Title 25—Indians--Volume 1
PART 162—LEASES AND PERMITS
§ 162.001   What is the purpose of this part?
(a) The purpose of this part is to promote leasing on Indian land for housing, economic development, and other purposes.
(b) This part specifies:
(1) Conditions and authorities under which we will approve leases of Indian land and may issue permits on Government land;
(2) How to obtain leases;
(3) Terms and conditions required in leases;
(4) How we administer and enforce leases; and
(5) Special requirements for leases made under special acts of Congress that apply only to certain Indian reservations.
(c) If any section, paragraph, or provision of this part is stayed or held invalid, the remaining sections, paragraphs, or provisions of this part remain in full force and effect.
§ 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); and
(7) Records (Subpart G).
(b) 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.
(c) Subpart F applies only to leases made under special acts of Congress covering particular 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, in which case the provisions in subpart F or any act of Congress under which the lease is made will govern.
§ 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.
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 § 162.018.
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.
Cancellation means BIA action to end a lease.
Consent or consenting means written authorization by an Indian landowner to a specified action.
Constructive notice means notice:
(1) Posted at the tribal government office, tribal community building, and/or the United States Post Office; and
(2) 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 wind 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.
Government land means any tract, or interest therein, in which the surface estate is owned and administered by the United States, not including Indian land.
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, single-family residential developments, and single-family residences:
(1) Administered by a tribe or tribally designated housing entity (TDHE); or
(2) Substantially financed using a tribal, Federal, or State housing assistance program or TDHE.
Immediate family means, in the absence of a definition under applicable tribal law, a spouse, brother, sister, aunt, uncle, niece, nephew, first cousin, lineal ancestor, lineal descendant, or member of the household.
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 under 25 U.S.C. 2206, any person described in paragraph (1) or (2) of this definition 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 possess Indian land, for a specified purpose and duration. The lessee's right to possess will limit the Indian landowners' right to possess the leased premises only to the extent provided in the lease.
Lease document means a lease, amendment, assignment, sublease, or leasehold mortgage.
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 to possess 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 to send something by U.S. Postal Service or commercial delivery service.
Minor means an individual who is less than 18 years of age.
Mortgagee means the holder of a leasehold mortgage.
NEPA means the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq.
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 that the person to whom the term is applied 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 whose parents are deceased.
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.
Permanent improvements means buildings, other structures, and associated infrastructure attached to the leased premises.
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 privilege to use Indian land or Government land by a permit.
Power of attorney means an authority by which one person enables another to act for him or 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 applicable tribal law or other tribal authorization.
Single-family residential development means two 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 no greater than that held by the lessee under the lease.
Surety means one who guarantees the performance of another.
TDHE means a tribally designated housing entity under 25 U.S.C. 4103(22), a tribally-sponsored or tribally sanctioned not-for-profit entity, or any limited partnership or other entity organized for the purpose of developing or improving low-income housing utilizing tax credits.
Termination means action by Indian landowners to end a lease.
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.
Tribal land means any tract, or interest therein, in which the surface estate is owned by one or more tribes in trust or restricted status, 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 land assignment means a contract or agreement that conveys to tribal members or wholly owned tribal corporations any rights for the use of tribal lands, assigned by an Indian tribe in accordance with tribal laws or customs.
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.
Trust or restricted land means any tract, or interest therein, held in trust or restricted status.
Trust or restricted status means:
(1) That the United States holds title to the tract or interest in trust for the benefit of one or more tribes or individual Indians; or
(2) That one or more tribes or individual Indians holds title to the tract or interest, but can alienate or encumber it only with the approval of the United States because of limitations in the conveyance instrument under Federal law or limitations 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.
USPAP means the Uniform Standards of Professional Appraisal Practice promulgated by the Appraisal Standards Board of the Appraisal Foundation to establish requirements and procedures for professional real property appraisal practice.
Us/we/our means the BIA.
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 our enforcement of a lease under this part no matter how “violation” or “default” is defined in the lease.
§ 162.004   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 Indian tribe owns an interest in trust or restricted status.
(1) We will not take any action on a lease of 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 your having obtained a lease from the owners of any fee interests. The lessee will be responsible for accounting to the owners of any fee interests that may exist in the property being leased.
(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 (b) 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 single life estate, the life tenant may lease the land without the consent of the owners of the remainder interests or our approval, for the duration of the life estate.
(i) The lease will terminate upon the death of the life tenant.
(ii) The life tenant must record the lease in the LTRO.
(iii) The lessee must pay rent directly to the life tenant under the terms of the lease unless the whereabouts of the life tenant are unknown, in which case we may collect rents on behalf of the life tenant.
(iv) 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.
(v) 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.
(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 single life estate, the life tenant may lease his or her interest without the consent of the owners of the remainder interests, but must obtain the consent of the co-owners and our approval.
(i) We will not lease on the life tenant's behalf.
(ii) The lease must provide that the lessee pays the life tenant directly, unless the life tenant's whereabouts are unknown in which case we may collect rents on behalf of the life tenant.
(iii) The lease must be recorded in the LTRO, even where our approval is not required.
(iv) We will be responsible for enforcing the terms of the lease on behalf of the owners of the remainder interests.
(3) Where the remaindermen and the life tenant have not entered into a lease or other written agreement approved by the Secretary providing for the distribution of rent monies under the lease, the life tenant will receive payment in accordance with the distribution and calculation scheme set forth in Part 179 of this chapter.
(4) The life tenant may not cause or allow permanent injury to the land.
(5) The life tenant must provide a copy of the executed lease to all owners of the remainder interests.
§ 162.005   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, unless you are authorized to possess or use the Indian land by a land use agreement not subject to this part under § 162.006(b) or by a permit.
(b) You do not need a lease to possess Indian land if:
(1) You are an Indian landowner who owns 100 percent of the trust or restricted interests in a tract; or
(2) You meet any of the criteria in the following table.
§ 162.006   To what types of land use agreements does this part apply?
(a) This part applies to leases of Indian land entered into under 25 U.S.C. 380, 25 U.S.C. 415(a), and 25 U.S.C. 4211, and other tribe-specific statutes authorizing surface leases of Indian land with our approval.
(b) This part does not apply to:
(1) Land use agreements entered into under other statutory authority, such as the following:
(2) Leases of water rights associated with Indian land, except to the extent the use of water rights is incorporated in a lease of the land itself.
(3) The following leases, which do not require our approval, except that you must record these leases in accordance with §§ 162.343, 162.443, and 162.568:
(i) A lease of tribal land by a 25 U.S.C. 477 corporate entity under its charter to a third party for a period not to exceed 25 years; and
(ii) A lease of Indian land under a special act of Congress authorizing leasing without our approval.
§ 162.007   To what permits does this part apply?
(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 to allow us to maintain a copy of the permit in our records. If we determine within 10 days of submission that the document does not meet the definition of “permit” and grants a legal interest in Indian land, we will notify you that a lease is required.
(b) The following table provides examples of some common characteristics of permits versus leases.
(c) We will not administer or enforce permits on Indian land.
(d) We may grant permits for the use of Government land. The leasing regulations in this part will apply to such permits, as appropriate.
§ 162.008   Does this part apply to lease documents I submitted for approval before January 4, 2013?
This part applies to all lease documents, except as provided in § 162.006. If you submitted your lease document to us for approval before January 4, 2013, the qualifications in paragraphs (a) and (b) of this section also apply.
(a) If we approved your lease document before January 4, 2013, this part applies to that lease document; however, if the provisions of the lease document conflict with this part, the provisions of the lease govern.
(b) If you submitted a lease document but we did not approve it before January 4, 2013, then:
(1) We will review the lease document under the regulations in effect at the time of your submission; and
(2) Once we approve the lease document, this part applies to that lease document; however, if the provisions of the lease document conflict with this part, the provisions of the lease document govern.
§ 162.009   Do I need BIA approval of a subleasehold mortgage?
Unless the lease provides otherwise, sublease, or by request of the parties, you do not need our approval of a subleasehold mortgage. If the lease or sublease requires, or parties request, our approval, we will use the procedures governing our review of leasehold mortgages.
§ 162.010   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) For fractionated tracts, notify all Indian landowners and obtain the consent of the Indian landowners of the applicable percentage of interests, under § 162.012; and
(2) Prospective lessees and Indian landowners must:
(i) Prepare the required information and analyses, including information to facilitate our analysis under applicable environmental and cultural resource requirements; and
(ii) Ensure the lease complies with the requirements in subpart C for residential leases, subpart D for business leases, or subpart E for wind energy evaluation, wind resource, or solar resource leases; and
(3) Prospective lessees 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.
§ 162.011   How does a prospective lessee identify and contact individual Indian landowners to negotiate a lease?
(a) Prospective lessees may submit a written request to us to obtain the following information. The request must specify that it is for the purpose of negotiating a lease:
(1) Names and addresses of the individual Indian landowners or their representatives;
(2) Information on the location of the parcel; and
(3) The percentage of undivided interest owned by each individual Indian landowner.
(b) We may assist prospective lessees in contacting the individual Indian landowners or their representatives for the purpose of negotiating a lease, upon request.
(c) We will assist individual Indian landowners in lease negotiations, upon their request.
§ 162.012   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:
(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, his or her consent will be included in the percentages in paragraphs (a)(1) and (2) of this section.
(4) Where owners of the applicable percentages in paragraph (a)(1) of this section 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; and
(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 affects 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) of this section 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.
§ 162.013   Who is authorized to consent to a lease?
(a) Indian tribes, adult Indian landowners, and 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 competent jurisdiction 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 1.3(b) and has been retained by the Indian landowner for this purpose;
(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 § 162.014;
(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 § 162.012, 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) An individual whose whereabouts are unknown to us, after we make a reasonable attempt to locate the individual;
(3) An individual who is found to be non compos mentis or determined to be an adult in need of assistance who does not have a guardian duly appointed by a court of competent jurisdiction, or an individual under legal disability as defined in part 115 of this chapter;
(4) An orphaned minor who does not have a guardian duly appointed by a court of competent jurisdiction;
(5) An individual who has given us a written power of attorney to lease their land; and
(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 3 month negotiation period following the notice; and
(iii) The land is not being used by an Indian landowner under § 162.005(b)(1).
§ 162.014   What laws will apply to leases approved under this part?
(a) In addition to the regulations in this part, leases approved under this part:
(1) Are subject to applicable Federal laws and any specific Federal statutory requirements that are not incorporated in this part;
(2) Are subject to tribal law, subject to paragraph (b) of this section; and
(3) Are not subject to State law or the law of a political subdivision thereof except that:
(i) State law or the law of a political subdivision thereof may apply in the specific areas and circumstances in Indian country where the Indian tribe with jurisdiction has made it expressly applicable;
(ii) State law may apply in the specific areas and circumstances in Indian country where Congress has made it expressly applicable; and
(iii) State law may apply where a Federal court has expressly applied State law to a specific area or circumstance in Indian country in the absence of Federal or tribal law.
(b) Tribal laws generally apply to land under the jurisdiction of the tribe enacting the laws, except to the extent that those tribal laws are inconsistent with these regulations or other applicable Federal law. However, these regulations may be superseded or modified by tribal laws, as long as:
(1) The tribe has notified us of the superseding or modifying effect of the tribal laws;
(2) The superseding or modifying of the regulation would not violate a Federal statute or judicial decision, or conflict with our general trust responsibility under Federal law; and
(3) The superseding or modifying of the regulation applies only to tribal land.
(c) Unless prohibited by Federal law, the parties to a lease may subject that lease 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.
§ 162.015   May a lease contain a preference consistent with tribal law for employment of tribal members?
A lease of Indian land may include a provision, consistent with tribal law, requiring the lessee to give a preference to qualified tribal members, based on their political affiliation with the tribe.
§ 162.016   Will BIA comply with tribal laws in making lease decisions?
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.
§ 162.017   What taxes apply to leases approved under this part?
(a) Subject only to applicable Federal law, permanent improvements on the leased land, without regard to ownership of those improvements, are not subject to any fee, tax, assessment, levy, or other charge imposed by any State or political subdivision of a State. Improvements may be subject to taxation by the Indian tribe with jurisdiction.
(b) Subject only to applicable Federal law, activities under a lease conducted on the leased premises are not subject to any fee, tax, assessment, levy, or other charge (e.g., business use, privilege, public utility, excise, gross revenue taxes) imposed by any State or political subdivision of a State. Activities may be subject to taxation by the Indian tribe with jurisdiction.
(c) Subject only to applicable Federal law, the leasehold or possessory interest is not subject to any fee, tax, assessment, levy, or other charge imposed by any State or political subdivision of a State. Leasehold or possessory interests may be subject to taxation by the Indian tribe with jurisdiction.
§ 162.018   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 approval or disapproval of a lease document, waiver of a requirement for lease approval (including but not limited to waivers of fair market rental and valuation, bonding, and insurance), cancellation of a lease, or an appeal.
§ 162.019   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. Roads or other infrastructure within the leased premises do not require compliance with 25 CFR part 169 during the term of the lease, unless otherwise stated in the lease.
§ 162.020   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 the acreage each tract contributes 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.
§ 162.021   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 §§ 162.340, 162.440, 162.530, and 162.565.
(d) We will work to ensure that the use of the land is consistent with the Indian landowners' wishes and applicable tribal law.
§ 162.022   What are BIA's responsibilities in administering and enforcing leases?
(a) Upon written notification from an 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 §§ 162.364, 162.464, and 162.589. Nothing in this part prevents an Indian landowner from exercising remedies available to the Indian landowners under the lease or applicable law.
(b) We will promptly respond to requests for BIA approval of amendments, assignments, leasehold mortgages, and subleases, as specified in subparts 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 under § 162.024.
§ 162.023   What 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, including eviction, on behalf of the Indian landowners and pursue any additional remedies available under applicable law. The Indian landowners may pursue any available remedies under applicable law.
§ 162.024   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 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 individual Indian landowners before and after taking emergency action. In all cases, we will notify the Indian landowners after taking emergency action by actual or constructive notice. We will provide written notification of our action to the Indian tribe exercising jurisdiction over the Indian land before and after taking emergency action.
§ 162.025   May decisions under this part be appealed?
Appeals from BIA decisions under this part may be taken under part 2 of this chapter, except for deemed approvals and as 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. Our decision to disapprove a lease may be appealed only by an Indian landowner. Our decision to disapprove any other lease document may be appealed only by the Indian landowners or the lessee.
§ 162.026   Who can answer questions about leasing?
An Indian landowner or prospective lessee may contact the local BIA realty office (or of any tribe acting on behalf of BIA under § 162.018) with jurisdiction over the land for answers to questions about the leasing process.
§ 162.027   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 of lease documents and enforcement of leases.
(b) We will adopt environmental assessments and environmental impact statements prepared by another Federal agency, Indian tribe, entity, or person under 43 CFR 46.320 and 42 CFR 1506.3, including those prepared under 25 U.S.C. 4115 and 25 CFR part 1000, but may require a supplement. We will 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 information that is marked confidential or proprietary and will exempt it from public release to the extent allowed by law and in accordance with 43 CFR part 2. We may, at our discretion, treat a lessee's failure to cooperate with such request, provide data, or grant access to information or records as a lease violation.
§ 162.028   How may an Indian tribe obtain information about leases on its land?
Upon request of the Indian tribe with jurisdiction, BIA will promptly provide information on the status of leases on tribal land, without requiring a Freedom of Information Act request.
§ 162.029   How does BIA provide notice to the parties to a lease?
(a) When this part requires us to notify the parties of the status of our review of a lease document (including but not limited to, providing notice to the parties of the date of receipt of a lease document, informing the parties of the need for additional review time, and informing the parties that a lease proposal package is not complete):
(1) For leases of tribal land, we will notify the lessee and the tribe by mail; and
(2) For leases of individually owned Indian land, we will notify the lessee by mail and, where feasible, the individual Indian landowners either by constructive notice or by mail.
(b) When this part requires us to notify the parties of our determination to approve or disapprove a lease document, and to provide any right of appeal:
(1) For leases of tribal land, we will notify the lessee and the tribe by mail; and
(2) For leases of individually owned Indian land, we will notify the lessee by mail and the individual Indian landowners either by constructive notice or by mail.
§ 162.101   What key terms do I need to know for this subpart?
For purposes of this subpart:
Adult means an individual who is 18 years of age or older.
Agricultural land means Indian land or Government land suited or used for the production of crops, livestock or other agricultural products, or Indian land suited or used for a business that supports the surrounding agricultural community.
Agricultural lease means a lease of agricultural land for farming and/or grazing purposes.
AIARMA means the American Indian Agricultural Resources Management Act of December 3, 1993 (107 Stat. 2011, 25 U.S.C. 3701 et seq. ), as amended on November 2, 1994 (108 Stat. 4572).
Assignment means an agreement between a tenant and an assignee, whereby the assignee acquires all of the tenant's rights, and assumes all of the tenant's obligations, under a lease.
BIA means the Bureau of Indian Affairs within the Department of the Interior and any tribe acting on behalf of BIA under § 162.109 of this part.
Bond means security for the performance of certain lease obligations, as furnished by the tenant, or a guaranty of such performance as furnished by a third-party surety.
Day means a calendar day.
Emancipated minor means a person under 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.
Fair annual rental means the amount of rental income that a leased tract of Indian land would most probably command in an open and competitive market.
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.
Government land means any tract, or interest therein, in which the surface estate is owned by the United States and administered by BIA, not including tribal land that has been reserved for administrative purposes.
Immediate family means a spouse, brother, sister, lineal ancestor, lineal descendant, or member of the household of an individual Indian landowner.
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.
Indian landowner means a tribe or individual Indian who owns an interest in Indian land in trust or restricted status.
Individually-owned land means any tract, or interest therein, in which the surface estate is owned by an individual Indian in trust or restricted status.
Interest, when used with respect to Indian land, means an ownership right to the surface estate of Indian land that is unlimited or uncertain in duration, including a life estate.
Lease means a written agreement between Indian landowners and a tenant or lessee, whereby the tenant or lessee is granted a right to possession of Indian land, for a specified purpose and duration. Unless otherwise provided, the use of this term will also include permits, as appropriate.
Lessee means tenant, as defined in this section.
Life estate means an interest in Indian land that is limited, in duration, to the life of the life tenant holding the interest, or the life of some other person.
Majority interest means more than 50% of the trust or restricted interests in a tract of Indian land.
Minor means an individual who is less than 18 years of age.
Mortgage means a mortgage, deed of trust or other instrument that pledges a tenant's leasehold interest as security for a debt or other obligation owed by the tenant to a lender or other mortgagee.
NEPA means the National Environmental Policy Act (42 U.S.C. § 4321, et seq. )
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.
Permit means a written agreement between Indian landowners and the applicant for the permit, also referred to as a permittee, whereby the permittee is granted a revocable privilege to use Indian land or Government land, for a specified purpose.
Remainder 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.
Restricted land or restricted status means land the title to which is held by an individual Indian or a tribe and which can only be alienated or encumbered by the owner with the approval of the Secretary because of limitations contained in the conveyance instrument pursuant to federal law.
Secretary means the Secretary of the Interior or an authorized representative.
Sublease means a written agreement by which the tenant grants to an individual or entity a right to possession no greater than that held by the tenant under the lease.
Surety means one who guarantees the performance of another.
Tenant means a person or entity who has acquired a legal right of possession to Indian land by a lease or permit under this part.
Trespass means an unauthorized possession, occupancy or use of Indian land.
Tribal land means the surface estate of land or any interest therein held by the United States in trust for a tribe, band, community, group or pueblo of Indians, and land that is held by a tribe, band, community, group or pueblo of Indians, subject to federal restrictions against alienation or encumbrance, and includes such land reserved for BIA administrative purposes when it is not immediately needed for such purposes. The term also includes 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. 984; 25 U.S.C. § 476).
Tribal laws means the body of law that governs land and activities under the jurisdiction of a tribe, including ordinances and other enactments by the tribe, tribal court rulings, and tribal common law.
Trust land means any tract, or interest therein, that the United States holds in trust status for the benefit of a tribe or individual Indian.
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 BIA and any tribe acting on behalf of the Secretary or BIA under § 162.110 of this part.
USPAP means the Uniform Standards of Professional Appraisal Practice, as promulgated by the Appraisal Standards Board of the Appraisal Foundation to establish requirements and procedures for professional real property appraisal practice.
§ 162.105   Can tracts with different Indian landowners be unitized for agricultural leasing purposes?
(a) An agricultural lease negotiated by Indian landowners may cover more than one tract of Indian land, but the minimum consent requirements for leases granted by Indian landowners under subparts B through D of this part will apply to each tract separately. We may combine multiple tracts into a unit for leases negotiated or advertised by us, if we determine that unitization is in the Indian landowners' best interests and consistent with the efficient administration of the land.
(b) Unless otherwise provided in the agricultural lease, the rent or other consideration derived from a unitized agricultural lease will be distributed based on the size of each landowner's interest in proportion to the acreage within the entire unit.
§ 162.106   What will BIA do if possession is taken without an approved agricultural lease or other proper authorization?
(a) If an agricultural lease is required, and possession is taken without an agricultural lease by a party other than an Indian landowner of the tract, we will treat the unauthorized use as a trespass. Unless we have reason to believe that the party in possession is engaged in negotiations with the Indian landowners to obtain an agricultural lease, we will take action to recover possession on behalf of the Indian landowners, and pursue any additional remedies available under applicable law.
(b) Where a trespass involves Indian agricultural land, we will also assess civil penalties and costs under part 166, subpart I, of this chapter.
§ 162.107   What are BIA's objectives in granting or approving agricultural leases?
We will assist Indian landowners in leasing their land for agricultural purposes. For the purposes of §§ 162.102 through 162.256:
(a) We will assist Indian landowners in leasing their land, either through negotiations or advertisement. In reviewing a negotiated lease for approval, we will defer to the landowners' determination that the lease is in their best interest, to the maximum extent possible. In granting a lease on the landowners' behalf, we will obtain a fair annual rental and attempt to ensure (through proper notice) that the use of the land is consistent with the landowners' wishes. We will also recognize the rights of Indian landowners to use their own land, so long as their Indian co-owners are in agreement and the value of the land is preserved.
(b) We will recognize the governing authority of the tribe having jurisdiction over the land to be leased, preparing and advertising leases in accordance with applicable tribal laws and policies. We will promote tribal control and self-determination over tribal land and other land under the tribe's jurisdiction, 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.
§ 162.108   What are BIA's responsibilities in administering and enforcing agricultural leases?
(a) We will ensure that tenants meet their payment obligations to Indian landowners, through the collection of rent on behalf of the landowners and the prompt initiation of appropriate collection and enforcement actions. We will also assist landowners in the enforcement of payment obligations that run directly to them, and in the exercise of any negotiated remedies that apply in addition to specific remedies made available to us under these or other regulations.
(b) We will ensure that tenants comply with the operating requirements in their agricultural leases, through appropriate inspections and enforcement actions as needed to protect the interests of the Indian landowners and respond to concerns expressed by them. We will take immediate action to recover possession from trespassers operating without an agricultural lease, and take other emergency action as needed to preserve the value of the land.
§ 162.109   What laws, other than these regulations, will apply to agricultural leases granted or approved under this part?
(a) Agricultural leases granted or approved under this part will be subject to federal laws of general applicability and any specific federal statutory requirements that are not incorporated in these regulations.
(b) Tribal laws generally apply to land under the jurisdiction of the tribe enacting such laws, except to the extent that those tribal laws are inconsistent with these regulations or other applicable federal law. These regulations may be superseded or modified by tribal laws, however, so long as:
(1) The tribal laws are consistent with the enacting tribe's governing documents;
(2) The tribe has notified us of the superseding or modifying effect of the tribal laws;
(3) The superseding or modifying of the regulation would not violate a federal statute or judicial decision, or conflict with our general trust responsibility under federal law; and
(4) The superseding or modifying of the regulation applies only to tribal land.
(c) State law may apply to agricultural lease disputes or define the remedies available to the Indian landowners in the event of an agricultural lease violation by the tenant, if the agricultural lease so provides and the Indian landowners have expressly agreed to the application of state law.
§ 162.110   Can these regulations be administered by tribes, on the Secretary's or on BIA's behalf?
Except insofar as these regulations provide for the granting, approval, or enforcement of agricultural leases and permits, the provisions in these regulations that authorize or require us to take certain actions will extend to any tribe or tribal organization that is administering specific programs or providing specific services under a contract or self-governance compact entered into under the Indian Self-Determination and Education Assistance Act (25 U.S.C. § 450f et seq. ).
§ 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:
(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 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.
§ 162.112   How must records associated with this part be preserved?
(a) Any organization, including tribes and tribal organizations, that have records identified in § 162.111(a) 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 § 162.111(b) 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.
§ 162.113   May decisions under this subpart be appealed?
Yes. Except where otherwise provided in this subpart, appeals from decisions by the BIA under this subpart may be taken pursuant to 25 CFR subpart 2.
§ 162.200   What types of leases are covered by this subpart?
The regulations in this subpart apply to agricultural leases, as defined in this part. The regulations in this subpart may also apply to business leases on agricultural land, where appropriate.
§ 162.201   Must agricultural land be managed in accordance with a tribe's agricultural resource management plan?
(a) Agricultural land under the jurisdiction of a tribe must be managed in accordance with the goals and objectives in any agricultural resource management plan developed by the tribe, or by us in close consultation with the tribe, under AIARMA.
(b) A ten-year agricultural resource management and monitoring plan must be developed through public meetings and completed within three years of the initiation of the planning activity. Such a plan must be developed through public meetings, and be based on the public meeting records and existing survey documents, reports, and other research from federal agencies, tribal community colleges, and land grant universities. When completed, the plan must:
(1) Determine available agricultural resources;
(2) Identify specific tribal agricultural resource goals and objectives;
(3) Establish management objectives for the resources;
(4) Define critical values of the Indian tribe and its members and identify holistic management objectives; and
(5) Identify actions to be taken to reach established objectives.
(c) Where the regulations in this subpart are inconsistent with a tribe's agricultural resource management plan, we may waive the regulations under part 1 of this title, so long as the waiver does not violate a federal statute or judicial decision or conflict with our general trust responsibility under federal law.
§ 162.202   How will tribal laws be enforced on agricultural land?
(a) Unless prohibited by federal law, we will recognize and comply with tribal laws regulating activities on agricultural land, including tribal laws relating to land use, environmental protection, and historic or cultural preservation.
(b) While the tribe is primarily responsible for enforcing tribal laws pertaining to agricultural land, we will:
(1) Assist in the enforcement of tribal laws;
(2) Provide notice of tribal laws to persons or entities undertaking activities on agricultural land, under § 162.204(c) of this subpart; and
(3) Require appropriate federal officials to appear in tribal forums when requested by the tribe, so long as such an appearance would not:
(i) Be inconsistent with the restrictions on employee testimony set forth at 43 CFR Part 2, Subpart E;
(ii) Constitute a waiver of the sovereign immunity of the United States; or
(iii) Authorize or result in a review of our actions by a tribal court.
(c) Where the regulations in this subpart are inconsistent with a tribal law, but such regulations cannot be superseded or modified by the tribal law under § 162.109 of this part, we may waive the regulations under part 1 of this chapter, so long as the waiver does not violate a federal statute or judicial decision or conflict with our general trust responsibility under federal law.
§ 162.203   When can the regulations in this subpart be superseded or modified by tribal laws and leasing policies?
(a) The regulations in this subpart may be superseded or modified by tribal laws, under the circumstances described in § 162.109(b) of this part.
(b) When specifically authorized by an appropriate tribal resolution establishing a general policy for the leasing of tribal and individually-owned agricultural land, we will:
(1) Waive the general prohibition against tenant preferences in leases advertised for bid under § 162.212 of this subpart, by allowing prospective Indian tenants to match the highest responsible bid (unless the tribal leasing policy specifies some other manner in which the preference must be afforded);
(2) Waive the requirement that a tenant post a bond under § 162.234 of this subpart;
(3) Modify the requirement that a tenant post a bond in a form described in § 162.235 of this subpart;
(4) Approve leases of tribal land at rates established by the tribe, as provided in § 162.222(b) of this subpart.
(c) When specifically authorized by an appropriate tribal resolution establishing a general policy for the leasing of “highly fractionated undivided heirship lands” (as defined in the tribal leasing policy), we may waive or modify the three-month notice requirement in § 162.209(b) of this subpart, so long as:
(1) The tribal law or leasing policy adopts an alternative plan for providing notice to Indian landowners, before an agricultural lease is granted by us on their behalf; and
(2) A waiver or modification of the three-month notice requirement is needed to prevent waste, reduce idle land acreage, and ensure lease income to the Indian landowners.
(d) Tribal leasing policies of the type described in paragraphs (b) through (c) of this section will not apply to individually-owned land that has been made exempt from such laws or policies under § 162.205 of this subpart.
§ 162.204   Must notice of applicable tribal laws and leasing policies be provided?
(a) A tribe must provide us with an official copy of any tribal law or leasing policy that supersedes or modifies these regulations under §§ 162.109 or 162.203 of this part. If the tribe has not already done so, we will provide notice of such a tribal law or leasing policy to affected Indian landowners and persons or entities undertaking activities on agricultural land. Such notice will be provided in the manner described in paragraphs (b) through (c) of this section.
(b) We will provide notice to Indian landowners, as to the superseding or modifying effect of any tribal leasing policy and their right to exempt their land from such a policy. Such notice will be provided by:
(1) Written notice included in a notice of our intent to lease the land, issued under § 162.209(b) of this subpart; or
(2) Public notice posted at the tribal community building or the United States Post Office, or published in the local newspaper that serves the area in which the Indian owners' land is located, at the time the tribal leasing policy is adopted.
(c) We will provide notice to persons or entities undertaking activities on agricultural land, as to the general applicability of tribal laws and the superseding or modifying effect of particular tribal laws and leasing policies. Such notice will be provided by:
(1) Written notice included in advertisements for lease, issued under § 162.212 of this subpart; or
(2) Public notice posted at the tribal community building or the United States Post Office, or published in a local newspaper of general circulation, at the time the tribal law is enacted or the leasing policy adopted.
§ 162.205   Can individual Indian landowners exempt their agricultural land from certain tribal leasing policies?
(a) Individual Indian landowners may exempt their agricultural land from the application of a tribal leasing policy of a type described in § 162.203(b) through (c) of this subpart, if the Indian owners of at least 50% of the trust or restricted interests in the land submit a written objection to us before a lease is granted or approved.
(b) Upon our receipt of a written objection from the Indian landowners that satisfies the requirements of paragraph (a) of this section, we will notify the tribe that the owners' land has been exempted from a specific tribal leasing policy. If the exempted land is part of a unitized lease tract, such land will be removed from the unit and leased separately, if appropriate.
(c) The procedures described in paragraphs (a) and (b) of this section will also apply to withdrawing an approved exemption.
§ 162.206   Can the terms of an agricultural lease be negotiated with the Indian landowners?
An agricultural lease may be obtained through negotiation. We will assist prospective tenants in contacting the Indian landowners or their representatives for the purpose of negotiating a lease, and we will assist the landowners in those negotiations upon request.
§ 162.207   When can the Indian landowners grant an agricultural lease?
(a) Tribes grant leases of tribally-owned agricultural land, including any tribally-owned undivided interest(s) in a fractionated tract, subject to our approval. Where tribal land is subject to a land assignment made to a tribal member or some other individual under tribal law or custom, the individual and the tribe must both grant the lease, subject to our approval.
(b) Adult Indian owners, or emancipated minors, may grant agricultural leases of their land, including undivided interests in fractionated tracts, subject to our approval.
(c) An agricultural lease of a fractionated tract may be granted by the owners of a majority interest in the tract, subject to our approval. Although prior notice to non-consenting individual Indian landowners is generally not needed prior to our approval of such a lease, a right of first refusal must be offered to any non-consenting Indian landowner who is using the entire lease tract at the time the lease is entered into by the owners of a majority interest. Where the owners of a majority interest grant such a lease on behalf of all of the Indian owners of a fractionated tract, the non-consenting Indian landowners must receive a fair annual rental.
(d) As part of the negotiation of a lease, Indian landowners may advertise their land to identify potential tenants with whom to negotiate.
§ 162.208   Who can represent the Indian landowners in negotiating or granting an agricultural lease?
The following individuals or entities may represent an individual Indian landowner:
(a) An adult with custody acting on behalf of his or her minor children;
(b) A guardian, conservator, or other fiduciary appointed by a court of competent jurisdiction to act on behalf of an individual Indian landowner;
(c) An adult or legal entity who has been given a written power of attorney that:
(1) Meets all of the formal requirements of any applicable tribal or state law;
(2) Identifies the attorney-in-fact and the land to be leased; and
(3) Describes the scope of the power granted and any limits thereon.
§ 162.209   When can BIA grant an agricultural lease on behalf of an Indian landowner?
(a) We may grant an agricultural lease on behalf of:
(1) Individuals who are found to be non compos mentis by a court of competent jurisdiction;
(2) Orphaned minors;
(3) The undetermined heirs and devisees of deceased Indian owners;
(4) Individuals who have given us a written power of attorney to lease their land; and
(5) Individuals whose whereabouts are unknown to us, after reasonable attempts are made to locate such individuals; and
(6) The individual Indian landowners of fractionated Indian land, when necessary to protect the interests of the individual Indian landowners.
(b) We may grant an agricultural lease on behalf of all of the individual Indian owners of a fractionated tract, where:
(1) We have provided the Indian landowners with written notice of our intent to grant a lease on their behalf, but the Indian landowners are unable to agree upon a lease during a three-month negotiation period immediately following such notice, or any other notice period established by a tribe under § 162.203(c) of this subpart; and
(2) The land is not being used by an Indian landowner under § 162.104(b) of this part.
§ 162.210   When can BIA grant a permit covering agricultural land?
(a) We may grant a permit covering agricultural land in the same manner as we would grant an agricultural lease under § 162.209 of this part. We may also grant a permit on behalf of individual Indian landowners, without prior notice, if it is impractical to provide notice to the owners and no substantial injury to the land will occur.
(b) We may grant a permit covering agricultural land, but not an agricultural lease, on government land.
(c) We will not grant a permit on tribal agricultural land, but a tribe may grant a permit, subject to our approval, in the same manner as it would grant a lease under § 162.207(a) of this subpart.
§ 162.211   What type of valuation or evaluation methods will be applied in estimating the fair annual rental of Indian land?
(a) To support the Indian landowners in their negotiations, and to assist in our consideration of whether an agricultural lease is in the Indian landowners' best interest, we must determine the fair annual rental of the land prior to our grant or approval of the lease, unless the land may be leased at less than a fair annual rental under § 162.222(b) through (c) of this subpart.
(b) A fair annual rental may be determined by competitive bidding, appraisal, or any other appropriate valuation method. Where an appraisal or other valuation is needed to determine the fair annual rental, the appraisal or valuation must be prepared in accordance with USPAP.
§ 162.212   When will the BIA advertise Indian land for agricultural leases?
(a) We will generally advertise Indian land for agricultural leasing:
(1) At the request of the Indian landowners; or
(2) Before we grant a lease under § 162.209(b) of this subpart.
(b) Advertisements will provide prospective tenants with notice of any superseding tribal laws and leasing policies that have been made applicable to the land under §§ 162.109 and 162.203 of this part, along with certain standard terms and conditions to be included in the lease. Advertisements will prohibit tenant preferences, and bidders at lease sales will not be afforded any preference, unless a preference in favor of individual Indians is required by a superseding tribal law or leasing policy.
(c) Advertisements will require sealed bids, and they may also provide for further competitive bidding among the prospective tenants at the conclusion of the bid opening. Competitive bidding should be supported, at a minimum, by a market study or rent survey that is consistent with USPAP.
§ 162.213   What supporting documents must be provided prior to BIA's grant or approval of an agricultural lease?
(a) If the tenant is a corporation, partnership or other legal entity, it must provide organizational and financial documents, as needed to show that the lease will be enforceable against the tenant and the tenant will be able to perform all of its lease obligations.
(b) Where a bond is required under § 162.234 of this subpart, the bond must be furnished before we grant or approve the lease.
(c) The tenant must provide environmental and archaeological reports, surveys, and site assessments, as needed to document compliance with NEPA and other applicable federal and tribal land use requirements.
§ 162.214   How and when will BIA decide whether to approve an agricultural lease?
(a) Before we approve a lease, we must determine in writing 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 (including preparation of the appropriate review documents under NEPA);
(3) Assure ourselves that adequate consideration has been given, as appropriate, to:
(i) The relationship between the use of the leased premises and the use of neighboring lands;
(ii) The height, quality, and safety of any structures or other facilities to be constructed on the leased premises;
(iii) The availability of police and fire protection, utilities, and other essential community services;
(iv) The availability of judicial forums for all criminal and civil matters arising on the leased premises; and
(v) The effect on the environment of the proposed land use.
(4) Require any lease modifications or mitigation measures that are needed to satisfy any requirements of this subpart, or any other federal or tribal land use requirements.
(b) Where an agricultural lease is in a form that has previously been accepted or approved by us, and all of the documents needed to support the findings required by paragraph (a) of this section have been received, we will decide whether to approve the lease within 30 days of the date of our receipt of the lease and supporting documents. If we decide to approve or disapprove a lease, we will notify the parties immediately and advise them of their right to appeal the decision under part 2 of this chapter. Copies of agricultural leases that have been approved will be provided to the tenant, and made available to the Indian landowners upon request.
§ 162.215   When will an agricultural lease be effective?
Unless otherwise provided in the lease, an agricultural lease will be effective on the date on which the lease is approved by us. An agricultural lease may be made effective on some past or future date, by agreement, but such a lease may not be approved more than one year prior to the date on which the lease term is to commence.
§ 162.216   When will a BIA decision to approve an agricultural lease be effective?
Our decision to approve an agricultural lease will be effective immediately, notwithstanding any appeal that may be filed under part 2 of this chapter.
§ 162.217   Must an agricultural lease or permit be recorded?
(a) An agricultural lease or permit must be recorded in our Land Titles and Records Office with jurisdiction over the land. We will record the lease or permit immediately following our approval under this subpart.
(b) Agricultural leases of tribal land that do not require our approval, under § 162.102 of this part, must be recorded by the tribe in our Land Titles and Records Office with jurisdiction over the land.
§ 162.218   Is there a standard agricultural lease form?
Based on the need for flexibility in advertising, negotiating and drafting of appropriate lease terms and conditions, there is no standard agricultural lease form that must be used. We will assist the Indian landowners in drafting lease provisions that conform to the requirements of this part.
§ 162.219   Are there any provisions that must be included in an agricultural lease?
In addition to the other requirements of this part, all agricultural leases must provide that:
(a) The obligations of the tenant and its sureties to the Indian landowners will also be enforceable by the United States, so long as the land remains in trust or restricted status;
(b) Nothing contained in this lease shall operate to delay or prevent a termination of federal trust responsibilities with respect to the land by the issuance of a fee patent or otherwise during the term of the lease; however, such termination shall not serve to abrogate the lease. The owners of the land and the lessee and his surety or sureties shall be notified of any such change in the status of the land;
(c) There must not be any unlawful conduct, creation of a nuisance, illegal activity, or negligent use or waste of the leased premises; and
(d) The tenant must comply with all applicable laws, ordinances, rules, regulations, and other legal requirements, including tribal laws and leasing policies.
§ 162.220   Are there any formal requirements that must be satisfied in the execution of an agricultural lease?
(a) An agricultural lease must identify the Indian landowners and their respective interests in the leased premises, and the lease must be granted by or on behalf of each of the Indian landowners. One who executes a lease in a representative capacity under § 162.208 of this subpart must identify the owner being represented and the authority under which such action is being taken.
(b) An agricultural lease must be executed by individuals having the necessary capacity and authority to bind the tenant under applicable law.
(c) An agricultural lease must include a citation of the provisions in this subpart that authorize our approval, along with a citation of the formal documents by which such authority has been delegated to the official taking such action.
§ 162.221   How should the land be described in an agricultural lease?
An agricultural lease should 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. Where there are undivided interests owned in fee status, the aggregate portion of trust and restricted interests should be identified in the description of the leased premises.
§ 162.222   How much rent must be paid under an agricultural lease?
(a) An agricultural lease must provide for the payment of a fair annual rental at the beginning of the lease term, unless a lesser amount is permitted under paragraphs (b) through (d) of this section. The tenant's rent payments may be:
(1) In fixed amounts; or
(2) Based on a share of the agricultural products generated by the lease, or a percentage of the income to be derived from the sale of such agricultural products.
(b) We will approve an agricultural lease of tribal land at a nominal rent, or at less than a fair annual rental, if such a rent is negotiated or established by the tribe.
(c) We will approve an agricultural lease of individually-owned land at a nominal rent or at less than a fair annual rental, if:
(1) The tenant is a member of the Indian landowner's immediate family, or a co-owner in the lease tract; or
(2) The tenant is a cooperative or other legal entity in which the Indian landowners directly participate in the revenues or profits generated by the lease.
(d) We will grant or approve a lease at less than a fair annual rental, as previously determined by an appraisal or some other appropriate valuation method, if the land is subsequently advertised and the tenant is the highest responsible bidder.
§ 162.223   Must the rent be adjusted under an agricultural lease?
(a) Except as provided in paragraph (c) of this section, an agricultural lease must provide for one or more rental adjustments if the lease term runs more than five years, unless the lease provides for the payment of:
(1) Less than a fair annual rental, as permitted under § 162.222(b) through (c) of this part; or
(2) A rental based primarily on a share of the agricultural products generated by the lease, or a percentage of the income derived from the sale of agricultural products.
(b) If rental adjustments are required, the lease must specify:
(1) How adjustments are made;
(2) Who makes the adjustments;
(3) When the adjustments are effective; and
(4) How disputes about the adjustments are resolved.
(c) An agricultural lease of tribal land may run for a term of more than five years, without providing for a rental adjustment, if the tribe establishes such a policy under § 162.203(b)(4) and negotiates such a lease.
§ 162.224   When are rent payments due under an agricultural lease?
An agricultural lease must specify the dates on which all rent payments are due. Unless otherwise provided in the lease, rent payments may not be made or accepted more than one year in advance of the due date. Rent payments are due at the time specified in the lease, regardless of whether the tenant receives an advance billing or other notice that a payment is due.
§ 162.225   Will untimely rent payments made under an agricultural lease be subject to interest charges or late payment penalties?
An agricultural lease must specify the rate at which interest will accrue on any rent payment not made by the due date or any other date specified in the lease. A lease may also identify additional late payment penalties that will apply if a rent payment is not made by a specified date. Unless otherwise provided in the lease, such interest charges and late payment penalties will apply in the absence of any specific notice to the tenant from us or the Indian landowners, and the failure to pay such amounts will be treated as a lease violation under § 162.251 of this subpart.
§ 162.226   To whom can rent payments be made under an agricultural lease?
(a) An agricultural lease must specify whether rent payments will be made directly to the Indian landowners or to us on behalf of the Indian landowners. If the lease provides for payment to be made directly to the Indian landowners, the lease must also require that the tenant retain specific documentation evidencing proof of payment, such as canceled checks, cash receipt vouchers, or copies of money orders or cashier's checks, consistent with the provisions of §§ 162.112 and 162.113 of this part.
(b) Rent payments made directly to the Indian landowners must be made to the parties specified in the lease, unless the tenant receives notice of a change of ownership. Unless otherwise provided in the lease, rent payments may not be made payable directly to anyone other than the Indian landowners.
(c) A lease that provides for rent payments to be made directly to the Indian landowners must also provide for such payments to be suspended and the rent thereafter paid to us, rather than directly to the Indian landowners, if:
(1) An Indian landowner dies;
(2) An Indian landowner requests that payment be made to us;
(3) An Indian landowner is found by us to be in need of assistance in managing his/her financial affairs; or
(4) We determine, in our discretion and after consultation with the Indian landowner(s), that direct payment should be discontinued.
§ 162.227   What form of rent payment can be accepted under an agricultural lease?
(a) When rent payments are made directly to the Indian landowners, the form of payment must be acceptable to the Indian landowners.
(b) Payments made to us may be delivered in person or by mail. We will not accept cash, foreign currency, or third-party checks. We will accept:
(1) Personal or business checks drawn on the account of the tenant;
(2) Money orders;
(3) Cashier's checks;
(4) Certified checks; or
(5) Electronic funds transfer payments.
§ 162.228   What other types of payments are required under an agricultural lease?
(a) The tenant may be required to pay additional fees, taxes, and/or assessments associated with the use of the land, as determined by the tribe having jurisdiction over the land. The tenant must pay these amounts to the appropriate tribal official.
(b) Except as otherwise provided in part 171 of this chapter, if the leased premises are within an Indian irrigation project or drainage district, the tenant must pay all operation and maintenance charges that accrue during the lease term. The tenant must pay these amounts to the appropriate official in charge of the irrigation project or drainage district. Failure to make such payments will constitute a violation of the lease under § 162.251.
§ 162.229   How long can the term of an agricultural lease run?
(a) An agricultural lease must provide for a definite lease term, specifying the commencement date. The commencement date of the lease may not be more than one year after the date on which the lease is approved.
(b) The lease term must be reasonable, given the purpose of the lease and the level of investment required. Unless otherwise provided by statute, the maximum term may not exceed ten years, unless a substantial investment in the improvement of the land is required. If such a substantial investment is required, the maximum term may be up to 25 years.
(c) 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.
(d) An agricultural lease may not provide the tenant with an option to renew, and such a lease may not be renewed or extended by holdover.
§ 162.230   Can an agricultural lease be amended, assigned, sublet, or mortgaged?
(a) An agricultural lease may authorize amendments, assignments, subleases, or mortgages of the leasehold interest, but only with the written consent of the parties to the lease in the same manner the original lease was approved, and our approval. An attempt by the tenant to mortgage the leasehold interest or authorize possession by another party, without the necessary consent and approval, will be treated as a lease violation under § 162.251 of this subpart.
(b) An agricultural lease may authorize us, one or more of the Indian landowners, or a designated representative of the Indian landowners, to consent to an amendment, assignment, sublease, mortgage, or other type of agreement, on the landowners' behalf. A designated landowner or representative may not negotiate or consent to an amendment, assignment, or sublease that would:
(1) Reduce the rentals payable to the other Indian landowners; or
(2) Terminate or modify the term of the lease.
(c) Where the Indian landowners have not designated a representative for the purpose of consenting to an amendment, assignment, sublease, mortgage, or other type of agreement, such consent may be granted by or on behalf of the landowners in the same manner as a new lease, under §§ 162.207 through 162.209 of this subpart.
§ 162.231   How can the land be used under an agricultural lease?
(a) An agricultural lease must describe the authorized uses of the leased premises. Any use of the leased premises for an unauthorized purpose, or a failure by the tenant to maintain continuous operations throughout the lease term, will be treated as a lease violation under § 162.251 of this subpart.
(b) An agricultural lease must require that farming and grazing operations be conducted in accordance with recognized principles of sustained yield management, integrated resource management planning, sound conservation practices, and other community goals as expressed in applicable tribal laws, leasing policies, or agricultural resource management plans. Appropriate stipulations or conservation plans must be developed and incorporated in all agricultural leases.
§ 162.232   Can improvements be made under an agricultural lease?
An agricultural lease must generally describe the type and location of any improvements to be constructed by the lessee. Unless otherwise provided in the lease, any specific plans for the construction of those improvements will not require the consent of the Indian owners or our approval.
§ 162.233   Who will own the improvements made under an agricultural lease?
(a) An agricultural lease may specify who will own any improvements constructed by the tenant, during the lease term. The lease must indicate whether any improvements constructed by the tenant will remain on the leased premises upon the expiration or termination of the lease, providing for the improvements to either:
(1) Remain on the leased premises, in a condition satisfactory to the Indian landowners and us; or
(2) Be removed within a time period specified in the lease, at the tenant's expense, with the leased premises to be restored as close as possible to their condition prior to construction of such improvements.
(b) If the lease allows the tenant to remove the improvements, it must also provide the Indian landowners with an option to waive the removal requirement and take possession of the improvements if they are not removed within the specified time period. If the Indian landowners choose not to exercise this option, we will take appropriate enforcement action to ensure removal at the tenant's expense.
§ 162.234   Must a tenant provide a bond under an agricultural lease?
Unless otherwise provided by a tribe under § 162.203 of this subpart, or waived by us at the request of the owners of a majority interest in an agricultural lease tract, the tenant must provide a bond to secure:
(a) The payment of one year's rental;
(b) The construction of any required improvements;
(c) The performance of any additional lease obligations, including the payment of operation and maintenance charges under § 162.228(b) of this subpart; and
(d) The restoration and reclamation of the leased premises, to their condition at the commencement of the lease term or some other specified condition.
§ 162.235   What form of bond can be accepted under an agricultural lease?
(a) Except as provided in paragraph (b) of this section, a bond must be deposited with us and made payable only to us, and such a bond may not be modified or withdrawn without our approval. We will only accept a bond in one of the following forms:
(1) Cash;
(2) Negotiable Treasury securities that:
(i) Have a market value at least equal to the bond amount; and
(ii) Are accompanied by a statement granting full authority to us to sell such securities in case of a violation of the terms of the lease.
(3) Certificates of deposit that indicate on their face that our approval is required prior to redemption by any party;
(4) Irrevocable letters of credit issued by federally-insured financial institutions authorized to do business in the United States. A letter of credit must:
(i) Contain a clause that grants us the authority to demand immediate payment if the tenant violates the lease or fails to replace the letter of credit at least 30 days prior to its expiration date;
(ii) Be payable to us;
(iii) Be irrevocable during its term and have an initial expiration date of not less than one year following the date of issuance; and
(iv) Be automatically renewable for a period of not less than one year, unless the issuing financial institution provides us with written notice that it will not be renewed, at least 90 calendar days before the letter of credit's expiration date.
(5) A surety bond issued by a company approved by the U.S. Department of the Treasury; or
(6) Any other form of highly liquid, non-volatile security that is easily convertible to cash and for which our approval is required prior to redemption by any party.
(b) A tribe may accept and hold any form of bond described in paragraph (a) of this section, to secure performance under an agricultural lease of tribal land.
§ 162.236   How will a cash bond be administered?
(a) If a cash bond is submitted, we will retain the funds in an account established in the name of the tenant.
(b) We will not pay interest on a cash performance bond.
(c) If the bond is not forfeited under § 162.252(a) of this subpart, we will refund the bond to the tenant upon the expiration or termination of the lease.
§ 162.237   What insurance is required under an agricultural lease?
When necessary to protect the interests of the Indian landowners, an agricultural lease must require that a tenant provide insurance. Such insurance may include property, crop, liability and/or casualty insurance. If insurance is required, it must identify both the Indian landowners and the United States as insured parties, and be sufficient to protect all insurable improvements on the leased premises.
§ 162.238   What indemnities are required under an agricultural lease?
(a) An agricultural lease must require that the tenant indemnify and hold the United States and the Indian landowners harmless from any loss, liability, or damages resulting from the tenant's use or occupation of the leased premises, unless:
(1) The tenant would be prohibited by law from making such an agreement; or (2) The interests of the Indian landowners are adequately protected by insurance.
(b) Unless the tenant would be prohibited by law from making such an agreement, an agricultural lease must specifically require that the tenant indemnify 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 materials from the leased premises that occurs during the lease term, regardless of fault.
§ 162.239   How will payment rights and obligations relating to agricultural land be allocated between the Indian landowners and the tenant?
(a) Unless otherwise provided in an agricultural lease, the Indian landowners will be entitled to receive any settlement funds or other payments arising from certain actions that diminish the value of the land or the improvements thereon. Such payments may include (but are not limited to) :
(1) Insurance proceeds;
(2) Trespass damages; and
(3) Condemnation awards.
(b) An agricultural lease may provide for the tenant to assume certain cost-share or other payment obligations that have attached to the land through past farming and grazing operations, so long as those obligations are specified in the lease and considered in any determination of fair annual rental made under this subpart.
§ 162.240   Can an agricultural lease provide for negotiated remedies in the event of a violation?
(a) A lease of tribal agricultural land may provide the tribe with certain negotiated remedies in the event of a lease violation, including the power to terminate the lease. An agricultural lease of individually-owned land may provide the individual Indian landowners with similar remedies, so long as the lease also specifies the manner in which those remedies may be exercised by or on behalf of the landowners.
(b) The negotiated remedies described in paragraph (a) of this section will apply in addition to the cancellation remedy available to us under § 162.252(c) of this subpart. If the lease specifically authorizes us to exercise any negotiated remedies on behalf of the Indian landowners, the exercise of such remedies may substitute for cancellation.
(c) An agricultural lease may provide for lease disputes to be resolved in tribal court or any other court of competent jurisdiction, or through arbitration or some other 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 under § 162.252 of this subpart.
§ 162.241   Will administrative fees be charged for actions relating to agricultural leases?
(a) We will charge an administrative fee each time we approve an agricultural lease, amendment, assignment, sublease, mortgage, or related document. These fees will be paid by the tenant, assignee, or subtenant, to cover our costs in preparing or processing the documents and administering the lease.
(b) Except as provided in paragraph (c) of this section, we will charge administrative fees based on the rent payable under the lease. The fee will be 3% of the annual rent payable, including any percentage-based rent that can be reasonably estimated.
(c) The minimum administrative fee is $10.00 and the maximum administrative fee is $500.00, and any administrative fees that have been paid will be non-refundable. However, we may waive all or part of these administrative fees, in our discretion.
(d) If all or part of the expenses of the work are paid from tribal funds, the tribe may establish an additional or alternate schedule of fees.
§ 162.242   How will BIA decide whether to approve an amendment to an agricultural lease?
We will approve an agricultural lease amendment if:
(a) The required consents have been obtained from the parties to the lease under § 162.230 and any sureties; and
(b) We find the amendment to be in the best interest of the Indian landowners, under the standards set forth in § 162.213 of this subpart.
§ 162.243   How will BIA decide whether to approve an assignment or sublease under an agricultural lease?
(a) We will approve an assignment or sublease under an agricultural lease if:
(1) The required consents have been obtained from the parties to the lease under § 162.230 and the tenant's sureties;
(2) The tenant is not in violation of the lease;
(3) The assignee agrees to be bound by, or the subtenant agrees to be subordinated to, the terms of the lease; and
(4) We find no compelling reason to withhold our approval in order to protect the best interests of the Indian owners.
(b) In making the finding required by paragraph (a)(4) of this section, we will consider whether:
(1) The Indian landowners should receive any income derived by the tenant from the assignment or sublease, under the terms of the lease;
(2) The proposed use by the assignee or subtenant will require an amendment of the lease;
(3) The value of any part of the leased premises not covered by the assignment or sublease would be adversely affected; and
(4) The assignee or subtenant has bonded its performance and provided supporting documents that demonstrate that the lease or sublease will be enforceable against the assignee or subtenant, and that the assignee or subtenant will be able to perform its obligations under the lease or sublease.
§ 162.244   How will BIA decide whether to approve a leasehold mortgage under an agricultural lease?
(a) We will approve a leasehold mortgage under an agricultural lease if:
(1) The required consents have been obtained from the parties to the lease under § 162.230 and the tenant's sureties;
(2) The mortgage covers only the tenant's interest in the leased premises, and no unrelated collateral;
(3) The loan being secured by the mortgage will be used only in connection with the development or use of the leased premises, and the mortgage does not secure any unrelated debts owed by the tenant to the mortgagee; and
(4) We find no 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 tenant'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 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 tenant.
§ 162.245   When will a BIA decision to approve an amendment, assignment, sublease, or mortgage under an agricultural lease be effective?
Our decision to approve an amendment, assignment, sublease, or mortgage under an agricultural lease will be effective immediately, notwithstanding any appeal that may be filed under part 2 of this chapter. Copies of approved documents will be provided to the party requesting approval, and made available to the Indian landowners upon request.
§ 162.246   Must an amendment, assignment, sublease, or mortgage approved under an agricultural lease be recorded?
An amendment, assignment, sublease, or mortgage approved under an agricultural lease must be recorded in our Land Titles and Records Office that has jurisdiction over the leased premises. We will record the document immediately following our approval under this subpart.
§ 162.247   Will BIA notify a tenant when a rent payment is due under an agricultural lease?
We may issue bills or invoices to a tenant in advance of the dates on which rent payments are due under an agricultural lease, but the tenant's obligation to make such payments in a timely manner will not be excused if such bills or invoices are not delivered or received.
§ 162.248   What will BIA do if rent payments are not made in the time and manner required by an agricultural lease?
(a) A tenant's failure to pay rent in the time and manner required by an agricultural lease will be a violation of the lease, and a notice of violation will be issued under § 162.251 of this subpart. If the lease requires that rent payments be made to us, we will send the tenant and its sureties a notice of violation within five business days of the date on which the rent payment was due. If the lease provides for payment directly to the Indian landowners, we will send the tenant and its sureties a notice of violation within five business days of the date on which we receive actual notice of non-payment from the landowners.
(b) If a tenant fails to provide adequate proof of payment or cure the violation within the requisite time period described in § 162.251(b) of this subpart, and the amount due is not in dispute, we may immediately take action to recover the amount of the unpaid rent and any associated interest charges or late payment penalties. We may also cancel the lease under § 162.252 of this subpart, or invoke any other remedies available under the lease or applicable law, including collection on any available bond or referral of the debt to the Department of the Treasury for collection. An action to recover any unpaid amounts will not be conditioned on the prior cancellation of the lease or any further notice to the tenant, nor will such an action be precluded by a prior cancellation.
(c) Partial payments may be accepted by the Indian landowners or us, but acceptance will not operate as a waiver with respect to any amounts remaining unpaid or any other existing lease violations. Unless otherwise provided in the lease, overpayments may be credited as an advance against future rent payments, or refunded.
(d) If a personal or business check is dishonored, and a rent payment is therefore not made by the due date, the failure to make the payment in a timely manner will be a violation of the lease, and a notice of violation will be issued under § 162.251 of this subpart. Any payment made to cure such a violation, and any future payments by the same tenant, must be made by one of the alternative payment methods listed in § 162.227(b) of this subpart.
§ 162.249   Will any special fees be assessed on delinquent rent payments due under an agricultural lease?
The following special fees will be assessed if rent is not paid in the time and manner required, in addition to any interest or late payment penalties that must be paid to the Indian landowners under an agricultural lease. The following special fees will be assessed to cover administrative costs incurred by the United States in the collection of the debt:
§ 162.250   How will BIA determine whether the activities of a tenant under an agricultural lease are in compliance with the terms of the lease?
(a) Unless an agricultural lease provides otherwise, we may enter the leased premises at any reasonable time, without prior notice, to protect the interests of the Indian landowners and ensure that the tenant is in compliance with the operating requirements of the lease.
(b) If an Indian landowner notifies us that a specific lease violation has occurred, we will initiate an appropriate investigation within five business days of that notification.
§ 162.251   What will BIA do in the event of a violation under an agricultural lease?
(a) If we determine that an agricultural lease has been violated, we will send the tenant and its sureties a notice of violation within five business days of that determination. The notice of violation must be provided by certified mail, return receipt requested.
(b) Within ten business days of the receipt of a notice of violation, the tenant 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 and/or explain why we should not cancel the lease; or
(3) Request additional time to cure the violation.
§ 162.252   What will BIA do if a violation of an agricultural lease is not cured within the requisite time period?
(a) If the tenant does not cure a violation of an agricultural lease within the requisite time period, we will consult with the Indian landowners, as appropriate, and determine whether:
(1) The lease should be canceled by us under paragraph (c) of this section and §§ 162.253 through 162.254 of this subpart;
(2) We should invoke any other remedies available to us under the lease, including collecting on any available bond;
(3) The Indian landowners wish to invoke any remedies available to them under the lease; or
(4) The tenant should be granted additional time in which to cure the violation.
(b) If we decide to grant a tenant additional time in which to cure a violation, the tenant must proceed diligently to complete the necessary corrective actions within a reasonable or specified time period from the date on which the extension is granted.
(c) If we decide to cancel the lease, we will send the tenant and its sureties a cancellation letter within five business days of that decision. The cancellation letter must be sent to the tenant by certified mail, return receipt requested. We will also provide actual or constructive notice of a cancellation decision to the Indian landowners, as appropriate. The cancellation letter will:
(1) Explain the grounds for cancellation;
(2) Notify the tenant of the amount of any unpaid rent, interest charges, or late payment penalties due under the lease;
(3) Notify the tenant of its right to appeal under part 2 of this chapter, as modified by § 162.253 of this subpart, including the amount of any appeal bond that must be posted with an appeal of the cancellation decision; and
(4) Order the tenant to vacate the property within 30 days of the date of receipt of the cancellation letter, if an appeal is not filed by that time.
§ 162.253   Will BIA's regulations concerning appeal bonds apply to cancellation decisions involving agricultural leases?
(a) The appeal bond provisions in § 2.5 of part 2 of this chapter will not apply to appeals from lease cancellation decisions made under § 162.252 of this subpart. Instead, when we decide to cancel an agricultural lease, we may require that the tenant post an appeal bond with an appeal of the cancellation decision. The requirement to post an appeal bond will apply in addition to all of the other requirements in part 2 of this chapter.
(b) An appeal bond should be set in an amount necessary to protect the Indian landowners against financial losses that will likely result from the delay caused by an appeal. Appeal bond requirements will not be separately appealable, but may be contested during the appeal of the lease cancellation decision.
§ 162.254   When will a cancellation of an agricultural lease be effective?
A cancellation decision involving an agricultural lease will not be effective until 30 days after the tenant receives a cancellation letter from us. The cancellation decision will remain ineffective if the tenant files an appeal under § 162.253 of this subpart and part 2 of this chapter, unless the decision is made immediately effective under part 2. While a cancellation decision is ineffective, the tenant must continue to pay rent and comply with the other terms of the lease. If an appeal is not filed in accordance with § 162.253 of this subpart and part 2 of this chapter, the cancellation decision will be effective on the 31st day after the tenant receives the cancellation letter from us.
§ 162.255   Can BIA take emergency action if the leased premises are threatened with immediate and significant harm?
If a tenant or any other party causes or threatens to cause immediate and significant harm to the leased premises during the term of an agricultural lease, we will take appropriate emergency action. Emergency action may include trespass proceedings under part 166, subpart I, of this chapter, or judicial action seeking immediate cessation of the activity resulting in or threatening the harm. Reasonable efforts will be made to notify the Indian landowners, either before or after the emergency action is taken.
§ 162.256   What will BIA do if a tenant holds over after the expiration or cancellation of an agricultural lease?
If a tenant remains in possession after the expiration or cancellation of an agricultural lease, we will treat the unauthorized use as a trespass. Unless we have reason to believe that the tenant is engaged in negotiations with the Indian landowners to obtain a new lease, we will take action to recover possession on behalf of the Indian landowners, and pursue any additional remedies available under applicable law, including the assessment of civil penalties and costs under part 166, subpart I, of this chapter.
§ 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 permanent 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, which may include office space necessary to administer programs for housing for public purposes.
(b) Leases for other residential development (for example, single-family residential developments and multi-family developments that are not housing for public purposes) are covered under subpart D of this part.
§ 162.302   Is there a model residential lease form?
(a) 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.
(b) If a model lease form prepared by us is not used by the parties to a residential lease, we will assist the Indian landowners, upon their request, in drafting lease provisions or in using tribal lease forms that conform to the requirements of this part.
§ 162.303   Who needs a lease for housing for public purposes?
A TDHE or tribal housing authority must obtain an approved residential lease under this subpart from the Indian landowners if, under the terms of its charter, it is a legal entity independent from the tribe, regardless of whether it is owned and operated by the tribe. A TDHE or tribal housing authority does not need an approved residential lease under this subpart if the tribe has authorized the TDHE's or tribal housing authority's possession through a tribal land assignment.
§ 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.
(1) The maximum term of a lease approved under 25 U.S.C. 4211 may not exceed 50 years or may be month-to-month. The lease may provide for an initial 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.
(2) The maximum term of a lease approved under 25 U.S.C. 415(a) may not exceed 50 years (consisting of an initial term not to exceed 25 years and one renewal not to exceed 25 years), unless 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), a different initial term, renewal term, or number of renewals.
(b) For tribal land, we will defer to the tribe's determination that the lease term, including any renewal, is reasonable. For individually owned Indian land, we will review the lease term, including any renewal, to ensure it is reasonable, given the:
(1) Purpose of the lease;
(2) Type of financing; and
(3) Level of investment.
(c) Unless the lease provides otherwise, a residential lease may not be extended by holdover.
§ 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, unless the lease provides for automatic renewal;
(3) Whether Indian landowner consent to the renewal is required;
(4) That the lessee must provide notice of the renewal to the Indian landowners and any mortgagees;
(5) The additional consideration, if any, that will be due upon the exercise of the option to renew or the start of the renewal term; and
(6) Any other conditions for renewal (e.g., that the lessee not be in violation of the lease at the time of renewal).
(b) We will record any renewal of a lease in the LTRO.
§ 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 ownership of permanent improvements and the responsibility for constructing, operating, maintaining, and managing permanent improvements under § 162.315; and
(6) Payment requirements and late payment charges, including interest.
(b) Where a representative executes a lease on behalf of an Indian landowner or lessee, the lease must identify the landowner or lessee being represented and the authority under which the action is taken.
(c) All residential leases must include the following provisions:
(1) The obligations of the lessee to the Indian landowners are also enforceable by the United States, so long as the land remains in trust or restricted status;
(2) There must not be any unlawful conduct, creation of a nuisance, illegal activity, or negligent use or waste of the leased premises;
(3) The lessee must comply with all applicable laws, ordinances, rules, regulations, and other legal requirements under § 162.014;
(4) If 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 with jurisdiction to determine how to proceed and appropriate disposition;
(5) BIA has the right, at any reasonable time during the term of the lease and upon reasonable notice in accordance with § 162.364, to enter the leased premises for inspection and to ensure compliance; and
(6) BIA may, at its discretion, treat as a lease violation any failure by the lessee to cooperate with a BIA request to make appropriate records, reports, or information available for BIA inspection and duplication.
(d) Unless the lessee would be prohibited by law from doing so, the lease must also contain the following provisions:
(1) The lessee 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; and
(2) The lessee indemnifies the United States and the Indian landowners against all liabilities or costs relating to use, handling, treatment, removal, storage, transportation, or disposal of hazardous materials, or release or discharge of any hazardous material from the leased premises that occurs during the lease term, regardless of fault, with the exception that the lessee is not required to indemnify the Indian landowners for liability or cost arising from the Indian landowners' negligence or willful misconduct.
(e) We may treat any provision of a lease document that violates Federal law as a violation of the lease.
§ 162.314   May permanent improvements be made under a residential lease?
(a) The lessee may construct permanent improvements under a residential lease if the residential lease authorizes the construction and generally describes the type and location of the permanent improvements to be constructed during the lease term.
(b) The lessee must provide reasonable notice to the Indian landowners of the construction of any permanent improvements not generally described in the lease.
§ 162.315   How must a residential lease address ownership of permanent improvements?
(a) A residential lease must specify who will own any permanent improvements the lessee constructs during the lease term. In addition, the lease must indicate whether each specific permanent improvement the lessee constructs will:
(1) Remain on the leased premises upon expiration, termination, or cancellation of the lease, 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 closely as possible to their condition before construction of the permanent improvements; or
(3) Be disposed of by other specified means.
(b) A lease that requires the lessee to remove the permanent improvements must also provide the Indian landowners with an option to take possession of and title to the permanent improvements if the improvements are not removed within the specified time period.
§ 162.316   How will BIA enforce removal requirements in a residential lease?
We may take appropriate enforcement action to ensure removal of the permanent improvements and restoration of the premises at the lessee's expense:
(a) In consultation with the tribe for tribal land or, where feasible, with Indian landowners for individually owned Indian land; and
(b) Before or after expiration, termination, or cancellation of the lease.
§ 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 one or more of the following:
(1) A legal description;
(2) A survey-grade global positioning system description; or
(3) Another description prepared by a registered land surveyor that is sufficient to identify the leased premises.
(b) If the tract is fractionated, we will identify the undivided trust or restricted interests in the leased premises.
§ 162.320   How much rent must be paid under a residential lease of tribal land?
(a) A residential lease of tribal land may allow for any payment amount negotiated by the tribe, and we will defer to the tribe and not require a valuation, if:
(1) The lease is for housing for public purposes; or
(2) The tribe submits a signed certification or tribal authorization stating that it has determined the negotiated amount to be in its best interest.
(b) The tribe may request, in writing, that we determine fair market rental, in which case we will use a valuation in accordance with § 162.322. After providing the tribe with the fair market rental, we will defer to a tribe's decision to allow for any payment amount negotiated by the tribe.
(c) If the conditions in paragraph (a) or (b) of this section are not met, we will require that the lease provide for fair market rental based on a valuation in accordance with § 162.322.
§ 162.321   How much rent must be paid under a residential lease of individually owned Indian land?
(a) 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) One hundred percent of the Indian landowners execute a written waiver of the right to receive fair market rental; or
(2) We waive the requirement under paragraph (c) of this section.
(b) We will require a valuation in accordance with § 162.322, unless:
(1) One hundred percent of the Indian landowners submit to us a written request to waive the valuation requirement; or
(2) We waive the requirement under paragraph (c) of this section.
(c) If the owners of the applicable percentage of interests under § 162.012 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, as determined by a valuation, unless we waive the requirement because:
(1) The lessee is a co-owner who, as of January 4, 2013, has been residing on the tract for at least 7 years, and no other co-owner raises an objection to BIA by July 3, 2013 to the lessee's continued possession of the tract; or
(2) The tribe or lessee will construct infrastructure improvements on, or serving, the leased premises, and we determine it is in the best interest of all the landowners.
§ 162.322   How will BIA 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. We will also do this, at the request of the tribe, for tribal land.
(b) We will either:
(1) Prepare, or have prepared, 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 landowners or lessee.
(c) We will use or approve a market analysis, appraisal, or other appropriate valuation method for use only if it:
(1) Has been prepared in accordance with USPAP or a valuation method developed by the Secretary under 25 U.S.C. 2214; and
(2) Complies with Department policies regarding appraisals, including third-party appraisals.
§ 162.323   When are rental payments due under a residential lease?
(a) A residential lease must specify the dates on which payments are due.
(b) Unless the lease provides otherwise, 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.
§ 162.324   Must a residential lease specify who receives rental payments?
(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 if:
(1) The Indian landowners' trust accounts are unencumbered;
(2) There are 10 or fewer beneficial owners; and
(3) One hundred percent of the beneficial owners (including those on whose behalf we have consented) agree to receive payment directly from the lessee at the start of the lease.
(c) If the lease provides that the lessee will directly pay the Indian landowners, then:
(1) The lease must include provisions for proof of payment upon our request.
(2) When we consent on behalf of an Indian landowner, the lessee must make payment to us on behalf of that landowner.
(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 the lease provides otherwise, 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 that:
(i) The lessee must make all Indian landowners' payments to us if 100 percent of the Indian landowners agree to suspend direct pay and provide us with documentation of their agreement; and
(ii) The lessee must make an individual Indian landowner's payment to us if that individual Indian landowner who dies, is declared non compos mentis, owes a debt resulting in a trust account encumbrance, or his or her whereabouts become unknown.
§ 162.325   What form of payment is acceptable 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, our preferred method of payment is electronic funds transfer payments. We will also accept:
(1) Money orders;
(2) Personal checks;
(3) Certified checks; or
(4) Cashier's checks.
(c) We will not accept cash or foreign currency.
(d) We will accept third-party checks only from financial institutions or Federal agencies.
§ 162.326   May a residential lease provide for non-monetary or varying types of compensation?
(a) A lease may provide for the following, subject to the conditions in paragraphs (b) and (c) of this section:
(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 tribal land, we will defer to the tribe's determination that the compensation under paragraph (a) of this section is in its best interest, if either:
(1) The lease is for housing for public purposes; or
(2) The tribe submits a signed certification or tribal authorization stating that it has determined the compensation under paragraph (a) of this section to be in its best interest.
(c) For individually owned Indian land, we may approve a lease that provides for compensation under paragraph (a) of this section if we determine that it is in the best interest of the Indian landowners.
§ 162.327   Will BIA notify a lessee when a payment is due under a residential lease?
Upon request of the Indian landowners, we may issue invoices to a lessee in advance of the dates on which payments are due under a residential lease. The lessee's obligation to make these payments in a timely manner will not be excused if invoices are not issued, delivered, or received.
§ 162.328   Must a residential lease provide for rental reviews or adjustments?
(a) For a residential lease of tribal land, unless the lease provides otherwise, no periodic review of the adequacy of rent or rental adjustment is required if:
(1) The tribe states in a tribal certification or authorization that it has determined that not having rental reviews and/or adjustments is in its best interest; or
(2) The lease is for housing for public purposes.
(b) For a residential lease of individually Indian owned land, unless the lease provides otherwise, no periodic review of the adequacy of rent or rental adjustment is required if:
(1) The lease is for housing for public purposes;
(2) The term of the lease is 5 years or less;
(3) The lease provides for automatic rental adjustments; or
(4) 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; or
(ii) The lease provides for most or all rent to be paid during the first 5 years of the lease term or before the date the review would be conducted.
(c) If the conditions in paragraph (a) or (b) of this section are not met, a review of the adequacy of rent must occur at least every fifth year, in the manner specified in the lease. The lease must specify:
(1) When adjustments take effect;
(2) Who can make adjustments;
(3) What the adjustments are based on; and
(4) How to resolve disputes arising from the adjustments.
(d) When a review results in the need for adjustment of rent, the Indian landowners must consent to the adjustment in accordance with § 162.012, unless the lease provides otherwise.
§ 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 assessments associated with the use of the land, as determined by entities having jurisdiction, except as provided in § 162.017. 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. We will treat failure to make these payments as a violation of the lease.
§ 162.334   Is a performance bond required for a residential lease document?
We will not require a lessee or assignee to provide a performance bond or alternative form of security for a residential lease document.
§ 162.335   Is insurance required for a residential lease document?
We will not require a lessee or assignee to provide insurance for a residential lease document.
§§ 162.336-162.337   [Reserved]
§ 162.338   What documents are required for BIA approval of a residential lease?
A lessee or the Indian landowners must submit the following documents to us to obtain BIA approval of a residential lease:
(a) A lease executed by the Indian landowners and the lessee that meets the requirements of this part;
(b) For tribal land, a tribal authorization for the lease and, if applicable, meeting the requirements of §§ 162.320(a), 162.326(b), and 162.328(a), or a separate signed certification meeting the requirements of §§ 162.320(a), 162.326(b), and 162.328(a);
(c) A valuation, if required under § 162.320 or § 162.321;
(d) A statement from the appropriate tribal authority that the proposed use is in conformance with applicable tribal law, if required by the tribe;
(e) Reports, surveys, and site assessments as needed to facilitate compliance with applicable Federal and tribal environmental and land use requirements, including any documentation prepared under § 162.027(b);
(f) A preliminary site plan identifying the proposed location of residential development, roads, and utilities, if applicable, unless the lease is for housing for public purposes;
(g) A legal description of the land under § 162.317;
(h) If the lease is being approved under 25 U.S.C. 415, information to assist us in our evaluation of the factors in 25 U.S.C. 415(a); and
(i) If the lessee is a corporation, limited liability company, partnership, joint venture, or other legal entity, except a tribal entity, information such as organizational documents, certificates, filing records, and resolutions, that demonstrates that:
(1) The representative has authority to execute a lease;
(2) The lease will be enforceable against the lessee; and
(3) The legal entity is in good standing and authorized to conduct business in the jurisdiction where the land is located.
§ 162.339   Will BIA review a proposed residential lease before or during preparation of the NEPA review documentation?
Upon request of the Indian landowners, we will review the proposed residential lease after negotiation by the parties, before or during preparation of the NEPA review documentation and any valuation. Within 10 days of receiving the proposed lease, we will provide an acknowledgement of the terms of the lease and identify any provisions that, based on this acknowledgment review, would justify disapproval of the lease, pending results of the NEPA review and any valuation.
§ 162.340   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 applicable laws and ordinances;
(3) If the lease is being approved under 25 U.S.C. 415, 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) Upon receiving a residential lease package, we will promptly notify the parties whether the package is or is not complete. A complete package includes all the information and supporting documents required under this subpart, including but not limited to, NEPA review documentation and valuation documentation, where applicable.
(1) If the residential lease package is not complete, our letter will identify the missing information or documents required for a complete package. If we do not respond to the submission of a residential lease package, the parties may take action under § 162.363.
(2) If the residential lease package is complete, we will notify the parties of the date of receipt. Within 30 days of the receipt date, we will approve or disapprove the lease or return the package for revision.
(c) If we do not meet the deadlines in this section, then the parties may take action under § 162.363.
(d) We will provide any lease approval or disapproval and the basis for the determination, along with notification of any appeal rights under part 2 of this chapter, in writing 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.
§ 162.341   How will BIA decide whether to approve a residential lease?
(a) We will approve a residential lease unless:
(1) The required consents have not been obtained from the parties to the lease;
(2) The requirements of this subpart have not been met; or
(3) We find a compelling reason to withhold our approval in order to protect the best interests of the Indian landowners.
(b) We will defer, to the maximum extent possible, to the Indian landowners' determination that the residential lease is in their best interest.
(c) We may not unreasonably withhold approval of a lease.
§ 162.342   When will a residential lease be effective?
(a) A residential lease will be effective on the date that we approve the lease, even if an appeal is filed under part 2 of this chapter.
(b) The lease may specify a date on which the obligations between the parties to a residential lease are triggered. Such date may be before or after the approval date under paragraph (a) of this section.
§ 162.343   Must a residential lease document be recorded?
(a) Any residential lease, amendment, assignment, or leasehold mortgage must be recorded in the LTRO with jurisdiction over the leased land. A residential sublease need not be recorded.
(1) We will record the lease or other document immediately following our approval.
(2) When our approval of an assignment is not required, the parties must record the assignment in the LTRO with jurisdiction over the leased land.
(b) The tribe must record lease documents for the following types of leases in the LTRO 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.
§ 162.344   Will BIA require an appeal bond for an appeal of a decision on a residential lease document?
BIA will not require an appeal bond for an appeal of a decision on a residential lease document.
§ 162.345   May the parties amend a residential lease?
The parties may amend a residential lease by obtaining:
(a) The lessee's signature;
(b) The Indian landowners' consent under the requirements in § 162.346; and
(c) BIA approval of the amendment under §§ 162.347 and 162.348.
§ 162.346   What are the consent requirements for an amendment of a residential lease?
(a) Unless the lease provides otherwise, the lessee must notify all Indian landowners of the proposed amendment.
(b) The Indian landowners, or their representatives under § 162.013, must consent to an amendment of a residential lease in the same percentages and manner as a new residential lease under § 162.012, unless the lease:
(1) Provides that individual Indian landowners are deemed to have consented if they do not object in writing to the amendment within a specified period of time following Indian landowners' receipt of the amendment and the lease meets the requirements of paragraph (c) of this section;
(2) Authorizes one or more representatives to consent to an amendment on behalf of all Indian landowners; or
(3) Designates us as the Indian landowners' representative for the purposes of consent to an amendment.
(c) If the lease provides for deemed consent under paragraph (b)(1) of this section, it must require the parties to submit to us:
(1) A copy of the executed amendment or other documentation of any Indian landowners' actual consent;
(2) Proof of mailing of the amendment to any Indian landowners who are deemed to have consented; and
(3) Any other pertinent information for review.
(d) Unless specifically authorized in the lease, a written power of attorney, or a 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 to the Indian landowners;
(2) Increase or decrease the lease area; or
(3) Terminate or change the term of the lease.
§ 162.347   What is the approval process for an amendment of a residential lease?
(a) When we receive an amendment that meets the requirements of this subpart, we will notify the parties of the date we receive it. We have 30 days from receipt of the executed amendment, proof of required consents, and required documentation to approve or disapprove the amendment. Our determination whether to approve the amendment will be in writing and will state the basis for our approval or disapproval.
(b) If we do not send a determination within 30 days from receipt of the required documents, the amendment is deemed approved to the extent consistent with Federal law. Unless the lease provides otherwise, provisions of the amendment that are inconsistent with Federal law will be severed and unenforceable; all other provisions of the amendment will remain in force.
§ 162.348   How will BIA decide whether to approve an amendment of a residential lease?
(a) We may disapprove a residential lease amendment only if at least one of the following is true:
(1) The Indian landowners have not consented and their consent is required;
(2) The lessee's mortgagees have not consented;
(3) The lessee is in violation of the lease;
(4) The requirements of this subpart have not been met; or
(5) We find a compelling reason to withhold our approval in order to protect the best interests of the Indian landowners.
(b) We will defer, to the maximum extent possible, to the Indian landowners' determination that the amendment is in their best interest.
(c) We may not unreasonably withhold approval of an amendment.
§ 162.349   May a lessee assign a residential lease?
(a) A lessee may assign a residential lease by meeting the consent requirements in § 162.350 and obtaining our approval of the assignment under §§ 162.351 and 162.352 or by meeting the conditions in paragraph (b) of this section.
(b) The lessee may assign the lease without our approval or meeting consent requirements if:
(1) The lease is for housing for public purposes, or 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 and conditions of the lease; and
(3) The assignee agrees in writing that any transfer of the lease will be in accordance with applicable law under § 162.014.
§ 162.350   What are the consent requirements for an assignment of a residential lease?
(a) Unless the lease provides otherwise, the lessee must notify all Indian landowners of the proposed assignment.
(b) The Indian landowners, or their representatives under § 162.013, must consent to an assignment of a residential lease in the same percentages and manner as a new residential lease under § 162.012, unless the lease:
(1) Provides for assignments without further consent of the Indian landowners or with consent in specified percentages and manner;
(2) Provides that individual Indian landowners are deemed to have consented where they do not object in writing to the assignment within a specified period of time following the landowners' receipt of the assignment and the lease meets the requirements of paragraph (c) of this section;
(3) Authorizes one or more of the Indian landowners to consent on behalf of all Indian landowners; or
(4) Designates us as the Indian landowners' representative for the purposes of consenting to an assignment.
(c) If the lease provides for deemed consent under paragraph (b)(2) of this section, it must require the parties to submit to us:
(1) A copy of the executed assignment or other documentation of any Indian landowners' actual consent;
(2) Proof of mailing of the assignment to any Indian landowners who are deemed to have consented; and
(3) Any other pertinent information for us to review.
(d) The lessee must obtain the consent of the holders of any mortgages.
§ 162.351   What is the approval process for an assignment of a residential lease?
(a) When we receive an assignment that meets the requirements of this subpart, we will notify the parties of the date we receive it. If our approval is required, we have 30 days from receipt of the executed assignment, proof of required consents, and required documentation to approve or disapprove the assignment. Our determination whether to approve the assignment will be in writing and will state the basis for our approval or disapproval.
(b) If we do not meet the deadline in this section, the lessee or Indian landowners may take appropriate action under § 162.363.
§ 162.352   How will BIA decide whether to approve an assignment of a residential lease?
(a) We may disapprove an assignment of a residential lease only if at least one of the following is true:
(1) The Indian landowners have not consented, and their consent is required;
(2) The lessee's mortgagees 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 requirements of this subpart have not been met; 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 the value of any part of the leased premises not covered by the assignment would be adversely affected.
(c) We will defer, to the maximum extent possible, to the Indian landowners' determination that the assignment is in their best interest.
(d) We may not unreasonably withhold approval of an assignment.
§ 162.353   May a lessee sublease a residential lease?
(a) A lessee may sublease a residential lease by meeting the consent requirements in § 162.354 and obtaining our approval of the sublease under §§ 162.355 and 162.356, or by meeting the conditions in paragraph (b) of this section.
(b) The lessee may sublease without meeting consent requirements or obtaining BIA approval of the sublease, if:
(1) The lease provides for subleasing without meeting consent requirements or obtaining BIA approval; and
(2) The sublease does not relieve the lessee/sublessor of any liability.
§ 162.354   What are the consent requirements for a sublease of a residential lease?
(a) Unless the lease provides otherwise, the lessee must notify all Indian landowners of the proposed sublease.
(b) The Indian landowners must consent to a sublease of a residential lease in the same percentages and manner as a new residential lease under § 162.012, unless the lease:
(1) Provides that individual Indian landowners are deemed to have consented where they do not object in writing to the sublease within a specified period of time following the landowners' receipt of the sublease and the lease meets the requirements of paragraph (c) of this section;
(2) Authorizes one or more of the Indian landowners to consent on behalf of all Indian landowners; or
(3) Designates us as the Indian landowners' representative for the purposes of consenting to a sublease.
(c) If the lease provides for deemed consent under paragraph (b)(1) of this section, it must require the parties to submit to us:
(1) A copy of the executed sublease or other documentation of any landowner's actual consent;
(2) Proof of mailing of the sublease to any Indian landowners who are deemed to have consented; and
(3) Any other pertinent information for us to review.
(d) The lessee must obtain the consent of any mortgagees.
§ 162.355   What is the approval process for a sublease of a residential lease?
(a) When we receive a sublease that meets the requirements of this subpart, we will notify the parties of the date we receive it. If our approval is required, we have 30 days from receipt of the executed sublease, proof of required consents, and required documentation to approve or disapprove the sublease.
(b) If we do not send a determination within 30 days from receipt of required documents, the sublease is deemed approved to the extent consistent with Federal law. Unless the lease provides otherwise, provisions of the sublease that are inconsistent with Federal law will be severed and unenforceable; all other provisions of the sublease will remain in force.
§ 162.356   How will BIA decide whether to approve a sublease of a residential lease?
(a) We may disapprove a sublease of a residential lease only if at least one of the following is true:
(1) The Indian landowners have not consented, and their consent is required;
(2) The lessee's mortgagees have not consented;
(3) The lessee is in violation of the lease;
(4) The lessee will not remain liable under the lease;
(5) The requirements of this subpart have not been met; 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 the value of any part of the leased premises not covered by the sublease would be adversely affected.
(c) We will defer, to the maximum extent possible, to the Indian landowners' determination that the sublease is in their best interest.
(d) We may not unreasonably withhold approval of a sublease.
§ 162.357   May a lessee mortgage a residential lease?
(a) A lessee may mortgage a residential lease by meeting the consent requirements in § 162.358 and obtaining BIA approval of the leasehold mortgage under in §§ 162.359 and 162.360.
(b) Refer to § 162.349(b) for information on what happens if a sale or foreclosure under an approved mortgage of the leasehold interest occurs.
§ 162.358   What are the consent requirements for a leasehold mortgage of a residential lease?
(a) Unless the lease provides otherwise, the lessee must notify all Indian landowners of the proposed leasehold mortgage.
(b) The Indian landowners, or their representatives under § 162.013, must consent to a leasehold mortgage of a residential lease in the same percentages and manner as a new residential lease under § 162.012, unless the lease:
(1) States that landowner consent is not required for a leasehold mortgage and identifies what law would apply in case of foreclosure;
(2) Provides that individual Indian landowners are deemed to have consented where they do not object in writing to the leasehold mortgage within a specified period of time following the landowners' receipt of the leasehold mortgage and the lease meets the requirements of paragraph (c) of this section;
(3) Authorizes one or more representatives to consent to a leasehold mortgage on behalf of all Indian landowners; or
(4) Designates us as the Indian landowners' representative for the purposes of consenting to a leasehold mortgage.
(c) If the lease provides for deemed consent under paragraph (b)(2) of this section, it must require the parties to submit to us:
(1) A copy of the executed leasehold mortgage or other documentation of any Indian landowners' actual consent;
(2) Proof of mailing of the leasehold mortgage to any Indian landowners who are deemed to have consented; and
(3) Any other pertinent information for us to review.
§ 162.359   What is the approval process for a leasehold mortgage of a residential lease?
(a) When we receive leasehold mortgage that meets the requirements of this subpart, we will notify the parties of the date we receive it. We have 20 days from receipt of the executed leasehold mortgage, proof of required consents, and required documentation to approve or disapprove 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 do not meet the deadline in this section, the lessee may take appropriate action under § 162.363.
§ 162.360   How will BIA decide whether to approve a leasehold mortgage of a residential lease?
(a) We may disapprove a leasehold mortgage of a residential lease only if at least one of the following is true:
(1) The Indian landowners have not consented, and their consent is required;
(2) The requirements of this subpart have not been met; 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 may consider whether:
(1) The leasehold mortgage proceeds would be used for purposes unrelated to the leased premises; and
(2) The leasehold mortgage is limited to the leasehold.
(c) We will defer, to the maximum extent possible, to the Indian landowners' determination that the leasehold mortgage is in their best interest.
(d) We may not unreasonably withhold approval of a leasehold mortgage.
§ 162.361   When will an amendment, assignment, sublease, or leasehold mortgage of a residential lease be effective?
(a) An amendment, assignment, sublease, or leasehold mortgage of a residential lease will be effective when approved, even if an appeal is filed under part 2 of this chapter, except:
(1) If the amendment or sublease was deemed approved under § 162.347(b) or § 162.355(b), the amendment or sublease becomes effective 45 days from the date the parties mailed or delivered the document to us for our review; and
(2) An assignment that does not require our approval under § 162.349(b) or a sublease that does not require our approval under § 162.353(b) becomes effective on the effective date specified in the assignment or sublease. If the assignment or sublease does not specify the effective date, it becomes effective upon execution by the parties.
(b) We will provide copies of approved documents to the party requesting approval, to the tribe for tribal land, and upon request, to other parties to the lease document.
§ 162.362   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 the landowners of their right to appeal the decision under part 2 of this chapter.
§ 162.363   What happens if BIA does not meet a deadline for issuing a decision on a lease document?
(a) If a Superintendent does not meet a deadline for issuing a decision on a lease, assignment, or leasehold mortgage, the parties may file a written notice to compel action with the appropriate Regional Director.
(b) The Regional Director has 15 days from receiving the notice to:
(1) Issue a decision; or
(2) Order the Superintendent to issue a decision within the time set out in the order.
(c) The parties may file a written notice to compel action with the BIA Director if:
(1) The Regional Director does not meet the deadline in paragraph (b) of this section;
(2) The Superintendent does not issue a decision within the time set by the Regional Director under paragraph (b)(2) of this section; or
(3) The initial decision on the lease, assignment, or leasehold mortgage is with the Regional Director, and he or she does not meet the deadline for such decision.
(d) The BIA Director has 15 days from receiving the notice to:
(1) Issue a decision; or
(2) Order the Regional Director or Superintendent to issue a decision within the time set out in the order.
(e) If the Regional Director or Superintendent does not issue a decision within the time set out in the order under paragraph (d)(2) of this section, then the BIA Director must issue a decision within 15 days from the expiration of the time set out in the order.
(f) The parties may file an appeal from our inaction to the Interior Board of Indian Appeals if the Director does not meet the deadline in paragraph (d) or (e) of this section.
(g) The provisions of 25 CFR 2.8 do not apply to the inaction of BIA officials with respect to a decision on a lease, amendment, assignment, sublease, or leasehold mortgage under this subpart.
§ 162.364   May BIA investigate compliance with a residential lease?
(a) We may enter the leased premises at any reasonable time, upon reasonable notice, and consistent with any notice requirements under applicable tribal law and applicable lease documents, to protect the interests of the Indian landowners and ensure that the lessee is in compliance with the requirements of the lease.
(b) If an Indian landowner notifies us that a specific lease violation has occurred, we will promptly initiate an appropriate investigation.
§ 162.365   May a residential lease provide for negotiated remedies if there is 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 one or both parties with the power to terminate the lease:
(1) BIA approval of the termination is not required;
(2) The termination is effective without BIA cancellation; and
(3) The Indian landowners must notify us of the termination so that we may record it in the LTRO.
(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 § 162.012 of this part. If the lease provides one or both parties with the power to terminate the lease:
(1) BIA concurrence with the termination is required to ensure that the Indian landowners of the applicable percentage of interests have consented; and
(2) BIA will record the termination in the LTRO.
(c) The parties must notify any mortgagee of any violation that may result in termination and the 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. The landowners may request our assistance in enforcing negotiated remedies.
(e) A residential lease may provide that lease violations will be addressed by the tribe, and that lease disputes will be resolved by a tribal court, any other court of competent jurisdiction, or 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 actions or proceedings, as appropriate, in deciding whether to exercise any of the remedies available to us.
162.366   What will BIA do about a violation of a residential lease?
(a) In the absence of actions or proceedings described in § 162.365(e), or if it is not appropriate for us to defer to the actions or proceedings, we will follow the procedures in paragraphs (b), (c), and (d) of this section and, as applicable, ensure consistency with 25 U.S.C. 4137.
(b) 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 (c) of this section, we will promptly send the lessee 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) The notice of violation will advise the lessee that, within 10 business days of the receipt of a notice of violation, the lessee must:
(i) Cure the violation and notify us, and the tribe for tribal land, 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) The notice of violation may order the lessee to cease operations under the lease.
(c) 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 lessee and any mortgagee 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 notice of violation will require the lessee to provide adequate proof of payment.
(d) The lessee will continue to be responsible for the obligations in the lease until the lease expires or is terminated or cancelled.
§ 162.367   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 required 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) Following consultation with the tribe for tribal land or, where feasible, with Indian landowners for individually owned Indian land, 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 any mortgagee 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 the lessee's 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 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 landowners may pursue any available remedies under tribal law.
(e) We will ensure that any action we take is consistent with 25 U.S.C. 4137, as applicable.
§ 162.368   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 these amounts will be treated as a lease violation.
(b) We may assess the following special fees 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:
§ 162.369   How will payment rights relating to a residential lease be allocated?
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 lease, insurance policy, order, award, judgment, or other document, the Indian landowners will be entitled to receive these payments.
§ 162.370   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 not be effective if an appeal is filed unless the cancellation is made immediately effective under part 2 of this chapter. While a cancellation decision is ineffective, the lessee must continue to pay rent and comply with the other terms of the lease.
§ 162.371   What will BIA do if a lessee remains in possession after a residential lease expires or is terminated or cancelled?
If a lessee remains in possession after the expiration, termination, or cancellation of a residential lease, we may treat the unauthorized possession as a trespass under applicable law in consultation with the Indian landowners. Unless the Indian landowners of the applicable percentage of interests under § 162.012 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 a forcible entry and detainer action.
§ 162.372   Will BIA appeal bond regulations 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.
§ 162.373   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.
§ 162.374   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.
§ 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 permanent improvements thereon) on Indian land that are not covered in another subpart of this part, 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.
§ 162.402   Is there a model business lease form?
There is no model business lease form because of the need for flexibility in negotiating and writing business leases; however, we may:
(a) Provide other guidance, such as checklists and sample lease provisions, to assist in the lease negotiation process; and
(b) 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.
§ 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. The maximum term of a lease approved under 25 U.S.C. 415(a) may not exceed 50 years (consisting of an initial term not to exceed 25 years and one renewal not to exceed 25 years), unless 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), a different initial term, renewal term, or number of renewals.
(b) For tribal land, we will defer to the tribe's determination that the lease term, including any renewal, is reasonable. For individually owned Indian land, we will review the lease term, including any renewal, to ensure it is reasonable, given the:
(1) Purpose of the lease;
(2) Type of financing; and
(3) Level of investment.
(c) The lease may not be extended by holdover.
§ 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, unless the lease provides for automatic renewal;
(3) Whether Indian landowner consent to the renewal is required;
(4) That the lessee must provide notice of the renewal to the Indian landowners and any sureties and mortgagees;
(5) The additional consideration, if any, that will be due upon the exercise of the option to renew or the start of the renewal term; and
(6) Any other conditions for renewal (e.g., that the lessee not be in violation of the lease at the time of renewal).
(b) We will record any renewal of a lease in the LTRO.
§ 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 ownership of permanent improvements and the responsibility for constructing, operating, maintaining, and managing permanent improvements under § 162.415;
(6) Payment requirements and late payment charges, including interest;
(7) Due diligence requirements under § 162.417 (unless the lease is for religious, educational, recreational, cultural, or other public purposes);
(8) Insurance requirements under § 162.437; and
(9) Bonding requirements under § 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) Where a representative executes a lease on behalf of an Indian landowner or lessee, the lease must identify the landowner or lessee being represented and the authority under which the action is taken.
(c) 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) There must not be any unlawful conduct, creation of a nuisance, illegal activity, or negligent use or waste of the leased premises;
(3) The lessee must comply with all applicable laws, ordinances, rules, regulations, and other legal requirements under § 162.014;
(4) If 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 with jurisdiction over the land to determine how to proceed and appropriate disposition;
(5) BIA has the right, at any reasonable time during the term of the lease and upon reasonable notice, in accordance with § 162.464, to enter the leased premises for inspection and to ensure compliance; and
(6) BIA may, at its discretion, treat as a lease violation any failure by the lessee to cooperate with a BIA request to make appropriate records, reports, or information available for BIA inspection and duplication.
(d) Unless the lessee would be prohibited by law from doing so, the lease must also contain the following provisions:
(1) The lessee 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; and
(2) 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, with the exception that the lessee is not required to indemnify the Indian landowners for liability or cost arising from the Indian landowners' negligence or willful misconduct.
(e) We may treat any provision of a lease document that violates Federal law as a violation of the lease.
§ 162.414   May permanent improvements be made under a business lease?
The lessee may construct permanent 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 permanent improvements to be constructed by the lessee; and
(b) A general schedule for construction of the permanent improvements, including dates for commencement and completion of construction.
§ 162.415   How must a business lease address ownership of permanent improvements?
(a) A business lease must specify who will own any permanent improvements the lessee constructs during the lease term and may specify under what conditions, if any, permanent improvements the lessee constructs may be conveyed to the Indian landowners during the lease term. In addition, the lease must indicate whether each specific permanent improvement the lessee constructs will:
(1) Remain on the leased premises, upon the expiration, cancellation, or termination of the lease, 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 closely as possible to their condition before construction of the permanent improvements; or
(3) Be disposed of by other specified means.
(b) A lease that requires the lessee to remove the permanent improvements must also provide the Indian landowners with an option to take possession of and title to the permanent improvements if the improvements are not removed within the specified time period.
§ 162.416   How will BIA enforce removal requirements in a business lease?
(a) We may take appropriate enforcement action to ensure removal of the permanent improvements and restoration of the premises at the lessee's expense:
(1) In consultation with the tribe, for tribal land or, where feasible, with Indian landowners for individually owned Indian land; and
(2) Before or after expiration, termination, or cancellation of the lease.
(b) We may collect and hold the performance bond or alternative form of security until removal and restoration are completed.
§ 162.417   What requirements for due diligence must a business lease include?
(a) If permanent improvements are to be constructed, the business lease must include due diligence requirements that require the lessee to complete construction of any permanent improvements within the schedule specified in the lease or general schedule of construction, and a process for changing the schedule by mutual consent of the parties. If construction does not occur, or is not expected to be completed, within the time period specified in the lease, the lessee must provide the Indian landowners and BIA with an explanation of good cause as to the nature of any delay, the anticipated date of construction of facilities, and evidence of progress toward commencement of construction.
(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 § 162.467.
(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.
§ 162.418   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, if possible. If the land cannot be so described, the lease must include one or more of the following:
(1) A legal description;
(2) A survey-grade global positioning system description; or
(3) Another description prepared by a registered land surveyor that is sufficient to identify the leased premises.
(b) If the tract is fractionated we will identify the undivided trust or restricted interests in the leased premises.
§ 162.419   May a business lease allow compatible uses?
A business lease may provide for the Indian landowners 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 landowners will not reduce or offset the monetary compensation for the business lease.
§ 162.420   How much monetary compensation must be paid under a business lease of tribal land?
(a) A business lease of tribal land may allow for any payment amount negotiated by the tribe, and we will defer to the tribe and not require a valuation if the tribe submits a tribal authorization expressly stating that it:
(1) Has negotiated compensation satisfactory to the tribe;
(2) Waives valuation; and
(3) Has determined that accepting such negotiated compensation and waiving valuation is in its best interest.
(b) The tribe may request, in writing, that we determine fair market rental, in which case we will use a valuation in accordance with § 162.422. After providing the tribe with the fair market rental, we will defer to a tribe's decision to allow for any payment amount negotiated by the tribe.
(c) If the conditions in paragraph (a) or (b) of this section are not met, we will require that the lease provide for fair market rental based on a valuation in accordance with § 162.422.
§ 162.421   How much monetary compensation must be paid under a business lease of individually owned Indian land?
(a) 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 (b) or (c) 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.
(b) 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:
(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 immediate family, as defined in § 162.003, of an individual Indian landowner;
(ii) The lessee is a co-owner in the leased tract;
(iii) A special relationship or circumstances exist that we believe warrant approval of the lease;
(iv) The lease is for religious, educational, recreational, cultural, or other public purposes;
(v) We have waived the requirement for a valuation under paragraph (e) of this section.
(c) 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.
(d) We will require a valuation in accordance with § 162.422, unless:
(1) 100 percent of the Indian landowners submit to us a written request to waive the valuation requirement; or
(2) We waive the requirement under paragraph (e) of this section.
(e) If the owners of the applicable percentage of interests under § 162.012 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, as determined by a valuation, unless we waive the requirement because the tribe or lessee will construct infrastructure improvements on, or serving, the leased premises, and we determine it is in the best interest of all the landowners.
§ 162.422   How will BIA determine fair market rental for a business lease?
(a) We will use a market analysis, appraisal, or other appropriate valuation method 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.
(b) We will either:
(1) Prepare, or have prepared, 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 landowners or lessee.
(c) We will use or approve use of a market analysis, appraisal, or other appropriate valuation method only if it:
(1) Has been prepared in accordance with USPAP or a valuation method developed by the Secretary under 25 U.S.C. 2214; and
(2) Complies with Departmental policies regarding appraisals, including third-party appraisals.
(d) Indian landowners may use competitive bidding as a valuation method.
§ 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 the lease provides otherwise, 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.
§ 162.424   Must a business lease specify who receives monetary compensation payments?
(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 if:
(1) The Indian landowners' trust accounts are unencumbered;
(2) There are 10 or fewer beneficial owners; and
(3) One hundred percent of the beneficial owners (including those on whose behalf we have consented) agree to receive payment directly from the lessee at the start of the lease.
(c) If the lease provides that the lessee will directly pay the Indian landowners, then:
(1) The lease must include provisions for proof of payment upon our request.
(2) When we consent on behalf of an Indian landowner, the lessee must make payment to us on behalf of that landowner.
(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 the lease provides otherwise, 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 that:
(i) The lessee must make all Indian landowners' payments to us if 100 percent of the Indian landowners agree to suspend direct pay and provide us with documentation of their agreement; and
(ii) The lessee must make that individual Indian landowner's payment to us if any individual Indian landowner who dies, is declared non compos mentis, owes a debt resulting in a trust account encumbrance, or his or her whereabouts become unknown.
§ 162.425   What form of monetary compensation payment is acceptable 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, our preferred method of payment is electronic funds transfer payments. We will also accept:
(1) Money orders;
(2) Personal checks;
(3) Certified checks; or
(4) Cashier's checks.
(c) We will not accept cash or foreign currency.
(d) We will accept third-party checks only from financial institutions or Federal agencies.
§ 162.426   May the business lease provide for non-monetary or varying types of compensation?
(a) A lease may provide for the following, subject to the conditions in paragraphs (b) and (c) of this section:
(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 compensation at specific stages during the life of the lease, including but not limited to fixed annual payments during construction, payments based on income during an operational period, and bonuses.
(b) For tribal land, we will defer to the tribe's determination that the compensation under paragraph (a) of this section is in its best interest, if the tribe submits a signed certification or tribal authorization stating that it has determined the compensation under paragraph (a) of this section to be in its best interest.
(c) For individually owned land, we may approve a lease that provides for compensation under paragraph (a) of this section if we determine that it is in the best interest of the Indian landowners.
§ 162.427   Will BIA notify a lessee when a payment is due under a business lease?
Upon request of the Indian landowners, we may issue invoices to a lessee in advance of the dates on which payments are due under a business lease. The lessee's obligation to make these payments in a timely manner will not be excused if invoices are not issued, delivered, or received.
§ 162.428   Must a business lease provide for compensation reviews or adjustments?
(a) For a business lease of tribal land, unless the lease provides otherwise, no periodic review of the adequacy of compensation or adjustment is required if the tribe states in its tribal certification or authorization that it has determined that not having compensation reviews and/or adjustments is in its best interest.
(b) For a business lease of individually owned Indian land, unless the lease provides otherwise, no periodic review of the adequacy of compensation or adjustment is required if:
(1) If the term of the lease is 5 years or less;
(2) The lease provides for automatic adjustments; or
(3) 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 religious, educational, recreational, cultural, or other public purposes;
(iii) The lease provides for most or all of the compensation to be paid during the first 5 years of the lease term or before the date the review would be conducted; or
(iv) The lease provides for graduated rent or non-monetary or various types of compensation.
(c) If the conditions in paragraph (a) or (b) of this section are not met, a review of the adequacy of compensation must occur at least every fifth year, in the manner specified in the lease. The lease must specify:
(1) When adjustments take effect;
(2) Who can make adjustments;
(3) What the adjustments are based on; and
(4) How to resolve disputes arising from the adjustments.
(d) When a review results in the need for adjustment of compensation, the Indian landowners must consent to the adjustment in accordance with § 162.012, unless the lease provides otherwise.
§ 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 assessments associated with the use of the land, as determined by entities having jurisdiction, except as provided in § 162.017. 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. We will treat failure to make these payments 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 how to allocate payment of the Indian irrigation operation and maintenance charges.
§ 162.434   Must a lessee provide a performance bond for a business lease?
The lessee must provide a performance bond or alternative form of security, except as provided in paragraph (f) of this section.
(a) The performance bond or alternative form of security must be in an amount sufficient to secure the contractual obligations including:
(1) No less than:
(i) The highest annual rental specified in the lease, if compensation is paid annually; or
(ii) If the compensation is not paid annually, another amount established by BIA in consultation with the tribe for tribal land or, where feasible, with Indian landowners for individually owned Indian land;
(2) The construction of any required permanent 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 start of the lease term or some other specified condition.
(b) The performance bond or other security:
(1) Must be deposited with us and made payable only to us, and may not be modified without our approval, except as provided in paragraph (b)(2) of this section; and
(2) For tribal land, if the lease so provides, may be deposited with the tribe and made payable to the tribe, and may not be modified without the approval of the tribe.
(c) The lease must specify the conditions under which we may adjust security or performance bond requirements to reflect changing conditions, including consultation with the tribal landowner for tribal land before the adjustment.
(d) We may require that the surety provide any supporting documents needed to show that the performance bond or alternative forms of security will be enforceable, and that the surety will be able to perform the guaranteed obligations.
(e) The performance bond or other security instrument must require the surety to provide notice to us at least 60 days before canceling a performance bond or other security. This will allow us to notify the lessee of its obligation to provide a substitute performance bond or other security and require collection of the bond or security before the cancellation date. Failure to provide a substitute performance bond or security is a violation of the lease.
(f) We may waive the requirement for a performance bond or alternative form of security if either:
(1) The lease is for religious, educational, recreational, cultural, or other public purposes; or
(2) The Indian landowners request it and we determine a waiver is in the Indian landowners' best interest.
(g) For tribal land, we will defer, to the maximum extent possible, to the tribe's determination that a waiver of a performance bond or alternative form of security is in its best interest.
§ 162.435   What forms of security are acceptable under a business lease?
(a) We will accept a performance bond only 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 bonds issued by a company approved by the U.S. Department of the Treasury.
(b) We may accept an alternative form of security approved by us that provides adequate protection for the Indian landowners and us, including but not limited to an escrow agreement and assigned savings account.
(c) All forms of performance bonds or alternative security must, if applicable:
(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 or alternative security; and
(4) Be automatically renewable during the term of the lease.
(d) We will not accept cash bonds.
§ 162.436   What is the release process for a performance bond or alternative form of security under a business lease?
(a) Upon expiration, termination, or cancellation of the lease, the lessee may ask BIA in writing to release the performance bond or alternative form of security.
(b) Upon receiving a request under paragraph (a) of this section, BIA will:
(1) 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; and
(2) Release the performance bond or alternative form of security to the lessee, unless we determine that the bond or security must be redeemed to fulfill the contractual obligations.
§ 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 permanent improvements on the premises.
(a) The insurance may include property, crop, liability, and 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. For tribal land, we will defer, to the maximum extent possible, to the tribe's determination that a waiver is in its best interest.
§ 162.438   What documents are required for BIA approval of a business lease?
A lessee or the Indian landowners must submit the following documents to us to obtain BIA approval of a business lease:
(a) A lease executed by the Indian landowners and the lessee that meets the requirements of this part;
(b) For tribal land, a tribal authorization for the lease and, if applicable, meeting the requirements of §§ 162.420(a), 162.426(b), and 162.428(a), or a separate signed certification meeting the requirements of §§ 162.426(b) and 162.428(a));
(c) A valuation, if required under § 162.420 or § 162.421;
(d) Proof of insurance, if required under § 162.437;
(e) A performance bond or other security, if required under § 162.434;
(f) Statement from the appropriate tribal authority that the proposed use is in conformance with applicable tribal law, if required by the tribe;
(g) Environmental and archeological reports, surveys, and site assessments as needed to facilitate compliance with applicable Federal and tribal environmental and land use requirements, including any documentation prepared under § 162.027(b);
(h) A restoration and reclamation plan (and any subsequent modifications to the plan), if appropriate;
(i) Where the lessee is not an entity owned and operated by the tribe, documents that demonstrate the technical capability of the lessee or lessee's agent to construct, operate, maintain, and terminate the proposed project and the lessee's ability to successfully design, construct, or obtain the funding for a project similar to the proposed project, if appropriate;
(j) A preliminary plan of development that describes the type and location of any permanent improvements the lessee plans to construct and a schedule showing the tentative commencement and completion dates for those improvements, if appropriate;
(k) A legal description of the land under § 162.418;
(l) If the lease is being approved under 25 U.S.C. 415, information to assist us in our evaluation of the factors in 25 U.S.C. 415(a); and
(m) If the lessee is a corporation, limited liability company, partnership, joint venture, or other legal entity, except a tribal entity, information such as organizational documents, certificates, filing records, and resolutions, that demonstrates that:
(1) The representative has authority to execute a lease;
(2) The lease will be enforceable against the lessee; and
(3) The legal entity is in good standing and authorized to conduct business in the jurisdiction where the land is located.
§ 162.439   Will BIA review a proposed business lease before or during preparation of the NEPA review documentation?
Upon request of the Indian landowners, we will review the proposed business lease after negotiation by the parties, before or during preparation of the NEPA review documentation and any valuation. Within 60 days of receiving the proposed lease, we will provide an acknowledgement of the terms of the lease and identify any provisions that, based on this acknowledgment review, would justify disapproval of the lease, pending results of the NEPA review and any valuation.
§ 162.440   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) If the lease is being approved under 25 U.S.C. 415, 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) Upon receiving a business lease package, we will promptly notify the parties whether the package is or is not complete. A complete package includes all the information and supporting documents required under this subpart, including but not limited to, NEPA review documentation and valuation documentation, where applicable.
(1) If the business lease package is not complete, our letter will identify the missing information or documents required for a complete package. If we do not respond to the submission of a business lease package, the parties may take action under § 162.463.
(2) If the business lease package is complete, we will notify the parties of the date of our receipt. Within 60 days of the receipt date, we will approve or disapprove the lease, return the package for revision, or inform the parties in writing that we need additional review time. If we inform the parties in writing that we need additional time, then:
(i) Our letter informing the parties that we need additional review time must identify our initial concerns and invite the parties to respond within 15 days of the date of the letter; and
(ii) We have 30 days from sending the letter informing the parties that we need additional time to approve or disapprove the lease.
(c) If we do not meet the deadlines in this section, then the parties may take appropriate action under § 162.463.
(d) We will provide any lease approval or disapproval and the basis for the determination, along with notification of any appeal rights under part 2 of this chapter, in writing 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.
§ 162.441   How will BIA decide whether to approve a business lease?
(a) We will approve a business lease unless:
(1) The required consents have not been obtained from the parties to the lease;
(2) The requirements of this subpart have not been met; or
(3) We find a compelling reason to withhold our approval in order to protect the best interests of the Indian landowners.
(b) We will defer, to the maximum extent possible, to the Indian landowners' determination that the lease is in their best interest.
(c) We may not unreasonably withhold approval of a lease.
§ 162.442   When will a business lease be effective?
(a) A business lease will be effective on the date that we approve the lease, even if an appeal is filed under part 2 of this chapter.
(b) The lease may specify a date on which the obligations between the parties to the business lease are triggered. Such date may be before or after the approval date under paragraph (a) of this section.
§ 162.443   Must a business lease document be recorded?
(a) Any business lease document must be recorded in our LTRO with jurisdiction over the leased land.
(1) We will record the lease document immediately following our approval.
(2) If our approval of an assignment or sublease is not required, the parties must record the assignment or sublease in the LTRO with jurisdiction over the leased land.
(b) The tribe must record lease documents for the following types of leases in the LTRO 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.
§ 162.444   Will BIA require an appeal bond for an appeal of a decision on a business lease document?
(a) If a party appeals our decision on a lease, assignment, amendment, or sublease, then the official to whom the appeal is made may require the appellant to post an appeal bond in accordance with part 2 of this chapter. We will not require an appeal bond:
(1) For an appeal of a decision on a leasehold mortgage; or
(2) If the tribe is a party to the appeal and requests a waiver of the appeal bond.
(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.
§ 162.445   May the parties amend a business lease?
The parties may amend a business lease by obtaining:
(a) The lessee's signature;
(b) The Indian landowners' consent under the requirements in § 162.446; and
(c) BIA approval of the amendment under §§ 162.447 and 162.448.
§ 162.446   What are the consent requirements for an amendment to a business lease?
(a) Unless the lease provides otherwise, the lessee must notify all Indian landowners of the proposed amendment.
(b) The Indian landowners, or their representatives under § 162.013, must consent to an amendment of a business lease in the same percentages and manner as a new business lease under § 162.012, unless the lease:
(1) Provides that individual Indian landowners are deemed to have consented where they do not object in writing to the amendment within a specified period of time following the landowners' receipt of the amendment and the lease meets the requirements of paragraph (c) of this section;
(2) Authorizes one or more representatives to consent to an amendment on behalf of all Indian landowners; or
(3) Designates us as the Indian landowners' representative for the purposes of consenting to an amendment.
(c) If the lease provides for deemed consent under paragraph (b)(1) of this section, it must require the parties to submit to us:
(1) A copy of the executed amendment or other documentation of any Indian landowners' actual consent;
(2) Proof of mailing of the amendment to any Indian landowners who are deemed to have consented; and
(3) Any other pertinent information for us to review.
(d) Unless specifically authorized in the lease, a written power of attorney, or a 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 to the Indian landowners;
(2) Increase or decrease the lease area;
(3) Terminate or change the term of the lease; or
(4) Modify the dispute resolution procedures.
§ 162.447   What is the approval process for an amendment to a business lease?
(a) When we receive an amendment that meets the requirements of this subpart, we will notify the parties of the date we receive it. We have 30 days from receipt of the executed amendment, proof of required consents, and required documentation to approve or disapprove the amendment or inform the parties in writing that we need additional review time. Our determination whether to approve the amendment will be in writing and will state the basis for our approval or disapproval.
(b) Our letter informing the parties that we need additional review time must identify our initial concerns and invite the parties to respond within 15 days of the date of the letter. We have 30 days from sending the letter informing the parties that we need additional time to approve or disapprove the amendment.
(c) If we do not meet the deadline in paragraph (a) or this section, or paragraph (b) of this section if applicable, the amendment is deemed approved to the extent consistent with Federal law. Unless the lease provides otherwise, provisions of the amendment that are inconsistent with Federal law will be severed and unenforceable; all other provisions of the amendment will remain in force.
§ 162.448   How will BIA decide whether to approve an amendment to a business lease?
(a) We may disapprove a business lease amendment only if at least one of the following is true:
(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 requirements of this subpart have not been met; or
(5) We find a compelling reason to withhold our approval in order to protect the best interests of the Indian landowners.
(b) We will defer, to the maximum extent possible to the Indian landowners' determination that the amendment is in their best interest.
(c) We may not unreasonably withhold approval of an amendment.