Title 25—Indians--Volume 1
PART 162—LEASES AND PERMITS
§ 162.449   May a lessee assign a business lease?
(a) A lessee may assign a business lease by meeting the consent requirements in § 162.450 and obtaining our approval of the assignment under §§ 162.451 and 162.452, or by meeting the conditions in paragraphs (b) or (c) of this section.
(b) Where provided in the lease, the lessee may assign the lease to the following without meeting consent requirements or obtaining BIA approval of the assignment, as long as the lessee notifies BIA of the assignment within 30 days after it is executed:
(1) Not more than three distinct legal entities specified in the lease; or
(2) The lessee's wholly owned subsidiaries.
(c) The lessee may assign the lease without our approval or meeting consent requirements if:
(1) The assignee is a leasehold mortgagee or its designee, acquiring the lease either through foreclosure or by conveyance;
(2) The assignee agrees in writing to assume all of the obligations 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.
§ 162.450   What are the consent requirements for an assignment of a business 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 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) The lessee must obtain the consent of the holders of any bonds or mortgages.
§ 162.451   What is the approval process for an assignment of a business 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 § 162.463.
§ 162.452   How will BIA decide whether to approve an assignment of a business lease?
(a) We may disapprove an assignment of a business 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 or sureties have not consented;
(3) The lessee is in violation of the lease;
(4) The assignee does not agree to be bound by the terms of the lease;
(5) The 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:
(1) The value of any part of the leased premises not covered by the assignment would be adversely affected; and
(2) If a performance bond is required, the assignee has posted the bond or security and provided supporting documents that demonstrate that:
(i) The lease will be enforceable against the assignee; and
(ii) The assignee will be able to perform its obligations under the lease or assignment.
(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.
§ 162.453   May a lessee sublease a business lease?
(a) A lessee may sublease a business lease by meeting the consent requirements in § 162.454 and obtaining our approval of the sublease under §§ 162.455 and 162.456, or by meeting the conditions in paragraph (b) of this section.
(b) Where the sublease is part of a commercial development or residential development, the lessee may sublease without meeting consent requirements or obtaining BIA approval of the sublease, if:
(1) The lease provides for subleasing without meeting consent requirements or obtaining BIA approval;
(2) The sublease does not relieve the lessee/sublessor of any liability; and
(3) The parties provide BIA with a copy of the sublease within 30 days after it is executed.
§ 162.454   What are the consent requirements for a sublease of a business 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 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 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 representatives to consent to a sublease 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 Indian landowners' 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.
§ 162.455   What is the approval process for a sublease of a business 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 or inform the parties in writing that we need additional review time. Our determination whether to approve the sublease 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 sublease.
(c) If we do not meet the deadline in paragraph (a) of this section, or paragraph (b) of this section if applicable, 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.
§ 162.456   How will BIA decide whether to approve a sublease of a business lease?
(a) We may disapprove a sublease of a business 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 or sureties have not consented;
(3) The lessee is in violation of the lease;
(4) The lessee will not remain liable under the lease;
(5) The 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.
§ 162.457   May a lessee mortgage a business lease?
(a) A lessee may mortgage a business lease by meeting the consent requirements in § 162.458 and obtaining our approval of the leasehold mortgage under §§ 162.459 and 162.460.
(b) Refer to § 162.449(c) for information on what happens if a sale or foreclosure under an approved mortgage of the leasehold interest occurs.
§ 162.458   What are the consent requirements for a leasehold mortgage of a business 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 business lease in the same percentages and manner as a new business 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.
§ 162.459   What is the approval process for a leasehold mortgage of a business lease?
(a) When we receive a 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 § 162.463.
§ 162.460   How will BIA decide whether to approve a leasehold mortgage of a business lease?
(a) We may disapprove a leasehold mortgage of a business 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 or sureties have not consented;
(3) The requirements of this subpart have not been met; or
(4) We find a compelling reason to withhold our approval in order to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(4) of this section, we may consider whether:
(1) The 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.
§ 162.461   When will an amendment, assignment, sublease, or leasehold mortgage of a business lease be effective?
(a) An amendment, assignment, sublease, or leasehold mortgage of a business 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 § 162.447(c) or § 162.455(c), the amendment or sublease becomes effective 45 days from the date the parties mailed or delivered the document to us for our review or, if we sent a letter informing the parties that we need additional time to approve or disapprove the lease, the amendment or sublease becomes effective 45 days from the date of the letter informing the parties that we need additional time to approve or disapprove the lease; and
(2) An assignment that does not require our approval under § 162.449(b) or § 162.449(c) or a sublease that does not require our approval under § 152.453(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.
§ 162.462   What happens if BIA disapproves an amendment, assignment, sublease, or leasehold mortgage of a business lease?
If we disapprove an amendment, assignment, sublease, or leasehold mortgage of a business lease, we will notify the parties immediately and advise the landowners of their right to appeal the decision under part 2 of this chapter.
§ 162.463   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), 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.
§ 162.464   May BIA investigate compliance with a business 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 to determine if 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.
§ 162.465   May a business lease provide for negotiated remedies if there is a violation?
(a) A business lease of tribal land may provide either or both parties with negotiated remedies in the event of a lease violation, including, but not 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 business lease of individually owned Indian land may provide either or both parties with negotiated remedies, so long as the lease also specifies the manner in which those remedies may be exercised by or on behalf of the 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 surety or mortgagee of any violation that may result in termination and the termination of a business lease.
(d) Negotiated remedies may apply in addition to, or instead of, the cancellation remedy available to us, as specified in the lease. The landowners may request our assistance in enforcing negotiated remedies.
(e) A business lease may provide that lease violations will be addressed by a 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.
§ 162.466   What will BIA do about a violation of a business lease?
(a) In the absence of actions or proceedings described in § 162.465(e), or if it is not appropriate for us to defer to the actions or proceedings, we will follow the procedures in paragraphs (b) and (c) of this section.
(b) If we determine there has been a violation of the conditions of a business lease, other than a violation of payment provisions covered by paragraph (c) of this section, we will promptly send the lessee and any surety and 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 compensation in the time and manner required by a business lease is a violation of the lease, and we will issue a notice of violation in accordance with this paragraph.
(1) We will send the lessees and any surety and 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 payments be made to us; or
(ii) Promptly following the date on which we receive actual notice of non-payment from the Indian landowners, if the lease provides for payment directly to the Indian landowners.
(2) We will send a copy of the notice of violation to the tribe for tribal land, or provide constructive notice to the Indian landowners for individually owned Indian land.
(3) The notice of violation will require the lessee to provide adequate proof of payment.
(d) The lessee and its sureties will continue to be responsible for the obligations in the lease until the lease expires, or is terminated or cancelled.
§ 162.467   What will BIA do if the lessee does not cure a violation of a business lease on time?
(a) If the lessee does not cure a violation of a business lease within the 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 compensation, referral of the debt to the Department of the Treasury for collection; or
(4) The lessee should be granted additional time in which to cure the violation.
(b) 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 compensation and any associated late payment charges.
(1) We do not have to cancel the lease or give any further notice to the lessee before taking action to recover unpaid compensation.
(2) We may still take action to recover any unpaid compensation if we cancel the lease.
(c) If we decide to cancel the lease, we will send the lessee and any surety and 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 compensation 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, including the possibility that the official to whom the appeal is made may require the lessee to post an appeal bond;
(4) Order the lessee to vacate the property within 31 days of the date of receipt of the cancellation letter, if an appeal is not filed by that time; and
(5) 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.
§ 162.468   Will late payment charges or special fees apply to delinquent payments due under a business lease?
(a) Late payment charges will apply as specified in the lease. The failure to pay 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 compensation is not paid in the time and manner required, in addition to the late payment charges that must be paid to the Indian landowners under the lease:
§ 162.469   How will payment rights relating to a business lease be allocated?
The business lease may allocate rights to payment for insurance proceeds, trespass damages, condemnation awards, settlement funds, and other payments between the Indian landowners and the lessee. If not specified in the lease, insurance policy, order, award, judgment, or other document, the Indian landowners or lessees will be entitled to receive these payments.
§ 162.470   When will a cancellation of a business lease be effective?
(a) A cancellation involving a business lease will not be effective until 31 days after the lessee receives a cancellation letter from us, or 41 days from the date we mailed the letter, whichever is earlier.
(b) The cancellation decision will 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 compensation and comply with the other terms of the lease.
§ 162.471   What will BIA do if a lessee remains in possession after a business lease expires or is terminated or cancelled?
If a lessee remains in possession after the expiration, termination, or cancellation of a business 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.
§ 162.472   Will BIA appeal bond regulations apply to cancellation decisions involving business leases?
(a) Except as provided in paragraph (b) of this section, the appeal bond provisions in part 2 of this chapter will apply to appeals from lease cancellation decisions
(b) The lessee may not appeal the appeal bond decision. The lessee may, however, request that the official to whom the appeal is made reconsider the appeal bond decision, based on extraordinary circumstances. Any reconsideration decision is final for the Department.
§ 162.473   When will BIA issue a decision on an appeal from a business leasing decision?
BIA will issue a decision on an appeal from a business leasing decision within 60 days of receipt of all pleadings.
§ 162.474   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.
§ 162.501   What types of leases does this subpart cover?
(a) This subpart covers:
(1) Wind energy evaluation leases (WEELs), which are short-term leases that authorize possession of Indian land for the purpose of installing, operating, and maintaining instrumentation, and associated infrastructure, such as meteorological towers, to evaluate wind resources for electricity generation; and
(2) Wind and solar resource (WSR) leases, which are leases that authorize possession of Indian land for the purpose of installing, operating, and maintaining instrumentation, facilities, and associated infrastructure, such as wind turbines and solar panels, to harness wind and/or solar energy to generate and supply electricity:
(i) For resale on a for-profit or non-profit basis;
(ii) To a utility grid serving the public generally; or
(iii) To users within the local community (e.g., on and adjacent to a reservation).
(b) If the generation of electricity is solely to support a use approved under subpart B, Agricultural Leases; subpart C, Residential Leases; or subpart D Business Leases (including religious, educational, recreational, cultural, or other public purposes), for the same parcel of land, then the installation, operation, and maintenance of instrumentation, facilities, and associated infrastructure are governed by subpart B, C, or D, as appropriate.
§ 162.502   Who must obtain a WEEL or WSR lease?
(a) Anyone seeking to possess Indian land to conduct activities associated with the evaluation of wind resources must obtain a WEEL, except that a WEEL is not required if use or possession of the Indian land to conduct wind energy evaluation activities is authorized:
(1) Under § 162.005(b);
(2) By a permit from the Indian landowners under § 162.007; or
(3) By a tribe on its land under 25 U.S.C. 81.
(b) Except as provided in §§ 162.005(b), 162.501, and paragraph (c) of this section, anyone seeking to possess Indian land to conduct activities associated with the development of wind and/or solar resources must obtain a WSR lease.
(c) A tribe that conducts wind and solar resource activities on its tribal land does not need a WEEL or WSR under this subpart.
§ 162.503   Is there a model WEEL or WSR lease?
There is no model WEEL or WSR lease because of the need for flexibility in negotiating and writing WEELs and WSR leases; however, we may:
(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.
§ 162.511   What is the purpose of a WEEL?
A WEEL is a short-term lease that allows the lessee to possess trust or restricted lands for the purpose of evaluating wind resources. The lessee may use information collected under the WEEL to assess the potential for wind energy development, and determine future placement and type of wind energy technology to use in developing the energy resource potential of the leased area.
§ 162.512   How long may the term of a WEEL run?
(a) A WEEL must provide for a definite term, state if there is an option to renew and if so, provide for a definite term for the renewal period. WEELs are for project evaluation purposes, and therefore may have:
(1) An initial term that is no longer than 3 years; and
(2) One renewal period not to exceed 3 years.
(b) The exercise of the option to renew must be in writing and the WEEL must specify:
(1) The time and manner in which the option must be exercised or is automatically effective;
(2) That confirmation of the renewal will be submitted to us, unless the WEEL provides for automatic renewal; and
(3) Additional consideration, if any, that will be due upon the exercise of the option to renew or the start of the renewal term.
§ 162.513   Are there mandatory provisions a WEEL must contain?
(a) All WEELs must identify:
(1) The tract or parcel of land being leased;
(2) The purpose of the WEEL and authorized uses of the leased premises;
(3) The parties to the WEEL;
(4) The term of the WEEL;
(5) The ownership of permanent improvements and the responsibility for constructing, operating, maintaining, and managing permanent improvements, under § 162.515;
(6) Payment requirements and late payment charges, including interest;
(7) Due diligence requirements, under § 162.517; and
(8) Insurance requirements, under § 162.527.
(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 WEELs 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 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 § 162.589, to enter the leased premises for inspection; 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;
(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.
§ 162.514   May permanent improvements be made under a WEEL?
(a) A WEEL anticipates the installation of facilities and associated infrastructure of a size and magnitude necessary for evaluation of wind resource capacity and potential effects of development. These facilities and associated infrastructure are considered permanent improvements. An equipment installation plan must be submitted with the lease under § 162.528(g).
(b) If any of the following changes are made to the equipment installation plan, the Indian landowners must approve the revised plan and the lessee must provide a copy of the revised plan to BIA:
(1) Location of permanent improvements;
(2) Type of permanent improvements; or
(3) Delay of 90 days or more in any phase of development.
§ 162.515   How must a WEEL address ownership of permanent improvements?
(a) A WEEL must specify who will own any permanent improvements the lessee installs during the lease term. In addition, the WEEL must indicate whether any permanent improvements the lessee installs:
(1) Will remain on the premises upon expiration, termination, or cancellation of the lease whether or not the WEEL is followed by a WSR lease, in a condition satisfactory to the Indian landowners;
(2) May be conveyed to the Indian landowners during the WEEL term and under what conditions the permanent improvements may be conveyed;
(3) Will be removed within a time period specified in the WEEL, at the lessee's expense, with the leased premises to be restored as closely as possible to their condition before installation of the permanent improvements; or
(4) Will be disposed of by other specified means.
(b) A WEEL that requires the lessee to remove the permanent improvements must also provide the Indian landowners with an option to take possession and title to the permanent improvements if the improvements are not removed within the specified time period.
§ 162.516   How will BIA enforce removal requirements in a WEEL?
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) After termination, cancellation, or expiration of the WEEL.
§ 162.517   What requirements for due diligence must a WEEL include?
(a) A WEEL must include due diligence requirements that require the lessee to:
(1) Install testing and monitoring facilities within 12 months after the effective date of the WEEL or other period designated in the WEEL and consistent with the plan of development; and
(2) If installation does not occur, or is not expected to be completed, within the time period specified in paragraph (a)(1) of this section, provide the Indian landowners and BIA with an explanation of good cause for any delay, the anticipated date of installation of facilities, and evidence of progress toward installing or completing testing and monitoring facilities.
(b) Failure of the lessee to comply with the due diligence requirements of the WEEL is a violation of the WEEL and may lead to:
(1) Cancellation of the WEEL under § 162.592; and
(2) Application of the requirement that the lessee transfer ownership of energy resource information collected under the WEEL to the Indian landowners under § 162.520.
§ 162.518   How must a WEEL describe the land?
(a) A WEEL 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.
§ 162.519   May a WEEL allow for compatible uses by the Indian landowner?
The WEEL may provide for the Indian landowners to use, or authorize others to use, the leased premises for other noncompeting uses compatible with the purpose of the WEEL. This may include the right to lease the premises for other compatible purposes. Any such use by the Indian landowners will not reduce or offset the monetary compensation for the WEEL.
§ 162.520   Who owns the energy resource information obtained under the WEEL?
(a) The WEEL must specify the ownership of any energy resource information the lessee obtains during the WEEL term.
(b) Unless otherwise specified in the WEEL, the energy resource information the lessee obtains through the leased activity becomes the property of Indian landowners at the expiration, termination, or cancellation of the WEEL or upon failure by the lessee to diligently install testing and monitoring facilities on the leased premises in accordance with § 162.517.
(c) BIA will keep confidential any information it is provided that is marked confidential or proprietary and that is exempt from public release, to the extent allowed by law.
§ 162.521   May a lessee incorporate its WEEL analyses into its WSR lease analyses?
Any analyses a lessee uses to bring a WEEL activity into compliance with applicable laws, ordinances, rules, regulations under § 162.014 and any other legal requirements may be incorporated by reference, as appropriate, into the analyses of a proposed WSR lease.
§ 162.522   May a WEEL contain an option for the lessee to enter into a WSR lease?
(a) A WEEL may provide for an option period following the expiration of the WEEL term during which the lessee and the Indian landowners may enter into a WSR lease.
(b) Our approval of a WEEL that contains an option to enter into a WSR lease does not guarantee or imply our approval of any WSR lease.
§ 162.523   How much compensation must be paid under a WEEL?
(a) The WEEL must state how much compensation will be paid.
(b) A WEEL must specify the date on which compensation will be due.
(c) Failure to make timely payments is a violation of the WEEL and may lead to cancellation of the WEEL.
(d) The lease compensation requirements of §§ 162.552 through 162.558 also apply to WEELs.
§ 162.524   Will BIA require a valuation for a WEEL?
We will not require a valuation for a WEEL.
§ 162.525   Must a lessee provide a performance bond for a WEEL?
We will not require the lessee to provide a performance bond or alternative form of security for a WEEL.
§ 162.526   [Reserved]
§ 162.527   Must a lessee provide insurance for a WEEL?
Except as provided in paragraph (d) of this section, a lessee must provide insurance necessary to protect the interests of Indian landowners and in the amount sufficient to protect all insurable permanent improvements on the leased 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) Lease insurance may be increased and extended for use as the required WSR lease insurance.
(d) We may waive the requirement for insurance upon the request of the Indian landowner, if a waiver is in the best interest of the Indian landowner, including if the lease is for less than fair market rental or nominal compensation. For tribal land, we will defer, to the maximum extent possible, to the tribe's determination that a waiver is in its best interest.
§ 162.528   What documents are required for BIA approval of a WEEL?
A lessee or the Indian landowners must submit the following documents to us to obtain BIA approval of a WEEL:
(a) A WEEL executed by the Indian landowners and the lessee that meets the requirements of this part;
(b) For tribal land, a tribal authorization for the WEEL;
(c) Proof of insurance, as required by § 162.527;
(d) Statement from the appropriate tribal authority that the proposed use is in conformance with applicable tribal law, if required by the tribe;
(e) 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);
(f) An equipment installation plan;
(g) A restoration and reclamation plan (and any subsequent modifications to the plan);
(h) 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;
(i) A legal description of the land under § 162.518;
(j) 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
(k) 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.
§ 162.529   Will BIA review a proposed WEEL before or during preparation of the NEPA review documentation?
Upon request of the Indian landowners, we will review the proposed WEEL after negotiation by the parties, before or during preparation of the NEPA review documentation. Within 10 days of receiving the proposed WEEL, 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.
§ 162.530   What is the approval process for a WEEL?
(a) Before we approve a WEEL, we must determine that the WEEL is in the best interest of the Indian landowners. In making that determination, we will:
(1) Review the WEEL and supporting documents;
(2) Identify potential environmental impacts and ensure compliance with all applicable environmental laws, land use laws, and ordinances;
(3) 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 the WEEL 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 for a WEEL, including but not limited to, NEPA review documentation, where applicable.
(1) If the WEEL 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 WEEL package, the parties may take action under § 162.588.
(2) If the WEEL package is complete, we will notify the parties of the date we receive the complete package, and, within 20 days of the date of receipt of the package at the appropriate BIA office, approve or disapprove the WEEL or return the package for revision.
(c) If we do not meet the deadline in this section, then the parties may take appropriate action under § 162.588.
(d) We will provide any WEEL approval determination and the basis for the determination, along with notification of appeal rights under part 2 of this chapter, in writing to the parties to the WEEL.
(e) We will provide any WEEL disapproval determination and the basis for the determination, along with notification of rights to an informal conference, in writing to the parties. Within 30 days of receipt of the disapproval determination, the parties may request an informal conference with the official who issued the determination. Within 30 days of receiving this request, the official must hold the informal conference with the parties. Within 10 days of the informal conference, the official must issue a decision and the basis for the decision, along with a notification of appeal rights under part 2 of this chapter, in writing to the parties to the WEEL.
(f) We will provide the approved WEEL on tribal land to the lessee and provide a copy to the tribe. We will provide the approved WEEL on individually owned Indian land to the lessee, and make copies available to the Indian landowners upon written request.
§ 162.531   How will BIA decide whether to approve a WEEL?
(a) We will approve a WEEL unless:
(1) The required consents have not been obtained from the parties to the WEEL;
(2) The requirements applicable to WEELs 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 WEEL is in their best interest.
(c) We may not unreasonably withhold approval of a WEEL.
§ 162.532   When will a WEEL be effective?
(a) A WEEL will be effective on the date on which we approve the WEEL, even if an appeal is filed under part 2 of this chapter.
(b) The WEEL may specify a date on which the obligations between the parties to a WEEL are triggered. Such date may be before or after the approval date under paragraph (a) of this section.
(c) WEEL lease documents not requiring our approval are effective upon execution by the parties, or on the effective date specified in the lease document. If the WEEL lease document does not specify an effective date, it becomes effective upon execution by the parties.
§ 162.533   Must a WEEL lease document be recorded?
(a) Any WEEL 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 tribal lands, even though BIA approval is not required:
(1) Leases of tribal land that a corporate entity leases to a third party under 25 U.S.C. 477; and
(2) Leases of tribal land under a special act of Congress authorizing leases without our approval.
§ 162.534   May the parties amend, assign, sublease, or mortgage a WEEL?
The parties may amend, assign, sublease, or mortgage a WEEL by following the procedures and requirements for amending, assigning, subleasing, or mortgaging a WSR lease.
§ 162.535   What effectiveness, compliance, and enforcement provisions apply to WEELs?
(a) The provisions at § 162.586 apply to WEEL lease documents.
(b) The provisions at §§ 162.587 through 162.589 and 162.591 through 162.599 apply to WEELs, except that any references to § 162.590 will apply instead to § 162.536.
§ 162.536   Under what circumstances may a WEEL be terminated?
A WEEL must state whether, and under what conditions, the Indian landowners may terminate the WEEL.
§ 162.537   [Reserved]
§ 162.538   What is the purpose of a WSR lease?
A WSR lease authorizes a lessee to possess Indian land to conduct activities related to the installation, operation, and maintenance of wind and/or solar energy resource development projects. Activities include installing instrumentation facilities and infrastructure associated with the generation, transmission, and storage of electricity and other related activities. Leases for biomass or waste-to-energy purposes are governed by subpart D of this part.
§ 162.539   Must I obtain a WEEL before obtaining a WSR lease?
You may enter into a WSR lease without a WEEL. While you may enter into a lease as a direct result of energy resource information gathered from a WEEL activity, obtaining a WEEL is not a precondition to entering into a WSR lease.
§ 162.540   How long may the term of a WSR lease run?
(a) A WSR lease must provide for a definite lease term, state if there is an option to renew, and if so, provide for a definite term for the renewal period. 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.
§ 162.541   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.
§ 162.542   Are there mandatory provisions a WSR lease must contain?
(a) All WSR leases must identify:
(1) The tract or parcel of land being leased;
(2) The purpose of the lease and authorized uses of the leased premises;
(3) The parties to the lease;
(4) The term of the lease;
(5) The ownership of permanent improvements and the responsibility for constructing, operating, maintaining, and managing, WSR equipment, roads, transmission lines and related facilities under § 162.543;
(6) Who is responsible for evaluating the leased premises for suitability; purchasing, installing, operating, and maintaining WSR equipment; negotiating power purchase agreements; and transmission;
(7) Payment requirements and late payment charges, including interest;
(8) Due diligence requirements, under § 162.546;
(9) Insurance requirements, under § 162.562; and
(10) Bonding requirements under § 162.559. 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 such action is taken.
(c) All WSR leases must include the following provisions:
(1) The obligations of the lessee and its sureties to the Indian landowners are also enforceable by the United States, so long as the land remains in trust or restricted status;
(2) 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 the lease, all activity in the immediate vicinity of the properties, resources, remains, or items will cease and the lessee will contact BIA and the tribe 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 § 162.589, 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.
§ 162.543   May permanent improvements be made under a WSR lease?
(a) A WSR lease must provide for the installation of a facility and associated infrastructure of a size and magnitude necessary for the generation and delivery of electricity, in accordance with § 162.019. These facilities and associated infrastructure are considered permanent improvements. A resource development plan must be submitted for approval with the lease under § 162.563(h).
(b) If the parties agree to any of the following changes to the resource development plan after lease approval, they must submit the revised plan to BIA for the file:
(1) Location of permanent improvements;
(2) Type of permanent improvements; or
(3) Delay of 90 days or more in any phase of development.
§ 162.544   How must a WSR lease address ownership of permanent improvements?
(a) A WSR lease must specify who will own any permanent improvements the lessee installs 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 installs will:
(1) Remain on the leased premises upon the 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 installation 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.
§ 162.545   How will BIA enforce removal requirements in a WSR 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 until removal and restoration are completed.
§ 162.546   What requirements for due diligence must a WSR lease include?
(a) A WSR lease must include due diligence requirements that require the lessee to:
(1) Commence installation of energy facilities within 2 years after the effective date of the lease or consistent with a timeframe in the resource development plan;
(2) If installation does not occur, or is not expected to be completed, within the time period specified in paragraph (a)(1) of this section, provide the Indian landowners and BIA with an explanation of good cause as to the nature of any delay, the anticipated date of installation of facilities, and evidence of progress toward commencement of installation;
(3) Maintain all on-site electrical generation equipment and facilities and related infrastructure in accordance with the design standards in the resource development plan; and
(4) Repair, place into service, or remove from the site within a time period specified in the lease any idle, improperly functioning, or abandoned equipment or facilities that have been inoperative for a continuous period specified in the lease (unless the equipment or facilities were idle as a result of planned suspension of operations, for example, for grid operations or during bird migration season).
(b) Failure of the lessee to comply with the due diligence requirements of the lease is a violation of the lease and may lead to cancellation of the lease under § 162.592.
§ 162.547   How must a WSR lease describe the land?
(a) A WSR lease must describe the leased premises by reference to a private or public 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.
§ 162.548   May a WSR lease allow compatible uses?
The 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 WSR lease and consistent with the terms of the WSR lease. This may include the right to lease the premises for other compatible purposes. Any such use or authorization by the Indian landowners will not reduce or offset the monetary compensation for the WSR lease.
§ 162.549   How much monetary compensation must be paid under a WSR lease of tribal land?
(a) A WSR lease of tribal land may allow for any payment 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 § 162.551. 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 § 162.551.
§ 162.550   How much monetary compensation must be paid under a WSR lease of individually owned Indian land?
(a) A WSR lease of individually owned Indian land must require payment of not less than fair market rental before any adjustments, based on a fixed amount, a percentage of the projected gross income, megawatt capacity fee, or some other method, unless paragraphs (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 Indian landowner;
(ii) The lessee is a co-owner of the leased tract;
(iii) A special relationship or circumstances exist that we believe warrant approval of the lease;
(iv) The lease is for public purposes; or
(v) We have waived the requirement for a valuation under paragraph (e) of this section.
(c) We may approve a lease that provides for the payment of less than a fair market rental during the periods before the generation and transmission of electricity begins, if we determine it is in the Indian landowners' best interest. The lease must specify the amount of the compensation and the applicable periods.
(d) We will require a valuation in accordance with § 162.422, unless:
(1) 100 percent of the landowners submit to us a written request to waive the valuation requirement; or
(2) We waive the requirement under paragraph (e) of this section; or
(3) We determine it is in the best interest of the Indian landowners to accept an economic analysis in lieu of an appraisal and:
(i) The Indian landowners submit an economic analysis that is approved by the Office of Indian Energy & Economic Development (IEED); or
(ii) IEED prepares an economic analysis at the request of the Indian landowners.
(e) If the owners of the applicable percentage of interests under § 162.011 of this part grant a WSR lease on behalf of all of the Indian landowners of a fractionated tract, the lease must provide that the non-consenting Indian landowners, and those on whose behalf we have consented, receive a fair market rental, 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.
§ 162.551   How will BIA determine fair market rental for a WSR lease?
(a) We will use a market analysis, appraisal, or other appropriate valuation method to determine the fair market rental before we approve a WSR lease of individually owned Indian land or, at the request of the tribe, for tribal land.
(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 Department policies regarding appraisals, including third-party appraisals.
(d) Indian landowners may use competitive bidding as a valuation method.
§ 162.552   When are monetary compensation payments due under a WSR lease?
(a) A WSR lease must specify the dates on which all payments are due.
(b) Unless 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.
§ 162.553   Must a WSR lease specify who receives monetary compensation payments?
(a) A WSR lease must specify whether the lessee will make payments directly to the Indian landowners (direct pay) or to us on their behalf.
(b) The lessee may make payments directly to the Indian landowners 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 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.
§ 162.554   What form of monetary compensation payment is acceptable under a WSR lease?
(a) When payments are made directly to Indian landowners, the form of payment must be acceptable to the Indian landowners.
(b) When payments are made to us, 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.
§ 162.555   May a WSR lease provide for non-monetary or varying types of compensation?
(a) A WSR 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 consideration at specific stages during the life of the lease, including but not limited to fixed annual payments during installation, payments based on income during an operational period, and bonuses.
(b) For tribal land, we will defer to the tribe's determination that the compensation in 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 in 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.
§ 162.556   Will BIA notify a lessee when a payment is due under a WSR 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 WSR lease. The lessee's obligation to make these payments in a timely manner will not be excused if invoices are not delivered or received.
§ 162.557   Must a WSR lease provide for compensation reviews or adjustments?
(a) For a WSR 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 reviews and/or adjustments is in its best interest.
(b) For a WSR 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 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.
§ 162.558   What other types of payments are required under a WSR 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, such as grazing, the lessees may agree among themselves how to allocate payment of the operation and maintenance charges.
§ 162.559   Must a lessee provide a performance bond for a WSR 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 the 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 installation 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 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 forms of security if:
(1) The lease is for 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 tribe's determination that a waiver of the performance bond or alternative form of security is in its best interest, to the maximum extent possible.
§ 162.560   What forms of security are acceptable under a WSR 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 terms of 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.
§ 162.561   What is the release process for a performance bond or alternative form of security under a WSR lease?
(a) Upon expiration, termination, or cancellation of the lease, the lessee must ask BIA in writing to release the performance bond or alternative form of security.
(b) Upon receiving the 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.
§ 162.562   Must a lessee provide insurance for a WSR lease?
Except as provided in paragraph (c) of this section, a lessee must provide insurance when necessary to protect the interests of Indian landowners and in the amount sufficient to protect all insurable permanent improvements on the leased premises.
(a) The insurance may include property, 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.
§ 162.563   What documents are required for BIA approval of a WSR lease?
A lessee or the Indian landowners must submit the following documents to us to obtain BIA approval of a WSR 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 §§ 162.549(a), 162.555(b), and 162.557(a), or a separate signed certification meeting the requirements of §§ 162.555(b) and 162.557(a));
(c) A valuation, if required under § 162.549 or § 162.550;
(d) Proof of insurance, if required under § 162.562;
(e) A performance bond or other security, if required under § 162.559;
(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 resource development plan that describes the type and location of any permanent improvements the lessee plans to install and a schedule showing the tentative commencement and completion dates for those improvements;
(i) A restoration and reclamation plan (and any subsequent modifications to the plan);
(j) 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;
(k) A legal description of the land under § 162.547;
(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.
§ 162.564   Will BIA review a proposed WSR lease before or during preparation of the NEPA review documentation?
Upon request of the Indian landowners, we will review the proposed WSR 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.
§ 162.565   What is the approval process for a WSR lease?
(a) Before we approve a WSR lease, we must determine that the lease is in the best interest of the Indian landowners. In making that determination, we will:
(1) Review the lease and supporting documents;
(2) Identify potential environmental impacts and ensure compliance with all applicable environmental laws, land use laws, and ordinances;
(3) 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 WSR 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 WSR 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 WSR lease package, the parties may take action under § 162.588.
(2) If the WSR lease package is complete, we will notify the parties of the date of 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 § 162.588.
(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 WSR leases on tribal land to the lessee and provide a copy to the tribe. We will provide approved WSR leases on individually owned Indian land to the lessee, and make copies available to the Indian landowners upon written request.
§ 162.566   How will BIA decide whether to approve a WSR lease?
(a) We will approve a WSR 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 WSR lease is in their best interest.
(c) We may not unreasonably withhold approval of a WSR lease.
§ 162.567   When will a WSR lease be effective?
(a) A WSR 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 lease are triggered. Such date may be before or after the approval date under paragraph (a) of this section.
§ 162.568   Must a WSR lease document be recorded?
(a) Any WSR lease document must be recorded in the 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 tribal lands, even though BIA approval is not required:
(1) Leases of tribal land that a corporate entity leases to a third party under 25 U.S.C. 477; and
(2) Leases of tribal land under a special act of Congress authorizing leases without our approval.
§ 162.569   Will BIA require an appeal bond for an appeal of a decision on a WSR lease document?
(a) If a party appeals our decision on a WSR 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.
§ 162.570   May the parties amend a WSR lease?
The parties may amend a WSR lease by obtaining:
(a) The lessee's signature;
(b) The Indian landowners' consent under the requirements in § 162.571; and
(c) BIA approval of the amendment under §§ 162.572 and 162.573.
§ 162.571   What are the consent requirements for an amendment to a WSR 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 WSR lease in the same percentages and manner as a new WSR 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 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 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 dispute resolution procedures.
§ 162.572   What is the approval process for an amendment to a WSR 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) of 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.
§ 162.573   How will BIA decide whether to approve an amendment to a WSR lease?
(a) We may disapprove a WSR 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.
§ 162.574   May a lessee assign a WSR lease?
(a) A lessee may assign a WSR lease by meeting the consent requirements in § 162.575 and obtaining our approval of the assignment under §§ 162.576 and 162.577 or by meeting the conditions in paragraphs (b) or (c) of this section.
(b) Where provided in the lease, the lessee may assign the lease to the following without meeting consent requirements or obtaining BIA approval of the assignment, as long as the lessee notifies BIA of the assignment within 30 days after it is executed:
(1) Not more than three distinct legal entities specified in the lease; or
(2) The lessee's wholly owned subsidiaries.
(c) The lessee may assign the lease without our approval or meeting consent requirements if:
(1) The assignee is a leasehold mortgagee or its designee, acquiring the lease either through foreclosure or by conveyance;
(2) The assignee agrees in writing to assume all of the obligations 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.
§ 162.575   What are the consent requirements for an assignment of a WSR 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 in the same percentages and manner as a new WSR 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 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;
(2) Authorizes one or more representatives to consent to an assignment on behalf of all Indian landowners; or
(3) 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)(1) 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 bonds or mortgages.
§ 162.576   What is the approval process for an assignment of a WSR 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 any of the deadlines in this section, the lessee or Indian landowners may take appropriate action under § 162.588.
§ 162.577   How will BIA decide whether to approve an assignment of a WSR lease?
(a) We may disapprove an assignment of a WSR 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 or sureties have not consented;
(3) The lessee is in violation of the lease;
(4) The assignee does not agree to be bound by the terms of the lease;
(5) The 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:
(1) The value of any part of the leased premises not covered by the assignment would be adversely affected; and
(2) If a performance bond is required, the assignee has posted the bond or security and provided supporting documents that demonstrate that:
(i) The lease will be enforceable against the assignee; and
(ii) The assignee will be able to perform its obligations under the lease or assignment.
(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.
§ 162.578   May a lessee sublease a WSR lease?
(a) A lessee may sublease a WSR lease by meeting the consent requirements in § 162.579 and obtaining our approval of the sublease under §§ 162.580 and 162.581, 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;
(2) The sublease does not relieve the lessee/sublessor of any liability; and
(3) The parties provide BIA with a copy of the sublease within 30 days after it is executed.
§ 162.579   What are the consent requirements for a sublease of a WSR lease?
(a) Unless the lease provides otherwise, the lessee must notify all Indian landowners of the proposed sublease.
(b) The Indian landowners, or their representatives under § 162.013, must consent to a sublease in the same percentages and manner as a new WSR 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 in paragraph (c) of this section;
(2) Authorizes one or more representatives to consent to a sublease 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 Indian landowners' 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.
§ 162.580   What is the approval process for a sublease of a WSR 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 or inform the parties to the sublease and Indian landowners in writing that we need additional review time. Our determination whether to approve the sublease will be in writing and will state the basis for our approval or disapproval.
(b) Our letter informing 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 sublease.
(c) If we do not meet the deadline in paragraph (a) of this section, or paragraph (b) of this section if applicable, 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.
§ 162.581   How will BIA decide whether to approve a sublease of a WSR lease?
(a) We may disapprove a sublease of a WSR 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 or sureties have not consented;
(3) The lessee is in violation of the lease;
(4) The lessee will not remain liable under the lease; and
(5) We find a compelling reason to withhold our approval in order to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(5) of this section, we 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.
§ 162.582   May a lessee mortgage a WSR lease?
(a) A lessee may mortgage a WSR lease by meeting the consent requirements in § 162.583 and obtaining our approval of the leasehold mortgage under §§ 162.584 and 162.585.
(b) Refer to § 162.574(c) for information on what happens if a sale or foreclosure under an approved mortgage of the leasehold interest occurs.
§ 162.583   What are the consent requirements for a leasehold mortgage of a WSR 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 in the same percentages and manner as a new WSR 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.
§ 162.584   What is the approval process for a leasehold mortgage of a WSR lease?
(a) When we receive a 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 § 162.588.
§ 162.585   How will BIA decide whether to approve a leasehold mortgage of a WSR lease?
(a) We may disapprove a leasehold mortgage of a WSR 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 or sureties have not consented;
(3) The requirements of this subpart have not been met; or
(4) We find a compelling reason to withhold our approval in order to protect the best interests of the Indian landowners.
(b) In making the finding required by paragraph (a)(4) of this section, we may consider whether:
(1) The 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.
§ 162.586   When will an amendment, assignment, sublease, or leasehold mortgage of a WSR lease be effective?
(a) An amendment, assignment, sublease, or leasehold mortgage of a WSR 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 § 162.572(b) or § 162.580(b), the amendment or sublease becomes effective 45 days from the date the parties mailed or delivered the document to us for our review or, if we sent a letter informing the parties that we need additional time to approve or disapprove the lease, the amendment or sublease becomes effective 45 days from the date of the letter informing the parties that we need additional time to approve or disapprove the lease; and
(2) An assignment that does not require our approval under § 162.574(b) or a sublease that does not require our approval under § 162.578(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.
§ 162.587   What happens if BIA disapproves an amendment, assignment, sublease, or leasehold mortgage of a WSR lease?
If we disapprove an amendment, assignment, sublease, or leasehold mortgage of a WSR lease, we will notify the parties immediately and advise the landowners of their right to appeal the decision under part 2 of this chapter.
§ 162.588   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), 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.
§ 162.589   May BIA investigate compliance with a WSR 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 to determine if 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.
§ 162.590   May a WSR lease provide for negotiated remedies if there is a violation?
(a) A WSR lease of tribal land may provide either or both parties with negotiated remedies in the event of a lease violation, including, but not limited to, the power to terminate the lease. If the lease provides 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 WSR lease of individually owned Indian land may provide either or both parties with negotiated remedies, so long as the lease also specifies the manner in which those remedies may be exercised by or on behalf of the 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 surety or mortgagee of any violation that may result in termination and the termination of a WSR lease.
(d) Negotiated remedies may apply in addition to, or instead of, the cancellation remedy available to us, as specified in the lease. The landowners may request our assistance in enforcing negotiated remedies.
(e) A WSR 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 and proceedings, as appropriate, in deciding whether to exercise any of the remedies available to us.
§ 162.591   What will BIA do about a violation of a WSR lease?
(a) In the absence of actions or proceedings described in § 162.590(e), or if it is not appropriate for us to defer to the actions or proceedings, we will follow the procedures in paragraphs (b) and (c) of this section.
(b) If we determine there has been a violation of the conditions of a WSR lease, other than a violation of payment provisions covered by paragraph (c) of this section, we will promptly send the lessee and any surety and 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 compensation in the time and manner required by a WSR lease is a violation of the lease, and we will issue a notice of violation in accordance with this paragraph.
(1) We will send the lessees and any surety and mortgagee a notice of violation by certified mail, return receipt requested:
(i) Promptly following the date on which payment was due, if the lease requires that payments be made to us; or
(ii) Promptly following the date on which we receive actual notice of non-payment from the Indian landowners, if the lease provides for payment directly to the Indian landowners.
(2) We will send a copy of the notice of violation to the tribe for tribal land, or provide constructive notice to the Indian landowners for individually owned Indian land.
(3) The notice of violation will require the lessee to provide adequate proof of payment.
(d) The lessee and its sureties will continue to be responsible for the obligations in the lease until the lease expires or is terminated or cancelled.
§ 162.592   What will BIA do if a lessee does not cure a violation of a WSR lease on time?
(a) If the lessee does not cure a violation of a WSR lease within the 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 compensation, referral of the debt to the Department of the Treasury for collection; or
(4) The lessee should be granted additional time in which to cure the violation.
(b) 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 compensation and any associated late payment charges.
(1) We do not have to cancel the lease or give any further notice to the lessee before taking action to recover unpaid compensation.
(2) We may still take action to recover any unpaid compensation if we cancel the lease.
(c) If we decide to cancel the lease, we will send the lessee and any surety and 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 compensation 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, including the possibility that the official to whom the appeal is made may require the lessee to post an appeal bond;
(4) Order the lessee to vacate the property within 31 days of the date of receipt of the cancellation letter, if an appeal is not filed by that time; and
(5) 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.
§ 162.593   Will late payment charges or special fees apply to delinquent payments due under a WSR lease?
(a) Late payment charges will apply as specified in the lease. The failure to pay 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 compensation is not paid in the time and manner required, in addition to late payment charges that must be paid to the Indian landowners under the lease:
§ 162.594   How will payment rights relating to WSR leases be allocated?
The WSR lease may allocate rights to payment for insurance proceeds, trespass damages, compensation 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.
§ 162.595   When will a cancellation of a WSR lease be effective?
(a) A cancellation involving a WSR lease will not be effective until 31 days after the lessee receives a cancellation letter from us, or 41 days from the date we mailed the letter, whichever is earlier.
(b) The cancellation decision will 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 compensation and comply with the other terms of the lease.
§ 162.596   What will BIA do if a lessee remains in possession after a WSR lease expires or is terminated or cancelled?
If a lessee remains in possession after the expiration, termination, or cancellation of a WSR 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.
§ 162.597   Will BIA appeal bond regulations apply to cancellation decisions involving WSR leases?
(a) Except as provided in paragraph (b) of this section, the appeal bond provisions in part 2 of this chapter will apply to appeals from lease cancellation decisions.
(b) The lessee may not appeal the appeal bond decision. The lessee may, however, request that the official to whom the appeal is made reconsider the appeal bond decision, based on extraordinary circumstances. Any reconsideration decision is final for the Department.
§ 162.598   When will BIA issue a decision on an appeal from a WSR leasing decision?
BIA will issue a decision on an appeal from a WSR leasing decision within 60 days of receipt of all pleadings.
§ 162.599   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.
§ 162.600   Crow Reservation.
(a) Notwithstanding the regulations in other sections of this part 162, Crow Indians classified as competent under the Act of June 4, 1920 (41 Stat. 751), as amended, may lease their trust lands and the trust lands of their minor children for farming or grazing purposes without the approval of the Secretary pursuant to the Act of May 26, 1926 (44 Stat. 658), as amended by the Act of March 15, 1948 (62 Stat. 80). However, at their election Crow Indians classified as competent may authorize the Secretary to lease, or assist in the leasing of such lands, and an appropriate notice of such action shall be made a matter of record. When this prerogative is exercised, the general regulations contained in this part 162 shall be applicable. Approval of the Secretary is required on leases signed by Crow Indians not classified as competent or made on inherited or devised trust lands owned by more than five competent devisees or heirs.
(b) The Act of May 26, 1926 (44 Stat. 658), as amended by the Act of March 15, 1948 (62 Stat. 80), provides that no lease for farming or grazing purposes shall be made for a period longer than five years, except irrigable lands under the Big Horn Canal; which may be leased for periods of ten years. No such lease shall provide the lessee a preference right to future leases which, if exercised, would thereby extend the total period of encumbrance beyond the five or ten years authorized by law.
(c) All leases entered into by Crow Indians classified as competent, under the above-cited special statutes, must be recorded at the Crow Agency. Such recording shall constitute notice to all persons. Under these special statutes, Crow Indians classified as competent are free to lease their property within certain limitations. The five-year (ten-year in the case of lands under the Big Horn Canal) limitation is intended to afford a protection to the Indians. The essence of this protection is the right to deal with the property free, clear, and unencumbered at intervals at least as frequent as those provided by law. If lessees are able to obtain new leases long before the termination of existing leases, they are in a position to set their own terms. In these circumstances lessees could perpetuate their leaseholds and the protection of the statutory limitations as to terms would be destroyed. Therefore, in implementation of the foregoing interpretation, any lease which, on its face, is in violation of statutory limitations or requirements, and any grazing lease executed more than 12 months, and any farming lease executed more than 18 months, prior to the commencement of the term thereof or any lease which purports to cancel an existing lease with the same lessee as of a future date and take effect upon such cancellation will not be recorded. Under a Crow tribal program, approved by the Department of the Interior, competent Crow Indians may, under certain circumstances, enter into agreements which require that, for a specified term, their leases be approved. Information concerning whether a competent Crow Indian has executed such an instrument is available at the office of the Superintendent of the Crow Agency, Bureau of Indian Affairs, Crow Agency, Montana. Any lease entered into with a competent Crow Indian during the time such instrument is in effect and which is not in accordance with such instrument will be returned without recordation.
(d) Where any of the following conditions are found to exist, leases will be recorded but the lessee and lessor will be notified upon discovery of the condition:
(1) The lease in single or counterpart form has not been executed by all owners of the land described in the lease;
(2) There is, of record, a lease on the land for all or a part of the same term;
(3) The lease does not contain stipulations requiring sound land utilization plans and conservation practices; or
(4) There are other deficiencies such as, but not limited to, erroneous land descriptions, and alterations which are not clearly endorsed by the lessor.
(e) Any adult Crow Indian classified as competent shall have the full responsibility for obtaining compliance with the terms of any lease made by him pursuant to this section. This shall not preclude action by the Secretary to assure conservation and protection of these trust lands.
(f) Leases made by competent Crow Indians shall be subject to the right to issue permits and leases to prospect for, develop, and mine oil, gas, and other minerals, and to grant rights-of-way and easements, in accordance with applicable law and regulations. In the issuance or granting of such permits, leases, rights-of-way or easements due consideration will be given to the interests of lessees and to the adjustment of any damages to such interests. In the event of a dispute as to the amount of such damage, the matter will be referred to the Secretary whose determination will be final as to the amount of said damage.
§ 162.601   Fort Belknap Reservation.
Not to exceed 20,000 acres of allotted and tribal lands (non-irrigable as well as irrigable) on the Fort Belknap Reservation in Montana may be leased for the culture of sugar beets and other crops in rotation for terms not exceeding ten years.
§ 162.602   Cabazon, Augustine, and Torres-Martinez Reservations, California.
(a) Upon a determination by the Secretary that the owner or owners are not making beneficial use thereof, restricted lands on the Cabazon, Augustine, and Torres-Martinez Indian Reservations which are or may be irrigated from distribution facilities administered by the Coachella Valley County Water District in Riverside County, California, may be leased by the Secretary in accordance with the regulations in this part for the benefit of the owner or owners.
(b) All leases granted or approved on restricted lands of the Cabazon, Augustine, and Torres-Martinez Indian Reservations shall be filed for record in the office of the county recorder of the county in which the land is located, the cost thereof to be paid by the lessee. A copy of each such lease shall be filed by the lessee with the Coachella Valley County Water District or such other irrigation or water district within which the leased lands are located. All such leases shall include a provision that the lessee, in addition to the rentals provided for in the lease, shall pay all irrigation charges properly assessed against the land which became payable during the term of the lease. Act of August 25, 1950 (64 Stat. 470); Act of August 28, 1958 (72 Stat. 968).
§ 162.603   San Xavier and Salt River Pima-Maricopa Reservations.
(a) Purpose and scope. The Act of November 2, 1966 (80 Stat. 1112), provides statutory authority for long-term leasing on the San Xavier and Salt River Pima-Maricopa Reservations, Arizona, in addition to that contained in the Act of August 9, 1955 (69 Stat. 539), as amended (25 U.S.C. 415). When leases are made under the 1955 Act on the San Xavier or Salt River Pima-Maricopa Reservations, the regulations in part 162 apply. The purpose of this section is to provide regulations for implementation of the 1966 Act. The 1966 Act does not apply to leases made for purposes that are subject to the laws governing mining leases on Indian lands.
(b) Duration of leases. Leases made under the 1966 Act for public, religious, educational, recreational, residential, or business purposes may be made for terms of not to exceed 99 years. The terms of a grazing lease shall not exceed ten years; the term of a farming lease that does not require the making of a substantial investment in the improvement of the land shall not exceed ten years; and the term of a farming lease that requires the making of a substantial investment in the improvement of the land shall not exceed 40 years. No lease shall contain an option to renew which extends the total term beyond the maximum term permitted by this section.
(c) Required covenant and enforcement thereof. Every lease under the 1966 Act shall contain a covenant on the part of the lessee that he will not commit or permit on the leased land any act that causes waste or a nuisance or which creates a hazard to health of persons or to property wherever such persons or property may be.
(d) Notification regarding leasing proposals. If the Secretary determines that a proposed lease to be made under the 1966 Act for public, religious, educational, recreational, residential, or business purposes will substantially affect the governmental interests of a municipality contiguous to the San Xavier Reservation or the Salt River Pima-Maricopa Reservation, as the case may be, he shall notify the appropriate authority of such municipality of the pendency of the proposed lease. The Secretary may, in his discretion, furnish such municipality with an outline of the major provisions of the lease which affect its governmental interests and shall consider any comments on the terms of the lease affecting the municipality or on the absence of such terms from the lease that the authorities may offer. The notice to the authorities of the municipality shall set forth a reasonable period, not to exceed 30 days, within which any such comments shall be submitted.
(e) Applicability of other regulations. The regulations in part 162 of this title shall apply to leases made under the 1966 Act except where such regulations are inconsistent with this section.
(f) Mission San Xavier del Bac. Nothing in the 1966 Act authorizes development that would detract from the scenic, historic, and religious values of the Mission San Xavier del Bac owned by the Franciscan Order of Friars Minor and located on the San Xavier Reservation.
§ 162.701   Who owns the records associated with this part?
(a) Records are the property of the United States if they:
(1) Are made or received by a tribe or tribal organization in the conduct of a Federal trust function under 25 U.S.C. 450f et seq., including the operation of a trust program; and
(2) Evidence the organization, functions, policies, decisions, procedures, operations, or other activities undertaken in the performance of a Federal trust function under this part.
(b) Records not covered by paragraph (a) of this section that are made or received by a tribe or tribal organization in the conduct of business with the Department of the Interior under this part are the property of the tribe.
§ 162.702   How must records associated with this part be preserved?
(a) Any organization, including a tribe or tribal organization, that has records identified in § 162.701(a) of this part, must preserve the records in accordance with approved Departmental records retention procedures under the Federal Records Act, 44 U.S.C. chapters 29, 31 and 33. These records and related records management practices and safeguards required under the Federal Records Act are subject to inspection by the Secretary and the Archivist of the United States.
(b) A tribe or tribal organization should preserve the records identified in § 162.701(b) of this part, for the period of time authorized by the Archivist of the United States for similar Department of the Interior records under 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.
§ 162.703   How does the Paperwork Reduction Act affect this part?
The collections of information in this part have been approved by the Office of Management and Budget under 44 U.S.C. 3501 et seq. and assigned OMB Control Number 1076-0155. Response is required to obtain a benefit. A Federal agency may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB Control Number.