessions. We
distributed a preliminary draft of the rule to tribes in February 2011
and held three consultation sessions: Thursday, March 17, 2011 at the
Reservation Economic Summit (RES) 2011 in Las Vegas; March 31, 2011 in
Minnesota; and April 6, 2011, in Albuquerque, New Mexico. We requested
that tribes submit written comments by April 18, 2011. We received
written and oral comments from over 70 Indian tribes during tribal
consultation. We reviewed each comment in depth and revised the rule
accordingly. This proposed rule incorporates those revisions. We also
compiled a summary of tribal comments received and our responses to
those comments and are making that document available to tribes at:
http://www.bia.gov/WhoWeAre/AS-IA/Consultation/index.htm. We plan to
hold additional tribal consultation sessions, particularly in the
geographic areas we were not able to reach prior to this proposed rule.
We will announce the dates and locations of the additional tribal
consultation sessions by letter to tribal leaders.
I. Paperwork Reduction Act
OMB Control No. 1076-0155 currently authorizes the collections of
information contained in 25 CFR part 162, totaling an estimated 106,065
annual burden hours. If this proposed rule is finalized, the annual
burden hours will increase by an estimated 2,910 hours. Because the
sections where the information collections occur changes, we are
including a table showing the section changes and whether a change to
the information collection requirement associated with those sections
has changed.
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Information collection
Current CFR cite New CFR cite requirement Explanation of change
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162.109, 162.204, 162.205............ 162.109, 162.204, Provide notice of No change. Previously
162.205, 162.338(e), tribal leasing laws, required, but now
162.438(e), regulations, listed in specific
162.528(d), 162.568(e). exemptions. subparts.
162.320(a), 321(a), Request for fair market New.
162.420(a), 421(a), rental/valuation on
162,546(a), 162.547(a). tribal land.
162.320(b), 321(b), Request for waiver of New.
162.420(b), 421(b), fair market rental/
162,546(b), 162.547(b). valuation for
individually owned
land.
162.324, 162.424, Agreement to suspend New.
162.550. direct pay.
162.368, 162.468, Notification of good New.
162.593. faith negotiations
with holdover.
162.207, 162.242-244, 162.604(a), 162.009, 162.207, Submit lease, No change. Previously
162.610. 162.242-244, 162. 345, assignment, amendment, required, but now
350, 353, 357, 162. leasehold mortgage for listed in separate
445, 450, 453, 457, approval. subparts.
162. 530, 162.570,
574, 578, 582.
162.213, 162.604(a).................. 162.024, 162.213, Provide supporting No change. Previously
162.338, 162.438, documentation. required, but now
162.528, 162.563. listed in separate
subparts.
162.004................ Submit permits to BIA Permits must now be
for file. submitted to BIA for
file.
162.217, 162.246..................... 162.217, 162.246, Submit lease for No change. Previously
162.341, 162.441, recording. required, but now
162.566. listed in separate
subparts.
162.234, 162.604(c).................. 162.234, 162.334, Provide a bond......... No change. Previously
162.434, 162.525, required, but now
162.559. listed in separate
subparts.
162.237, 162.604(d).................. 162.237, 162.337, Provide information for No change. Previously
162.437, 162.527, acceptable insurance. required, but now
162.562. listed in separate
subparts.
162.241.............................. 162.241................ Administrative fees.... No change.
162.247, 162.613..................... 162.247, 162.325, 329, Pay rent............... No change. Previously
162.425, 429, 162.523, required, but now
551, 555. listed in separate
subparts.
162.248, 162.616..................... 162.248, 162.365, Pay penalties for late No change. Previously
162.465, 162.590. payment. required, but now
listed in separate
subparts.
162.212, 162.606..................... 162.009, 162.212....... Bidding on advertised No change. Previously
lease. required, but now
listed in separate
subparts.
162.603.............................. 162.008(b)(2).......... Use of minor's land.... No change. Previously
required, but now
listed in separate
subparts.
162.251, 162.618..................... 162.251, 162.363, Provide notice of No change. Previously
162.463, 162.588. curing violation. required, but now
listed in separate
subparts.
162.256, 162.623..................... 162.256, 162.368, Respond to notice of No change. Previously
162.468, 162.593. trespass. required, but now
listed in separate
subparts.
162.113.............................. 162.022, 162.113....... Appealing decisions.... No change. Previously
required, but now
listed in separate
subparts.
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The table showing the burden of the information collection is
included below for your information.
BILLING CODE 4310-6W-P
[[Page 73788]]
[GRAPHIC] [TIFF OMITTED] TP29NO11.010
[[Page 73789]]
[GRAPHIC] [TIFF OMITTED] TP29NO11.011
BILLING CODE 4310-6W-C
BIA invites comments on the information collection requirements in
the proposed regulation. You may submit comments to OMB by facsimile to
(202) 395-5806 or you may send an email to the attention of the OMB
Desk Officer for the Department of the Interior: omb.eop.gov">OIRA_DOCKET@omb.eop.gov. Please send a copy of your comments to the person
listed in the FOR FURTHER INFORMATION CONTACT section of this notice.
Note that the request for comments on the rule and the request for
comments on the information collection are separate. To best ensure
consideration of your comments on the information collection, we
encourage you to submit them by December 29, 2011; while OMB has 60
days from the date of publication to act on the information collection
request, OMB may choose to act on or after 30 days. Comments on the
information collection should address: (a) The necessity of this
information collection for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of the burden (hours
and cost) of the collection of information, including the validity of
the methodology and assumptions used; (c) ways we could enhance the
quality, utility and clarity of the information to be collected; and
(d) ways we could minimize the burden of the collection of the
information on the respondents, such as through the use of automated
collection techniques or other forms of information technology. Please
note that an agency may not sponsor or request, and an individual need
not respond to, a collection of information unless it has a valid OMB
Control Number.
J. National Environmental Policy Act
This rule does not constitute a major Federal action significantly
affecting the quality of the human environment because these are
``regulations * * * whose environmental effects are too broad,
speculative, or conjectural to lend themselves to meaningful analysis
and will later be subject to the NEPA process, either collectively or
case-by-case.'' 43 CFR 46.210(j). No extraordinary circumstances exist
that would require greater NEPA review.
K. Effects on the Energy Supply (E.O. 13211)
This rule is not a significant energy action under the definition
in Executive Order 13211. A Statement of Energy Effects is not
required.
L. Clarity of This Regulation
We are required by Executive Orders 12866 and 12988 and by the
Presidential Memorandum of June 1, 1998, to write all rules in plain
language. This means that each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us
comments by one of the methods listed in the ``COMMENTS'' section. To
better help us revise the rule, your comments should be as specific as
possible. For example, you should tell us the numbers of the sections
or paragraphs that are unclearly written, which sections or sentences
are too long, the sections where you believe lists or tables would be
useful, etc.
M. Public Availability of Comments
Before including your address, phone number, email address, or
other personal identifying information in your comment, you should be
aware that your entire comment--including your personal identifying
information--may be made publicly available at any time. While you can
ask us in your comment to withhold your personal identifying
information from public review, we cannot guarantee that we will be
able to do so.
List of Subjects in 25 CFR Part 162
Indians--lands.
For the reasons stated in the preamble, the Department of the
Interior, Bureau of Indian Affairs, proposes to amend part 162 in Title
25 of the Code of Federal Regulations as follows:
PART 162--LEASES AND PERMITS
1. Revise the authority citation for part 162 to read as follows:
Authority: 5 U.S.C. 301, R.S. 463 and 465; 25 U.S.C. 2 and 9.
Interpret or apply sec. 3, 26 Stat. 795, sec. 1, 28 Stat. 305, secs.
1, 2, 31 Stat. 229, 246, secs. 7, 12, 34 Stat. 545, 34 Stat. 1015,
1034, 35 Stat. 70, 95, 97, sec. 4, 36 Stat. 856, sec. 1, 39 Stat.
128, 41 Stat. 415, as amended, 751, 1232, sec. 17, 43 Stat. 636,
641, 44 Stat. 658, as amended, 894, 1365, as amended, 47 Stat. 1417,
sec. 17, 48
[[Page 73790]]
Stat. 984, 988, 49 Stat. 115, 1135, sec. 55, 49 Stat. 781, sec. 3,
49 Stat. 1967, 54 Stat. 745, 1057, 60 Stat. 308, secs. 1, 2, 60
Stat. 962, sec. 5, 64 Stat. 46, secs. 1, 2, 4, 5, 6, 64 Stat. 470,
69 Stat. 539, 540, 72 Stat. 968, 107 Stat. 2011, 108 Stat. 4572,
March 20, 1996, 110 Stat. 4016; 25 U.S.C. 380, 393, 393a, 394, 395,
397, 402, 402a, 403, 403a, 403b, 403c, 409a, 413, 415, 415a, 415b,
415c, 415d, 477, 635, 2201 et seq., 3701, 3702, 3703, 3712, 3713,
3714, 3715, 3731, 3733, 4211; 44 U.S.C. 3101 et seq.
Sec. 162.100 [Removed]
2. Remove Sec. 162.100.
Sec. Sec. 162.101.162.113 [Redesignated]
3. Redesignate Sec. 162.101-Sec. 162.113 in subpart A as Sec.
162.101-Sec. 162.113 in subpart B.
4. Revise subpart A to read as follows:
PART 162--LEASES AND PERMITS
Subpart A--General Provisions
Purpose, Definitions, and Scope
Sec.
162.001 What is the purpose of this part?
162.002 How is this part subdivided?
162.003 What key terms do I need to know?
162.004 May BIA approve or grant permits under this part?
When to Get a Lease
162.005 When does this part apply?
162.006 To what land does this part apply?
162.007 To what types of land use agreements does this part not
apply?
162.008 When do I need a lease to authorize possession of Indian
land?
How to Get a Lease
162.009 How do I obtain a lease?
162.010 How does a prospective lessee identify and contact Indian
landowners to negotiate a lease?
162.011 What are the consent requirements for a lease?
162.012 Who is authorized to consent to a lease?
Lease Administration
162.013 What laws apply to leases approved under this part?
162.014 Will BIA comply with tribal laws in making decisions
regarding leases?
162.015 May tribes administer this part on BIA's behalf?
162.016 May a lease address access to the leased premises by roads
or other infrastructure?
162.017 May a lease combine tracts with different Indian landowners?
162.018 What are BIA's responsibilities in approving leases?
162.019 What are BIA's responsibilities in administering and
enforcing leases?
162.020 What may BIA do if an individual or entity takes possession
of or uses Indian land without an approved lease or other proper
authorization?
162.021 May BIA take emergency action if Indian land is threatened?
162.022 May decisions under this part be appealed?
162.023 Who may I contact with questions concerning the leasing
process?
162.024 What documentation may BIA require in approving,
administering, and enforcing leases?
Subpart A--General Provisions
Purpose, Definitions, and Scope
Sec. 162.001 What is the purpose of this part?
This part identifies:
(a) Conditions and authorities under which we will approve leases
of Indian land and may issue permits on Government land;
(b) How to obtain leases;
(c) Terms and conditions required in leases;
(d) How we administer and enforce leases; and
(e) Special requirements for leases made under special acts of
Congress that apply only to certain Indian reservations.
Sec. 162.002 How is this part subdivided?
(a) This part includes multiple subparts relating to:
(1) General Provisions (Subpart A);
(2) Agricultural Leases (Subpart B);
(3) Residential Leases (Subpart C);
(4) Business Leases (Subpart D);
(5) Wind Energy Evaluation, Wind Resource, and Solar Resource
Leases (Subpart E);
(6) Special Requirements for Certain Reservations (Subpart F);
(7) Records (Subpart G).
(b) Subpart F identifies special provisions applicable only to
leases made under special acts of Congress that apply only to certain
Indian reservations. Leases covered by Subpart F are also subject to
the provisions in subparts A through G, except to the extent that
subparts A through G are inconsistent with the provisions in subpart F
or any act of Congress under which the lease is made.
(c) Leases covered by Subpart B are not subject to the provisions
in subpart A. Leases covered by subpart B are subject to the provisions
in subpart G, except that if a provision in subpart B conflicts with a
provision of subpart G, then the provision in subpart B will govern.
Sec. 162.003 What key terms do I need to know?
Adult means a person who is 18 years of age or older.
Appeal bond means a bond posted upon filing of an appeal that
provides a security or guaranty if an appeal creates a delay in
implementing a BIA decision that could cause a significant and
measurable financial loss to another party.
Approval means written authorization by the Secretary or a
delegated official or, where applicable, the ``deemed approved''
authorization of an amendment or sublease.
Assignment means an agreement between a lessee and an assignee,
whereby the assignee acquires all or some of the lessee's rights, and
assumes all or some of the lessee's obligations, under a lease.
BIA means the Secretary of the Interior or the Bureau of Indian
Affairs within the Department of the Interior and any tribe acting on
behalf of the Secretary or Bureau of Indian Affairs under Sec.
162.015, except that this term means only the Secretary of the Interior
or Bureau of Indian Affairs if the function is an inherently Federal
function.
Business day means Monday through Friday, excluding federally
recognized holidays and other days that the applicable office of the
Federal Government is closed to the public.
Consent or consenting means written authorization by an Indian
landowner to a specified action.
Constructive notice means:
(1) Public notice posted at the tribal government office, tribal
community building, and/or the United States Post Office; and
(2) Notice published in the local newspaper(s) nearest to the
affected land and/or announced on a local radio station(s).
Court of competent jurisdiction means a Federal, tribal, or State
court with jurisdiction.
Day means a calendar day, unless otherwise specified.
Emancipated minor means a person less than 18 years of age who is
married or who is determined by a court of competent jurisdiction to be
legally able to care for himself or herself.
Equipment installation plan means a plan that describes the type
and location of any improvements to be installed by the lessee to
evaluate the resources and a schedule showing the tentative
commencement and completion dates for installation of those
improvements.
Fair market rental means the amount of rental income that a leased
tract of Indian land would most probably command in an open and
competitive market, or as determined by competitive bidding.
Fee interest means an interest in land that is owned in
unrestricted fee status, and is thus freely alienable by the fee owner.
Fractionated tract means a tract of Indian land owned in common by
Indian landowners and/or fee owners holding undivided interests
therein.
[[Page 73791]]
Government land means any tract, or interest therein, in which the
surface estate is owned and administered by the United States, not
including tribal land that has been reserved for administrative
purposes.
Holdover means circumstances in which a lessee remains in
possession of the leased premises after the lease term expires.
Housing for public purposes means multi-family developments and
single-family residential developments (i) administered by a tribe,
Tribally-Designated Housing Entity, or a tribally-sponsored or tribally
sanctioned not-for-profit entity; or (ii) substantially financed using
a tribal, Federal, or State housing assistance program or not-for
profit entity.
Immediate family means a spouse, brother, sister, aunt, uncle,
niece, nephew, first cousin, lineal ancestor, lineal descendant, or
member of the household.
Improvements means buildings, other structures, and associated
infrastructure constructed or installed under a lease to serve the
purposes of the lease.
Indian means:
(1) Any person who is a member of any Indian tribe, is eligible to
become a member of any Indian tribe, or is an owner as of October 27,
2004, of a trust or restricted interest in land;
(2) Any person meeting the definition of Indian under the Indian
Reorganization Act (25 U.S.C. 479) and the regulations promulgated
thereunder; and
(3) With respect to the inheritance and ownership of trust or
restricted land in the State of California pursuant to 25 U.S.C. 2206,
any person described in paragraph (1) or (2) or any person who owns a
trust or restricted interest in a parcel of such land in that State.
Indian land means any tract in which any interest in the surface
estate is owned by a tribe or individual Indian in trust or restricted
status and includes both individually owned Indian land and tribal
land.
Indian landowner means a tribe or individual Indian who owns an
interest in Indian land.
Individually owned Indian land means any tract, or interest
therein, in which the surface estate is owned by an individual Indian
in trust or restricted status.
Indian tribe means an Indian tribe under section 102 of the
Federally Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a).
Interest, when used with respect to Indian land, means an ownership
right to the surface estate of Indian land.
Lease means a written contract between Indian landowners and a
lessee, whereby the lessee is granted a right to possession of Indian
land, for a specified purpose and duration.
Leasehold mortgage means a mortgage, deed of trust, or other
instrument that pledges a lessee's leasehold interest as security for a
debt or other obligation owed by the lessee to a lender or other
mortgagee.
Lessee means person or entity who has acquired a legal right of
possession to Indian land by a lease under this part.
Life estate means an interest in property held only for the
duration of a designated person's life. A life estate may be created by
a conveyance document or by operation of law.
LTRO means the Land Titles and Records Office of the BIA.
Mail means mailing by U.S. Postal Service or commercial delivery
service.
Minor means an individual who is less than 18 years of age.
Nominal rental or nominal compensation means a rental amount that
is so insignificant that it bears no relationship to the value of the
property that is being leased.
Non compos mentis means a person who has been legally determined by
a court of competent jurisdiction to be of unsound mind or incapable of
managing his or her own affairs.
Notice of violation means a letter notifying the lessee of a
violation of the lease and providing the lessee with a specified period
of time to show cause why the lease should not be cancelled for the
violation. A 10-day show cause letter is one type of notice of
violation.
Orphaned minor means a minor who does not have one or more
guardians duly appointed by a court of competent jurisdiction.
Performance bond means security for the performance of certain
lease obligations, as furnished by the lessee, or a guaranty of such
performance as furnished by a third-party surety.
Permit means a written, non-assignable agreement between Indian
landowners or BIA and the permittee, whereby the permittee is granted a
temporary, revocable privilege to use Indian land or Government land,
for a specified purpose.
Permittee means a person or entity who has acquired a legal right
of use to Indian land or Government land by a permit.
Power of attorney means an authority by which one person enables
another to act for him/her as attorney in fact.
Remainder interest means an interest in Indian land that is created
at the same time as a life estate, for the use and enjoyment of its
owner after the life estate terminates.
Restoration and reclamation plan means a plan that defines the
reclamation, revegetation, restoration, and soil stabilization
requirements for the project area, and requires the expeditious
reclamation of construction areas and revegetation of disturbed areas
to reduce invasive plant infestation and erosion.
Secretary means the Secretary of the Interior.
Single-family residence means a building with one to four dwelling
units on a tract of land under a single residential lease, or as
defined by tribal zoning law or other tribal authorization.
Single-family residential development means one or more single-
family residences owned, managed, or developed by a single entity.
Sublease means a written agreement by which the lessee grants to an
individual or entity a right to possession less than that held by the
lessee under the lease.
Surety means one who guarantees the performance of another.
Trespass means any unauthorized occupancy, use of, or action on any
Indian land or Government land.
Tribal authorization means a duly adopted tribal resolution, tribal
ordinance, or other appropriate tribal document authorizing the
specified action.
Tribally Designated Housing Entity means a tribally designated
housing entity under 25 U.S.C. 4103(21).
Tribal land means the surface estate of lands or any interest
therein, title to which is held by the United States in trust for one
or more tribes, or title to which is held by one or more tribes subject
to Federal restrictions against alienation or encumbrance, and includes
such lands reserved for BIA administrative purposes. The term also
includes the surface estate of lands held by the United States in trust
for an Indian corporation chartered under section 17 of the Act of June
18, 1934 (48 Stat. 988; 25 U.S.C. 477).
Tribal law means the body of non-Federal law that governs lands and
activities under the jurisdiction of a tribe, including ordinances or
other enactments by the tribe, and tribal court rulings.
Tribal land assignment means a contract or agreement that conveys
to tribal members any rights for the temporary use of tribal lands,
assigned by an Indian tribe in accordance with tribal laws or customs.
Trust or restricted land or trust or restricted status means any
tract, or interest therein, that the United States
[[Page 73792]]
holds in trust for the benefit of one or more tribes or individual
Indians, or any tract, or interest therein, that one or more tribes or
individual Indians holds title to, but can only alienate or encumber
with the approval of the United States because of limitations contained
in the conveyance instrument pursuant to Federal law or limitations
contained in Federal law.
Undivided interest means a fractional share in the surface estate
of Indian land, where the surface estate is owned in common with other
Indian landowners or fee owners.
Us/we/our means the Secretary or the Bureau of Indian Affairs (BIA)
and any tribe acting on behalf of the Secretary or BIA under Sec.
162.015, except that this term means only the Secretary or BIA if the
function is an inherently Federal function.
Uniform Standards of Professional Appraisal Practice (USPAP) means
the standards promulgated by the Appraisal Standards Board of the
Appraisal Foundation to establish requirements and procedures for
professional real property appraisal practice.
Violation means a failure to take an action, including payment of
compensation, when required by the lease, or to otherwise not comply
with a term of the lease. This definition applies for purposes of this
part no matter how ``violation'' or ``default'' is defined in the
lease.
Sec. 162.004 May BIA approve or grant permits under this part?
(a) Permits for the use of Indian land do not require our approval;
however, you must fulfill the following requirements:
(1) Ensure that permitted activities comply with all applicable
environmental and cultural resource laws; and
(2) Submit all permits to the appropriate BIA office for us to
confirm that the document meets the definition of ``permit'' and does
not grant an interest in Indian land and allow us to maintain a copy of
the permit in our records.
(b) The following table provides characteristics of permits versus
leases.
------------------------------------------------------------------------
Permit Lease
------------------------------------------------------------------------
Does not grant a legal interest in Indian Grants a legal interest in
land. Indian land.
Shorter term.............................. Longer term.
Limited use............................... Broader use with associated
infrastructure.
Subject to unlimited access by others..... Lessee has right of
possession, ability to
limit or prohibit access by
others.
Indian landowner may terminate at any time Indian landowner may
terminate under limited
circumstances.
------------------------------------------------------------------------
(c) We may grant permits for the use of Government land. The
leasing regulations in this part will apply to such permits, as
appropriate.
When to Get a Lease
Sec. 162.005 When does this part apply?
(a) This part applies to all leases, amendments, assignments,
subleases, and leasehold mortgages submitted to BIA for approval after
[INSERT FINAL RULE EFFECTIVE DATE].
(b) If the terms of a lease document approved by BIA prior to
[INSERT FINAL RULE EFFECTIVE DATE] conflict with this part, the terms
of the lease document govern.
(c) We may amend this part at any time.
Sec. 162.006 To what land does this part apply?
(a) This part applies to Indian land and Government land, including
any tract in which an individual Indian or tribe owns an interest in
trust or restricted status.
(1) We will not lease fee interests or collect rent on behalf of
fee interest owners. We will not condition our approval of a lease of
the trust and restricted interests on a lease having been obtained from
the owners of any fee interests.
(2) We will not include the fee interests in a tract in calculating
the applicable percentage of interests required for consent to a lease
document.
(b) This paragraph applies if there is a life estate on the land to
be leased.
(1) When all of the trust or restricted interests in a tract are
subject to a life estate, the life tenant may lease the land without
our approval, for the duration of the life estate. The following
conditions apply:
(i) Such a lease must be recorded;
(ii) The lessee must pay rent directly to the life tenant under the
terms of the lease;
(iii) We may monitor the use of the land on behalf of the owners of
the remainder interests, as appropriate, but will not be responsible
for enforcing the lease on behalf of the life tenant.
(iv) We will not lease the remainder interests or join in a lease
by the life tenant on behalf of the owners of the remainder interests
except as needed to preserve the value of the land;
(v) We will not lease on the life tenant's behalf, but we may
collect rents on behalf of the life tenant; and
(vi) We will be responsible for enforcing the terms of the lease on
behalf of the owners of the remainder interests.
(2) When less than all of the trust or restricted interests in a
tract are subject to a life estate, the life tenant may not lease the
land unless the remainder interests are also leased. The following
conditions apply:
(i) We will not lease on the life tenant's behalf, but we may
collect rents on behalf of the life tenant; and
(ii) We will be responsible for enforcing the terms of the lease on
behalf of the owners of the remainder interests.
(3) Rent payable under the lease will be paid to the life tenant in
accordance with Part 179 of this chapter, unless the document creating
the life estate provides otherwise.
(4) All leases entered into by life tenants must be recorded in our
Land Titles and Records Office, even where our approval is not
required.
Sec. 162.007 To what types of land use agreements does this part not
apply?
(a) This part does not apply to the following types of land use
agreements:
------------------------------------------------------------------------
This part does not apply to . . . which are covered by . . .
------------------------------------------------------------------------
Mineral leases, prospecting permits, or 25 CFR parts 211, 212 and
mineral development agreements. 225.
Grazing permits........................... 25 CFR part 166.
Timber contracts.......................... 25 CFR part 163.
Contracts or agreements that encumber 25 U.S.C. 81.
tribal land.
Rights-of-way............................. 25 CFR part 169.
Tribal land assignments and similar tribal laws.
instruments authorizing temporary uses.
Traders' licenses......................... 25 CFR part 140.
------------------------------------------------------------------------
(b) This part does not apply to leases of water rights associated
with Indian land, except to the extent the use of such water rights is
incorporated in a lease of the land itself.
Sec. 162.008 When do I need a lease to authorize possession of Indian
land?
(a) You need a lease under this part to possess Indian land if you
meet one of the criteria in the following table.
[[Page 73793]]
------------------------------------------------------------------------
then you must obtain a lease
If you are . . . under this part . . .
------------------------------------------------------------------------
(1) A person or legal entity (including from the owners of the land
an independent legal entity owned and before taking possession of
operated by a tribe) who is not an the land or any portion
owner of the Indian land. thereof.
(2) An Indian landowner of a fractional from the owners of other trust
interest in the land. and restricted interests in
the land, unless those owners
have given you permission to
take or continue in possession
without a lease.
------------------------------------------------------------------------
(b) You do not need a lease to possess Indian land if you meet any
of the criteria in the following table.
------------------------------------------------------------------------
You do not need a lease if you are . . but the following conditions
. apply . . .
------------------------------------------------------------------------
(1) An Indian landowner who owns 100 (1) We may require you to
percent of the trust or restricted provide evidence of a direct
interests in a tract. benefit to the minor child;
and
(2) A parent or guardian of a minor (2) When the child is no longer
child who owns 100 percent of the a minor, you must obtain a
trust interests in the land. lease to authorize continued
possession.
(3) A 25 U.S.C. 477 corporate entity You must record documents in
that holds the Indian land directly accordance with Sec.
under its Federal charter (not 162.341, Sec. 162.441, and
pursuant to a lease from the Indian Sec. 162.566.
tribe).
(4) A person or legal entity that is You must record documents in
leasing Indian land under a special accordance with Sec.
act of Congress authorizing leases 162.341, Sec. 162.441, and
without our approval. Sec. 162.566.
------------------------------------------------------------------------
(c) Landowners who enter into an agreement under paragraph (a)(2)
may wish to consider documenting such an agreement and recording it in
the LTRO.
How to Get a Lease
Sec. 162.009 How do I obtain a lease?
(a) This section establishes the basic steps to obtain a lease.
(1) Prospective lessees must:
(i) Directly negotiate with Indian landowners for a lease; and
(ii) Notify all Indian landowners and obtain the consent of the
Indian landowners of the applicable percentage of interests, for
fractionated tracts; and
(2) Prospective lessees and Indian landowners must:
(i) Prepare the required information and analyses, including
information to facilitate BIA's analysis under applicable environmental
and cultural resource requirements; and
(ii) Ensure the lease complies with the requirements in subpart B
for agricultural leases, subpart C for residential leases, subpart D
for business leases, and subpart E for wind energy evaluation, wind
resource, or solar resource leases; and
(3) Prospective lessees and/or Indian landowners must submit the
lease, and required information and analyses, to the BIA office with
jurisdiction over the lands covered by the lease for our review and
approval.
(b) Generally, residential, business, wind energy evaluation, wind
resource, and solar resource leases will not be advertised for
competitive bid.
Sec. 162.010 How does a prospective lessee identify and contact
Indian landowners to negotiate a lease?
(a) Prospective lessees may submit a written request to us to
obtain the following information for the purpose of negotiating a
lease:
(1) Names and addresses of the Indian landowners or their
representatives;
(2) Information on the location of the parcel; and
(3) The percentage of undivided interest owned by each Indian
landowner.
(b) We may assist prospective lessees in contacting the Indian
landowners or their representatives for the purpose of negotiating a
lease, upon request.
(c) We will assist the Indian landowners in those negotiations,
upon their request.
Sec. 162.011 What are the consent requirements for a lease?
(a) For fractionated tracts:
(1) Except in Alaska, the owners of the following percentage of
undivided trust or restricted interests in a fractionated tract of
Indian land must consent to a lease of that tract:
------------------------------------------------------------------------
If the number of owners of the undivided Then the required percentage
trust or restricted interest in the tract of the undivided trust or
is restricted interest is
------------------------------------------------------------------------
(i) One to five........................... 90 percent;
(ii) Six to 10............................ 80 percent;
(iii) 11 to 19............................ 60 percent;
(iv) 20 or more........................... Over 50 percent.
------------------------------------------------------------------------
(2) Leases in Alaska require consent of all of the Indian
landowners in the tract.
(3) If the prospective lessee is also an Indian landowner, their
consent will be included in the percentages in paragraphs (a)(1) and
(a)(2).
(4) Where owners of the applicable percentages in paragraph (a)(1)
consent to a lease document:
(i) That lease document binds all non-consenting owners to the same
extent as if those owners also consented to the lease document.
(ii) That lease document will not bind a non-consenting Indian
tribe, except with respect to the tribally owned fractional interest,
and the non-consenting Indian tribe will not be treated as a party to
the lease. Nothing in this paragraph shall be construed to affect the
sovereignty or sovereign immunity of the Indian tribe.
(5) We will determine the number of owners of, and undivided
interests in, a fractionated tract of Indian land, for the purposes of
calculating the percentages in paragraph (a)(1) based on our records on
the date on which the lease is submitted to us for approval.
(b) Tribal land subject to a tribal land assignment may only be
leased with the consent of the tribe.
Sec. 162.012 Who is authorized to consent to a lease?
(a) Indian tribes, adult Indian landowners, or emancipated minors,
may consent to a lease of their land, including undivided interests in
fractionated tracts.
(b) The following individuals or entities may consent on behalf of
an individual Indian landowner:
(1) An adult with legal custody acting on behalf of his or her
minor children;
(2) A guardian, conservator, or other fiduciary appointed by a
court of
[[Page 73794]]
competent jurisdiction recognized to act on behalf of an individual
Indian landowner;
(3) Any person who is authorized to practice before the Department
of the Interior under 43 CFR part 1 and has been retained by the Indian
landowner;
(4) BIA, under the circumstances in paragraph (c) of this section;
or
(5) An adult or legal entity who has been given a written power of
attorney that:
(i) Meets all of the formal requirements of any applicable law
under Sec. 162.013; and
(ii) Identifies the attorney-in-fact; and
(iii) Describes the scope of the powers granted, to include leasing
land, and any limits on those powers.
(c) BIA may give written consent to a lease, and that consent must
be counted in the percentage ownership described in Sec. 162.011, on
behalf of:
(1) The individual owner if the owner is deceased and the heirs to,
or devisees of, the interest of the deceased owner have not been
determined;
(2) Individuals whose whereabouts are unknown to us, after we make
a reasonable attempt to locate such individuals;
(3) Individuals who are found to be non compos mentis, or
determined to be an adult in need of assistance or under legal
disability as defined in part 115 of this chapter;
(4) Orphaned minors who do not have guardians duly appointed by a
court of competent jurisdiction;
(5) Individuals who have given us a written power of attorney to
lease their land; or
(6) The individual Indian landowners of a fractionated tract where:
(i) We have given the Indian landowners written notice of our
intent to consent to a lease on their behalf;
(ii) The Indian landowners are unable to agree upon a lease during
a three month negotiation period following the notice; and
(iii) The land is not being used by an Indian landowner under Sec.
162.008(b)(1).
Lease Administration
Sec. 162.013 What laws will apply to leases approved under this part?
(a) In addition to the regulations in this part, leases approved
under this part are subject to:
(1) Applicable Federal laws and any specific Federal statutory
requirements that are not incorporated in this part;
(2) Tribal law, subject to paragraph (b) of this section; and
(3) State law, in the specific areas and circumstances in Indian
country where Congress or a Federal court has made it expressly
applicable.
(b) If any regulation in this part conflicts with a tribal law, the
Secretary may waive the application of such regulation to tribal land,
unless the waiver would:
(1) Violate a Federal statute or judicial decision; or
(2) Conflict with the United States' trust responsibility under
Federal law.
(c) The parties to a specific lease may subject it to State or
local law in the absence of Federal or tribal law, if:
(1) The lease includes a provision to this effect; and
(2) The Indian landowners expressly agree to the application of
State or local law.
(d) An agreement under paragraph (c) of this section does not waive
a tribe's sovereign immunity unless the tribe expressly states its
intention to waive sovereign immunity in the lease of tribal land.
Sec. 162.014 Will BIA comply with tribal laws in making decisions
regarding leases?
Unless contrary to Federal law, BIA will comply with tribal laws in
making decisions regarding leases, including tribal laws regulating
activities on leased land under tribal jurisdiction, including, but not
limited to, tribal laws relating to land use, environmental protection,
and historic or cultural preservation.
Sec. 162.015 May tribes administer this part on BIA's behalf?
A tribe or tribal organization may contract or compact under the
Indian Self-Determination and Education Assistance Act (25 U.S.C. 450f
et seq.) to administer any portion of this part that is not an inherent
Federal function.
Sec. 162.016 May a lease address access to the leased premises by
roads or other infrastructure?
A lease may address access to the leased premises by roads or other
infrastructure, as long as the access complies with applicable
statutory and regulatory requirements, including 25 CFR part 169.
Sec. 162.017 May a lease combine tracts with different Indian
landowners?
(a) We may approve a lease that combines multiple tracts of Indian
land into a unit, if we determine that unitization is:
(1) In the Indian landowners' best interest; and
(2) Consistent with the efficient administration of the land.
(b) For a lease that covers multiple tracts, the minimum consent
requirements apply to each tract separately.
(c) Unless the lease provides otherwise, the rent or other
compensation will be prorated in proportion to each tract acreage
contribution to the entire lease. Once prorated per tract, the rent
will be distributed to the owners of each tract based upon their
respective percentage interest in that particular tract.
Sec. 162.018 What are BIA's responsibilities in approving leases?
(a) We will work to provide assistance to Indian landowners in
leasing their land, either through negotiations or advertisement.
(b) We will promote tribal control and self-determination over
tribal land and other land under the tribe's jurisdiction, including
through contracts and self-governance compacts entered into under the
Indian Self-Determination and Education Assistance Act, as amended, 25
U.S.C. 450f et. seq.
(c) We will promptly respond to requests for BIA approval of
leases, as specified in Sec. 162.339, Sec. 162.439, Sec. 162.529,
and Sec. 162.564.
(d) We will work to ensure that the use of the land is consistent
with the Indian landowners' wishes.
Sec. 162.019 What are BIA's responsibilities in administering and
enforcing leases?
(a) Upon notification from the Indian landowner that the lessee has
failed to comply with the terms and conditions of the lease, we will
promptly take appropriate action, as specified in Sec. 162.362, Sec.
162.462, and Sec. 162.587.
(b) We will promptly respond to requests for BIA approval of
amendments, assignments, leasehold mortgages, and subleases, as
specified in subparts B, C, D, and E.
(c) We will respond to Indian landowners' concerns regarding the
management of their land.
(d) We will take emergency action as needed to preserve the value
of the land.
Sec. 162.020 What may BIA do if an individual or entity takes
possession of or uses Indian land without an approved lease or other
proper authorization?
If an individual or entity takes possession of, or uses, Indian
land without a lease and a lease is required, the unauthorized
possession or use is a trespass. We may take action to recover
possession on behalf of the Indian landowners and pursue any additional
remedies available under applicable law. The Indian landowner may
pursue any available remedies under tribal law.
Sec. 162.021 May BIA take emergency action if Indian land is
threatened?
(a) We may take appropriate emergency action if there is a natural
disaster or if an individual or entity causes or threatens to cause
immediate
[[Page 73795]]
and significant harm to Indian land. Emergency action may include
judicial action seeking immediate cessation of the activity resulting
in or threatening the harm.
(b) We will make reasonable efforts to notify the Indian landowners
before and after taking emergency action. In all cases, we will notify
the Indian landowners after taking emergency action by constructive
notice.
Sec. 162.022 May decisions under this part be appealed?
Appeals from BIA decisions under this part may be taken pursuant to
part 2 of this chapter, except where otherwise provided in this part.
For purposes of appeals from BIA decisions under this part,
``interested party'' is defined as any person whose own direct economic
interest is adversely affected by an action or decision.
Sec. 162.023 Who may I contact with questions concerning the leasing
process?
The Indian landowner or prospective lessee may contact the local
BIA realty office with jurisdiction over the land for answers to
questions about the leasing process.
Sec. 162.024 What documentation may BIA require in approving,
administering, and enforcing leases?
(a) We may require that the parties provide any pertinent
environmental and technical records, reports, and other information
(e.g., records of lease payments), related to approval, administration,
and enforcement of leases.
(b) We will adopt environmental assessments and environmental
impact statements prepared by another Federal agency, entity, or person
under 43 CFR 46.320 and 42 CFR 1506.3, but may require a supplement. We
shall use any reasonable evidence that another Federal agency has
accepted the environmental report, including but not limited to,
letters of approval or acceptance.
(c) Upon our request, the parties must make appropriate records,
reports, or information available for our inspection and duplication.
We will keep confidential any such information that is marked
confidential or proprietary and is exempt from public release, to the
extent allowed by law. Failure to cooperate with such request, provide
data, or grant access to information or records, may, at our
discretion, be treated as a lease violation. All approved leases must
include such disclosure provisions.
5. In Sec. 162.101, revise the section heading and the
introductory language to read as follows:
Sec. 162.101 What key terms do I need to know for this subpart?
For the purposes of this subpart:
* * * * *
Sec. Sec. 162.102-162.104 [Removed]
6. Remove Sec. 162.102-Sec. 162.104.
Sec. Sec. 162.105 and 162.106 [Amended]
7. In Sec. 162.105 and Sec. 162.106, remove the word ``lease''
and add in its place the words ``agricultural lease'' and remove the
word ``leasing'' and add in its place the words ``agricultural
leasing'' wherever they appear.
8. In Sec. 162.107, revise the section heading and the
introductory language in paragraph (a) to read as follows:
Sec. 162.107 What are BIA's objectives in granting and approving
agricultural leases?
(a) We will assist Indian landowners in leasing their land for
agricultural purposes. For the purposes of Sec. Sec. 162.102 through
162.256:
* * * * *
Sec. Sec. 162.108-162.110 [Amended]
9. In Sec. 162.108-Sec. 162.110 remove the word ``lease''
wherever it appears and add in its place the words ``agricultural
lease''.
10. In Sec. 162.111, revise the section heading, the introductory
language in paragraph (a), and paragraph (b) to read as follows:
Sec. 162.111 Who owns the records associated with this subpart?
(a) Records associated with this subpart are the property of the
United States if they:
* * * * *
(b) Records associated with this subpart not covered by paragraph
(a) of this section that are made or received by a tribe or tribal
organization in the conduct of business with the Department of the
Interior under this subpart are the property of the tribe.
11. Revise the heading of Sec. 162.112 to read as follows:
Sec. 162.112 How must records associated with this part be preserved?
Sec. 162.113 [Amended]
12. In Sec. 162.113 remove the word ``part'' wherever it appears
and add in its place the word ``subpart''.
13. Add new subparts C through D to read as follows:
Subpart C--Residential Leases
Residential Leasing General Provisions
Sec.
162.301 What types of leases does this subpart cover?
162.302 Is there a model residential lease form?
Lease Requirements
162.311 How long may the term of a residential lease run?
162.312 What must the lease include if it contains an option to
renew?
162.313 Are there mandatory provisions that a residential lease must
contain?
162.314 May improvements be made under a residential lease?
162.315 How must a residential lease address ownership of
improvements?
162.316 How will BIA enforce removal requirements in a residential
lease?
162.317 How must a residential lease describe the land?
Rental Requirements
162.320 How much rent must be paid under a residential lease?
162.321 Will BIA require a valuation to determine fair market rental
for a residential lease?
162.322 What type of valuation may be used to determine fair market
rental for a residential lease?
162.323 When are rental payments due under a residential lease?
162.324 Must a residential lease specify to whom rental payments may
be made?
162.325 What form of payment may be accepted under a residential
lease?
162.326 May a residential lease provide for non-monetary or varying
types of compensation?
162.327 Will BIA notify a lessee when a payment is due under a
residential lease?
162.328 Must a residential lease provide for rental reviews or
adjustments?
162.329 What other types of payments are required under a
residential lease?
Bonding and Insurance
162.334 Must a lessee or assignee provide a performance bond for a
residential lease?
162.335 What forms of performance bonds may be accepted under a
residential lease?
162.336 What is the bond release process under a residential lease?
162.337 Must a lessee provide insurance for a residential lease?
Approval
162.338 What documents must the parties submit to obtain BIA
approval of a residential lease?
162.339 What is the approval process for a residential lease?
162.340 When will a residential lease be effective?
162.341 Must residential lease documents be recorded?
162.342 What action may BIA take if a residential lease disapproval
decision is appealed?
Amendments
162.343 May the parties amend a residential lease?
162.344 What are the consent requirements for an amendment of a
residential lease?
162.345 What is the approval process for an amendment of a
residential lease?
162.346 How will BIA decide whether to approve an amendment of a
residential lease?
[[Page 73796]]
Assignments
162.347 May a lessee assign a residential lease?
162.348 What are the consent requirements for an assignment of a
residential lease?
162.349 What is the approval process for an assignment of a
residential lease?
162.350 How will BIA decide whether to approve an assignment of a
residential lease?
Subleases
162.351 May a lessee sublease a residential lease?
162.352 What are the consent requirements for a sublease of a
residential lease?
162.353 What is the approval process for a sublease of a residential
lease?
162.354 How will BIA decide whether to approve a sublease of a
residential lease?
Leasehold Mortgages
162.355 May a lessee mortgage a residential lease?
162.356 What are the consent requirements for a leasehold mortgage
of a residential lease?
162.357 What is the approval process for a leasehold mortgage of a
residential lease?
162.358 How will BIA decide whether to approve a leasehold mortgage
of a residential lease?
Effectiveness, Compliance, and Enforcement
162.359 When will an amendment, assignment, sublease, or leasehold
mortgage under a residential lease be effective?
162.360 What happens if BIA disapproves an amendment, assignment,
sublease, or leasehold mortgage?
162.361 May BIA investigate compliance with a residential lease?
162.362 May a residential lease provide for negotiated remedies in
the event of a violation?
162.363 What will BIA do about a violation of a residential lease?
162.364 What will BIA do if the lessee does not cure a violation of
a residential lease on time?
162.365 Will late payment charges or special fees apply to
delinquent payments due under a residential lease?
162.366 How will payment rights relating to a residential lease be
allocated between the Indian landowners and the lessee?
162.367 When will a cancellation of a residential lease be
effective?
162.368 What will BIA do if a lessee remains in possession after a
residential lease expires or is cancelled?
162.369 Will BIA regulations concerning appeal bonds apply to
cancellation decisions involving residential leases?
162.370 When will BIA issue a decision on an appeal from a
residential leasing decision?
162.371 What happens if the lessee abandons the leased premises?
Subpart D--Business Leases
Business Leasing General Provisions
Sec.
162.401 What types of leases does this subpart cover?
162.402 Is there a model business lease form?
Lease Requirements
162.411 How long may the term of a business lease run?
162.412 What must the lease include if it contains an option to
renew?
162.413 Are there mandatory provisions that a business lease must
contain?
162.414 May improvements be made under a business lease?
162.415 How must a business lease address ownership of improvements?
162.416 How will BIA enforce removal requirements in a business
lease?
162.417 What requirements for due diligence must a business lease
include?
162.418 May a business lease allow compatible uses?
162.419 How must a business lease describe the land?
Monetary Compensation Requirements
162.420 How much monetary compensation must be paid under a business
lease?
162.421 Will BIA require a valuation to determine fair market rental
for a business lease?
162.422 What type of valuation may be used to determine fair market
rental for a business lease?
162.423 When are monetary compensation payments due under a business
lease?
162.424 Must a business lease specify to whom monetary compensation
payments may be made?
162.425 What form of monetary compensation payment may be accepted
under a business lease?
162.426 May the business lease provide for non-monetary or varying
types of compensation?
162.427 Will BIA notify a lessee when a payment is due under a
business lease?
162.428 Must a business lease provide for compensation reviews or
adjustments?
162.429 What other types of payments are required under a business
lease?
Bonding and Insurance
162.434 Must a lessee provide a performance bond for a business
lease?
162.435 What forms of performance bond may be accepted under a
business lease?
162.436 What is the bond release process under a business lease?
162.437 Must a lessee provide insurance for a business lease?
Approval
162.438 What documents must the parties submit to obtain BIA
approval of a business lease?
162.439 What is the approval process for a business lease?
162.440 When will a business lease be effective?
162.441 Must business lease documents be recorded?
162.442 What action may BIA take if a lease disapproval decision is
appealed?
Amendments
162.443 May the parties amend a business lease?
162.444 What are the consent requirements for an amendment to a
business lease?
162.445 What is the approval process for an amendment to a business
lease?
162.446 How will BIA decide whether to approve an amendment to a
business lease?
Assignments
162.447 May a lessee assign a business lease?
162.448 What are the consent requirements for an assignment of a
business lease?
162.449 What is the approval process for an assignment of a business
lease?
162.450 How will BIA decide whether to approve an assignment of a
business lease?
Subleases
162.451 May a lessee sublease a business lease?
162.452 What are the consent requirements for a sublease of a
business lease?
162.453 What is the approval process for a sublease of a business
lease?
162.454 How will BIA decide whether to approve a sublease of a
business lease?
Leasehold Mortgages
162.455 May a lessee mortgage a business lease?
162.456 What are the consent requirements for a leasehold mortgage
under a business lease?
162.457 What is the approval process for a leasehold mortgage under
a business lease?
162.458 How will BIA decide whether to approve a leasehold mortgage
under a business lease?
Effectiveness, Compliance, and Enforcement
162.459 When will an amendment, assignment, sublease, or leasehold
mortgage under a business lease be effective?
162.460 What happens if BIA disapproves an amendment, assignment,
sublease, or leasehold mortgage under a business lease?
162.461 May BIA investigate compliance with a business lease?
162.462 May a business lease provide for negotiated remedies in the
event of a violation?
162.463 What will BIA do about a violation of a business lease?
162.464 What will BIA do if the lessee does not cure a violation of
a business lease on time?
162.465 Will late payment charges or special fees apply to
delinquent payments due under a business lease?
162.466 How will payment rights relating to a business lease be
allocated between the Indian landowners and the lessee?
162.467 When will a cancellation of a business lease be effective?
162.468 What will BIA do if a lessee remains in possession after a
business lease expires or is cancelled?
162.469 Will BIA regulations concerning appeal bonds apply to
cancellation decisions involving business leases?
[[Page 73797]]
162.470 When will BIA issue a decision on an appeal from a business
leasing decision?
162.471 What happens if the lessee abandons the leased premises?
Subpart C--Residential Leases
Residential Leasing General Provisions
Sec. 162.301 What types of leases does this subpart cover?
(a) This subpart covers both ground leases (undeveloped land) and
leases of developed land (together with the improvements thereon) on
Indian land, for housing purposes. Leases covered by this subpart would
authorize the construction or use of:
(1) A single-family residence; and
(2) Housing for public purposes.
(b) Leases for other residential development (for example, single-
family residential developments that are not housing for public
purposes and multi-family developments) are covered under subpart D of
this part.
Sec. 162.302 Is there a model residential lease form?
We will make available one or more model lease forms that satisfy
the formal requirements of this part, including, as appropriate, the
model tribal lease form jointly developed by BIA, the Department of
Housing and Urban Development, the Department of Veterans' Affairs, and
the Department of Agriculture. Use of a model lease form is not
mandatory, provided all requirements of this part are met. If a model
lease form is not used, we will assist the Indian landowners in
drafting lease provisions or in using tribal lease forms that conform
to the requirements of this part.
Lease Requirements
Sec. 162.311 How long may the term of a residential lease run?
(a) A residential lease must provide for a definite lease term,
state if there is an option to renew and, if so, provide for a definite
term for the renewal period.
(b) Unless otherwise provided by paragraphs (b)(1) or (b)(2) of
this section, the maximum term may not exceed 50 years. The lease may
provide for a primary term of less than 50 years with a provision for
one or more renewals, so long as the maximum term, including all
renewals, does not exceed 50 years.
(1) If a Federal statute provides for a longer maximum term (e.g.,
25 U.S.C. 415(a) allows for a maximum term of 99 years for certain
tribes), the lease may provide for a primary term, and one renewal not
to exceed 25 years, so long as the maximum term, including the renewal,
does not exceed the maximum term established by statute.
(2) Where all of the trust or restricted interests in a tract are
owned by a deceased Indian whose heirs and devisees have not yet been
determined, the maximum term may not exceed two years.
(c) A residential lease may not be extended by holdover.
Sec. 162.312 What must the lease include if it contains an option to
renew?
(a) If the lease provides for an option to renew, the lease must
specify:
(1) The time and manner in which the option must be exercised or is
automatically effective;
(2) That confirmation of the renewal will be submitted to us;
(3) Whether landowner consent to the renewal is required;
(4) That the lessee must provide notice to the Indian landowner and
any mortgagees of the renewal;
(5) The additional consideration, if any, that will be due upon the
exercise of the option to renew or the commencement of the renewal
term;
(6) That any change in the terms of the lease will be considered an
amendment subject to consent and BIA approval requirements pursuant to
Sec. Sec. 162.343 through 162.346; and
(7) Any other conditions for renewal (e.g., the lessee may not be
in violation of the lease at the time of renewal).
(b) We must record any renewal of a lease in the Land Titles and
Records Office.
Sec. 162.313 Are there mandatory provisions that a residential lease
must contain?
(a) All residential leases must identify:
(1) The tract or parcel of land being leased;
(2) The purpose of the lease and authorized uses of the leased
premises;
(3) The parties to the lease;
(4) The term of the lease;
(5) The owner being represented and the authority under which such
action is being taken, where one executes a lease in a representative
capacity;
(6) The citation of the statute that authorizes our approval;
(7) Who is responsible for constructing, owning, operating,
maintaining, and managing improvements;
(8) Payment requirements and late payment charges, including
interest;
(9) Insurance requirements under Sec. 162.337; and
(10) Bonding requirements under Sec. 162.334. If a performance
bond is required, the lease must state that the lessee must obtain the
consent of the surety for any legal instrument that directly affects
their obligations and liabilities.
(b) All residential leases must include the following provisions:
(1) The obligations of the lessee and its sureties to the Indian
landowners are also enforceable by the United States, so long as the
land remains in trust or restricted status;
(2) Nothing in the lease would prevent or delay termination of
Federal trust responsibilities for the land during the lease's term;
(3) There must not be any unlawful conduct, creation of a nuisance,
illegal activity, or negligent use or waste of the leased premises;
(4) The lessee must comply with all applicable laws, ordinances,
rules, regulations, and other legal requirements under Sec. 162.013;
(5) The lessee indemnifies and holds the United States and the
Indian landowners harmless from any loss, liability, or damages
resulting from the lessee's use or occupation of the leased premises
(this provision is not mandatory if the lessee would be prohibited by
law from making such an agreement);
(6) The lessee indemnifies the United States and the Indian
landowners against all liabilities or costs relating to the use,
handling, treatment, removal, storage, transportation, or disposal of
hazardous materials, or the release or discharge of any hazardous
material from the leased premises that occurs during the lease term,
regardless of fault, unless the liability or cost arises from the gross
negligence or willful misconduct of the Indian landowner (this
provision is not mandatory if the lessee would be prohibited by law
from making such an agreement);
(7) In the event that historic properties, archeological resources,
human remains, or other cultural items not previously reported are
encountered during the course of any activity associated with this
lease, all activity in the immediate vicinity of the properties,
resources, remains, or items will cease and the lessee will contact BIA
and the tribe that has jurisdiction to determine how to proceed and
appropriate disposition;
(8) BIA has the right, at any reasonable time during the term of
the lease and upon reasonable notice, to enter upon the leased premises
for inspection and compliance; and
(9) Unless otherwise indicated, this is a lease of the trust and
restricted interests in the property described and is not a lease of
any undivided fee interests. All rental payments by the
[[Page 73798]]
lessee will be distributed to the trust and restricted landowners and
life estate holders on trust and restricted land only. The lessee will
be responsible for accounting to the owners of any fee interests that
may exist in the property being leased.
(c) We may treat any provision of a lease, sublease, amendment,
assignment, or leasehold mortgage that is in violation of Federal law
as a violation of the lease.
Sec. 162.314 May improvements be made under a residential lease?
(a) The lessee may construct improvements under a residential lease
if the residential lease authorizes the construction and generally
describes the type and location of the improvements to be constructed
during the lease term.
(b) The lessee must provide reasonable notice to the Indian
landowners of the construction of any major improvements not generally
described in the lease. We will treat any attempt by the lessee to
construct major improvements, without the necessary notice, as a lease
violation.
Sec. 162.315 How must a residential lease address ownership of
improvements?
(a) A residential lease must specify who will own any improvements
the lessee constructs during the lease term. In addition, the lease
must indicate whether each specific improvement the lessee constructs
will, upon the expiration or termination of the lease:
(1) Remain on the leased premises, in a condition satisfactory to
the Indian landowners and become the property of the Indian landowner;
(2) Be removed immediately or within a time period specified in the
lease, at the lessee's expense, with the leased premises to be restored
as close as possible to their condition before construction of such
improvements; or
(3) Be disposed of by other means.
(b) A lease that requires the lessee to remove the improvements
must also provide the Indian landowners with an option to take
possession of and title to the improvements if the improvements are not
removed within the specified time period.
(c) Any permanent improvements on the leased land shall be subject
to 25 CFR 1.4 and, in addition, shall not be subject to any fee, tax,
assessment, levy, or other such charge imposed by any State or
political subdivision of a State, without regard to ownership of those
improvements. Improvements may be subject to taxation by the Indian
tribe with jurisdiction.
Sec. 162.316 How will BIA enforce removal requirements in a
residential lease?
We may take appropriate enforcement action in consultation with the
tribe for tribal land or, where feasible, with Indian landowners for
individually owned Indian land, to ensure removal of the improvements
or restoration of the premises at the lessee's expense. We may take
such enforcement action after termination or expiration of the lease.
We may collect and hold the performance bond until removal and
restoration are completed.
Sec. 162.317 How must a residential lease describe the land?
(a) A residential lease must describe the leased premises by
reference to a public or private survey, if possible. If the land
cannot be so described, the lease must include a legal description or
other description that is sufficient to identify the leased premises,
subject to our approval.
(b) If the tract is fractionated, we will describe the undivided
trust or restricted interest in the leased premises.
Rental Requirements
Sec. 162.320 How much rent must be paid under a residential lease?
(a) A residential lease of tribal land may allow for any payment
amount negotiated by the tribe, if the tribe submits a signed
certification stating that it has determined the negotiated amount to
be in its best interest. The tribe may request, in writing, that we
require fair market rental, in which case we will determine fair market
rental in accordance with Sec. 162.322 and will approve the lease only
if it requires payment of not less than fair market rental. Unless the
tribe makes such a request, BIA will not require a valuation or
appraisal or determine fair market rental, but instead will defer to
the tribe's determination that the negotiated compensation is in its
best interest.
(b) A residential lease of individually owned Indian land must
require payment of not less than fair market rental except that we may
approve a lease of individually owned Indian land that provides for the
payment of nominal rent, or less than a fair market rental, if:
(1) The Indian landowners execute a written waiver of the right to
receive fair market rental; and
(2) We determine it is in the Indian landowners' best interest,
based on factors including but not limited to:
(i) The lessee is a member of the Indian landowner's immediate
family as defined in Sec. 162.003;
(ii) The lessee is a co-owner of the leased tract; or
(iii) A special relationship or circumstances exist that we believe
warrant approval of the lease.
(c) Where the owners of the applicable percentage of interests
consent to a residential lease on behalf of all the Indian landowners
of a fractionated tract, the lease must provide that the non-consenting
Indian landowners and those on whose behalf we have consented receive
fair market rental.
Sec. 162.321 Will BIA require a valuation to determine fair market
rental for a residential lease?
(a) We will not require valuations for negotiated residential
leases of tribal land, or of any undivided tribal interest in a
fractionated tract, if the tribe submits a signed certification. The
tribe may request, in writing, that we require a valuation, in which
case we will determine fair market rental in accordance with Sec.
162.322.
(b) We will require valuations for individually owned Indian land,
except that we may waive the valuation requirement when:
(1) 100 percent of the Indian landowners submit to us a written
request to waive the valuation requirement; and
(2) We determine that the waiver is in the best interest of the
Indian landowners, taking into consideration the landowners' written
request.
(c) We have 30 days from receipt of the waiver request in paragraph
(b) of this section to make a determination. Our determination whether
to approve the request will be in writing and will state the basis for
our approval or disapproval. If we fail to meet the 30-day deadline,
the lessee or Indian landowners may take appropriate action under part
2 of this chapter.
Sec. 162.322 What type of valuation may be used to determine fair
market rental for a residential lease?
(a) We will use a market analysis, appraisal, or other appropriate
valuation method to determine the fair market rental for residential
leases of individually owned Indian land, or at the request of the
tribe for tribal land.
(b) We will either:
(1) Prepare a market analysis, appraisal, or other appropriate
valuation method; or
(2) Use an approved market analysis, appraisal, or other
appropriate valuation method from the Indian landowner or lessee.
(c) We will approve a market analysis, appraisal, or other
appropriate valuation method for use only if it:
[[Page 73799]]
(1) Has been prepared in accordance with USPAP or a valuation
method developed by the Secretary pursuant to 25 U.S.C. 2214; and
(2) Complies with Department policies.
Sec. 162.323 When are rental payments due under a residential lease?
(a) A residential lease must specify the dates on which all
payments are due.
(b) Unless otherwise provided in the lease, payments may not be
made or accepted more than one year in advance of the due date.
Sec. 162.324 Must a residential lease specify to whom rental payments
may be made?
(a) A residential lease must specify whether the lessee will make
payments directly to the Indian landowners (direct pay) or to us on
their behalf.
(b) The lessee may make payments directly to the Indian landowners
whose trust accounts are unencumbered when there are 10 or fewer
beneficial owners and 100 percent of the beneficial owners agree to
receive payment from the lessee at the commencement of the lease.
(1) If the lease provides that the lessee will directly pay the
Indian landowners, the lease must include provisions for proof of
payment.
(2) When we consent on behalf of an Indian landowner, the lessee
must make payment to us.
(3) The lessee must send direct payments to the parties and
addresses specified in the lease, unless the lessee receives notice of
a change of ownership or address.
(4) Unless otherwise provided in the lease, payments may not be
made payable directly to anyone other than the Indian landowners.
(5) Direct payments must continue through the duration of the
lease, except if:
(i) 100 percent of the Indian landowners agree to suspend direct
pay and provide us with documentation of their agreement, then the
lessee must make all Indian landowners' payments to us; or
(ii) If any individual Indian landowner dies, is declared non
compos mentis, becomes whereabouts unknown, or owes a debt resulting in
a trust account encumbrance, then the lessee must make that individual
Indian landowner's payment to us.
Sec. 162.325 What form of payment may be accepted under a residential
lease?
(a) When payments are made directly to Indian landowners, the form
of payment must be acceptable to the Indian landowners.
(b) When payments are made to us, we will accept:
(1) Money orders;
(2) Personal checks;
(3) Certified checks;
(4) Cashier's checks; or
(5) Electronic funds transfer payments.
(c) We will not accept cash, foreign currency, or third-party
checks, except that we will accept third-party checks from financial
institutions or Federal agencies.
(d) The preferred method of payment is electronic funds transfer
payments.
Sec. 162.326 May a residential lease provide for non-monetary or
varying types of compensation?
(a) With our approval, the lease may provide for:
(1) Alternative forms of rental, including, but not limited to in-
kind consideration; or
(2) Varying types of compensation at specific stages during the
life of the lease.
(b) For individually owned land, we will approve alternative forms
of rental and varying types of compensation if we determine that it is
in the best interest of the Indian landowners. For tribal land, we will
defer to the tribe's determination that the alternative forms of rental
and varying types of consideration are in its best interest, if the
tribe submits a signed certification stating that it has determined the
alternative forms of rental and varying types of consideration to be in
its best interest.
Sec. 162.327 Will BIA notify a lessee when a payment is due under a
residential lease?
Upon request of the Indian landowner, we may issue invoices to a
lessee in advance of the dates on which payments are due under a
residential lease, but the lessee's obligation to make such payments in
a timely manner will not be excused if such invoices are not issued,
delivered, or received.
Sec. 162.328 Must a residential lease provide for rental reviews or
adjustments?
(a) For a residential lease with a term of five years or less, the
parties may agree in the lease to provide for periodic reviews of the
adequacy of rent in the lease. For a residential lease with a term of
more than five years, a review of the adequacy of rent must occur at
least every fifth year, in the manner specified in the lease, unless
the conditions in paragraph (b) of this section are met. The lease must
specify:
(1) When adjustments take effect;
(2) Who is authorized to make adjustments;
(3) What the adjustments are based on; and
(4) How to resolve disputes arising from the adjustments.
(b) A review of the adequacy of rent is not required if:
(1) The lease provides for automatic rental adjustments; or
(2) We determine it is in the best interest of the Indian
landowners not to require a review or automatic adjustment based on
circumstances including, but not limited to, where the lease provides
for payment of less than fair market rental or the lease provides for
most or all rent to be paid during the first five years of the lease
term or prior to the date the review would be conducted.
(c) When a review results in the need for adjustment of rent, we
must approve the adjustment and Indian landowners must consent to the
adjustment in accordance with Sec. 162.011, unless otherwise provided
in the lease.
Sec. 162.329 What other types of payments are required under a
residential lease?
(a) The lessee may be required to pay additional fees, taxes, and/
or assessments associated with the use of the land, as determined by
entities having jurisdiction, except as provided in Sec. 162.315(c).
The lessee must pay these amounts to the appropriate office.
(b) If the leased premises are within an Indian irrigation project
or drainage district, except as otherwise provided in part 171 of this
chapter, the lessee must pay all operation and maintenance charges that
accrue during the lease term. The lessee must pay these amounts to the
appropriate office in charge of the irrigation project or drainage
district. Failure to make such payments will be treated as a violation
of the lease.
Bonding and Insurance
Sec. 162.334 Must a lessee or assignee provide a performance bond for
a residential lease?
(a) Except for leases for housing for public purposes or as
provided in (f), the lessee must provide a performance bond in an
amount sufficient to secure the contractual obligations including:
(1) No less than the highest annual rental specified in the lease,
if the rent is paid annually, or other amount established by BIA in
consultation with the tribe for tribal land or, where feasible, with
Indian landowners for individually owned Indian land, if the rent is to
be paid on a non-annual schedule;
(2) The operation and maintenance charges for any land located
within an irrigation project; and
(3) As appropriate, the restoration and reclamation of the leased
premises to
[[Page 73800]]
their condition at the commencement of the lease term or some other
specified condition.
(b) The performance bond must be deposited with us and made payable
only to us, and may not be modified without our approval.
(c) The lease must provide that we may adjust security or
performance bond requirements at any time to reflect changing
conditions.
(d) We may require that the surety provide any supporting documents
needed to show that the performance bond will be enforceable, and that
the surety will be able to perform the guaranteed obligations.
(e) The surety must provide notice to us at least 60 days before
canceling a performance bond so that we may notify the lessee of its
obligation to provide a substitute performance bond. Failure to provide
a substitute performance bond will be a violation of the lease.
(f) We may waive the requirement for a performance bond upon the
request of the Indian landowner, if the waiver is in the best interest
of the Indian landowner, including if the lease is for less than fair
market rental or nominal rent. We may revoke the waiver and require a
performance bond at any time if the waiver is no longer in the best
interest of the Indian landowner.
Sec. 162.335 What forms of performance bonds may be accepted under a
residential lease?
(a) We will only accept a performance bond in one of the following
forms:
(1) Cashiers' checks;
(2) Certificates of deposit issued by a federally insured financial
institution authorized to do business in the United States;
(3) Irrevocable letters of credit issued by a federally insured
financial institution authorized to do business in the United States;
(4) Negotiable Treasury securities; or
(5) Surety bond issued by a company approved by the U.S. Department
of the Treasury.
(b) All forms of performance bonds must:
(1) Indicate on their face that BIA approval is required for
redemption;
(2) Be accompanied by a statement granting full authority to BIA to
make an immediate claim upon or sell them if lessee violates the lease;
(3) Be irrevocable during the term of the performance bond; and
(4) Be automatically renewable during the term of the lease.
Sec. 162.336 What is the bond release process under a residential
lease?
(a) Upon expiration, termination, or cancellation of the lease, the
lessee must submit a written request for a performance bond release to
BIA.
(b) Upon receipt of a request under paragraph (a) of this section,
BIA will confirm with the tribe, for tribal land or, where feasible,
with the Indian landowners for individually owned Indian land, that the
lessee has complied with all lease obligations, then release the
performance bond to the lessee unless we determine that the bond must
be redeemed to fulfill the contractual obligations.
Sec. 162.337 Must a lessee provide insurance for a residential lease?
Except as provided in paragraph (c) of this section, a lessee must
provide insurance necessary to protect the interests of the Indian
landowners and in an amount sufficient to protect all insurable
improvements on the premises.
(a) The insurance may include property, liability and/or casualty
insurance, depending on the Indian landowners' interests to be
protected.
(b) Both the Indian landowners and the United States must be
identified as additional insured parties.
(c) We may waive the requirement for insurance upon the request of
the Indian landowner, if a waiver is in the best interest of the Indian
landowner, including if the lease is for less than fair market rental
or nominal compensation. We may revoke the waiver and require insurance
at any time if the waiver is no longer in the best interest of the
Indian landowner.
Approval
Sec. 162.338 What documents must the parties submit to obtain BIA
approval of a residential lease?
A lessee or the Indian landowner must submit the following
documents to us to obtain BIA approval of a residential lease:
(a) A lease executed by the Indian landowner and the lessee that
complies with the requirements of this part;
(b) A valuation, if required under Sec. 162.321;
(c) Organizational documents, certificates, filing records, and
resolutions or other authorization documents, including evidence of the
representative's authority to execute a lease, if the lessee is a
corporation, limited liability company, partnership, joint venture, or
other legal entity, except a tribal entity, to show that the lease will
be enforceable and that the legal entity is in good standing and
authorized to conduct business in the jurisdiction where the land is
located;
(d) A performance bond, where required;
(e) Statement from the appropriate tribal authority that the
proposed use is in conformance with applicable tribal law;
(f) Reports, surveys, and site assessments as needed to facilitate
compliance with applicable Federal and tribal land use requirements;
(g) A preliminary site plan identifying the proposed location of
residential development, roads and utilities, if applicable;
(h) Information to assist us in our evaluation of the factors in 25
U.S.C. 415(a);
(i) Information to facilitate BIA's analysis under applicable
environmental and cultural resources laws; and
(j) Any additional documentation we determine to be reasonably
necessary for approval.
Sec. 162.339 What is the approval process for a residential lease?
(a) Before we approve a residential lease, we must determine that
the lease is in the best interest of the Indian landowners. In making
that determination, we will:
(1) Review the lease and supporting documents;
(2) Ensure compliance with all applicable laws and ordinances;
(3) Assure ourselves that adequate consideration has been given to
the factors in 25 U.S.C. 415(a);
(4) Require any lease modifications or mitigation measures
necessary to satisfy any requirements including any other Federal or
tribal land use requirements; and
(5) If the lease is a negotiated lease, defer to the Indian
landowners' determination that the lease is in their best interest, to
the maximum extent possible.
(b) When we receive a residential lease proposal and all of the
supporting documents that conform to this part, we will, within 30 days
of receiving the documents at the appropriate BIA office, approve,
disapprove, return the submission for revision, or notify the parties
in writing that we need additional time to review the lease. Our letter
notifying the parties that we need additional time to review the lease
must identify our initial concerns and invite the parties to respond
within 15 days. We have 30 days from sending the notification to make a
determination whether to approve or disapprove the lease.
(c) If we fail to meet the deadlines in this section, then the
parties may take appropriate action under part 2 of this chapter.
(d) We will make any lease approval or disapproval determination
and the
[[Page 73801]]
basis for the determination, along with notification of appeal rights
under part 2 of this chapter, in writing and will send the
determination and notification to the parties to the lease.
(e) Any residential lease issued under the authority of the Native
American Housing Assistance and Self-Determination Act, 25 U.S.C.
4211(a), whether on tribal land or on individually owned Indian land,
must be approved by us and by the affected tribe.
(f) We will provide approved residential leases on tribal land to
the lessee and provide a copy to the tribe. We will provide approved
residential leases on individually owned Indian land to the lessee, and
make copies available to the Indian landowners upon written request.
Sec. 162.340 When will a residential lease be effective?
(a) A residential lease will be effective on the date that we
approve the lease, notwithstanding any appeal that may be filed under
part 2 of this chapter.
(b) The lease may specify a date on which the obligations between
the parties are triggered. Such date may be before or after the
approval date under paragraph (a) of this section.
Sec. 162.341 Must residential lease documents be recorded?
(a) A residential lease, amendment, assignment, leasehold mortgage,
and sublease must be recorded in our Land Titles and Records Office
with jurisdiction over the leased land.
(1) We will record the lease or other document immediately
following our approval.
(2) When our approval of an assignment or sublease is not required,
the parties must record the assignment or sublease in the Land Title
and Records Office with jurisdiction over the leased land.
(b) The tribe must record the following leases in the Land Titles
and Records Office with jurisdiction over the leased lands, even though
BIA approval is not required:
(1) Leases of tribal land that a corporate entity leases to a third
party under 25 U.S.C. 477; and
(2) Leases of tribal land under a special act of Congress
authorizing leases without our approval under certain conditions.
Sec. 162.342 What action may BIA take if a residential lease
disapproval decision is appealed?
(a) If a party appeals our decision to disapprove a lease,
assignment, amendment, sublease, or leasehold mortgage, then the
official to whom the appeal is made may require the lessee to post an
appeal bond in an amount necessary to protect the Indian landowners
against financial losses and damage to trust resources likely to result
from the delay caused by an appeal. The requirement to post an appeal
bond will apply in addition to all of the other requirements in part 2
of this chapter.
(b) The appellant may not appeal the appeal bond decision. The
appellant may, however, request that the official to whom the appeal is
made reconsider the bond decision, based on extraordinary
circumstances. Any reconsideration decision is final for the
Department.
Amendments
Sec. 162.343 May the parties amend a residential lease?
(a) The parties may amend a residential lease by obtaining:
(1) The lessee's signature;
(2) The Indian landowners' consent pursuant to the requirements
contained in Sec. 162.344; and
(3) BIA approval of the amendment under Sec. 162.345 and Sec.
162.346.
(b) The parties may not amend a residential lease if the lease
expressly prohibits amendments.
Sec. 162.344 What are the consent requirements for an amendment of a
residential lease?
(a) The Indian landowners, or their representatives under Sec.
162.012, must consent to an amendment of a residential lease in the
same percentages and manner as a new residential lease under Sec.
162.011, unless the requirements in paragraphs (a)(1) or (a)(2) of this
section are met.
(1) The approved residential lease establishes that individual
Indian landowners are deemed to have consented if they do not object in
writing to the amendment after a specified period of time following
Indian landowners' receipt of the amendment. If the lease provides for
deemed consent, it must require the parties to submit to us: a copy of
the executed amendment or other documentation of the Indian landowners'
consent; proof of mailing of the amendment to any Indian landowners who
are deemed to have consented; and any other pertinent information to us
for review.
(2) The approved residential lease authorizes one or more
representatives to consent to an amendment on behalf of all Indian
landowners. The lease may also designate us as the Indian landowners'
representative for the purposes of consent to an amendment.
(b) Unless specifically authorized in the lease, the written power
of attorney, or court document, Indian landowners may not be deemed to
have consented to, and an Indian landowner's designated representative
may not negotiate or consent to, an amendment that would:
(1) Reduce the payment obligations or terms to the Indian
landowners;
(2) Increase or decrease the lease area; or
(3) Terminate or change the term of the lease.
Sec. 162.345 What is the approval process for an amendment of a
residential lease?
We have 30 days from receipt of the executed amendment, proof of
required consents, and required documentation to make a determination
whether to approve the amendment or notify the parties in writing that
we need additional time to review the amendment.
(a) Our letter notifying the parties that we need additional time
to review the amendment must identify our initial concerns and invite
the parties to respond within 15 days. We have 30 days from sending the
notification to make a determination whether to approve or disapprove
the amendment.
(b) If we fail to send either a determination or notification
within 30 days from receipt of the required documents or 30 days from
sending the notification, the amendment is deemed approved to the
extent consistent with Federal law. We will retain our full enforcement
authority for amendments that are deemed approved.
(c) Our determination whether to approve the amendment will be in
writing and will state the basis for our approval or disapproval.
Sec. 162.346 How will BIA decide whether to approve an amendment of a
residential lease?
(a) We may only disapprove a residential lease amendment if:
(1) The required consents have not been obtained from the parties
to the lease and any mortgagees or sureties;
(2) The lessee is in violation of the lease; or
(3) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) We may not unreasonably withhold approval of an amendment.
Assignments
Sec. 162.347 May a lessee assign a residential lease?
A lessee may assign a residential lease by meeting the consent
requirements in
[[Page 73802]]
Sec. 162.348 and obtaining our approval of the assignment under Sec.
162.349 and Sec. 162.350, unless the lease expressly prohibits
assignments.
Sec. 162.348 What are the consent requirements for an assignment of a
residential lease?
(a) The Indian landowners, or their representatives under Sec.
162.012, must consent to an assignment of a residential lease in the
same percentages and manner as a new residential lease under Sec.
162.011, unless the requirements in paragraphs (a)(1), (a)(2), or
(a)(3) of this section are met.
(1) The assignee agrees in writing to assume all of the lessee's
obligations under the lease, including bonding requirements, and:
(i) The lease provides for assignments without further consent of
the Indian landowners or with consent in specified percentages and
manner; or
(ii) The assignee is a leasehold mortgagee or its designee,
acquiring the lease either through foreclosure or by conveyance.
(2) The lease establishes that individual Indian landowners are
deemed to have consented where they do not object in writing to the
assignment after a specified period of time following landowners'
receipt of the assignment. If the lease provides for deemed consent, it
must require the parties to submit to us: a copy of the executed
assignment or other documentation of the Indian landowners' consent;
proof of mailing of the assignment to any Indian landowners who are
deemed to have consented; and any other pertinent information for us to
review.
(3) The lease authorizes one or more of the Indian landowners to
consent on behalf of all Indian landowners. The lease may also
designate us as the Indian landowners' representative for the purposes
of consenting to an assignment.
(b) The lessee must obtain the consent of the holders or any bonds
or mortgages.
Sec. 162.349 What is the approval process for an assignment of a
residential lease?
(a) The lessee may assign the lease without our approval if:
(1) The assignee is a leasehold mortgagee or its designee,
acquiring the lease either through foreclosure or by conveyance;
(2) The assignee agrees in writing to assume all of the obligations
of the lease; and
(3) The assignee agrees in writing that any transfer of the lease
will be in accordance with applicable law under Sec. 162.013.
(b) We have 30 days from receipt of the executed assignment, proof
of required consents, and required documentation to make a
determination whether to approve the assignment or notify the parties
that we need additional information. Our determination whether to
approve the assignment will be in writing and will state the basis for
our approval or disapproval.
(c) If we fail to meet the deadline in this section, the lessee or
Indian landowners may take appropriate action under part 2 of this
chapter.
Sec. 162.350 How will BIA decide whether to approve an assignment of
a residential lease?
(a) We may only disapprove an assignment of a residential lease if:
(1) The Indian landowners have not consented, and their consent is
required;
(2) The lessee's mortgagees or sureties have not consented;
(3) The lessee is in violation of the lease;
(4) The assignee does not agree to be bound by the terms of the
lease;
(5) The proposed use by the assignee will require an amendment to
the lease; or
(6) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(6) of this
section, we may consider whether:
(1) The value of any part of the leased premises not covered by the
assignment would be adversely affected; and
(2) If a performance bond is required, the assignee has bonded its
performance and provided supporting documents that demonstrate that the
lease will be enforceable against the assignee, and that the assignee
will be able to perform its obligations under the lease or assignment.
(c) If the lease was approved at less than fair market rental and
the assignee is not a co-owner or member of the Indian landowners'
immediate family, the assignment must provide for the assignee to pay
fair market rental to the Indian landowner.
(d) We may not unreasonably withhold approval of an assignment.
Subleases
Sec. 162.351 May a lessee sublease a residential lease?
(a) A lessee may sublease a residential lease by meeting the
consent requirements in Sec. 162.352 and obtaining our approval of the
sublease under Sec. 162.353 and Sec. 162.354, or by meeting the
conditions in paragraph (b) of this section, unless the lease expressly
prohibits subleases.
(b) Where the sublease is part of a housing development for public
purposes, the lessee may sublease without meeting consent requirements
or obtaining BIA approval of the sublease, as long as:
(1) The lease provides for subleasing without meeting consent
requirements or obtaining BIA approval;
(2) We have approved a general plan for the development; and
(3) We have approved a sublease form and general rent schedule for
use in the project.
Sec. 162.352 What are the consent requirements for a sublease of a
residential lease?
(a) The Indian landowners must consent to a sublease of a
residential lease in the same percentages and manner as a new
residential lease pursuant to Sec. 162.011, unless the requirements in
paragraphs (a)(1) or (a)(2) of this section are met.
(1) The lease establishes that individual Indian landowners are
deemed to have consented where they do not object in writing to the
sublease after a specified period of time following landowners' receipt
of the sublease. If the lease provides for deemed consent, it must
require the parties to submit to us: a copy of the executed sublease or
other documentation of the landowners' consent; proof of mailing of the
sublease to any Indian landowners who are deemed to have consented; and
any other pertinent information for us to review.
(2) The lease authorizes one or more of the Indian landowners to
consent on behalf of all Indian landowners. The lease may also
designate us as the Indian landowners' representative for the purposes
of consenting to a sublease.
(b) The lessee must obtain the consent of any sureties.
Sec. 162.353 What is the approval process for a sublease of a
residential lease?
We have 30 days from receipt of the executed sublease, proof of
required consents, and required documentation to make a determination
whether to approve the sublease or notify the parties in writing that
we need additional time to review the sublease.
(a) Our letter notifying the parties that we need additional time
to review the sublease must identify our initial concerns and invite
the parties to respond within 15 days. We have 30 days from sending the
notification to
[[Page 73803]]
make a determination whether to approve or disapprove the sublease. Our
determination whether to approve the sublease will be in writing and
will state the basis for our approval or disapproval.
(b) If we fail to send either a determination or notification
within 30 days from receipt of required documents or from sending the
notification, the sublease is deemed approved to the extent consistent
with Federal law. We will retain our full enforcement authority for
subleases that are deemed approved.
Sec. 162.354 How will BIA decide whether to approve a sublease of a
residential lease?
(a) We may only disapprove a sublease of a residential lease if:
(1) The Indian landowners have not consented, and their consent is
required;
(2) The lessee's mortgagees or sureties have not consented;
(3) The lessee is in violation of the lease;
(4) The lessee will not remain liable under the lease;
(5) The sublessee does not agree to be bound by the terms of the
lease;
(6) The proposed use by the sublessee will require an amendment of
the lease; or
(7) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(7) of this
section, we will consider whether:
(1) The value of any part of the leased premises not covered by the
sublease would be adversely affected; and
(2) If a performance bond is required by the sublease, the
sublessee has bonded its performance and provided supporting documents
that demonstrate that the lease will be enforceable against the
sublessee, and that the sublessee will be able to perform its
obligations under the lease or sublease.
(c) If the lease was approved at less than fair market rental, and
the sublessee is not a co-owner or a member of the Indian landowner's
immediate family, the sublease must provide for the sublessee to pay
fair market rental to the Indian landowner.
(d) We may not unreasonably withhold approval of a sublease.
Leasehold Mortgages
Sec. 162.355 May a lessee mortgage a residential lease?
A lessee may mortgage a residential lease by meeting the consent
requirements in Sec. 162.356 and obtaining BIA approval of the
leasehold mortgage under in Sec. 162.357 and Sec. 162.358, unless the
lease expressly prohibits leasehold mortgages.
Sec. 162.356 What are the consent requirements for a leasehold
mortgage of a residential lease?
The Indian landowners, or their representatives under Sec.
162.012, must consent to a leasehold mortgage under a residential lease
in the same percentages and manner as a new residential lease under
Sec. 162.011, unless the requirements in paragraphs (a), (b), or (c)
of this section are met.
(a) The lease contains a general authorization for a leasehold
mortgage and states what law would apply in case of foreclosure.
(b) The lease establishes that individual Indian landowners are
deemed to have consented where they do not object in writing to the
leasehold mortgage after a specified period of time following
landowners' receipt of the leasehold mortgage. If the lease provides
for deemed consent, it must require the parties to submit to us: A copy
of the executed leasehold mortgage or other documentation of the Indian
landowners' consent; proof of mailing of the leasehold mortgage to any
Indian landowners who are deemed to have consented; and any other
pertinent information for us to review.
(c) The lease authorizes one or more representatives to consent to
a leasehold mortgage on behalf of all Indian landowners. The lease may
also designate us as the Indian landowners' representative for the
purposes of consenting to a leasehold mortgage.
Sec. 162.357 What is the approval process for a leasehold mortgage of
a residential lease?
(a) We have 30 days from receipt of the executed leasehold
mortgage, proof of required consents, and required documentation to
make a determination whether to approve the leasehold mortgage or
notify the parties that we need additional information. Our
determination whether to approve the leasehold mortgage will be in
writing and will state the basis for our approval or disapproval.
(b) If we fail to meet the deadline in this section, the lessee may
take appropriate action under part 2 of this chapter.
Sec. 162.358 How will BIA decide whether to approve a leasehold
mortgage of a residential lease?
(a) We may only disapprove the leasehold mortgage if:
(1) The Indian landowners have not consented, and their consent is
required;
(2) The holders of lessee's bond have not consented; or
(3) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(3) of this
section, we will consider whether:
(1) The lessee's ability to comply with the lease would be
adversely affected by any new loan obligations;
(2) Any lease provisions would require modification to be
consistent with the mortgage;
(3) The remedies available to us or to Indian landowners would be
limited (beyond any additional notice and cure rights to be afforded to
the mortgagee) in the event of a lease violation; and
(4) Any rights of the Indian landowners would be subordinated or
adversely affected in the event of a loan default by the lessee.
(c) We may not unreasonably withhold approval of a leasehold
mortgage.
Effectiveness, Compliance, and Enforcement
Sec. 162.359 When will an amendment, assignment, sublease, or
leasehold mortgage under a residential lease be effective?
(a) An amendment, assignment, sublease, or leasehold mortgage under
a residential lease will be effective upon our approval,
notwithstanding any appeal that may be filed under part 2 of this
chapter, unless approval is not required under Sec. 162.008(b), Sec.
162.349(a), or Sec. 162.351(b), or the conditions in paragraph (b) of
this section apply. We will provide copies of approved documents to the
party requesting approval, and upon request, to other parties to the
agreement.
(b) If the amendment or sublease was deemed approved pursuant to
Sec. 162.345(b) or Sec. 162.353(b), the amendment or sublease becomes
effective 45 days from the date the parties mailed or delivered the
document to us for our review.
(c) An assignment or sublease that does not require landowner
consent or BIA approval shall be effective upon execution by the
parties.
Sec. 162.360 What happens if BIA disapproves an amendment,
assignment, sublease, or leasehold mortgage?
If we disapprove an amendment, assignment, sublease, or leasehold
mortgage of a residential lease, we will notify the parties immediately
and advise them of their right to appeal the decision under part 2 of
this chapter.
[[Page 73804]]
Sec. 162.361 May BIA investigate compliance with a residential lease?
(a) We may enter the leased premises at any reasonable time, upon
reasonable notice, to protect the interests of the Indian landowners
and ensure that the lessee is in compliance with the requirements of
the lease.
(b) If the Indian landowner notifies us that a specific lease
violation has occurred, we will promptly initiate an appropriate
investigation.
Sec. 162.362 May a residential lease provide for negotiated remedies
in the event of a violation?
(a) A residential lease of tribal land may provide either or both
parties with negotiated remedies in the event of a lease violation,
including, but not limited to, the power to terminate the lease. If the
lease provides the parties with the power to terminate the lease, BIA
approval of the termination is not required and the termination is
effective without BIA cancellation. The parties must notify us of the
termination so that we may record it in the Land Titles and Records
Office.
(b) A residential lease of individually owned Indian land may
provide either or both parties with negotiated remedies, so long as the
lease also specifies the manner in which those remedies may be
exercised by or on behalf of the Indian landowners of the applicable
percentage of interests under Sec. 162.011 of this part. If the lease
provides the parties with the power to terminate the lease, BIA
concurrence with the termination is required to ensure that the Indian
landowners of the applicable percentage of interests have consented.
BIA will record the termination in the Land Titles and Records Office.
(c) The parties must notify any surety or mortgagee of a
termination of a residential lease.
(d) Negotiated remedies may apply in addition to, or instead of,
the cancellation remedy available to us, as specified in the lease.
(e) A residential lease may provide for lease disputes to be
resolved in tribal court or any other court of competent jurisdiction,
by a tribal governing body in the absence of a tribal court, or through
an alternative dispute resolution method. We may not be bound by
decisions made in such forums, but we will defer to ongoing
proceedings, as appropriate, in deciding whether to exercise any of the
remedies available to us.
162.363 What will BIA do about a violation of a residential lease?
(a) If we determine there has been a violation of the conditions of
a residential lease other than a violation of payment provisions
covered by paragraph (b) of this section, we will promptly send the
lessee and its sureties and any mortgagee a notice of violation by
certified mail, return receipt requested.
(1) We will send a copy of the notice of violation to the tribe for
tribal land, or provide constructive notice to Indian landowners for
individually owned Indian land.
(2) Within 10 business days of the receipt of a notice of
violation, the lessee must:
(i) Cure the violation and notify us in writing that the violation
has been cured;
(ii) Dispute our determination that a violation has occurred; or
(iii) Request additional time to cure the violation.
(3) If a violation is determined to have occurred, we will make a
reasonable attempt to notify the Indian landowners.
(4) We may order the lessee to stop work.
(b) A lessee's failure to pay rent in the time and manner required
by a residential lease is a violation of the lease, and we will issue a
notice of violation in accordance with this paragraph.
(1) We will send the lessees and its sureties a notice of violation
by certified mail, return receipt requested:
(i) Promptly following the date on which the payment was due, if
the lease requires that rental payments be made to us; or
(ii) Promptly following the date on which we receive actual notice
of non-payment from the Indian landowners, if the lease provides for
payment directly to the Indian landowners.
(2) We will send a copy of the notice of violation to the tribe for
tribal land, or provide constructive notice to Indian landowners for
individually owned Indian land.
(3) The lessee must provide adequate proof of payment as required
in the notice of violation.
(c) The lessee and its sureties will continue to be responsible for
the obligations contained in the lease until the lease is terminated,
cancelled, or expires.
Sec. 162.364 What will BIA do if the lessee does not cure a violation
of a residential lease on time?
(a) If the lessee does not cure a violation of a residential lease
within the requisite time period, or provide adequate proof of payment
as required in the notice of violation, we will consult with the tribe
for tribal land or, where feasible, with Indian landowners for
individually owned Indian land, and determine whether:
(1) We should cancel the lease;
(2) The Indian landowners wish to invoke any remedies available to
them under the lease;
(3) We should invoke other remedies available under the lease or
applicable law, including, collection on any available performance bond
or, for failure to pay rent, referral of the debt to the Department of
the Treasury for collection; or
(4) The lessee should be granted additional time in which to cure
the violation.
(b) We may take action to recover unpaid rent and any associated
late payment charges.
(1) We do not have to cancel the lease or give any further notice
to the lessee before taking action to recover unpaid rent.
(2) We may still take action to recover any unpaid rent if we
cancel the lease.
(c) If we decide to cancel the lease, we will send the lessee and
its sureties and any mortgagees a cancellation letter by certified
mail, return receipt requested within 5 business days of our decision.
We will send a copy of the cancellation letter to the tribe for tribal
land, and will provide Indian landowners for individually owned Indian
land with actual or constructive notice of the cancellation. The
cancellation letter will:
(1) Explain the grounds for cancellation;
(2) If applicable, notify the lessee of the amount of any unpaid
rent or late payment charges due under the lease;
(3) Notify the lessee of their right to appeal under part 2 of this
chapter, including the possibility that the official to whom the appeal
is made may require the lessee to post an appeal bond;
(4) Order the lessee to vacate the property within 31 days of the
date of receipt of the cancellation letter, if an appeal is not filed
by that time; and
(5) Require any other action BIA deems necessary to protect the
Indian landowners.
(d) We may invoke any other remedies available to us under the
lease, including collecting on any available performance bond, and the
Indian landowner may pursue any available remedies under tribal law.
Sec. 162.365 Will late payment charges or special fees apply to
delinquent payments due under a residential lease?
(a) Late payment charges will apply as specified in the lease. The
failure to pay such amounts will be treated as a lease violation.
[[Page 73805]]
(b) The following special fees may be assessed to cover
administrative costs incurred by the United States in the collection of
the debt, if rent is not paid in the time and manner required, in
addition to late payment charges that must be paid to the Indian
landowners under the lease:
------------------------------------------------------------------------
The lessee will pay . . . For . . .
------------------------------------------------------------------------
(a) $50.00................................ Dishonored checks.
(b) $15.00................................ Processing of each notice or
demand letter.
(c) 18 percent of balance due............. Treasury processing
following referral for
collection of delinquent
debt.
------------------------------------------------------------------------
Sec. 162.366 How will payment rights relating to a residential lease
be allocated between the Indian landowners and the lessee?
The residential lease may allocate rights to payment for insurance
proceeds, trespass damages, condemnation awards, settlement funds, and
other payments between the Indian landowners and the lessee. If not
specified in the insurance policy, order, award, judgment, or other
document including the lease, the Indian landowners will be entitled to
receive such payments.
Sec. 162.367 When will a cancellation of a residential lease be
effective?
(a) A cancellation involving a residential lease will not be
effective until 31 days after the lessee receives a cancellation letter
from us, or 41 days from the date we mailed the letter, whichever is
earlier.
(b) The cancellation decision will be stayed if an appeal is filed
unless the cancellation is made immediately effective under part 2 of
this chapter. While a cancellation decision is stayed, the lessee must
continue to pay rent and comply with the other terms of the lease.
Sec. 162.368 What will BIA do if a lessee remains in possession after
a residential lease expires or is cancelled?
If a lessee remains in possession after the expiration or
cancellation of a residential lease, we may treat the unauthorized
possession as a trespass under applicable law. Unless the applicable
percentage of Indian landowners under Sec. 162.011 have notified us in
writing that they are engaged in good faith negotiations with the
holdover lessee to obtain a new lease, we may take action to recover
possession on behalf of the Indian landowners, and pursue any
additional remedies available under applicable law, such as forcible
entry and detainer action.
Sec. 162.369 Will BIA regulations concerning appeal bonds apply to
cancellation decisions involving residential leases?
(a) Except as provided in paragraph (b) of this section, the appeal
bond provisions in part 2 of this chapter will apply to appeals from
lease cancellation decisions.
(b) The lessee may not appeal the appeal bond decision. The lessee
may, however, request that the official to whom the appeal is made
reconsider the appeal bond decision, based on extraordinary
circumstances. Any reconsideration decision is final for the
Department.
Sec. 162.370 When will BIA issue a decision on an appeal from a
residential leasing decision?
BIA will issue a decision on an appeal from a leasing decision
within 30 days of receipt of all pleadings.
Sec. 162.371 What happens if the lessee abandons the leased premises?
If a lessee abandons the leased premises, we will treat the
abandonment as a violation of the lease. The lease may specify a period
of non-use after which the lease premises will be considered abandoned.
Subpart D--Business Leases
Business Leasing General Provisions
Sec. 162.401 What types of leases does this subpart cover?
(a) This subpart covers both ground leases (undeveloped land) and
leases of developed land (together with the improvements thereon) on
Indian land, including:
(1) Leases for residential purposes that are not covered in subpart
C;
(2) Leases for business purposes that are not covered in subpart E;
(3) Leases for religious, educational, recreational, cultural, or
other public purposes; and
(4) Commercial or industrial leases for retail, office,
manufacturing, storage, biomass, waste-to-energy, or other business
purposes.
(b) Leases covered by this subpart may authorize the construction
of single-purpose or mixed use projects designed for use by any number
of lessees or occupants.
Sec. 162.402 Is there a model business lease form?
There is no model business lease because of the need for
flexibility in negotiating and writing business leases; however, we may
provide other guidance, such as checklists and sample lease provisions
to assist in the lease negotiation process. Additionally, we may assist
the Indian landowners, upon their request, in developing appropriate
lease provisions or in using tribal lease forms that conform to the
requirements of this part.
Lease Requirements
Sec. 162.411 How long may the term of a business lease run?
(a) A business lease must provide for a definite term, state if
there is an option to renew and, if so, provide for a definite term for
the renewal period. Unless authorized by paragraph (b), a business
lease may have an initial term not to exceed 25 year and one renewal
period not to exceed 25 years.
(b) If a Federal statute provides for a longer maximum term (e.g.,
25 U.S.C. 415(a) allows for a maximum term of 99 years for certain
tribes), the lease may provide for a primary term, and one renewal not
to exceed 25 years, so long as the maximum term, including the renewal,
does not exceed the maximum term established by statute.
(c) The lease term, including any renewal, must be reasonable,
given the:
(1) Purpose of the lease;
(2) Type of financing; and
(3) Level of investment.
(d) Where all of the trust or restricted interests in a tract are
owned by a deceased Indian whose heirs and devisees have not yet been
determined, the maximum term may not exceed two years.
(e) The lease may not be extended by holdover.
Sec. 162.412 What must the lease include if it contains an option to
renew?
(a) If the lease provides for an option to renew, the lease must
specify:
(1) The time and manner in which the option must be exercised or is
automatically effective;
(2) That confirmation of the renewal will be submitted to us;
(3) Whether Indian landowner consent to the renewal is required;
(4) That the lessee must provide notice to the Indian landowner and
any mortgagees of the renewal;
(5) The additional consideration, if any, that will be due upon the
exercise of the option to renew or the commencement of the renewal
term;
(6) That any change in the terms of the lease will be considered an
amendment subject to consent and BIA approval requirements pursuant to
Sec. 162.444; and
(7) Any other conditions for renewal (e.g., the lessee may not be
in violation of the lease at the time of renewal).
[[Page 73806]]
(b) We must record any renewal of a lease in the Land Title and
Records Office.
Sec. 162.413 Are there mandatory provisions that a business lease
must contain?
(a) All business leases must identify:
(1) The tract or parcel of land being leased;
(2) The purpose of the lease and authorized uses of the leased
premises;
(3) The parties to the lease;
(4) The term of the lease;
(5) The owner being represented and the authority under which such
action is being taken, where one executes a lease in a representative
capacity;
(6) The citation of the statute that authorizes our approval;
(7) Who is responsible for constructing, owning, operating,
maintaining, and managing improvements pursuant to Sec. 162.415;
(8) Payment requirements and late payment charges, including
interest;
(9) Due diligence requirements under Sec. 162.417 (unless the
lease is for religious, educational, recreational, cultural, or other
public purposes);
(10) Insurance requirements under Sec. 162.437; and
(11) Bonding requirements under Sec. 162.434. If a performance
bond is required, the lease must state that the lessee must obtain the
consent of the surety for any legal instrument that directly affects
their obligations and liabilities.
(b) All business leases must include the following provisions:
(1) The obligations of the lessee and its sureties to the Indian
landowners are also enforceable by the United States, so long as the
land remains in trust or restricted status;
(2) Nothing in the lease would prevent or delay termination of
Federal trust responsibilities for the land during the lease's term;
(3) There must not be any unlawful conduct, creation of a nuisance,
illegal activity, or negligent use or waste of the leased premises;
(4) The lessee must comply with all applicable laws, ordinances,
rules, regulations, and other legal requirements under Sec. 162.013;
(5) The lessee indemnifies and holds the United States and the
Indian landowners harmless from any loss, liability, or damages
resulting from the lessee's use or occupation of the leased premises
(this provision is not mandatory if the lessee would be prohibited by
law from making such an agreement);
(6) The lessee indemnifies the United States and the Indian
landowners against all liabilities or costs relating to the use,
handling, treatment, removal, storage, transportation, or disposal of
hazardous materials, or the release or discharge of any hazardous
material from the leased premises that occurs during the lease term,
regardless of fault, unless the liability or cost arises from the gross
negligence or willful misconduct of the Indian landowner (this
provision is not mandatory if the lessee would be prohibited by law
from making such an agreement);
(7) In the event that historic properties, archeological resources,
human remains, or other cultural items not previously reported are
encountered during the course of any activity associated with this
lease, all activity in the immediate vicinity of the properties,
resources, remains, or items will cease and the lessee will contact BIA
and the tribe that has jurisdiction over the land to determine how to
proceed and appropriate disposition;
(8) BIA has the right, at any reasonable time during the term of
the lease and upon reasonable notice, to enter upon the leased premises
for inspection; and
(9) Unless otherwise indicated, this is a lease of the trust and
restricted interests in the property described and is not a lease of
any undivided fee interests. All rental payments by the lessee will be
distributed to the trust and restricted landowners and life estate
holders on trust and restricted land only. The lessee will be
responsible for accounting to the owners of any fee interests that may
exist in the property being leased.
(c) We may treat any provision of a lease, sublease, amendment,
assignment, or leasehold mortgage that is in violation of Federal law
as a violation of the lease.
Sec. 162.414 May improvements be made under a business lease?
The lessee may construct improvements under a business lease if the
business lease specifies, or provides for the development of:
(a) A plan that describes the type and location of any improvements
to be built by the lessee; and
(b) A schedule for construction of the improvements.
Sec. 162.415 How must a business lease address ownership of
improvements?
(a) A business lease must specify who will own any improvements the
lessee builds during the lease term and may specify that any
improvements the lessee builds may be conveyed to the Indian landowners
during the lease term. In addition, the lease must indicate whether
each specific improvement the lessee builds will, upon the expiration
or termination of the lease:
(1) Remain on the leased premises, in a condition satisfactory to
the Indian landowners, and become the property of the Indian
landowners;
(2) Be removed within a time period specified in the lease, at the
lessee's expense, with the leased premises to be restored as close as
possible to their condition before construction of such improvements;
or
(3) Be disposed of by other specified means.
(b) A lease that requires the lessee to remove the improvements
must also provide the Indian landowners with an option to take
possession of and title to the improvements if the improvements are not
removed within the specified time period.
(c) Any permanent improvements on the leased land shall be subject
to 25 CFR 1.4 and, in addition, shall not be subject to any fee, tax,
assessment, levy, or other such charge imposed by any State or
political subdivision of a State, without regard to ownership of those
improvements. Improvements may be subject to taxation by the Indian
tribe with jurisdiction.
Sec. 162.416 How will BIA enforce removal requirements in a business
lease?
We may take appropriate enforcement action in consultation with the
tribe for tribal land or, where feasible, with Indian landowners for
individually owned Indian land, to ensure removal of the improvements
or restoration of the premises at the lessee's expense. We may take
such enforcement action after termination or expiration of the lease.
We may collect and hold the performance bond until removal and
restoration are completed.
Sec. 162.417 What requirements for due diligence must a business
lease include?
(a) If improvements are to be built, the business lease must
include due diligence requirements that require the lessee to complete
construction of any improvements within the schedule specified in the
lease. The lessee must provide the Indian landowners and BIA good cause
as to the nature of any delay, the anticipated date of construction of
facilities, and evidence of progress toward commencement of
construction, if construction does not occur, or is not expected to be
completed, within the time period specified in the lease.
(b) Failure of the lessee to comply with the due diligence
requirements of the lease is a violation of the lease and may lead to
cancellation of the lease under Sec. 162.464.
[[Page 73807]]
(c) BIA may waive the requirements in this section if such waiver
is in the best interest of the Indian landowners.
(d) The requirements of this section do not apply to leases for
religious, educational, recreational, cultural, or other public
purposes.
Sec. 162.418 May a business lease allow compatible uses?
A business lease may provide for the Indian landowner to use, or
authorize others to use, the leased premises for other uses compatible
with the purpose of the business lease and consistent with the terms of
the business lease. Any such use or authorization by the Indian
landowner will not reduce or offset the monetary compensation for the
business lease.
Sec. 162.419 How must a business lease describe the land?
(a) A business lease must describe the leased premises by reference
to an official or certified survey pursuant to Sec. 162.438(j) of this
part.
(b) If the tract is fractionated we will describe the undivided
trust interest in the leased premises.
Monetary Compensation Requirements
Sec. 162.420 How much monetary compensation must be paid under a
business lease?
(a) A business lease of tribal land may allow for any payment
amount negotiated by the tribe as long as the tribe provides the tribal
authorization required by Sec. 162.421(a). The tribe may request, in
writing, that we require fair market rental, in which case we will
determine fair market rental in accordance with Sec. 162.422 and will
approve the lease only if it requires payment of not less than fair
market rental. Unless the tribe makes such a request, BIA will not
require a valuation or appraisal or determine fair market rental, but
instead will defer to the tribe's determination that the negotiated
compensation is in its best interest.
(b) A business lease of individually owned Indian land must require
payment of not less than fair market rental before any adjustments,
based on a fixed amount, a percentage of the projected income, or some
other method, unless paragraphs (1) or (2) of this section permit a
lesser amount. The lease must establish how the fixed amount,
percentage, or combination will be calculated and the frequency at
which the payments will be made.
(1) We may approve a lease of individually owned Indian land that
provides for the payment of nominal compensation, or less than a fair
market rental, if:
(i) The Indian landowners execute a written waiver of the right to
receive fair market rental; and
(ii) We determine it is in the Indian landowners' best interest,
based on factors including, but not limited to:
(A) The lessee is a member of the individual Indian landowner's
immediate family as defined in Sec. 162.003;
(B) The lessee is a co-owner in the leased tract;
(C) A special relationship or circumstances exist that we believe
warrant approval of the lease; or
(D) The lease is for religious, educational, recreational,
cultural, or other public purposes.
(2) We may approve a lease that provides for payment of less than a
fair market rental during the pre-development or construction periods,
if we determine it is in the Indian landowners' best interest. The
lease must specify the amount of the compensation and the applicable
periods.
(3) Where the owners of the applicable percentage of interests
under Sec. 162.011 of this part execute a business lease on behalf of
all of the Indian landowners of a fractionated tract, the lease must
provide that the non-consenting Indian landowners, and those on whose
behalf we have consented, receive a fair market rental.
Sec. 162.421 Will BIA require a valuation to determine fair market
rental for a business lease?
(a) We will not require valuations or appraisals for negotiated
business leases of tribal land, or of any undivided tribal interest in
a fractionated tract, if the tribe submits a tribal authorization
expressly stating that it:
(1) Has negotiated compensation satisfactory to the tribe;
(2) Waives valuation and appraisal; and
(3) Has determined that accepting such negotiated compensation and
waiving valuation and appraisal is in its best interest.
(b) The tribe may request that BIA require a valuation or
appraisal, in which case BIA must determine fair market rental in
accordance with Sec. 162.422.
(c) We may only waive the valuation requirement for business leases
on individually owned Indian land if:
(1) The lease is for religious, educational, recreational,
cultural, or other public purposes; and
(2) 100 percent of the Indian landowners submit to us a written
request to waive the valuation requirement; and
(3) We determine that the waiver is in the best interest of the
Indian landowners, taking into consideration the landowners' written
request.
(d) We have 30 days from receipt of the waiver request in paragraph
(c) of this section to make a determination. Our determination whether
to approve the request will be in writing and will state the basis for
our approval or disapproval. If we fail to meet the 30-day deadline,
the lessee or Indian landowners may take appropriate action under part
2 of this chapter.
Sec. 162.422 What type of valuation may be used to determine fair
market rental for a business lease?
(a) We will use an appraisal to determine the fair market rental
before we approve a business lease of individually owned Indian land,
or at the request of the tribe for tribal land, unless we approve
another type of valuation pursuant to paragraph (d).
(b) We will either:
(1) Prepare an appraisal; or
(2) Use an approved appraisal from the Indian landowner or lessee.
(c) We will approve an appraisal for use only if it:
(1) Has been prepared in accordance with USPAP or a valuation
method developed by the Secretary pursuant to 25 U.S.C. 2214; and
(2) Complies with Departmental policies regarding appraisals,
including third-party appraisals.
(d) Upon receipt of a tribal authorization, we may use some other
type of valuation for a business lease on tribal land, if it conforms
to USPAP or a valuation method developed by the Secretary pursuant to
25 U.S.C. 2214.
Sec. 162.423 When are monetary compensation payments due under a
business lease?
(a) A business lease must specify the dates on which all payments
are due.
(b) Unless otherwise provided in the lease, payments may not be
made or accepted more than one year in advance of the due date.
Sec. 162.424 Must a business lease specify to whom monetary
compensation payments may be made?
(a) A business lease must specify whether the lessee will make
payments directly to the Indian landowners (direct pay) or to us on
their behalf.
(b) The lessee may make payments directly to the Indian landowners
whose trust accounts are unencumbered when there are 10 or fewer
beneficial owners and 100 percent of the beneficial owners agree to
receive payment directly from the lessee.
(1) If the lease provides that the lessee will directly pay the
Indian landowners,
[[Page 73808]]
the lease must also require that the lessee provide us with
certification of payment.
(2) When we consent on behalf of an Indian landowner, the lessee
must make payment to us.
(3) The lessee must send direct payments to the parties and
addresses specified in the lease, unless the lessee receives notice of
a change of ownership or address.
(4) Unless otherwise provided in the lease, compensation payments
may not be made payable directly to anyone other than the Indian
landowners.
(5) Direct payments must continue through the duration of the
lease, except if:
(i) 100 percent of the Indian landowners agree to suspend direct
pay and provide us with documentation of their agreement, then the
lessee must make all Indian landowners' payments to us; or
(ii) If any individual Indian landowner dies, is declared non
compos mentis, becomes whereabouts unknown, or owes a debt resulting in
a trust account encumbrance, then the lessee must make that individual
Indian landowner's payment to us.
Sec. 162.425 What form of monetary compensation payment may be
accepted under a business lease?
(a) When payments are made directly to Indian landowners, the form
of payment must be acceptable to the Indian landowners.
(b) When payments are made to us, we will accept:
(1) Money orders;
(2) Certified checks;
(3) Cashier's checks; or
(4) Electronic funds transfer payments.
(c) We will not accept cash, personal checks, foreign currency, or
third-party checks except for third-party checks from financial
institutions.
(d) The preferred method of payment is electronic funds transfer
payments.
Sec. 162.426 May the business lease provide for non-monetary or
varying types of compensation?
(a) With our approval, the lease may provide for:
(1) Alternative forms of compensation, including but not limited to
payments based on percentage of income or in-kind consideration; or
(2) Varying types of compensation at specific stages during the
life of the lease, including but not limited to fixed annual payments
during construction and payments based on income during an operational
period.
(b) For individually owned land, we will approve alternative forms
of compensation and varying types of compensation if we determine that
it is in the best interest of the Indian landowners. For tribal land,
we will defer to the tribe's determination that the alternative forms
of rental and varying types of consideration are in its best interest,
if the tribe submits a signed certification stating that it has
determined the alternative forms of rental and varying types of
consideration to be in its best interest.
Sec. 162.427 Will BIA notify a lessee when a payment is due under a
business lease?
Upon request of the Indian landowner, we may issue invoices to a
lessee in advance of the dates on which payments are due under a
business lease, but the lessee's obligation to make such payments in a
timely manner will not be excused if such invoices are not issued,
delivered, or received.
Sec. 162.428 Must a business lease provide for compensation reviews
or adjustments?
(a) A review of the adequacy of compensation must occur at least
every fifth year, in the manner specified in the lease, unless the
conditions in paragraph (b) of this section are met. The lease must
specify:
(1) When adjustments take effect;
(2) Who is authorized to make adjustments;
(3) What the adjustments are based on; and
(4) How disputes arising from the adjustments are resolved.
(b) A review of the adequacy of compensation is not required if:
(1) The lease provides for automatic adjustments; or
(2) We determine it is in the best interest of the Indian
landowners not to require a review or automatic adjustment based on
circumstances including, but not limited to, the following:
(1) The lease provides for payment of less than fair market rental;
(2) The lease is for religious, educational, recreational,
cultural, or other public purposes; or
(3) The lease provides for most or all of the compensation to be
paid during the first five years of the lease term or prior to the date
the review would be conducted.
(c) When a review results in the need for adjustment of
compensation, we must approve the adjustment and Indian landowners must
consent to the adjustment in accordance with Sec. 162.011, unless
otherwise provided in the lease.
Sec. 162.429 What other types of payments are required under a
business lease?
(a) The lessee may be required to pay additional fees, taxes, and/
or assessments associated with the use of the land, as determined by
entities having jurisdiction, except as provided in Sec. 162.415(c).
The lessee must pay these amounts to the appropriate office.
(b) If the leased premises are within an Indian irrigation project
or drainage district, except as otherwise provided in part 171 of this
chapter, the lessee must pay all operation and maintenance charges that
accrue during the lease term. The lessee must pay these amounts to the
appropriate office in charge of the irrigation project or drainage
district. Failure to make such payments will be treated as a violation
of the lease.
(c) Where the property is subject to at least one other lease for
another compatible use, the lessees may agree among themselves as to
how to allocate payment of the Indian irrigation operation and
maintenance charges.
Bonding and Insurance
Sec. 162.434 Must a lessee provide a performance bond for a business
lease?
(a) Except as provided in paragraph (f) of this section, the lessee
must provide a performance bond in an amount sufficient to secure the
contractual obligations including:
(1) No less than the highest annual rental specified in the lease,
if compensation is paid annually, or other amount established by BIA in
consultation with the tribe for tribal land or, where feasible, with
Indian landowners for individually owned Indian land, if the
compensation is to be paid on a non-annual schedule;
(2) The construction of any required improvements;
(3) The operation and maintenance charges for any land located
within an irrigation project; and
(4) The restoration and reclamation of the leased premises, to
their condition at the commencement of the lease term or some other
specified condition.
(b) The performance bond must be deposited with us and made payable
only to us, and may not be modified without our approval.
(c) The lease must provide that we may adjust security or
performance bond requirements at any time to reflect changing
conditions.
(d) We may require that the surety provide any supporting documents
needed to show that the performance bond will be enforceable, and that
the surety will be able to perform the guaranteed obligations.
[[Page 73809]]
(e) The surety must provide notice to us at least 60 days before
canceling a performance bond so that we may notify the lessee of its
obligation to provide a substitute performance bond and require
collection of the bond prior to the cancellation date. Failure to
provide a substitute performance bond will be a violation of the lease.
(f) We may waive the requirement for a performance bond if the
lease is for religious, educational, recreational, cultural, or other
public purposes, or upon the request of the Indian landowner, if a
waiver is in the best interest of the Indian landowner. We may revoke
the waiver and require a performance bond at any time if the waiver is
no longer in the best interest of the Indian landowner.
Sec. 162.435 What forms of performance bond may be accepted under a
business lease?
(a) We will only accept a performance bond in one of the following
forms:
(1) Certificates of deposit issued by a federally insured financial
institution authorized to do business in the United States;
(2) Irrevocable letters of credit issued by a federally insured
financial institution authorized to do business in the United States;
(3) Negotiable Treasury securities; or
(4) Surety bond issued by a company approved by the U.S. Department
of the Treasury.
(b) All forms of performance bonds must:
(1) Indicate on their face that BIA approval is required for
redemption;
(2) Be accompanied by a statement granting full authority to BIA to
make an immediate claim upon or sell them if the lessee violates the
lease;
(3) Be irrevocable during the term of the performance bond; and
(4) Be automatically renewable during the term of the lease.
Sec. 162.436 What is the bond release process under a business lease?
(a) Upon expiration, termination, or cancellation of the lease, the
lessee may submit a written request for a performance bond release to
BIA.
(b) Upon receipt of a request under paragraph (a) of this section,
BIA will confirm with the tribe, for tribal land or, where feasible,
with the Indian landowners for individually owned Indian land, that the
lessee has complied with all lease obligations, then release the
performance bond to the lessee, unless we determine that the bond must
be redeemed to fulfill the contractual obligations.
Sec. 162.437 Must a lessee provide insurance for a business lease?
Except as provided in paragraph (c) of this section, a lessee must
provide insurance necessary to protect the interests of the Indian
landowners and in the amount sufficient to protect all insurable
improvements on the premises, unless otherwise provided in the lease.
(a) Such insurance may include property, crop, liability and/or
casualty insurance, depending on the Indian landowners' interests to be
protected.
(b) Both the Indian landowners and the United States must be
identified as additional insured parties.
(c) We may waive the requirement for insurance upon the request of
the Indian landowner, if a waiver is in the best interest of the Indian
landowner, including if the lease is for less than fair market rental
or nominal compensation. We may revoke the waiver and require insurance
at any time if the waiver is no longer in the best interest of the
Indian landowner.
Approval
Sec. 162.438 What documents must the parties submit to obtain BIA
approval of a business lease?
A lessee or the Indian landowner must submit the following
documents to us to obtain BIA approval of a business lease:
(a) A lease executed by the Indian landowner and the lessee that
complies with the requirements of this part;
(b) An appraisal or other valuation under Sec. 162.421, if
appropriate;
(c) Organizational documents, certificates, filing records, and
resolutions or other authorization documents, including evidence of the
representative's authority to execute a lease, if the lessee is a
corporation, limited liability company, partnership, joint venture, or
other legal entity, to show that the lease will be enforceable and that
the legal entity is in good standing and authorized to conduct business
in the jurisdiction where the land is located;
(d) A performance bond, where required:
(e) Statement from appropriate tribal authority that the proposed
use is in conformance with applicable tribal law;
(f) Environmental and archeological reports, surveys, and site
assessments as needed to facilitate compliance with applicable Federal
and tribal environmental and land use requirements;
(g) A restoration and reclamation plan (and any subsequent
modifications to the plan), if appropriate;
(h) Documents that demonstrate the lessee's technical capability to
construct, operate, maintain, and terminate the proposed project and
the lessee's history in successfully designing, constructing, or
obtaining the funding for a project similar to the proposed project, if
appropriate;
(i) A preliminary plan of development that describes the type and
location of any improvements the lessee plans to construct and a
schedule showing the tentative commencement and completion dates for
those improvements, if appropriate;
(j) An official or a certified survey of the leased premises that
includes the legal description of the land encumbered by the lease and
a description of each tract of trust or restricted land in the lease
and the acreage of each. We will review the survey under the DOI
Standards for Indian Trust Land Boundary Evidence;
(k) Information to assist us in our evaluation of the factors in 25
U.S.C. 415(a); and
(l) Any additional documentation we determine to be reasonably
necessary for approval.
Sec. 162.439 What is the approval process for a business lease?
(a) Before we approve a business lease, we must determine that the
lease is in the best interest of the Indian landowners. In making that
determination, we will:
(1) Review the lease and supporting documents;
(2) Identify potential environmental impacts and ensure compliance
with all applicable environmental laws, land use laws, and ordinances;
(3) Assure ourselves that adequate consideration has been given to
the factors in 25 U.S.C. 415(a).
(4) Require any lease modifications or mitigation measures
necessary to satisfy any requirements including any other Federal or
tribal land use requirements; and
(5) If the lease is a negotiated lease, defer to the Indian
landowners' determination that the lease is in their best interest, to
the maximum extent possible.
(b) When we receive a business lease and all of the supporting
documents that conform to this part, we will, within 60 days of the
date of receipt of the documents at the appropriate BIA office,
approve, disapprove, return the submission for revision, or notify the
parties in writing that we need additional time to review the lease.
Our letter notifying the parties that we need additional time to review
the lease must identify our initial concerns and invite
[[Page 73810]]
the parties to respond within 15 days. We have 30 days from sending the
notification to make a determination whether to approve or disapprove
the sublease.
(c) If we fail to the deadlines in this section, then the parties
may take appropriate action under part 2 of this chapter.
(d) Any lease approval or disapproval determination and the basis
for the determination, along with notification of appeal rights under
part 2 of this chapter, will be made in writing and will be sent to the
parties to the lease.
(e) We will provide approved business leases on tribal land to the
lessee and provide a copy to the tribe. We will provide approved
business leases on individually owned Indian land to the lessee, and
make copies available to the Indian landowners upon written request.
Sec. 162.440 When will a business lease be effective?
(a) A business lease will be effective on the date on which we
approve the lease, notwithstanding any appeal that may be filed under
part 2 of this chapter.
(b) The lease may specify a date on which the obligations between
the parties to a business lease are triggered. Such date may be before
or after the approval date under paragraph (a) of this section.
Sec. 162.441 Must business lease documents be recorded?
(a) A business lease, amendment, assignment, leasehold mortgage,
and sublease must be recorded in our Land Titles and Records Office
with jurisdiction over the leased land.
(1) We will record the lease or other document immediately
following our approval.
(2) If our approval is not required, the parties must record the
assignment or sublease in the Land Title and Records Office with
jurisdiction over the leased land.
(b) The tribe must record the following leases in the Land Title
and Records Office with jurisdiction over the leased lands, even though
BIA approval is not required:
(1) Leases of tribal land a corporate entity leases to a third
party under 25 U.S.C. 477; and
(2) Leases of tribal land under a special act of Congress
authorizing leases without our approval under certain conditions.
Sec. 162.442 What action may BIA take if a lease disapproval decision
is appealed?
(a) If a party appeals our decision to disapprove a lease,
assignment, amendment, sublease or leasehold mortgage, then the
official to whom the appeal is made may require the lessee to post an
appeal bond in an amount necessary to protect the Indian landowners
against financial losses and damage to trust resources likely to result
from the delay caused by an appeal. The requirement to post an appeal
bond will apply in addition to all of the other requirements in part 2
of this chapter.
(b) The appellant may not appeal the appeal bond decision. The
appellant may, however, request that the official to whom the appeal is
made reconsider the bond decision, based on extraordinary
circumstances. Any reconsideration decision is final for the
Department.
Amendments
Sec. 162.443 May the parties amend a business lease?
(a) The parties may amend a business lease by obtaining:
(1) The lessee's signature;
(2) The Indian landowners' consent pursuant to the requirements
contained in Sec. 162.444; and
(3) BIA approval of the amendment under Sec. 162.445 and Sec.
162.446.
(b) The parties may not amend a business lease if the lease
expressly prohibits amendments.
Sec. 162.444 What are the consent requirements for an amendment to a
business lease?
(a) The Indian landowners, or their representatives under Sec.
162.012, must consent to an amendment in the same percentages and
manner as a new business lease pursuant to Sec. 162.011, unless the
requirements in paragraphs (a)(1) or (a)(2) of this section are met.
(1) The approved business lease establishes that individual Indian
landowners are deemed to have consented where they do not object in
writing to the amendment after a specified period of time following
landowners' receipt of the amendment. If the lease provides for deemed
consent, it must require the parties to submit to us: A copy of the
executed amendment or other documentation of the Indian landowners'
consent; proof of mailing of the amendment to any Indian landowners who
are deemed to have consented; and any other pertinent information for
us to review.
(2) The approved business lease authorizes one or more
representatives to consent to an amendment on behalf of all Indian
landowners. The lease may also designate us as the Indian landowners'
representative for the purposes of consenting to an amendment.
(b) Unless specifically authorized in the lease, the written power
of attorney, or court document, Indian landowners may not be deemed to
have consented, and an Indian landowner's designated representative may
not negotiate or consent to an amendment that would:
(1) Reduce the payment obligations or terms to the Indian
landowners;
(2) Increase or decrease the lease area; or
(3) Terminate or change the term of the lease.
Sec. 162.445 What is the approval process for an amendment to a
business lease?
We have 30 days from receipt of the executed amendment, proof of
required consents, and required documentation to make a determination
whether to approve the amendment or notify the parties in writing that
we need additional time to review the amendment.
(a) Our letter notifying the parties that we need additional time
to review the amendment must identify our initial concerns and invite
the parties to respond within 15 days. We have 30 days from sending the
notification to make a determination whether to approve or disapprove
the amendment.
(b) If we fail to send either a determination or a notification
within 30 days from receipt of required documents and completion of
environmental reviews or 30 days from sending the notification, the
amendment is deemed approved to the extent consistent with Federal law.
We will retain our full enforcement authority for amendments that are
deemed approved.
(c) Our determination whether to approve the amendment will be in
writing and will state the basis for our approval or disapproval.
Sec. 162.446 How will BIA decide whether to approve an amendment to a
business lease?
(a) We may only disapprove a business lease amendment if:
(1) The required consents have not been obtained from the parties
to the lease and any mortgagees or sureties;
(2) The lessee is in violation of the lease; or
(3) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) We may not unreasonably withhold approval of an amendment.
Assignments
Sec. 162.447 May a lessee assign a business lease?
(a) A lessee may assign a business lease by meeting the consent
[[Page 73811]]
requirements contained in Sec. 162.448 and obtaining our approval of
the assignment under Sec. 162.449 and Sec. 162.450, or by meeting the
conditions in paragraphs (b) or (c) of this section, unless the lease
expressly prohibits assignments.
(b) Where provided in the lease, the lessee may assign the lease to
the following without meeting consent requirements or obtaining BIA
approval of the assignment, as long as the lessee notifies BIA of the
assignment within 30 days:
(1) Not more than two distinct legal entities specified in the
lease; or
(2) The lessee's wholly owned subsidiaries.
(c) If a sale or foreclosure under an approved mortgage of the
leasehold interest occurs and the mortgagee is the purchaser, the
mortgagee/purchaser may assign the leasehold interest without meeting
the consent requirements or obtaining BIA approval, as long as the
assignee accepts and agrees in writing to be bound by all the terms and
conditions of the lease.
Sec. 162.448 What are the consent requirements for an assignment of a
business lease?
(a) The Indian landowners, or their representatives under Sec.
162.012, must consent to an assignment of a business lease in the same
percentages and manner as a new business lease pursuant to Sec.
162.011, unless the requirements in paragraphs (a)(1) or (a)(2) of this
section are met.
(1) The approved business lease establishes that individual Indian
landowners are deemed to have consented where they do not object in
writing to the assignment after a specified period of time following
landowners' receipt of the assignment. If the lease provides for deemed
consent, it must require the parties to submit to us: A copy of the
executed assignment or other documentation of the Indian landowners'
consent; proof of mailing to any Indian landowners who are deemed to
have consented; and any other pertinent information to us for review.
(2) The approved business lease authorizes one or more
representatives to consent to an assignment on behalf of all Indian
landowners. The lease may also designate us as the Indian landowners'
representative for the purposes of consenting to an assignment.
(b) The lessee must obtain the consent of the holders of any bonds
or mortgages.
Sec. 162.449 What is the approval process for an assignment of a
business lease?
(a) We have 30 days from receipt of the executed assignment, proof
of required consents, and required documentation to make a
determination whether to approve the assignment or notify the parties
that we need additional information. Our determination whether to
approve the assignment will be in writing and will state the basis for
our approval or disapproval.
(b) If we fail to meet the deadline in this section, the lessee or
Indian landowners may take appropriate action under part 2 of this
chapter.
Sec. 162.450 How will BIA decide whether to approve an assignment of
a business lease?
(a) We may only disapprove an assignment of a business lease if:
(1) The required consents have not been obtained from the parties
to the lease or the lessee's mortgagees or sureties;
(2) The lessee is in violation of the lease;
(3) The assignee does not agree to be bound by the terms of the
lease; or
(4) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(4) of this
section, we may consider whether:
(1) The value of any part of the leased premises not covered by the
assignment would be adversely affected; and
(2) If a performance bond is required, the assignee has bonded its
performance and provided supporting documents that demonstrate that the
lease will be enforceable against the assignee, and that the assignee
will be able to perform its obligations under the lease or assignment.
(c) We may not unreasonably withhold approval of an assignment.
Subleases
Sec. 162.451 May a lessee sublease a business lease?
(a) A lessee may sublease a business lease by meeting the consent
requirements contained in Sec. 162.452 and obtaining our approval of
the sublease under Sec. 162.453 and Sec. 162.454, or by meeting the
conditions in paragraph (b) of this section, unless the lease expressly
prohibits subleases.
(b) Where the sublease is part of a commercial development or
residential development, the lessee may sublease without meeting
consent requirements or obtaining BIA approval of the sublease, as long
as:
(1) The lease provides for subleasing without meeting consent
requirements or obtaining BIA approval;
(2) We have approved a general plan and rent schedule for the
development;
(3) We have approved a sublease form for use in the project; and
(4) The parties provide BIA with a copy of the executed sublease
within 30 days.
Sec. 162.452 What are the consent requirements for a sublease of a
business lease?
The Indian landowners must consent to a sublease of a business
lease in the same percentages and manner as a new business lease under
Sec. 162.011, unless the requirements in paragraphs (a) or (b) of this
section are met.
(a) The lease establishes that individual Indian landowners are
deemed to have consented where they do not object in writing to the
sublease after a specified period of time following landowners' receipt
of the sublease. If the lease provides for deemed consent, it must
require the parties to submit to us: A copy of the executed sublease or
other documentation of the Indian landowners' consent; proof of mailing
of the sublease to any Indian landowners who are deemed to have
consented; and any other pertinent information for us to review.
(b) The lease authorizes one or more representatives to consent to
a sublease on behalf of all Indian landowners. The lease may also
designate us as the Indian landowners' representative for the purposes
of consenting to a sublease.
Sec. 162.453 What is the approval process for a sublease of a
business lease?
BIA has 30 days from receipt of the executed sublease, proof of
required consents, and required documentation to make a determination
whether to approve the sublease or notify the parties in writing that
we need additional time to review the sublease.
(a) Our letter notifying the parties that we need additional time
to review the sublease must identify our initial concerns and invite
the parties to respond within 15 days. We have 30 days from sending the
notification to make a determination whether to approve or disapprove
the sublease.
(b) If we fail to send either a determination or a notification
within 30 days from receipt of required documents or 30 days from
sending the notification, the sublease is deemed approved to the extent
consistent with Federal law. We will retain our full enforcement
authority for subleases that are deemed approved.
[[Page 73812]]
Sec. 162.454 How will BIA decide whether to approve a sublease of a
business lease?
(a) We may only disapprove a sublease of a business lease if:
(1) The required consents have not been obtained from the parties
to the lease and any mortgagees or sureties;
(2) The lessee is in violation of the lease;
(3) The lessee will not remain liable under the lease;
(4) The sublessee does not agree to be bound by the terms of the
lease; or
(5) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding requirement by paragraph (a)(5) of this
section, we will consider whether:
(1) The value of any part of the leased premises not covered by the
sublease would be adversely affected; and
(2) If a performance bond is required by the sublease, the
sublessee has bonded its performance and provided supporting documents
that demonstrate that the lease will be enforceable by the lessee
against the sublessee, and that the sublessee will be able to perform
its obligations under the lease.
(c) We may not unreasonably withhold approval of a sublease.
Leasehold Mortgages
Sec. 162.455 May a lessee mortgage a business lease?
(a) A lessee may mortgage a business lease by meeting the consent
requirements contained in Sec. 162.456 and obtaining our approval of
the leasehold mortgage under Sec. 162.457 and Sec. 162.458, unless
the lease expressly prohibits leasehold mortgages.
(b) Refer to Sec. 162.447(c) for information on what happens if a
sale or foreclosure under an approved mortgage of the leasehold
interest occurs.
Sec. 162.456 What are the consent requirements for a leasehold
mortgage under a business lease?
The Indian landowners, or their representatives under Sec.
162.012, must consent to a leasehold mortgage under a business lease in
the same percentages and manner as a new business lease under Sec.
162.011, unless the requirements in paragraphs (a), (b), or (c) of this
section are met.
(a) The lease contains a general authorization for a leasehold
mortgage and states what law would apply in case of foreclosure.
(b) The lease establishes that individual Indian landowners are
deemed to have consented where they do not object in writing to the
leasehold mortgage after a specified period of time following
landowners' receipt of the leasehold mortgage. If the lease provides
for deemed consent, it must require the parties to submit to us: A copy
of the executed leasehold mortgage or other documentation of the Indian
landowners' consent; proof of mailing of the leasehold mortgage to any
Indian landowners who are deemed to have consented; and any other
pertinent information for us to review.
(c) The lease authorizes one or more representatives to consent to
a leasehold mortgage on behalf of all Indian landowners. The lease may
also designate us as the Indian landowners' representative for the
purposes of consenting to a leasehold mortgage.
Sec. 162.457 What is the approval process for a leasehold mortgage
under a business lease?
(a) We have 30 days from receipt of the executed leasehold
mortgage, proof of required consents, and required documentation to
make a determination whether to approve the leasehold mortgage or
notify the parties in writing that we need additional time to review
the leasehold mortgage. Our determination whether to approve the
leasehold mortgage will be in writing and will state the basis for our
approval or disapproval.
(b) If we fail to meet the deadline in this section, the lessee may
take appropriate action under part 2 of this chapter.
Sec. 162.458 How will BIA decide whether to approve a leasehold
mortgage under a business lease?
(a) We may only disapprove a leasehold mortgage under a business
lease if:
(1) The required consents have not been obtained from the parties
to the lease and the lessee's sureties;
(2) The leasehold mortgage covers more than the lessee's interest
in the leased premises or encumbers unrelated collateral; or
(3) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(3) of this
section, we will consider whether:
(1) The lessee's ability to comply with the lease would be
adversely affected by any new loan obligations;
(2) Any lease provisions would be modified by the leasehold
mortgage;
(3) The remedies available to us or to the Indian landowners would
be limited (beyond any additional notice and cure rights to be afforded
to the mortgagee), in the event of a lease violation; and
(4) Any rights of the Indian landowners would be subordinated or
adversely affected in the event of a loan default by the lessee.
(c) We may not unreasonably withhold approval of a leasehold
mortgage.
Effectiveness, Compliance, and Enforcement
Sec. 162.459 When will an amendment, assignment, sublease, or
leasehold mortgage under a business lease be effective?
(a) An amendment, assignment, sublease, or leasehold mortgage under
a business lease will be effective when approved, notwithstanding any
appeal that may be filed under part 2 of this chapter, unless approval
is not required under Sec. 162.008(b), Sec. 162.447(b), or Sec.
162.451(b), or the conditions in paragraph (b) of this section apply.
We will provide the approved documents to the party requesting approval
and, upon request, to the other parties to the agreement.
(b) If the amendment or sublease was deemed approved pursuant to
Sec. 162.445(b) or Sec. 162.453(b), the amendment or sublease becomes
effective 45 days from the date the parties mailed or delivered the
document to us for our review.
(c) An assignment or sublease that does not require landowner
consent or BIA approval shall be effective upon execution by the
parties.
Sec. 162.460 What happens if BIA disapproves an amendment,
assignment, sublease, or leasehold mortgage under a business lease?
If we disapprove an amendment, assignment, sublease, or leasehold
mortgage of a business lease, we will notify the parties immediately
and advise them of their right to appeal the decision under part 2 of
this chapter.
Sec. 162.461 May BIA investigate compliance with a business lease?
(a) We may enter the leased premises at any reasonable time, upon
reasonable notice, to protect the interests of the Indian landowners
and to determine if the lessee is in compliance with the requirements
of the lease.
(b) If the Indian landowner notifies us that a specific lease
violation has occurred, we will promptly initiate an appropriate
investigation.
Sec. 162.462 May a business lease provide for negotiated remedies in
the event of a violation?
(a) A business lease of tribal land may provide either or both
parties with negotiated remedies in the event of a lease violation,
including, but not
[[Page 73813]]
limited to, the power to terminate the lease. If the lease provides the
parties with the power to terminate the lease, BIA approval of the
termination is not required and the termination is effective without
BIA cancellation. The parties must notify us of the termination so that
we may record it in the Land Titles and Records Office.
(b) A business lease of individually owned Indian land may provide
either or both parties with negotiated remedies, so long as the lease
also specifies the manner in which those remedies may be exercised by
or on behalf of the applicable percentage of Indian landowners under
Sec. 162.011 of this part. If the lease provides the parties with the
power to terminate the lease, BIA concurrence with the termination is
required to ensure that the Indian landowners of the applicable
percentage of interests have consented. BIA will record the termination
in the Land Titles and Records Office.
(c) The parties must notify any surety or mortgagee of a
termination of a business lease.
(d) Negotiated remedies may apply in addition to, or instead of,
the cancellation remedy available to us, as specified in the lease.
(e) A business lease may provide for lease disputes to be resolved
in tribal court or any other court of competent jurisdiction, by a
tribal governing body in the absence of a tribal court, or through an
alternative dispute resolution method. We may not be bound by decisions
made in such forums, but we will defer to ongoing proceedings, as
appropriate, in deciding whether to exercise any of the remedies
available to us.
Sec. 162.463 What will BIA do about a violation of a business lease?
(a) If we determine there has been a violation of the conditions of
a business lease, other than a violation of payment provisions covered
by paragraph (b) of this section, we will promptly send the lessee and
its sureties and any mortgagee a notice of violation by certified mail,
return receipt requested.
(1) We will send a copy of the notice of violation to the tribe for
tribal land, or provide constructive notice to Indian landowners for
individually owned Indian land.
(2) Within 10 business days of the receipt of a notice of
violation, the lessee must:
(i) Cure the violation and notify us in writing that the violation
has been cured;
(ii) Dispute our determination that a violation has occurred; or
(iii) Request additional time to cure the violation.
(3) If a violation is determined to have occurred, we will make a
reasonable attempt to notify the Indian landowners.
(4) We may order the lessee to stop work.
(b) A lessee's failure to pay compensation in the time and manner
required by a residential lease is a violation of the lease, and we
will issue a notice of violation in accordance with this paragraph.
(1) We will send the lessees and its sureties a notice of violation
by certified mail, return receipt requested:
(i) Promptly following the date on which the payment was due, if
the lease requires that payments be made to us; or
(ii) Promptly following the date on which we receive actual notice
of non-payment from the Indian landowners, if the lease provides for
payment directly to the Indian landowners.
(2) We will send a copy of the notice of violation to the tribe for
tribal land, or provide constructive notice to the Indian landowners
for individually owned Indian land.
(3) The lessee must provide adequate proof of payment as required
in the notice of violation.
(c) The lessee and its sureties will continue to be responsible for
the obligations contained in the lease until the lease is terminated,
cancelled, or expires.
Sec. 162.464 What will BIA do if the lessee does not cure a violation
of a business lease on time?
(a) If the lessee does not cure a violation of a business lease
within the requisite time period, or provide adequate proof of payment
as required in the notice of violation, we will consult with the tribe
for tribal land or, where feasible, Indian landowners for individually
owned Indian land, and determine whether:
(1) We should cancel the lease;
(2) The Indian landowners wish to invoke any remedies available to
them under the lease;
(3) We should invoke other remedies available under the lease or
applicable law, including, collection on any available performance bond
or, for failure to pay compensation, referral of the debt to the
Department of the Treasury for collection; or
(4) The lessee should be granted additional time in which to cure
the violation.
(b) We may take action to recover unpaid compensation and any
associated late payment charges.
(1) We do not have to cancel the lease or give any further notice
to the lessee before taking action to recover unpaid compensation.
(2) We may still take action to recover any unpaid compensation if
we cancel the lease.
(c) If we decide to cancel the lease, we will send the lessee and
its sureties and any mortgagees a cancellation letter by certified
mail, return receipt requested, within 5 business days of our decision.
We will send a copy of the cancellation letter to the tribe for tribal
land, and will provide Indian landowners for individually owned Indian
land with actual or constructive notice of the cancellation. The
cancellation letter will:
(1) Explain the grounds for cancellation;
(2) If applicable, notify the lessee of the amount of any unpaid
compensation or late payment charges due under the lease;
(3) Notify the lessee of their right to appeal under part 2 of this
chapter, including the possibility that the official to whom the appeal
is made may require the lessee to post an appeal bond;
(4) Order the lessee to vacate the property within 31 days of the
date of receipt of the cancellation letter, if an appeal is not filed
by that time; and
(5) Require any other action BIA deems necessary to protect the
Indian landowners.
(d) We may invoke any other remedies available to us under the
lease, including collecting on any available performance bond, and the
Indian landowner may pursue any available remedies under tribal law.
Sec. 162.465 Will late payment charges or special fees apply to
delinquent payments due under a business lease?
(a) Late payment charges will apply as specified in the lease. The
failure to pay such amounts will be treated as a lease violation.
(b) The following special fees may be assessed to cover
administrative costs incurred by the United States in the collection of
the debt, if compensation is not paid in the time and manner required,
in addition to the late payment charges that must be paid to the Indian
landowners under the lease:
------------------------------------------------------------------------
The lessee will pay . . . For . . .
------------------------------------------------------------------------
(a) $50.00................................ Dishonored checks.
(b) $15.00................................ Processing of each notice or
demand letter.
(c) 18 percent of balance due............. Treasury processing
following referral for
collection of delinquent
debt.
------------------------------------------------------------------------
[[Page 73814]]
Sec. 162.466 How will payment rights relating to a business lease be
allocated between the Indian landowners and the lessee?
The business lease may allocate rights to payment for insurance
proceeds, trespass damages, condemnation awards, settlement funds, and
other payments between the Indian landowners and the lessee. If not
specified in the insurance policy, order, award, judgment, or other
document including the lease, the Indian landowners or lessees will be
entitled to receive such payments.
Sec. 162.467 When will a cancellation of a business lease be
effective?
(a) A cancellation involving a business lease will not be effective
until 31 days after the lessee receives a cancellation letter from us,
or 41 days from the date we mailed the letter, whichever is earlier.
(b) The cancellation decision will be stayed if an appeal is filed
unless the cancellation is made immediately effective under part 2 of
this chapter. While a cancellation decision is stayed, the lessee must
continue to pay compensation and comply with the other terms of the
lease.
Sec. 162.468 What will BIA do if a lessee remains in possession after
a business lease expires or is cancelled?
If a lessee remains in possession after the expiration or
cancellation of a business lease, we may treat the unauthorized
possession as a trespass under applicable law. Unless the applicable
percentage of Indian landowners under Sec. 162.011 have notified us in
writing that they are engaged in good faith negotiations with the
holdover lessee to obtain a new lease, we may take action to recover
possession on behalf of the Indian landowners, and pursue any
additional remedies available under applicable law, such as forcible
entry and detainer action.
Sec. 162.469 Will BIA regulations concerning appeal bonds apply to
cancellation decisions involving business leases?
(a) Except as provided in paragraph (b) of this section, the appeal
bond provisions in part 2 of this chapter will apply to appeals from
lease cancellation decisions.
(b) The lessee may not appeal the appeal bond decision. The lessee
may, however, request that the official to whom the appeal is made
reconsider the appeal bond decision, based on extraordinary
circumstances. Any reconsideration decision is final for the
Department.
Sec. 162.470 When will BIA issue a decision on an appeal from a
business leasing decision?
BIA will issue a decision on an appeal from a business leasing
decision within 60 days of receipt of all pleadings.
Sec. 162.471 What happens if the lessee abandons the leased premises?
If a lessee abandons the leased premises, we will treat the
abandonment as a violation of the lease. The lease may specify a period
of non-use after which the lease premises will be considered abandoned.
14. Remove subpart F in its entirety (Sec. 162.600-Sec. 162.623)
and redesignate Sec. 162.500-Sec. 162.503 in subpart E as Sec.
162.600-Sec. 162.603 in subpart F under the following heading:
Subpart F--Special Requirements for Certain Reservations
15. Add a new subpart E to read as follows:
Subpart E--Wind and Solar Resource Leases
General Provisions Applicable to Both WEELs and WSR Leases
Sec.
162.501 What types of leases does this subpart cover?
162.502 Who must obtain a WEEL or WSR lease?
162.503 Is there a model WEEL or WSR lease?
WEELs
162.511 What is the purpose of a WEEL?
162.512 How long may the term of a WEEL run?
162.513 Are there mandatory provisions a WEEL must contain?
162.514 May improvements be made under a WEEL?
162.515 How must a WEEL address ownership of improvements?
162.516 How will BIA enforce removal requirements in a WEEL?
162.517 What requirements for due diligence must a WEEL include?
162.518 May a WEEL allow for compatible uses by the Indian
landowner?
162.519 Who owns the energy resource information obtained under the
WEEL?
162.520 May a lessee incorporate its WEEL analyses into its WSR
lease analyses?
162.521 May a WEEL contain an option for a lessee to enter into a
WSR lease?
162.522 How may a lessee obtain an extension of an option period?
Monetary Compensation Requirements
162.523 How much compensation must be paid under a WEEL?
162.524 Will BIA require a valuation for a WEEL?
Bonding and Insurance
162.525 Must a lessee provide a performance bond for a WEEL?
162.526 Reserved.
162.527 Must a lessee provide insurance for a WEEL?
Approval
162.528 What documents must the parties submit to obtain BIA
approval of a WEEL?
162.529 What is the approval process for a WEEL?
Administration
162.530 May the parties amend, assign, sublease, or mortgage a WEEL?
162.531 Reserved.
Compliance and Enforcement
162.532 How does BIA ensure compliance with a WEEL?
162.533 What will BIA do if a lessee does not cure a violation of a
WEEL on time?
162.534 Under what circumstance may a WEEL be terminated or
cancelled?
WSR Leases
162.535 What is the purpose of a WSR lease?
162.536 Must I obtain a WEEL before obtaining a WSR lease?
162.537 How long may the term of a WSR lease run?
163.538 What must the lease include if it contains an option to
renew?
162.539 Are there mandatory provisions a WSR lease must contain?
162.540 May improvements be made under a WSR lease?
162.541 How must a WSR lease address ownership of improvements?
162.542 How will BIA enforce removal requirements in a WSR lease?
162.543 What requirements for due diligence must a WSR lease
include?
162.544 May a WSR lease allow compatible uses?
162.545 How must a WSR lease describe the land?
Monetary Compensation Requirements
162.546 How much monetary compensation must be paid under a WSR
lease?
162.547 Will BIA require a valuation to determine fair market rental
of a WSR lease?
162.548 What type of valuation may be used to determine fair market
rental for a WSR lease?
162.549 When are monetary compensation payments due under a WSR
lease?
162.550 Must a WSR lease specify to whom monetary compensation
payments may be made?
162.551 What form of monetary compensation payment may be accepted
under a WSR lease?
162.552 May the WSR lease provide for non-monetary or varying types
of compensation?
162.553 Will BIA notify a lessee when a payment is due under a WSR
lease?
162.554 Must a WSR lease provide for compensation reviews or
adjustments?
162.555 What other types of payments are required under a WSR lease?
Bonding and Insurance
162.559 Must a lessee provide a performance bond for a WSR lease?
[[Page 73815]]
162.560 What forms of performance bond may be accepted under a WSR
lease?
162.561 What is the bond release process under a WSR lease?
162.562 Must a lessee provide insurance for a WSR lease?
Approval
162.563 What documents must the parties submit to obtain BIA
approval of a WSR lease?
162.564 What is the approval process for a WSR lease?
162.565 When will a WSR lease be effective?
162.566 Must WEEL and WSR lease documents be recorded?
162.567 What action may BIA take if a lease disapproval decision is
appealed?
Amendments
162.568 May the parties amend a WSR lease?
162.569 What are the consent requirements for an amendment to a WSR
lease?
162.570 What is the approval process for an amendment to a WSR
lease?
162.571 How will BIA decide whether to approve an amendment to a WSR
lease?
Assignments
162.572 May a lessee assign a WSR lease?
162.573 What are the consent requirements for an assignment of a WSR
lease?
162.574 What is the approval process for an assignment of a WSR
lease?
162.575 How will BIA decide whether to approve an assignment of a
WSR lease?
Subleases
162.576 May a lessee sublease a WSR lease?
162.577 What are the consent requirements for a sublease of a WSR
lease?
162.578 What is the approval process for a sublease of a WSR lease?
162.579 How will BIA decide whether to approve a sublease of a WSR
lease?
Leasehold Mortgages
162.580 May a lessee mortgage a WSR lease?
162.581 What are the consent requirements for a leasehold mortgage
of a WSR lease?
162.582 What is the approval process for a leasehold mortgage of a
WSR lease?
162.583 How will BIA decide whether to approve a leasehold mortgage
of a WSR lease?
Effectiveness, Compliance, and Enforcement
162.584 When will an amendment, assignment, sublease, or leasehold
mortgage under a WSR lease be effective?
162.585 What happens if BIA disapproves an amendment, assignment,
sublease, or leasehold mortgage of a WSR lease?
162.586 May BIA investigate compliance with a WSR lease?
162.587 May a WSR lease provide for negotiated remedies in the event
of a violation?
162.588 What will BIA do about a violation of a WSR lease?
162.589 What will BIA do if a lessee does not cure a violation of a
WSR lease on time?
162.590 Will late payment charges or special fees apply to
delinquent payments due under a WSR lease?
162.591 How will payment rights relating to WSR leases be allocated
between the Indian landowners and the lessee?
162.592 When will a cancellation of a WSR lease be effective?
162.593 What will BIA do if a lessee remains in possession after a
WSR lease expires or is cancelled?
162.594 Will BIA regulations concerning appeal bonds apply to
cancellation decisions involving WSR leases?
162.595 When will BIA issue a decision on an appeal from a WSR
leasing decision?
162.596 What happens if the lessee abandons the leased premises?
Subpart E--Wind and Solar Resource Leases
General Provisions Applicable to WEELs and WSR Leases
Sec. 162.501 What types of leases does this subpart cover?
(a) This subpart covers:
(1) Wind energy evaluation leases (WEELs), which are short-term
leases that authorize possession of Indian land for the purpose of
installing, operating, and maintaining instrumentation, and associated
infrastructure, such as meteorological towers, to evaluate wind
resources for electricity generation; and
(2) Wind and solar resource (WSR) leases, which are leases that
authorize possession of Indian land for the purpose of installing,
operating, and maintaining instrumentation, facilities, and associated
infrastructure, such as wind turbines and solar panels, to harness wind
and/or solar energy to generate and supply electricity:
(i) For resale on a for-profit or non-profit basis;
(ii) To a utility grid serving the public generally; or
(iii) To users within the local community (e.g., on and adjacent to
a reservation).
(b) If the generation of electricity is solely to support a use
approved under subpart B, Agricultural Leases; subpart C, Residential
Leases; or subpart D Business Leases (including religious, educational,
recreational, cultural, or other public purposes), for the same parcel
of land, then the installation, operation, and maintenance of
instrumentation, facilities, and associated infrastructure are governed
by subpart B, C, or D, as appropriate.
Sec. 162.502 Who must obtain a WEEL or WSR lease?
(a) Except as provided in Sec. 162.008(b) and 162.501, anyone
seeking to possess Indian land to conduct activities associated with
the evaluation of wind resources must obtain a WEEL.
(b) Except as provided in Sec. 162.008(b) and 162.501, anyone
seeking to possess Indian land to conduct activities associated with
the development of wind and/or solar resources must obtain a WSR lease.
(c) A tribe that conducts wind and solar resource activities on its
tribal land does not need a WEEL or WSR under this subpart.
Sec. 162.503 Is there a model WEEL or WSR lease?
There is no model WEEL or WSR lease because of the need for
flexibility in negotiating and writing WEELs and WSR leases; however,
we may provide other guidance, such as checklists and a sample lease to
assist in the lease negotiation process. Additionally, we may assist
the Indian landowners, upon their request, in developing appropriate
lease provisions or in using tribal lease forms that conform to the
requirements of this part.
WEELs
Sec. 162.511 What is the purpose of a WEEL?
A WEEL is a short-term lease that allows the lessee to use trust or
restricted lands for the purpose of evaluating wind resources. The
lessee may use information collected under the WEEL to assess the
potential for wind energy development, and determine future placement
and type of wind energy technology to use in developing the energy
resource potential of the leased area.
Sec. 162.512 How long may the term of a WEEL run?
(a) A WEEL must provide for a definite term, state if there is an
option to renew and, if so, provide for a definite term for the renewal
period. WEELs are for project evaluation purposes, and therefore may
have:
(1) An initial term that is no longer than 3 years; and
(2) One renewal period not to exceed 3 years.
(b) The exercise of the option to renew must be in writing and the
WEEL must specify:
(1) The time and manner in which the option must be exercised; and
(2) Additional consideration, if any, that will be due upon the
exercise of the option to renew or the commencement of the renewal
term.
Sec. 162.513 Are there mandatory provisions a WEEL must contain?
(a) All WEELs must identify:
(1) The tract or parcel of land being leased;
(2) The purpose of the WEEL and authorized uses of the leased
premises;
[[Page 73816]]
(3) The parties to the WEEL;
(4) The term of the WEEL;
(5) The owner being represented and the authority under which such
action is being taken, where one executes the WEEL in a representative
capacity;
(6) The citation of the statute that authorizes our approval;
(7) Who is responsible for constructing, owning, operating,
maintaining, and managing improvements, pursuant to Sec. 162.515;
(8) Payment requirements and late payment charges, including
interest; and
(9) Due diligence requirements, pursuant to Sec. 162.517;
(b) All WEELs must include the provisions:
(1) There must not be any unlawful conduct, creation of a nuisance,
illegal activity, or negligent use or waste of leased premises;
(2) The obligations of the lessee and its sureties to the Indian
landowners are also enforceable by the United States, so long as the
land remains in trust or restricted status;
(3) Nothing in the lease would prevent or delay termination of
Federal trust responsibilities for the land during the lease's term;
(4) The lessee must comply with all applicable laws, ordinances,
rules, regulations, and other legal requirements under Sec. 162.013;
(5) The lessee indemnifies and holds the United States and the
Indian landowners harmless from any loss, liability, or damages
resulting from the lessee's use of the leased premises, unless the
lessee would be prohibited by law from making such an agreement;
(6) In the event that historic properties, archeological resources,
human remains, or other cultural items, not previously reported are
encountered during the course of any activity associated with this
lease, all activity in the immediate vicinity of the properties,
resources, remains, or items will cease, and the lessee will contact
BIA and the tribe that has jurisdiction to determine how to proceed and
appropriate disposition; and
(7) BIA has the right, at any reasonable time during the term of
the lease, and upon reasonable notice, to enter upon the leased
premises for inspection.
Sec. 162.514 May improvements be made under a WEEL?
(a) A WEEL anticipates the installation of facilities and
associated infrastructure of a size and magnitude necessary for
evaluation of wind resource capacity and potential effects of
development. These facilities and associated infrastructure are
considered improvements. An equipment installation plan must be
submitted with the lease pursuant to Sec. 162.528(f).
(b) If any of the following changes are made to the equipment
installation plan, the Indian landowners must approve the revised plan
and the lessee must provide a copy of the revised plan to BIA:
(1) Location of improvements;
(2) Type of improvements; or
(3) Delay of 90 days or more in any phase of development.
Sec. 162.515 How must a WEEL address ownership of improvements?
(a) A WEEL must specify who will own any improvements the lessee
installs during the lease term. In addition, the WEEL must indicate
whether any improvements the lessee installs:
(1) Will remain on the premises upon expiration or termination of
the lease whether or not there is conversion of the WEEL to a WSR
lease, in a condition satisfactory to the Indian landowners;
(2) May be conveyed to the Indian landowners during the WEEL term;
(3) Will be removed within a time period specified in WEEL, at the
lessee's expense, with the leased premises to be restored as close as
possible to their condition before installation of such improvements;
or
(4) Will be disposed of by other specified means.
(b) A WEEL that requires the lessee to remove the improvements must
also provide the Indian landowners with an option to take possession
and title to the improvements if the improvements are not removed
within the specified time period.
(c) Any permanent improvements on the leased land shall be subject
to 25 CFR 1.4 and, in addition, shall not be subject to any fee, tax,
assessment, levy, or other such charge imposed by any State or
political subdivision of a State, without regard to ownership of those
improvements. Improvements may be subject to taxation by the Indian
tribe with jurisdiction.
Sec. 162.516 How will BIA enforce removal requirements in a WEEL?
We may take appropriate enforcement action in consultation with the
tribe for tribal land or, where feasible, Indian landowners for
individually owned Indian land, to ensure removal of the improvements
or restoration of the premises at the lessee's expense. We may take
such enforcement action after termination or expiration of the WEEL.
Sec. 162.517 What requirements for due diligence must a WEEL include?
(a) A WEEL must require the lessee to undertake the following due
diligence:
(1) Install testing and monitoring facilities within 12 months
after the effective date of the WEEL or other period designated in the
WEEL and consistent with the plan of development; and
(2) Provide the Indian landowners and BIA with an explanation as to
good cause for any delay, the anticipated date of installation of
facilities, and evidence of progress toward installing or completing
testing and monitoring facilities, if installation does not occur, or
is not expected to be completed, within the time period specified in
paragraph (a)(1) of this section.
(b) Failure of the lessee to comply with the due diligence
requirements of the WEEL is a violation of the WEEL and may lead to
cancellation of the WEEL and the requirement that the lessee transfer
of ownership of energy resource information collected under the WEEL to
the Indian landowner under Sec. 162.519.
Sec. 162.518 May a WEEL allow for compatible uses by the Indian
landowner?
The WEEL may provide for the Indian landowner to use the leased
premises for other noncompeting uses compatible with the purpose of the
WEEL. This may include the right to lease the premises for other
compatible purposes. Any such use by the Indian landowner will not
reduce or offset the monetary compensation for the WEEL.
Sec. 162.519 Who owns the energy resource information obtained under
the WEEL?
(a) The WEEL must specify the ownership of any energy resource
information the lessee obtains during the WEEL term.
(b) Unless otherwise specified in the WEEL, the energy resource
information the lessee obtains through the leased activity becomes the
property of Indian landowner at the termination or expiration of the
WEEL or upon failure by the lessee to diligently install testing and
monitoring facilities on the leased premises in accordance with Sec.
162.517.
(c) BIA will keep confidential any information it is provided that
is marked confidential or proprietary and that is exempt from public
release, to the extent allowed by law.
Sec. 162.520 May a lessee incorporate its WEEL analyses into its WSR
lease analyses?
Any analyses a lessee uses to bring a WEEL activity into compliance
with applicable laws, ordinances, rules, regulations under Sec.
162.013 and any
[[Page 73817]]
other legal requirements may be incorporated by reference, as
appropriate, into the analyses of a proposed WSR lease.
Sec. 162.521 May a WEEL contain an option for the lessee to enter
into a WSR lease?
(a) A WEEL may provide for an option period following the
expiration of the WEEL term during which time the lessee and the Indian
landowner have the option to enter into a WSR lease if:
(1) The option period is no more than 3 years, except as provided
in Sec. 162.522;
(2) The intent to install energy resource development facilities is
stated at the time of the initial WEEL application;
(3) The WSR lease will be limited to the land covered by the WEEL,
or a portion thereof;
(4) The WEEL imposes due diligence requirements on the lessee;
(5) The WEEL states the circumstances in which the option period
may be terminated; and
(6) The WSR lease will be the direct result of energy resource
information gathered from the WEEL activities and associated data.
(b) Our approval of a WEEL that contains an option to enter into a
WSR lease does not guarantee or imply our approval of any WSR lease.
Sec. 162.522 How may a lessee obtain an extension of an option
period?
(a) A lessee may request extension of the option period for a term
of no more than 3 years.
(b) We will approve the extension if:
(1) The parties agree in writing to the extension and have already
submitted a proposed WSR lease to us for approval; and
(2) The extension is necessary for us to complete the lease
approval process.
Monetary Compensation Requirements
Sec. 162.523 How much compensation must be paid under a WEEL?
(a) The WEEL must state how much compensation will be paid.
(b) A WEEL must specify the date on which compensation will be due.
(c) Failure to make timely payments is a violation of the WEEL and
may lead to cancellation of the WEEL.
(d) The lease compensation requirements of Sec. Sec. 162.549
through 162.555, also apply to WEELs.
Sec. 162.524 Will BIA require a valuation for a WEEL?
BIA will not require a valuation for a WEEL.
Bonding and Insurance
Sec. 162.525 Must a lessee provide a performance bond for a WEEL?
The lessee is not required to provide a performance bond for a
WEEL.
Sec. 162.526 [Reserved].
Sec. 162.527 Must a lessee provide insurance for a WEEL?
Except as provided in paragraph (d) of this section, a lessee must
provide insurance necessary to protect the interests of Indian
landowners and in the amount sufficient to protect all insurable
improvements on the leased premises, unless otherwise provided in the
WEEL.
(a) Such insurance may include property, crop, liability and/or
casualty insurance, depending on the Indian landowners' interests to be
protected.
(b) Both the Indian landowners and the United States must be
identified as additional insured parties.
(c) Lease insurance may be increased and extended for use as the
required WSR lease insurance.
(d) We may waive the requirement for insurance upon the request of
the Indian landowner, if a waiver is in the best interest of the Indian
landowner, including if the lease is for less than fair market rental
or nominal compensation. We may revoke the waiver and require insurance
at any time if the waiver is no longer in the best interest of the
Indian landowner.
Approval
Sec. 162.528 What documents must the parties submit to obtain BIA
approval of a WEEL?
A lessee or the Indian landowner must submit the following
documents to us to obtain BIA approval of a WEEL:
(a) A WEEL executed by the Indian landowners and the lessee that
complies with the requirements of this part;
(b) Organizational documents, certificates, filing records, and
resolutions or other authorization documents, including evidence of the
representative's authority to execute a lease, if the lessee is a
corporation, limited liability company, partnership, joint venture, or
other legal entity, to show that the WEEL will be enforceable and that
the legal entity is in good standing and authorized to conduct business
in the jurisdiction where the land is located;
(c) Proof of insurance, as required by Sec. 162.527;
(d) Statement from the appropriate tribal authority that the
proposed use is in conformance with applicable tribal law;
(e) Environmental and archeological reports, surveys, and site
assessments as needed to facilitate compliance with applicable Federal
and tribal environmental and land use requirements;
(f) An equipment installation plan;
(g) A restoration and reclamation plan (and any subsequent
modifications to the plan);
(h) An official or certified survey of the leased premises that
includes the legal description of the land encumbered by the WEEL and a
description of each tract of trust or restricted land in the WEEL and
the acreage of each. We will review the survey under the DOI Standards
for Indian Trust Land Boundary Evidence;
(i) Documents that demonstrate the technical capability of the
lessee or lessee's agent to construct, operate, maintain, and terminate
resource evaluation facilities and history in successfully designing,
constructing, or obtaining the funding for a resource evaluation
project (for example, documents evidencing lessee's actual ownership,
development, or management of a successful similar size project within
the last 5 years);
(j) Information to assist us in our evaluation of the factors in 25
U.S.C. 415(a); and
(k) Any additional documentation we determine to be reasonably
necessary for approval.
Sec. 162.529 What is the approval process for a WEEL?
(a) Before we approve a WEEL, we must determine that the WEEL is in
the best interest of the Indian landowners. In making that
determination, we will:
(1) Review the WEEL and supporting documents;
(2) Identify potential environmental impacts and ensure compliance
with all applicable environmental laws, land use laws, and ordinances;
(3) Assure ourselves that adequate consideration has been given to
the factors in 25 U.S.C. 415(a); and
(4) Require any lease modifications or mitigation measures
necessary to satisfy any requirements including any other Federal or
tribal land use requirements.
(b) When we receive a WEEL and all of the supporting documents that
conform to this part, we will, within 20 days of the date of receipt of
the documents at the appropriate BIA office, approve, disapprove,
return the submission for revision, or notify the parties in writing
that we need additional time to review the WEEL. Our letter notifying
the parties that we need additional time to review the WEEL must
identify our initial concerns
[[Page 73818]]
and invite the parties to respond within 15 days. We have 30 days from
sending the notification to make a determination whether to approve or
disapprove the sublease.
(c) If we fail to meet the deadline in this section, then the
parties may take appropriate action under part 2 of this chapter.
(d) In reviewing a WEEL for approval, we will defer to the Indian
landowners' determination that the WEEL is in their best interest, to
the maximum extent possible.
(e) Any WEEL approval or disapproval determination and the basis
for the determination, along with notification of rights to appeal the
determination under part 2 of this chapter, will be made in writing and
will be sent to the parties.
Administration
Sec. 162.530 May the parties amend, assign, sublease, or mortgage a
WEEL?
The parties may amend, assign, sublease, or mortgage a WEEL by
following the procedures and requirements for amending, assigning,
subleasing, or mortgaging a WSR lease.
Sec. 162.531 [Reserved]
Compliance and Enforcement
Sec. 162.532 How does BIA ensure compliance with a WEEL?
(a) If we determine that a WEEL has been violated, we will promptly
send the lessee and its sureties a notice of violation. We may also
order the lessee to stop work. The notice of violation must be provided
by certified mail, return receipt requested.
(b) Within 5 days of the receipt of the notice of violation, the
lessee must:
(1) Cure the violation and notify us in writing that the violation
has been cured;
(2) Dispute our determination that a violation has occurred; or
(3) Request additional time to cure the violation.
(c) If we determine that a violation has occurred, we will make a
reasonable attempt to notify the Indian landowners.
Sec. 162.533 What will BIA do if a lessee does not cure a violation
of a WEEL on time?
(a) If the lessee does not cure a violation of a WEEL within the
requisite time period, we will consult with the tribe for tribal land
or, where feasible, Indian landowners for individually owned Indian
land, and determine whether:
(1) We should cancel the WEEL, or
(2) The Indian landowners wish to invoke any remedies available to
them under the WEEL; or
(3) We should invoke any other remedies available to us under the
WEEL.
(b) If we decide to cancel the WEEL, we will send the lessee and
its sureties and any mortgagees a cancellation letter by certified
mail, return receipt requested, within 5 business days of our decision.
We will send a copy of the cancellation letter to the tribe for tribal
land, and will provide Indian landowners for individually owned Indian
land with actual or constructive notice of the cancellation. The
cancellation letter will:
(1) Explain the grounds for cancellation;
(2) If applicable, notify the lessee of the amount of any unpaid
compensation or late payment charges due under the WEEL;
(3) Notify the lessee of their right to appeal under part 2 of this
chapter;
(4) Order the lessee to vacate the property within 31 days of the
date of receipt of the cancellation letter, if an appeal is not filed
by that time; and
(5) Order the lessee to take any other action we deem necessary to
protect the Indian landowners.
(c) The cancellation will not be effective until 31 days after the
lessee receives a cancellation letter from us, or 41 days from the date
the letter is mailed, whichever is earlier.
(d) The cancellation decision will be stayed if the lessee files an
appeal unless the cancellation is made immediately effective under part
2 of this chapter. While a cancellation decision is stayed, the lessee
must continue to pay compensation and comply with the other terms of
the WEEL.
(e) Nothing in this part affects BIA's ability to take emergency
action to protect the leased premises under Sec. 162.021.
Sec. 162.534 Under what circumstances may a WEEL be terminated or
cancelled?
(a) A WEEL must state whether, and under what conditions, an Indian
landowner may terminate the WEEL.
(b) We may cancel the WEEL if we have determined cancellation is
appropriate under Sec. 162.523 (failure to make timely payments) or
Sec. 162.533 (failure to cure a violation within the requisite time).
WSR Leases
Sec. 162.535 What is the purpose of a WSR lease?
A WSR lease authorizes a lessee to possess Indian land to conduct
activities related to the installation, operation, and maintenance of
wind and/or solar energy resource development projects. Activities
include installing instrumentation facilities, and infrastructure
associated with the generation, transmission, and storage of
electricity and other related activities.
Sec. 162.536 Must I obtain a WEEL before obtaining a WSR lease?
You may enter into a WSR lease independent of a WEEL. While you may
enter into a lease as a direct result of energy resource information
gathered from a WEEL activity, obtaining a WEEL is not a precondition
to entering into a WSR lease.
Sec. 162.537 How long may the term of a WSR lease run?
(a) A WSR lease must provide for a definite lease term, state if
there is an option to renew and, if so, provide for a definite term for
the renewal period. Unless authorized by paragraph (b), leases for WSR
development purposes may have an initial term not to exceed 25 years
and one renewal period not to exceed 25 years.
(b) If a statute provides for a longer maximum term (e.g., 25
U.S.C. 415(a) allows for a maximum term of 99 years for certain
tribes), the lease may provide for a primary term, and one renewal not
to exceed 25 years, so long as the maximum term, including the renewal,
does not exceed the maximum term established by statute.
(c) The lease term, including any renewal, must be reasonable,
given the
(1) Purpose of the lease;
(2) Type of financing; and
(3) Level of investment.
(d) Where all of the trust or restricted interests in a tract are
owned by a deceased Indian whose heirs and devisees have not yet been
determined, the maximum term may not exceed two years.
(e) The lease may not be extended by holdover.
Sec. 162.538 What must the lease include if it contains an option to
renew?
(a) If the lease provides for an option to renew, the lease must
specify:
(1) The time and manner in which the option must be exercised or is
automatically effective;
(2) That confirmation of the renewal will be submitted to us;
(3) Whether Indian landowner consent to the renewal is required;
(4) That the lessee must provide notice to the Indian landowner and
any mortgagees of the renewal;
(5) The additional consideration, if any, that will be due upon the
exercise of the option to renew or the commencement of the renewal
term; and
[[Page 73819]]
(6) That any change in the terms of the lease will be considered an
amendment subject to consent and BIA approval requirements pursuant to
Sec. Sec. 162.568 to 162.571; and
(7) Any other conditions for renewal (e.g., the lessee may not be
in violation of the lease at the time of renewal).
(b) We must record any renewal of a lease in the Land Titles and
Records Office.
Sec. 162.539 Are there mandatory provisions a WSR lease must contain?
(a) All WSR leases must identify:
(1) The tract or parcel of land being leased;
(2) The purpose of the lease and authorized uses of the leased
premises;
(3) The parties to the lease;
(4) The term of the lease;
(5) The owner being represented and the authority under which such
action is being taken, where one executes a lease in a representative
capacity;
(6) The citation of the statute that authorizes our approval;
(7) Who is responsible for constructing, owning, operating,
maintaining, and managing, WSR equipment, roads, transmission lines and
related facilities;
(8) Who is responsible for evaluating the leased premises for
suitability; purchasing, installing, operating, and maintaining WSR
equipment; negotiating power purchase agreements; and transmission;
(9) Payment requirements and late payment charges, including
interest;
(10) Due diligence requirements, pursuant to Sec. 162.543;
(11) Insurance requirements; and
(12) Bonding requirements under Sec. 162.559. If a performance
bond is required, the lease must state that the lessee must obtain the
consent of the surety or guarantor for any legal instrument that
directly affects their obligations and liabilities.
(b) All WSR leases must include the following provisions:
(1) The obligations of the lessee and its sureties to the Indian
landowners are also enforceable by the United States, so long as the
land remains in trust or restricted status;
(2) Nothing in the lease would prevent or delay termination of
Federal trust responsibilities for the land during the lease's term;
(3) There must not be any unlawful conduct, creation of a nuisance,
illegal activity, or negligent use or waste of the leased premises;
(4) The lessee must comply with all applicable laws, ordinances,
rules, regulations, and other legal requirements under Sec. 162.013;
(5) The lessee indemnifies and holds the United States and the
Indian landowners harmless from any loss, liability, or damages
resulting from the lessee's use or occupation of the leased premises
(this provision is not mandatory if the lessee would be prohibited by
law from making such an agreement);
(6) In the event that historic properties, archeological resources,
human remains, or other cultural items not previously reported are
encountered during the course of any activity associated with the
lease, all activity in the immediate vicinity of the properties,
resources, remains, or items will cease and the lessee will contact BIA
and the tribe that has jurisdiction to determine how to proceed and
appropriate disposition;
(7) BIA has the right, at any reasonable time during the term of
the lease and upon reasonable notice, to enter upon the leased premises
for inspection; and
(8) Unless otherwise indicated, this is a lease of the trust and
restricted interests in the property described and is not a lease of
any undivided fee interests. All compensation payments by the lessee
will be distributed to the trust and restricted landowners and life
estate holders on trust and restricted land only. The lessee will be
responsible for accounting to the owners of any fee interests that may
exist in the property being leased.
(c) We may treat any provision of a lease, sublease, assignment,
amendment or mortgage that is in violation of Federal law as a
violation of the lease.
Sec. 162.540 May improvements be made under a WSR lease?
(a) A WSR lease must provide for the installation of a facility and
associated infrastructure of a size and magnitude necessary for the
generation and delivery of electricity. These facilities and associated
infrastructure are considered improvements. A resource development plan
must be submitted for approval with the lease pursuant to Sec.
162.563(g).
(b) If any of the following changes are made to the resource
development plan, the Indian landowner and BIA must approve the revised
plan:
(1) Location of improvements;
(2) Type of improvements; or
(3) Delay of 90 days or more in any phase of development.
Sec. 162.541 How must a WSR lease address ownership of improvements?
(a) A WSR lease must specify who will own any improvements the
lessee installs during the lease term and may specify that any
improvements the lessee installs may be conveyed to the Indian
landowners during the lease term and under what conditions the
improvements may be conveyed. In addition, the lease must indicate
whether each specific improvement the lessee installs will, upon the
expiration or termination of the lease:
(1) Remain on the leased premises, in a condition satisfactory to
the Indian landowners and become the property of the Indian landowner;
(2) Be removed within a time period specified in the lease, at the
lessee's expense, with the leased premises to be restored as close as
possible to their condition before installation of such improvements;
or
(3) Be disposed of by other specified means.
(b) A lease that requires the lessee to remove the improvements
must also provide the Indian landowners with an option to take
possession of and title to the improvements if the improvements are not
removed within the specified time period.
Sec. 162.542 How will BIA enforce removal requirements in a WSR
lease?
We may take appropriate enforcement action in consultation with the
tribe, for tribal land or, where feasible, Indian landowners for
individually owned Indian land, to ensure removal of the improvements
or restoration of the premises at the lessee's expense. We may take
such enforcement action after termination or expiration of the lease.
We may collect and hold the performance bond until removal and
restoration are completed.
Sec. 162.543 What requirements for due diligence must a WSR lease
include?
(a) A WSR lease must include due diligence requirements that
require the lessee to:
(1) Commence installation of energy facilities within 2 years after
the effective date of the lease or consistent with a timeframe
contained in the resource development plan;
(2) Provide the Indian landowners and BIA good cause as to the
nature of any delay, the anticipated date of installation of
facilities, and evidence of progress toward commencement of
installation, if installation does not occur, or is not expected to be
completed, within the time period specified in paragraph (a)(1) of this
section;
(3) Maintain all on-site electrical generation equipment and
facilities and related infrastructure in accordance with the design
standards in the resource development plan; and
[[Page 73820]]
(4) Repair, place into service, or remove from the site within 30
days any idle, improperly functioning, or abandoned equipment or
facilities that have been inoperative for any continuous period of 3
months (unless the equipment or facilities were idle as a result of
planned suspension of operations, for example, for grid operations or
during bird migration season).
(b) Failure of the lessee to comply with the due diligence
requirements of the lease is a violation of the lease and may lead to
cancellation of the lease under Sec. 162.589.
Sec. 162.544 May a WSR lease allow compatible uses?
The lease may provide for the Indian landowner to use, or authorize
others to use, the leased premises for other uses compatible with the
purpose of the WSR lease and consistent with the terms of the WSR
lease. This may include the right to lease the premises for other
compatible purposes. Any such use or authorization by the Indian
landowner will not reduce or offset the monetary compensation for the
WSR lease.
Sec. 162.545 How must a WSR lease describe the land?
(a) A WSR lease must describe the leased premises by reference to
an official or certified survey as required by Sec. 162.563(i) of this
part.
(b) If the tract is fractionated, we will describe the undivided
trust interest in the leased premises.
Monetary Compensation Requirements
Sec. 162.546 How much monetary compensation must be paid under a WSR
lease?
(a) A WSR lease of tribal land may allow for any payment negotiated
by the tribe as long as the tribe provides the tribal authorization
required by Sec. 162.547(a). The tribe may request, in writing, that
we require fair market rental, in which case we will determine fair
market rental in accordance with Sec. 162.548 and will approve the
lease only if it requires payment of not less than fair market rental.
Unless the tribe makes such a request, BIA will not require a valuation
or appraisal or determine fair market rental, but instead will defer to
the tribe's determination that the negotiated compensation is in its
best interest.
(b) A WSR lease of individually owned Indian land must require
payment of not less than fair market rental before any adjustments,
based on a fixed amount, a percentage of the projected gross income,
megawatt capacity fee, or some other method, unless paragraphs (a)(1)
or (a)(2) of this section permit a lesser amount. The lease must
establish how the fixed amount, percentage or combination will be
calculated and the frequency at which the payments will be made.
(1) We may approve a lease of individually owned Indian land that
provides for the payment of nominal compensation, or less than a fair
market rental, if:
(i) The Indian landowners execute a written waiver of the right to
receive fair market rental; and
(ii) We determine it is in the Indian landowners' best interest,
based on factors including, but not limited to:
(A) The lessee is a member of the Indian landowners' immediate
family as defined in Sec. 162.003;
(B) The lessee is a co-owner of the leased tract;
(C) A special relationship or circumstances exist that we believe
warrant approval of the lease; or
(D) The lease is for public purposes.
(2) We may approve a lease that provides for the payment of less
than a fair market rental during the periods before the generation and
transmission of electricity begins, if we determine it is in the Indian
landowners' best interest. The lease must specify the amount of the
compensation and the applicable periods.
(3) Where the owners of the applicable percentage of interests
under Sec. 162.011 of this part grant a WSR lease on behalf of all of
the Indian landowners of a fractionated tract, the lease must provide
that the non-consenting Indian landowners, and those on whose behalf we
have consented, receive a fair market rental.
Sec. 162.547 Will BIA require a valuation to determine fair market
rental of a WSR lease?
(a) We will not require valuations or appraisals for negotiated WSR
leases of tribal land, or of any undivided tribal interest in a
fractionated tract, if the tribe submits a tribal authorization
expressly stating that it:
(1) Has negotiated compensation satisfactory to the tribe;
(2) Waives valuation and appraisal; and
(3) Has determined that accepting such negotiated compensation and
waiving valuation and appraisal is in its best interest.
(b) The tribe may request that BIA require a valuation or
appraisal, in which case BIA must determine fair market rental in
accordance with Sec. 162.548.
(c) We will not waive the valuation requirement for WSR leases on
individually owned Indian land, but we may accept an economic analysis
in lieu of an appraisal if we determine it to be in the best interest
of the Indian landowners and:
(1) The Indian landowners submit a written statement to us
requesting an economic analysis in lieu of an appraisal and explaining
the basis for the request and their willingness to accept nominal or
less than fair market rental;
(2) After receiving an estimated timeframe for completion of the
analysis from the Office of Indian Energy & Economic Development
(IEED), the Indian landowner submits a written request for economic
analysis to IEED; and
(3) IEED prepares an economic analysis of the project.
Sec. 162.548 What type of valuation may be used to determine fair
market rental for a WSR lease?
(a) We will use an appraisal to determine the fair market rental
before we approve a WSR lease of individually owned Indian land, or at
the request of the tribe for tribal land, unless we approve another
type of valuation under paragraph (d) of this section.
(b) We will either:
(1) Prepare an appraisal; or
(2) Use an approved appraisal from the Indian landowner or lessee.
(c) We will approve an appraisal for use only if it:
(1) Has been prepared in accordance with USPAP or a valuation
method developed by the Secretary pursuant to 25 U.S.C. 2214; and
(2) Complies with Department policies regarding appraisals,
including third-party appraisals.
(d) Upon receipt of a tribal authorization, we may use some other
type of valuation for a WSR lease on tribal land, if it conforms to
USPAP or a valuation method developed by the Secretary pursuant to 25
U.S.C. 2214.
Sec. 162.549 When are monetary compensation payments due under a WSR
lease?
(a) A WSR lease must specify the dates on which all payments are
due.
(b) Unless otherwise provided in the lease, payments may not be
made or accepted more than one year in advance of the due date.
(c) Payments are due at the time specified in the lease, regardless
of whether the lessee receives an advance billing or other notice that
a payment is due.
[[Page 73821]]
Sec. 162.550 Must a WSR lease specify to whom monetary compensation
payments may be made?
(a) A WSR lease must specify whether the lessee will make payments
directly to the Indian landowners (direct pay) or to us on their
behalf.
(b) The lessee may make payments directly to the Indian landowners
whose trust accounts are unencumbered when there are 10 or fewer
beneficial owners and 100 percent of the beneficial owners agree to
receive payment directly from the lessee.
(1) If the lease provides that the lessee will directly pay the
Indian landowners, the lease must also require that the lessee provide
us with certification of payment.
(2) When we consent on behalf of an Indian landowner, the lessee
must make payment to us.
(3) The lessee must send direct payments to the parties and
addresses specified in the lease, unless the lessee receives notice of
a change of ownership or address.
(4) Unless otherwise provided in the lease, payments may not be
made payable directly to anyone other than the Indian landowners.
(5) Direct payments must continue through the duration of the
lease, except if:
(i) 100 percent of the Indian landowners agree to suspend direct
pay and provide us with documentation of their agreement, then the
lessee must make all Indian landowners' payments to us; or
(ii) If any individual Indian landowner dies, is declared non
compos mentis, becomes whereabouts unknown, or owes a debt resulting in
a trust account encumbrance, then the lessee must make that individual
Indian landowner's payment to us.
Sec. 162.551 What form of monetary compensation payment may be
accepted under a WSR lease?
(a) When payments are made directly to Indian landowners, the form
of payment must be acceptable to the Indian landowners.
(b) When payments are made to us, we will accept:
(1) Money orders;
(2) Certified checks;
(3) Cashier's checks; or
(4) Electronic funds transfer payments.
(c) We will not accept cash, foreign currency, or third-party
checks except for third-party checks from financial institutions.
(d) The preferred method of payment is electronic funds transfer
payments.
Sec. 162.552 May the WSR lease provide for non-monetary or varying
types of compensation?
(a) With our approval, the lease may provide for:
(1) Alternative forms of compensation, including but not limited to
in-kind consideration and payments based on percentage of income; or
(2) Varying types of consideration at specific stages during the
life of the lease, including but not limited to fixed annual payments
during installation, payments based on income during an operational
period, and bonuses.
(b) For individually owned land, we will approve alternative forms
of compensation and varying types of consideration if we determine that
it is in the best interest of the Indian landowners. For tribal land,
we will defer to the tribe's determination that the alternative forms
of rental and varying types of consideration are in its best interest,
if the tribe submits a signed certification stating that it has
determined the alternative forms of rental and varying types of
consideration to be in its best interest.
Sec. 162.553 Will BIA notify a lessee when a payment is due under a
WSR lease?
Upon request of the Indian landowner, we may issue invoices to a
lessee in advance of the dates on which payments are due under a WSR
lease, but the lessee's obligation to make such payments in a timely
manner will not be excused if such invoices are not delivered or
received.
Sec. 162.554 Must a WSR lease provide for compensation reviews or
adjustments?
(a) A review of the adequacy of compensation must occur at least
every fifth year, in the manner specified in the lease, unless the
conditions in paragraph (b) of this section are met. The lease must
specify:
(1) When adjustments take effect;
(2) Who is authorized to make adjustments;
(3) What the adjustments are based on; and
(4) How to resolve disputes arising from the adjustments.
(b) A review of the adequacy of compensation is not required if:
(1) The lease provides for automatic adjustments; or
(2) We determine it is in the best interest of the Indian
landowners not to require a review or automatic adjustment based on
circumstances including, but not limited to, the following:
(i) The lease provides for payment of less than fair market rental;
(ii) The lease is for public purposes; or
(iii) The lease provides for most or all of the compensation to be
paid during the first five years of the lease term or prior to the date
the review would be conducted.
(c) When a review results in the need for adjustment of
compensation, we must approve the adjustment and Indian landowners must
consent to the adjustment in accordance with Sec. 162.011, unless
otherwise provided in the lease.
Sec. 162.555 What other types of payments are required under a WSR
lease?
(a) The lessee may be required to pay additional fees, taxes, and/
or assessments associated with the use of the land, as determined by
entities having jurisdiction, except as provided in Sec. 162.515(c).
The lessee must pay these amounts to the appropriate office.
(b) If the leased premises are within an Indian irrigation project
or drainage district, except as otherwise provided in part 171 of this
chapter, the lessee must pay all operation and maintenance charges that
accrue during the lease term. The lessee must pay these amounts to the
appropriate office in charge of the irrigation project or drainage
district. Failure to make such payments will be treated as a violation
of the lease.
(c) Where the property is subject to at least one other lease for
another compatible use, such as grazing, the lessees may agree among
themselves as to how to allocate payment of the operation and
maintenance charges.
Bonding and Insurance
Sec. 162.559 Must a lessee provide a performance bond for a WSR
lease?
(a) Except as provided in paragraph (f) of this section, the lessee
must provide a performance bond in an amount sufficient to secure the
contractual obligations including:
(1) No less than the highest annual rental specified in the lease,
if the compensation is paid annually, or other amount established by
BIA in consultation with the tribe, for tribal land or, where feasible,
with Indian landowners for individually owned Indian land, if the
compensation is to be paid on a non-annual schedule;
(2) The performance and payment for the installation of any
required improvements;
(3) The operation and maintenance charges for any land located
within an irrigation project; and
(4) The restoration and reclamation of the leased premises, to
their condition at the commencement of the lease term or some other
specified condition.
[[Page 73822]]
(b) The performance bond must be deposited with us and made payable
only to us, and may not be modified without our approval.
(c) The lease must provide that we may adjust security or
performance bond requirements at any time to reflect changing
conditions.
(d) We may require that the surety provide any supporting documents
needed to show that the performance bond will be enforceable, and that
the surety will be able to perform the guaranteed obligations.
(e) The surety must provide notice to us at least 60 days before
canceling a performance bond so that we may notify the lessee of its
obligation to provide a substitute performance bond and require
collection of the bond prior to the cancellation date. Failure to
provide a substitute performance bond will be a violation of the lease.
(f) We may waive the requirement for a performance bond upon the
request of the Indian landowner, if a waiver is in the best interest of
the Indian landowner, including if the lease is for less than fair
market rental or nominal compensation. We may revoke the waiver and
require a performance bond at any time if the waiver is no longer in
the best interest of the Indian landowner.
Sec. 162.560 What forms of performance bond may be accepted under a
WSR lease?
(a) We will only accept a performance bond in one of the following
forms:
(1) Certificates of deposit issued by a federally insured financial
institution authorized to do business in the United States;
(2) Irrevocable letters of credit issued by a federally insured
financial institution authorized to do business in the United States;
(3) Negotiable Treasury securities; or
(4) Surety bond issued by a company approved by the U.S. Department
of the Treasury.
(b) All forms of performance bonds must:
(1) Indicate on their face that BIA approval is required for
redemption;
(2) Be accompanied by a statement granting full authority to BIA to
make an immediate claim upon or sell them if the lessee violates the
terms of the lease;
(3) Be irrevocable during the term of the performance bond; and
(4) Be automatically renewable during the term of the lease.
Sec. 162.561 What is the bond release process under a WSR lease?
(a) Upon expiration, termination, or cancellation of the lease, the
lessee must submit a written request for a performance bond release to
BIA.
(b) Upon receipt of the request under paragraph (a) of this
section, BIA will confirm with the tribe, for tribal land or, where
feasible, with the Indian landowners for individually owned Indian
land, that the lessee has complied with all lease obligations, then
release the performance bond to the lessee unless we determine that the
performance bond must be redeemed to fulfill the contractual
obligations.
Sec. 162.562 Must a lessee provide insurance for a WSR lease?
Except as provided in paragraph (c) of this section, a lessee must
provide insurance when necessary to protect the interests of Indian
landowners and in the amount sufficient to protect all insurable
improvements on the leased premises.
(a) Such insurance may include property, liability and/or casualty
insurance, depending on the Indian landowners' interests to be
protected.
(b) Both the Indian landowners and the United States must be
identified as additional insured parties.
(c) We may waive the requirement for insurance upon the request of
the Indian landowner, if a waiver is in the best interest of the Indian
landowner, including if the lease is for less than fair market rental
or nominal compensation. We may revoke the waiver and require insurance
at any time if the waiver is no longer in the best interest of the
Indian landowner.
Approval
Sec. 162.563 What documents must the parties submit to obtain BIA
approval of a WSR lease?
A lessee or the Indian landowner must submit the following
documents to us to obtain BIA approval of a WSR lease:
(a) A lease executed by the Indian landowner and the lessee that
complies with the requirements of this part;
(b) An appraisal or other valuation under Sec. 162.547, if
appropriate;
(c) Organizational documents, certificates, filing records, and
resolutions or other authorization documents, including evidence of the
representative's authority to execute a lease, if the lessee is a
corporation, limited liability company, partnership, joint venture, or
other legal entity, to show that the lease will be enforceable and that
the legal entity is in good standing and authorized to conduct business
in the jurisdiction where the land is located;
(d) A performance bond, where required;
(e) Statement from the appropriate tribal authority that the
proposed use is in conformance with applicable tribal law;
(f) Environmental and archeological reports, surveys, and site
assessments as needed to facilitate compliance applicable Federal and
tribal environmental and land use requirements;
(g) A resource development plan that describes the type and
location of any improvements the lessee plans to install and a schedule
showing the tentative commencement and completion dates for those
improvements;
(h) A restoration and reclamation plan (and any subsequent
modifications to the plan);
(i) An official or a certified survey of the leased premises that
includes the legal description of the land encumbered by the lease and
a description of each tract of trust or restricted land in the lease
and the acreage of each. We will review the survey under the DOI
Standards for Indian Trust Land Boundary Evidence;
(j) Documents that demonstrate the technical capability of the
lessee or lessee's agent to construct, operate, maintain, and terminate
resource development facilities and the lessee's history in
successfully designing, constructing, or obtaining the funding for a
resource development project (for example, documents evidencing
lessee's actual ownership, development, or management of a successful
similarly-sized project within the last 5 years);
(k) Information to assist us in our evaluation of the factors in 25
U.S.C. 415(a); and
(l) Any additional documentation we determine to be reasonably
necessary for approval.
Sec. 162.564 What is the approval process for a WSR lease?
(a) Before we approve a WSR lease, we must determine that the lease
is in the best interest of the Indian landowners. In making that
determination, we will:
(1) Review the lease and supporting documents;
(2) Identify potential environmental impacts and ensure compliance
with all applicable environmental laws, land use laws, and ordinances;
(3) Assure ourselves that adequate consideration has been given to
the factors in 25 U.S.C. 415(a);
(4) Require any lease modifications or mitigation measures
necessary to satisfy any requirements including any other Federal or
tribal land use requirements; and
(5) If the lease is a negotiated lease, defer to the Indian
landowners' determination that the lease is in their
[[Page 73823]]
best interest, to the maximum extent possible.
(b) When we receive a WSR lease proposal and all of the supporting
documents that conform to this part, we will, within 60 days of the
date of receipt of the documents at the appropriate BIA office,
approve, disapprove, return the submission for revision, or notify the
parties in writing that we need additional time to review the lease.
Our letter notifying the parties that we need additional time to review
the lease must identify our initial concerns and invite the parties to
respond within 15 days. We have 30 days from sending the notification
to make a determination whether to approve or disapprove the sublease.
(c) If we fail to meet the deadlines in this section, then the
parties may take appropriate action under part 2 of this chapter.
(d) We will make any lease approval or disapproval determination
and the basis for the determination, along with notification of appeal
rights under part 2 of this chapter, in writing and will send the
determination and notification to the parties to the lease.
(e) We will provide approved WSR leases on tribal land to the
lessee and provide a copy to the tribe. We will provide approved WSR
leases on individually owned Indian land to the lessee, and make copies
available to the Indian landowners upon written request.
Sec. 162.565 When will a WSR lease be effective?
(a) A WSR lease will be effective on the date on which we approve
the lease, notwithstanding any appeal that may be filed under part 2 of
this chapter.
(b) The lease may specify a date on which the obligations between
the parties to a WSR lease are triggered. Such date may be before or
after the approval date under paragraph (a).
Sec. 162.566 Must WEEL and WSR lease documents be recorded?
(a) A WEEL and WSR lease, amendment, assignment, leasehold
mortgage, and sublease must be recorded in our Land Titles and Records
Office with jurisdiction over the leased land.
(1) We will record the lease or other document immediately
following our approval.
(2) If our approval is not required, the parties must record the
assignment or sublease in the Land Title and Records Office with
jurisdiction over the leased land.
(b) The tribe must record the following leases in the Land Titles
and Records Office with jurisdiction over the tribal lands, even though
BIA approval is not required:
(1) Leases of tribal land that a corporate entity leases to a third
party under 25 U.S.C. 477; and
(2) Leases of tribal land under a special act of Congress
authorizing leases without our approval.
Sec. 162.567 What action may BIA take if a lease disapproval decision
is appealed?
(a) If a party appeals our decision to disapprove a lease,
assignment, amendment, sublease or leasehold mortgage, then the
official to whom the appeal is made may require the lessee to post an
appeal bond in an amount necessary to protect the Indian landowners
against financial losses and damage to trust resources likely to result
from the delay caused by an appeal. The requirement to post an appeal
bond will apply in addition to all of the other requirements in part 2
of this chapter.
(b) The appellant may not appeal the appeal bond decision. The
appellant may, however, request that the official to whom the appeal is
made reconsider the bond decision, based on extraordinary
circumstances. Any reconsideration decision is final for the
Department.
Amendments
Sec. 162.568 May the parties amend a WSR lease?
(a) The parties may amend a WSR lease by obtaining:
(1) The lessee's signature;
(2) The Indian landowners' consent pursuant to the requirements
contained in Sec. 162.569; and
(3) BIA approval of the amendment under Sec. 162.570 and Sec.
162.571.
(b) The parties may not amend a WSR lease if the lease expressly
prohibits amendments.
Sec. 162.569 What are the consent requirements for an amendment to a
WSR lease?
(a) The Indian landowners, or their representatives under Sec.
162.012, must consent to an amendment of a WSR lease in the same
percentages and manner as a new WSR lease pursuant to Sec. 162.011,
unless the requirements in paragraphs (a)(1) or (a)(2) are met.
(1) The approved WSR lease establishes that individual Indian
landowners are deemed to have consented if they do not object in
writing to the amendment after a specified period of time following
landowners' receipt of the amendment. If the lease provides for deemed
consent, it must require the parties to submit to us: A copy of the
executed amendment or other documentation of the Indian landowners'
consent; proof of mailing of the amendment to any Indian landowners who
are deemed to have consented; and any other pertinent information to us
for review.
(2) The approved WSR lease authorizes one or more representatives
to consent to an amendment on behalf of all Indian landowners. The
lease may also designate us as the Indian landowners' representative
for the purposes of consenting to an amendment.
(b) Unless specifically authorized in the lease, the written power
of attorney, or court document, Indian landowners may not be deemed to
have consented, and an Indian landowner's designated representative may
not negotiate or consent to an amendment that would:
(1) Reduce the payment obligations or terms to the Indian
landowners;
(2) Increase or decrease the lease area; or
(3) Terminate or change the term of the lease.
Sec. 162.570 What is the approval process for an amendment to a WSR
lease?
We have 30 days from receipt of the executed assignment, proof of
required consents, and required documentation to make a determination
whether to approve the amendment or notify the parties in writing that
we need additional time to review the amendment.
(a) Our letter notifying the parties that we need additional time
to review the amendment must identify our initial concerns and invite
the parties to respond within 15 days. We have 30 days from sending the
notification to make a determination whether to approve or disapprove
the amendment.
(b) If we fail to send either a determination or a notification
within 30 days from receipt of required documents and the completion of
any environmental reviews or 30 days from sending the notification, the
amendment is deemed approved to the extent consistent with Federal law.
We will retain our full enforcement authority for amendments that are
deemed approved.
(c) Our determination whether to approve the amendment will be in
writing and will state the basis for our approval or disapproval.
Sec. 162.571 How will BIA decide whether to approve an amendment to a
WSR lease?
(a) We may only disapprove a WSR lease amendment if:
(1) The required consents have not been obtained from the parties
to the lease and any mortgagees or sureties;
(2) The lessee is in violation of the lease; or
[[Page 73824]]
(3) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) We may not unreasonably withhold approval of an amendment.
Assignments
Sec. 162.572 May a lessee assign a WSR lease?
(a) A lessee may assign a WSR lease by meeting the consent
requirements contained in Sec. 162.573 and obtaining our approval of
the assignment under Sec. 162.574 and Sec. 162.575 or by meeting the
conditions in paragraphs (b) or (c) of this section, unless the lease
expressly prohibits assignments.
(b) Where provided in the lease, the lessee may assign the lease to
the following without meeting consent requirements or obtaining BIA
approval of the assignment, as long as the lessee notifies BIA of the
assignment within 30 days:
(1) Not more than two distinct legal entities specified in the
lease; or
(2) The lessee's wholly owned subsidiaries.
(c) If a sale or foreclosure under an approved mortgage of the
leasehold interest occurs and the mortgagee is the purchaser, the
mortgagee/purchaser may assign the leasehold interest without meeting
the consent requirements or obtaining our approval, as long as the
assignee accepts and agrees in writing to be bound by all the terms and
conditions of the lease.
Sec. 162.573 What are the consent requirements for an assignment of a
WSR lease?
The Indian landowners, or their representatives under Sec.
162.012, must consent to an assignment in the same percentages and
manner as a new WSR lease, unless the requirements in paragraphs (a) or
(b) of this section are met.
(a) The lease establishes that individual Indian landowners are
deemed to have consented where they do not object in writing to the
assignment after a specified period of time following landowners'
receipt of the assignment. If the lease provides for deemed consent, it
must require the parties to submit to us: a copy of the executed
assignment or other documentation of the Indian landowners' consent;
proof of mailing of the assignment to any Indian landowners who are
deemed to have consented; and any other pertinent information for us to
review.
(b) The approved WSR lease authorizes one or more representatives
to consent to an assignment on behalf of all Indian landowners. The
lease may also designate us as the Indian landowners' representative
for the purposes of consenting to an assignment.
Sec. 162.574 What is the approval process for an assignment of a WSR
lease?
(a) We have 30 days from receipt of the executed assignment, proof
of required consents, and required documentation to make a
determination whether to approve the assignment or notify the parties
that we need additional information. Our determination whether to
approve the assignment will be in writing and will state the basis for
our approval or disapproval.
(b) If we fail to meet any of the deadlines in this section, the
lessee or Indian landowners may take appropriate action under part 2 of
this chapter.
Sec. 162.575 How will BIA decide whether to approve an assignment of
a WSR lease?
(a) We may only disapprove an assignment of a WSR lease if:
(1) The required consents have not been obtained from the parties
to the lease or the lessee's mortgagees or sureties;
(2) The lessee is in violation of the lease;
(3) The assignee does not agree to be bound by the terms of the
lease; or
(4) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(4) of this
section, we will consider whether:
(1) The value of any part of the leased premises not covered by the
assignment would be adversely affected; and
(2) If a performance bond is required, the assignee has bonded its
performance and provided supporting documents that demonstrate that the
lease will be enforceable against the assignee, and that the assignee
will be able to perform its obligations under the lease or assignment.
(c) We may not unreasonably withhold approval of an assignment.
Subleases
Sec. 162.576 May a lessee sublease a WSR lease?
A lessee may sublease a WSR lease by meeting the consent
requirements contained in Sec. 162.577 and obtaining our approval of
the sublease under Sec. 162.578 and Sec. 162.579, unless the lease
expressly prohibits subleases.
Sec. 162.577 What are the consent requirements for a sublease of a
WSR lease?
The Indian landowners, or their representatives under Sec.
162.012, must consent to a sublease in the same percentages and manner
as a new WSR lease under Sec. 162.011, unless the requirements in
paragraphs (a) or (b) of this section are met.
(a) The lease establishes that individual Indian landowners are
deemed to have consented where they do not object in writing to the
sublease after a specified period of time following landowners' receipt
of the sublease. If the lease provides for deemed consent, it must
require the parties to submit to us: a copy of the executed sublease or
other documentation of the Indian landowners' consent; proof of mailing
of the sublease to any Indian landowners who are deemed to have
consented; and any other pertinent information for us to review.
(b) The approved WSR lease authorizes one or more representatives
to consent to a sublease on behalf of all Indian landowners. The lease
may also designate us as the Indian landowners' representative for the
purposes of consenting to a sublease.
Sec. 162.578 What is the approval process for a sublease of a WSR
lease?
We have 30 days from receipt of the executed sublease, proof of
required consents, and required documentation to make a determination
whether to approve the sublease or notify the parties to the sublease
and Indian landowners in writing that we need additional time to review
the sublease. Our determination whether to approve the sublease will be
in writing and will state the basis for our approval or disapproval.
(a) Our letter notifying parties that we need additional time to
review the sublease must identify our initial concerns and invite the
parties to respond within 15 days. We have 30 days from sending the
notification to make a determination whether to approve or disapprove
the sublease.
(b) If we fail to send either a determination or a notification
within 30 days from receipt of required documents or 30 days from
sending the notification, the sublease is deemed approved to the extent
consistent with Federal law. We will retain our full enforcement
authority for subleases that are deemed approved.
Sec. 162.579 How will BIA decide whether to approve a sublease of a
WSR lease?
(a) We will only disapprove a sublease of a WSR lease if:
[[Page 73825]]
(1) The required consents have not been obtained from the parties
to the lease and the lessee's mortgagees or sureties;
(2) The lessee is in violation of the lease;
(3) The lessee will not remain liable under the lease;
(4) The sublessee does not agree to be bound by the terms of the
lease; and
(5) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(5) of this
section, we will consider whether:
(1) The value of any part of the leased premises not covered by the
sublease would be adversely affected; and
(2) The sublessee has bonded its performance and provided
supporting documents that demonstrate that the lease will be
enforceable against the sublessee, and that the sublessee will be will
be able to perform its obligations under the lease or sublease.
(c) We may not unreasonably withhold approval of a sublease.
Leasehold Mortgages
Sec. 162.580 May a lessee mortgage a WSR lease?
A lessee may mortgage a WSR lease by meeting the consent
requirements contained in Sec. 162.581 and obtaining our approval of
the leasehold mortgage under Sec. 162.582 and Sec. 162.583, unless
the lease expressly prohibits leasehold mortgages.
Sec. 162.581 What are the consent requirements for a leasehold
mortgage of a WSR lease?
The Indian landowners, or their representatives under Sec.
162.012, must consent to a leasehold mortgage in the same percentages
and manner as a new WSR lease under Sec. 162.011, unless the
requirements in paragraphs (a), (b), or (c) of this section are met.
(a) The lease contains a general authorization for a leasehold
mortgage and states what law would apply in case of foreclosure.
(b) The lease establishes that individual Indian landowners are
deemed to have consented where they do not object in writing to the
leasehold mortgage after a specified period of time following
landowners' receipt of the leasehold mortgage. If the lease provides
for deemed consent, it must require the parties to submit to us: a copy
of the executed leasehold mortgage or other documentation of the Indian
landowners' consent; proof of mailing of the leasehold mortgage to any
Indian landowners who are deemed to have consented; and any other
pertinent information for us to review.
(c) The approved WSR lease authorizes one or more representatives
to consent to a leasehold mortgage on behalf of all Indian landowners.
The lease may also designate us as the Indian landowners'
representative for the purposes of consenting to a leasehold mortgage.
Sec. 162.582 What is the approval process for a leasehold mortgage of
a WSR lease?
(a) We have 30 days from receipt of the executed leasehold
mortgage, proof of required consents, and required documentation to
make a determination whether to approve the leasehold mortgage or
notify the parties in writing that we need additional time to review
the leasehold mortgage. Our determination whether to approve the
leasehold mortgage will be in writing and will state the basis for our
approval or disapproval.
(b) If we fail to meet the deadline in this section, the lessee may
take appropriate action under part 2 of this chapter.
Sec. 162.583 How will BIA decide whether to approve a leasehold
mortgage of a WSR lease?
(a) We may only disapprove a leasehold mortgage under a WSR lease
if:
(1) The required consents have not been obtained from the parties
to the lease under or the lessee's sureties;
(2) The leasehold mortgage covers more than the lessee's interest
in the leased premises collateral or encumbers unrelated collateral; or
(3) We find a compelling reason to withhold our approval in order
to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(3) of this
section, we will consider whether:
(1) The lessee's ability to comply with the lease would be
adversely affected by any new loan obligations;
(2) Any lease provisions would be modified by the leasehold
mortgage;
(3) The remedies available to us or to the Indian landowners would
be limited (beyond any additional notice and cure rights to be afforded
to the mortgagee), in the event of a lease violation; and
(4) Any rights of the Indian landowners would be subordinated or
adversely affected in the event of a loan default by the lessee.
(c) We may not unreasonably withhold approval of a leasehold
mortgage.
Effectiveness, Compliance, and Enforcement
Sec. 162.584 When will an amendment, assignment, sublease, or
leasehold mortgage under a WSR lease be effective?
(a) An amendment, assignment, sublease, or leasehold mortgage under
a WSR lease will be effective when approved, notwithstanding any appeal
that may be filed under part 2 of this chapter, unless approval is not
required under Sec. 162.008(b) or the conditions in paragraph (b)
apply. We will provide copies of approved documents to the party
requesting approval and, upon request, to the other parties to the
agreement.
(b) If the amendment or sublease was deemed approved pursuant to
Sec. 162.570(b) or Sec. 162.578(b), the amendment or sublease becomes
effective 45 days from the date the parties mailed or delivered the
document to us for our review.
(c) An assignment that has does not require landowner consent or
BIA approval shall be effective upon execution by the parties.
Sec. 162.585 What happens if BIA disapproves an amendment,
assignment, sublease, or leasehold mortgage of a WSR lease?
If we disapprove an amendment, assignment, sublease, or leasehold
mortgage of a WSR lease, we will notify the parties immediately and
advise them of their right to appeal the decision under part 2 of this
chapter.
Sec. 162.586 May BIA investigate compliance with a WSR lease?
(a) We may enter the leased premises at any reasonable time, upon
reasonable notice, to protect the interests of the Indian landowners
and to determine if the lessee is in compliance with the requirements
of the lease.
(b) If the Indian landowner notifies us that a specific lease
violation has occurred, we will promptly initiate an appropriate
investigation.
Sec. 162.587 May a WSR lease provide for negotiated remedies in the
event of a violation?
(a) A WSR lease of tribal land may provide either or both parties
with negotiated remedies in the event of a lease violation, including,
but not limited to, the power to terminate the lease. If the lease
provides the parties with the power to terminate the lease, BIA
approval of the termination is not required and the termination is
effective without BIA cancellation. The parties must notify us of the
termination so that we may record it in the Land Titles and Records
Office.
[[Page 73826]]
(b) A WSR lease of individually owned Indian land may provide
either or both parties with negotiated remedies, so long as the lease
also specifies the manner in which those remedies may be exercised by
or on behalf of the applicable percentage of Indian landowners under
Sec. 162.011 of this part. If the lease provides the parties with the
power to terminate the lease, BIA concurrence with the termination is
required to ensure that the Indian landowners of the applicable
percentage of interests have consented. BIA will record the termination
in the Land Titles and Records Office.
(c) The parties must notify any surety or mortgagee of a
termination of a WSR lease.
(d) Negotiated remedies may apply in addition to, or instead of,
the cancellation remedy available to us, as specified in the lease.
(e) A WSR lease may provide for lease disputes to be resolved in
tribal court or any other court of competent jurisdiction, by a tribal
governing body in the absence of a tribal court, or through an
alternative dispute resolution method. We may not be bound by decisions
made in such forums, but we will defer to ongoing proceedings, as
appropriate, in deciding whether to exercise any of the remedies
available to us.
Sec. 162.588 What will BIA do about a violation of a WSR lease?
(a) If we determine there has been a violation of the conditions of
a WSR lease, other than a violation of payment provisions covered by
paragraph (b) of this section, we will promptly send the lessee and its
sureties and any mortgagee a notice of violation. The notice of
violation must be provided by certified mail, return receipt requested.
(1) We will send a copy of the notice of violation to the tribe for
tribal land, or provide constructive notice to Indian landowners for
individually owned Indian land.
(2) Within 10 business days of the receipt of a notice of
violation, the lessee must:
(i) Cure the violation and notify us in writing that the violation
has been cured;
(ii) Dispute our determination that a violation has occurred; or
(iii) Request additional time to cure the violation.
(3) If a violation is determined to have occurred, we will make a
reasonable attempt to notify the Indian landowners.
(4) We may order the lessee to stop work.
(b) A lessee's failure to pay compensation in the time and manner
required by a residential lease is a violation of the lease, and we
will issue a notice of violation in accordance with this paragraph.
(1) We will send the lessees and its sureties a notice of violation
by certified mail, return receipt requested:
(i) Promptly following the date on which payment was due, if the
lease requires that payments be made to us; or
(ii) Promptly following the date on which we receive actual notice
of non-payment from the Indian landowners, if the lease provides for
payment directly to the Indian landowners.
(2) We will send a copy of the notice of violation to the tribe for
tribal land, or provide constructive notice to the Indian landowners
for individually owned Indian land.
(3) The lessee must provide adequate proof of payment as required
in the notice of violation.
(c) The lessee and its sureties will continue to be responsible for
the obligations contained in the lease until the lease is terminated,
cancelled, or expires.
(d) Nothing in this part affects BIA's ability to take emergency
action to protect the leased premises under Sec. 162.021.
Sec. 162.589 What will BIA do if a lessee does not cure a violation
of a WSR lease on time?
(a) If the lessee does not cure a violation of a WSR lease within
the requisite time period, or provide adequate proof of payment as
required in the notice of violation, we will consult with the tribe for
tribal land or, where feasible, Indian landowners for individually
owned Indian land, and determine whether:
(1) We should cancel the lease;
(2) The Indian landowners wish to invoke any remedies available to
them under the lease;
(3) We should invoke other remedies available under the lease or
applicable law, including collection on any available performance bond
or, for failure to pay compensation, referral of the debt to the
Department of the Treasury for collection; or
(4) The lessee should be granted additional time in which to cure
the violation.
(b) We may take action to recover unpaid compensation and any
associated late payment charges.
(1) We do not have to cancel the lease or give any further notice
to the lessee before taking action to recover unpaid compensation.
(2) We may still take action to recover any unpaid compensation if
we cancel the lease.
(c) If we decide to cancel the lease, we will send the lessee and
its sureties and any mortgagees a cancellation letter by certified
mail, return receipt requested, within 5 business days of our decision.
We will send a copy of the cancellation letter to the tribe for tribal
land, and will provide Indian landowners for individually owned Indian
land with actual or constructive notice of the cancellation. The
cancellation letter will:
(1) Explain the grounds for cancellation;
(2) If applicable, notify the lessee of the amount of any unpaid
compensation or late payment charges due under the lease;
(3) Notify the lessee of their right to appeal under part 2 of this
chapter, including the possibility that the official to whom the appeal
is made may require the lessee to post an appeal bond;
(4) Order the lessee to vacate the property within 31 days of the
date of receipt of the cancellation letter, if an appeal is not filed
by that time; and
(5) Require any other action BIA deems necessary to protect the
Indian landowners.
(d) We may invoke any other remedies available to us under the
lease, including collecting on any available performance bond, and the
Indian landowner may pursue any available remedies under tribal law.
Sec. 162.590 Will late payment charges or special fees apply to
delinquent payments due under a WSR lease?
(a) Late payment charges will apply as specified in the lease. The
failure to pay such amounts will be treated as a lease violation.
(b) The following special fees may be assessed to cover
administrative costs incurred by the United States in the collection of
the debt, if compensation is not paid in the time and manner required,
in addition to late payment charges that must be paid to the Indian
landowners under the lease:
------------------------------------------------------------------------
The lessee will pay . . . For . . .
------------------------------------------------------------------------
(a) $50.00................................ Dishonored checks.
(b) $15.00................................ Processing of each notice or
demand letter.
(c) 18 percent of balance due............. Treasury processing
following referral for
collection of delinquent
debt.
------------------------------------------------------------------------
Sec. 162.591 How will payment rights relating to WSR leases be
allocated between the Indian landowners and the lessee?
The WSR lease may allocate rights to payment for insurance
proceeds,
[[Page 73827]]
trespass damages, compensation awards, settlement funds, and other
payments between the Indian landowners and the lessee. If not specified
in the insurance policy, order, award, judgment, or other document
including the lease, the Indian landowners will be entitled to receive
such payments.
Sec. 162.592 When will a cancellation of a WSR lease be effective?
(a) A cancellation involving a WSR lease will not be effective
until 31 days after the lessee receives a cancellation letter from us,
or 41 days from the date we mailed the letter, whichever is earlier.
(b) The cancellation decision will be stayed if an appeal is filed
unless the cancellation is made immediately effective under part 2 of
this chapter. While a cancellation decision is stayed, the lessee must
continue to pay compensation and comply with the other terms of the
lease.
Sec. 162.593 What will BIA do if a lessee remains in possession after
a WSR lease expires or is cancelled?
If a lessee remains in possession after the expiration or
cancellation of a lease, we may treat the unauthorized possession as a
trespass under applicable law. Unless the applicable percentage of
Indian landowners under Sec. 162.011 have notified us in writing that
they are engaged in good faith negotiations with the holdover lessee to
obtain a new lease, we may take action to recover possession on behalf
of the Indian landowners, and pursue any additional remedies available
under applicable law, such as forcible entry and detainer action.
Sec. 162.594 Will BIA regulations concerning appeal bonds apply to
cancellation decisions involving WSR leases?
(a) Except as provided in paragraph (b) of this section, the appeal
bond provisions in part 2 of this chapter will apply to appeals from
lease cancellation decisions.
(b) The lessee may not appeal the appeal bond decision. The lessee
may, however, request that the official to whom the appeal is made
reconsider the appeal bond decision, based on extraordinary
circumstances. Any reconsideration decision is final for the
Department.
Sec. 162.595 When will BIA issue a decision on an appeal from a WSR
leasing decision?
BIA will issue a decision on an appeal from a leasing decision
within 60 days of receipt of all pleadings.
Sec. 162.596 What happens if the lessee abandons the leased premises?
If a lessee abandons the leased premises, we will treat the
abandonment as a violation of the lease. The lease may specify a period
of non-use after which the lease premises will be considered abandoned.
16. Add a new subpart G to read as follows:
Subpart G--Records
Sec.
162.701 Who owns the records associated with this part?
162.702 How must records associated with this part be preserved?
162.703 How does the Paperwork Reduction Act affect this part?
Subpart G--Records
Sec. 162.701 Who owns the records associated with this part?
(a) Records are the property of the United States if they:
(1) Are made or received by a tribe or tribal organization in the
conduct of a Federal trust function under 25 U.S.C. 450f et. seq.,
including the operation of a trust program; and
(2) Evidence the organization, functions, policies, decisions,
procedures, operations, or other activities undertaken in the
performance of a Federal trust function under this part.
(b) Records not covered by paragraph (a) of this section that are
made or received by a tribe or tribal organization in the conduct of
business with the Department of the Interior under this part are the
property of the tribe.
Sec. 162.702 How must records associated with this part be preserved?
(a) Any organization, including tribes and tribal organizations,
that has records identified in Sec. 162.701(a) of this part, must
preserve the records in accordance with approved Departmental records
retention procedures under the Federal Records Act, 44 U.S.C. Chapters
29, 31 and 33. These records and related records management practices
and safeguards required under the Federal Records Act are subject to
inspection by the Secretary and the Archivist of the United States.
(b) A tribe or tribal organization should preserve the records
identified in Sec. 162.701(b) of this part, for the period of time
authorized by the Archivist of the United States for similar Department
of the Interior records in accordance with 44 U.S.C. Chapter 33. If a
tribe or tribal organization does not preserve records associated with
its conduct of business with the Department of the Interior under this
part, it may prevent the tribe or tribal organization from being able
to adequately document essential transactions or furnish information
necessary to protect its legal and financial rights or those of persons
directly affected by its activities.
Sec. 162.703 How does the Paperwork Reduction Act affect this part?
The collections of information contained in this part, have been
approved by the Office of Management and Budget under 44 U.S.C. 3501 et
seq. and assigned OMB Control Number 1076-0155. Response is required to
obtain a benefit. A Federal agency may not conduct or sponsor, and you
are not required to respond to, a collection of information unless it
displays a currently valid OMB Control Number.
Dated: September 22, 2011.
Larry Echo Hawk,
Assistant Secretary--Indian Affairs.
[FR Doc. 2011-29991 Filed 11-28-11; 8:45 am]
BILLING CODE 4310-6W-P