6500 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs 

25 CFR Part 162

RIN 1076–AE36

Trust Management Reform: Residential 

Leases and Business Leases

AGENCY: Bureau of Indian Affairs, 

Interior.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Bureau of Indian Affairs 

(BIA) proposes to revise its regulations 

in the area of residential leases and 

business leases on trust and restricted 

land. The revisions would further fulfill 

the Secretary’s fiduciary responsibility 

to federally recognized tribes and 

individual Indians. These regulations 

currently have reserved subparts for 

Residential Lease and Business Lease. 

These subparts, along with a subpart for 

General Provisions, will eventually 

provide regulations for residential and 

business leases on trust and restricted 

land. When we publish these changes as 

a final rule, we will remove the current 

subpart for Non-Agricultural Leases.

DATES: Written comments must be 

submitted no later than May 10, 2004.

ADDRESSES: Comments on this proposed 

rule should be addressed to: Ben 

Burshia, Chief, Division of Real Estate 

Services, Office of Trust 

Responsibilities, Bureau of Indian 

Affairs, 1849 C Street NW., MS 4513–

MIB, Washington, DC 20240. 

Submissions by facsimile should be sent 

to (202) 219–1255. Electronic comment 

submission is not available at this time. 

DOI invites comments on the 

information collection requirements in 

the proposed regulation. You may 

submit comments by telefacsimile at 

(202) 395–5806 or by e-mail at 

Ruth_Solomon@omb.eop.gov. Please 

also send a copy of your comments to 

BIA at the location specified above. 

Note that requests for comments on the 

rule and the information collection are 

separate.

FOR FURTHER INFORMATION CONTACT: Ben 

Burshia, 202–219–1195.

SUPPLEMENTARY INFORMATION:

I. Background 

II. Subpart-by-Subpart Analysis 

III. Public Comments 

IV. Procedural Requirements 

A. Regulatory Planning and Review 

(Executive Order 12866) 

B. Regulatory Flexibility Act (5 U.S.C. 601 

et seq.) 

C. Small Business Regulatory Enforcement 

Fairness Act (SBREFA) of 1996

D. Unfunded Mandates Reform Act of 1955

E. Taking Implication Assessment 

(Executive Order 12630) 

F. Energy Effects (Executive Order 13211) 

G. Federalism (Executive Order 13132) 

H. Civil Justice Reform (Executive Order 

12988) 

I. National Environmental Policy Act 

(NEPA) 

J. Consultation and Coordination with 

Indian Tribal Governments (Executive 

Order 13175)

K. Paperwork Reduction Act (44 U.S.C. 

3501)

I. Background 

As part of trust reform initiatives, in 

January of 2001, the Bureau of Indian 

Affairs issued final Leasing and 

Permitting Regulations, 25 CFR part 162 

(66 FR 7109, January 22, 2001). This 

final rule replaced the existing part 162 

in its entirety. At that time, we reserved 

Subpart C, Residential Leases, and 

Subpart D, Business Leases, for future 

rulemaking to include the Indian Land 

Consolidation Act Amendments of 2000 

and all other issues related to residential 

and business leases. 

This proposed rule provides guidance 

for processing individual Indian and 

tribal residential and business leases on 

trust and restricted land. Subpart F, 

Non-agricultural Leases, currently 

provides general leasing regulations for 

all non-agricultural leases, which 

includes residential and business leases. 

The current Subpart F is general and 

does not differentiate between business 

and residential leases. Therefore, with 

text added to reserved Subparts C and 

D, Subpart F will be removed. 

This proposed rule addresses the 

specific needs of residential and 

business leases and thus, will facilitate 

streamlining the processing of 

residential and business leases. This 

proposed rule will strengthen the 

services that we provide to federally 

recognized tribes and individual 

Indians. The rule is consistent with our 

fiduciary responsibility to individual 

Indians and tribes and reflects the 

provisions of the Departmental Manual, 

Part 303, Chapter 2, Principles for 

Managing Indian Trust Assets. 

II. Subpart-by-Subpart Analysis 

25 CFR part 162, Subpart C, 

Residential Leases, and Subpart D, 

Business Leases, will replace Subpart F, 

Non-Agricultural Leases. The consent 

requirements in the proposed 

regulations are consistent with the 

Indian Land Consolidation Act 

Amendments (ILCA) of 2000. Because 

the ILCA Amendments of 2000 do not 

apply to tribes in Alaska, the consent 

requirements for Alaska will remain the 

same as the previous regulations 

governing leasing. The proposed 

regulations provide for recognition and 

accommodation of tribal laws regulating 

activities for residential and business 

leases, unless prohibited by federal law. 

The proposed regulations provide 

procedures for lease amendments, 

assignments, subleases and leasehold 

mortgages. 

Under Subpart C, Residential Leases, 

of the proposed regulation, the 

definition for Residential Leases covers 

both ground leases and leases for 

residential development on tribal and 

allotted land. The definition of 

Residential Lease is defined as singlefamily homes and housing for public 

purposes. This definition was 

developed in order to provide 

regulations that streamline the 

processing of residential leases for 

Indian housing; leases not meeting this 

definition will be processed under 

Subpart D, Business Leases. The 

proposed regulations provide for a 30-

day time-frame under which the 

Secretary or her designee must issue a 

decision on a complete residential lease 

application. Residential leases for 

nominal rent will be approved on tribal 

land if the rent is established by the 

tribe or on individual Indian land when 

the tenant is a member of the 

landowner’s immediate family or a coowner in the tract. Rental adjustments 

are not required for a residential lease 

unless negotiated in the lease. Also, 

bonds may not be required, if specified 

in the lease and upon a determination 

that it is in the best interest of the 

landowner(s). Subpart C also includes 

provisions for enforcement of lease 

violations. 

Subpart D, Business Leases, of the 

proposed regulations covers both 

ground leases (undeveloped land) and 

leases of developed land (together with 

improvements thereon) on tribal or 

allotted land, authorizing the 

development or use of the leased 

premises. Leases covered by this subpart 

may authorize the construction of 

single-purpose or mixed use projects 

designed for use by any number of 

tenants or occupants. The leases may 

include: (1) Leases for residential 

purposes that are not covered in Subpart 

C; (2) Leases for public, religious, 

educational, and recreational purposes; 

and (3) Commercial or industrial leases 

for retail, office, manufacturing, storage, 

and/or other business purposes. The 

potential lessee may negotiate a lease 

with an Indian landowner. The lease is 

subject to the review and approval of 

the Secretary. Generally, business leases 

will not be advertised for competitive 

bid. A potential lessee may request, in 

writing, the names and addresses of the 

Indian landowners or their 

representatives for the purposes of 

negotiating a lease. The proposed 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6501

business lease regulations provide for 

the following when considering 

approval, disapproval or when 

requesting additional document 

information: When we receive a 

business lease and all of the supporting 

documents that conform to this part, we 

will approve, disapprove, or return for 

additional documents/corrections/

modifications to the lease within 60 

days of the date of our receipt of the 

documents. If we do not act within 60 

days, the Indian landowner may take 

appropriate action under part 2 of this 

chapter. If we approve or disapprove a 

lease, we will notify the parties 

immediately and advise them of their 

right to appeal the decision under part 

2 of this chapter. Copies of business 

leases that have been granted or 

approved will be provided to the tenant, 

and made available to the Indian 

landowners upon request. 

III. Public Comments 

The Bureau of Indian Affairs, with 

tribal participation, formulated a team 

to draft regulations for residential and 

business leases. On June 5, 2002, the 

initial draft Residential Lease and 

Business Lease regulations were 

distributed to the Regional Offices, the 

National Congress of American Indians, 

and the Inter-Tribal Monitoring 

Association, requesting comments. The 

comments received through that 

distribution were considered in the 

development of the final draft 

regulations as were the comments 

received from Tribal Consultations 

(meetings) in Portland, Oregon; 

Phoenix, Arizona; and Nashville, 

Tennessee, in September of 2002. In 

addition, the comments received from 

further consultation sessions in 

November of 2002 were taken into 

consideration in the formulation of the 

following proposed Residential and 

Business Leasing regulations. The 

consideration of comments has resulted 

in refinement, clarification and 

restructuring of the residential and 

business lease provisions. 

In response to comments received, in 

Subpart C, Residential Leases, the 

definition of ‘‘immediate family’’ has 

been expanded to include ‘‘or when 

some other special relationship exists 

between the lessor and the lessee or 

special circumstances exists that in the 

opinion of the Secretary warrant the 

approval of the residential lease,’’ based 

on 25 CFR 152.25(d). The definition of 

‘‘single-family home’’ has been 

amended to include ‘‘a building with 

one to four dwelling units on a tract of 

land under a single lease’’ and a 

definition for ‘‘tribal land assignment’’

is provided. 

The consent requirements were 

amended to clarify that the applicable 

percent for consent pertains to the 

amount of undivided interest owned 

and not the amount of owners. Language 

was provided to clarify who can 

represent the Indian landowners in 

negotiating or granting a residential 

lease. The environmental requirements 

were amended to include an explicit 

commitment to adopt tribal 

environmental reviews, to the extent 

such adoption is allowed under our 

procedures implementing the National 

Environmental Policy Act of 1969 

(NEPA).

Comments were received requesting 

clarification on whether or not a 30-year 

lease can be paid in full at one time. 

Consistent with 25 U.S.C. 415b, the 

proposed regulations allow for payment 

in full only if it is provided for in the 

lease, otherwise rental payments may 

not be made or accepted more than one 

year in advance of the due date. 

Comments were received requesting 

more than one option to renew a 

residential lease. The proposed 

regulations have been amended to allow 

for more than one option to renew a 

residential lease provided the lease 

authority is the Native American 

Housing Assistance and SelfDetermination Act of 1996, 25 U.S.C. 

4211. Comments were received from the 

Department of Housing and Urban 

Development (HUD) requesting that we 

provide language for the approval of 

leasehold mortgages on a residential 

lease for the purposes of refinancing a 

loan. The proposed regulations have 

been amended to expand the scope for 

approval of leasehold mortgages on 

residential leases, which would include 

refinancing. The Secretary will approve 

a leasehold mortgage under a residential 

lease when the required consents have 

been obtained from the Indian 

landowners and the Secretary finds that 

it is in the best interest of the 

landowner. HUD requested that along 

with the landowner’s approval for 

cancellation of a lease, that we require 

the approval of the leasehold mortgagee. 

The proposed regulations were 

amended to include a requirement for 

approval from the mortgagee before 

cancellation of the residential lease. 

Comments were received requesting 

clarification of what would happen in 

the instance that a tenant does not 

diligently develop or abandons the 

leased premises. The proposed 

regulations were amended providing 

language to clarify this section of the 

regulation. 

In the consideration of comments 

received, Subpart D, Business Leases, 

we are adding to the proposed 

regulations the key terms under 

§ 162.101 ‘‘Approval which means 

written authorization by the Secretary or 

his/her delegated official and must be a 

part of the instrument being approved.’’

Also, under this same section we are 

proposing to add for clarification, the 

term ‘‘Fair annual rental or fair market 

rental means the amount of rental 

income that a leased tract of Indian land 

would most probably command in an 

open and competitive market.’’ The 

term Fair Annual Rental will be 

removed. Fair market rental relates to a 

period of time which may be more or 

less than one year, whereas, fair annual 

rental is for a one year period. We 

received comments on approvals and 

the proposed regulations were changed 

to add to § 162.107 paragraph ‘‘(c) All 

approvals must be in writing for 

permits, leases, subleases, assignments, 

modifications, amendments, etc., unless 

otherwise provided in the master lease.’’

During consultations, there was a 

comment about Who can represent the 

Indian landowners in negotiating or 

granting a lease? The proposed 

regulations include paragraph ‘‘(d) Any 

person who is authorized to practice 

before the Department of the Interior 

under 43 CFR part 1 and has been given 

written authorization for 

representation.’’ A comment was 

received about the requirement of 

appraisals on tribal land being unduly 

burdensome to tribal business and 

economic development. The proposed 

regulations include under § 162.407 

paragraph ‘‘(d) Upon a duly adopted 

Tribal Resolution, we will use some 

other type of valuation for a business 

lease on tribal land, subject to our 

approval.’’ A comment was received on 

NEPA compliance. We address this 

concern in requiring that the tenant 

should provide any environmental, 

archaeological reports and other 

documents, as determined by us to be 

necessary to facilitate our compliance 

with federal and tribal and/or local land 

use requirements, if applicable. We will 

adopt any tribal environmental review 

as our NEPA review, to the extent such 

adoption meets our standards in 

implementing NEPA. We received a 

comment inquiring on, May a lease be 

mortgaged without the consent of the 

Indian landowners? The proposed 

regulations include under § 162.430, 

‘‘* * * provided, if the approved lease 

includes the following: (a) The lease 

may be mortgaged without the further 

consent of the Indian landowners for the 

purpose of borrowing capital for 

commercially reasonable purposes 

defined in the lease if the lease contains 

a general authorization for such a 

6502 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

mortgage; (b) The mortgage cannot 

secure any unrelated debts owed by the 

lessee to the mortgagee; (c) The 

mortgage may be refinanced; and (d) 

The encumbrance instrument must be 

approved by us.’’ A comment was 

received on What happens if the lessee 

abandons the lease? The proposed 

regulations include under § 162.457, 

‘‘(a) If the lessee abandons the leased 

premises, the lessee and its sureties will 

not be relieved of the obligations 

contained in the lease; and (b) We may 

cancel the lease, effective immediately, 

and attempt to find a new lessee for the 

property.’’ There were other comments 

on the typographical, grammatical and 

punctuation of the draft regulation, they 

were duly noted and changed 

appropriately. Other comments were 

acknowledged, considered and duly 

noted when we felt those items were 

either already addressed or were 

statutorily resolved. 

IV. Procedural Requirements 

A. Regulatory Planning and Review 

(Executive Order 12866) 

Under Executive Order 12866 (58 FR 

51735, October 4, 1993), the BIA must 

determine whether the regulatory action 

is ‘‘significant’’ and therefore subject to 

OMB review and the requirements of 

the Executive Order. The Order defines 

‘‘significant regulatory action’’ as one 

that is likely to result in a rule that may: 

(1) Have an annual effect on the 

economy of $100 million or more or 

adversely affect in a material way the 

economy, a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or tribal governments or 

communities; 

(2) Create a serious inconsistency or 

otherwise interfere with an action taken 

or planned by another agency; 

(3) Materially alter the budgetary 

impact of entitlements, grants, user fees, 

or loan programs or the rights and 

obligations of recipients thereof; or 

(4) Raise novel legal or policy issues 

arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in the Executive Order. 

This proposed rule describes how the 

BIA will administer residential and 

business leases on trust and restricted 

land. Thus, the impact of the rule is 

confined to the Federal Government and 

individual Indian and tribal landowners 

and does not impose a compliance 

burden on the economy generally. 

Accordingly, it has been determined 

that this rule is not a ‘‘significant 

regulatory action’’ from an economic 

standpoint, or otherwise creates any 

inconsistencies or budgetary impacts to 

any other agency or federal program. 

B. Regulatory Flexibility Act (5 U.S.C. 

601 et seq.) 

Under the Regulatory Flexibility Act, 

5 U.S.C. 601 et seq., as amended, 

whenever an agency is required to 

publish a notice of rulemaking for any 

proposed or final rule, it must prepare 

and make available for public comment 

a regulatory flexibility analysis that 

describes the effects of the rule on small 

entities (e.g., small businesses, small 

organizations, and small government 

jurisdictions). Indian tribes are not 

considered to be small entities for 

purposes of the Act and, consequently, 

no regulatory flexibility analysis has 

been done. 

This proposed implementation 

guidance does not have significant 

adverse effects on competition, 

employment, investment, productivity, 

innovation, or the ability of U.S. based 

enterprises to compete with foreignbased enterprises. Accordingly, this 

proposed regulation will not have an 

economic impact on a substantial 

number of small entities, and, therefore, 

no regulatory flexibility analysis has 

been prepared. 

C. Small Business Regulatory 

Enforcement Fairness Act (SBREFA) of 

1996

Under 5 U.S.C. 804(2), SBREFA, a 

rule is major if OMB finds that it results 

in (1) An annual effect on the economy 

of $100 million or more; (2) A major 

increase in costs or prices for 

consumers, individual industries, 

Federal, State, or local government 

agencies, or geographic regions; or (3) 

Significant adverse effects on 

competition, employment, investment, 

productivity, innovation, or the ability 

of U.S.-based enterprises to compete 

with foreign-based enterprises. 

This proposed rule is not a major rule 

as defined by section 804 of the 

SBREFA. This rule is uniquely confined 

to the Federal Government, individual 

Indians and tribal landowners, thus, it 

will not result in the expenditure by 

State, local and tribal governments, in 

the aggregate, or by the private sector, of 

$100 million or more in any one year. 

This proposed rule provides regulatory 

guidance for residential and business 

leases on trust and restricted lands 

owned by individual Indians and tribes. 

D. Unfunded Mandates Reform Act 

The proposed implementation 

guidance would not impose unfunded 

mandates as defined by the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4, March 22, 1995, 109 Stat. 48). 

This proposed rule will not result in the 

expenditure by State, local and tribal 

governments, in the aggregate, or by the 

private sector, of $100 million or more 

in any one year (2 U.S.C. 1532). The 

impact of this proposed rule is confined 

to residential and business lease on land 

held in trust for individual Indians and 

tribes. Accordingly, this proposed rule 

will not result in the expenditure of 

$100 million or more in any one year.

E. Takings Implication Assessment 

(Executive Order 12630) 

This proposed implementation 

guidance does not have significant 

‘‘takings’’ implications. Policies that 

have taking implications do not include 

actions affecting properties that are held 

in trust by the United States. The 

residential and business leasing 

regulations provide specific regulatory 

guidance on trust lands. 

F. Energy Effects (Executive Order 

13211) 

On May 18, 2001, the President issued 

Executive Order 13211 which speaks to 

regulations that significantly affect 

energy supply, distribution, and use. 

The Executive Order requires agencies 

to prepare Statements of Energy Effects 

when undertaking certain actions. This 

proposed rule is restricted to 25 CFR 

part 162, subpart C, Residential Leases, 

and subpart D, Business Leases, on 

lands held in trust for individual 

Indians and tribes. Mineral 

development on lands held in trust for 

individual Indians and tribes is 

regulated under the Indian Mineral 

Development Act. Regulations for 

mineral development are provided 

under a separate part in 25 CFR parts 

211, 212 and 225. This proposed 

implementation guidance is not 

expected to significantly affect energy 

supplies, distribution, or use. Therefore, 

no Statement of Energy Effects has been 

prepared. 

G. Federalism (Executive Order 13132) 

This proposed implementation 

guidance does not have significant 

Federalism effects because it pertains 

solely to Federal-tribal relations and 

will not interfere with the roles, rights, 

and responsibilities of States. While this 

proposed rule will impact tribal 

governments, there is no federalism 

impact on the trust relationship or 

balance of power between the United 

States government and the various tribal 

governments affected by this 

rulemaking. Therefore, in accordance 

with Executive Order 13132, it is 

determined that this rule will not have 

sufficient federalism implications to 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6503

warrant the preparation of a federalism 

assessment. 

H. Civil Justice Reform (Executive Order 

12988) 

With respect to the review of existing 

regulations and the promulgation of 

new regulations, section 3(a) of 

Executive Order 12988, Civil Justice 

Reform, 61 FR 4729, February 7, 1996, 

imposes on executive agencies the 

general duty to adhere to the following 

requirements: (1) Eliminate drafting 

errors and ambiguity; (2) write 

regulations to minimize litigation; and 

(3) provide a clear legal standard for 

effective conduct rather than a general 

standard and promote simplification 

and burden reduction. With regard to 

the review required by section 3 (a), 

section (b) of Executive Order 12988 

specifically requires that executive 

agencies make every reasonable effort to 

insure that the regulations: (1) Clearly 

specifies the preemptive effect, if any; 

(2) clearly specifies any effect on 

existing federal law or regulation; (3) 

provides a clear legal standard for 

affecting conduct while promoting 

simplification and burden reduction; (4) 

specifies the retroactive affect if any; (5) 

adequately defines key terms; and (6) 

addresses other important issues 

affecting clarity and general 

draftsmanship under any guidelines 

issued by the Attorney General. Section 

3(c) of Executive Order 12988 requires 

executive agencies to review regulations 

in light of the applicable standards in 

section 3(a) and section 3(b) to 

determine whether they are met or it is 

unreasonable to meet one or more of 

them. This proposed implementation 

guidance does not unduly burden the 

judicial system and meets the applicable 

standards provided in sections 3(a) and 

3(b)(2) of the Executive Order 12988. 

I. National Environmental Policy Act 

(NEPA) 

This proposed rule is categorically 

excluded from the preparation of an 

environmental assessment or an 

environmental impact statement under 

the National Environmental Policy Act 

of 1969, 42 U.S.C. 4321, et seq., because 

its environmental effects are too broad, 

speculative, or conjectural to lend 

themselves to meaningful analysis and 

the Federal actions under the proposed 

rule (i.e., approval or disapproval of 

leases of Indian lands) will be subject at 

the time of the action itself to the 

National Environmental Policy Act 

process, either collectively or case-bycase. Further, no extraordinary 

circumstances exist to require 

preparation of an environmental 

assessment or environmental impact 

statement. 

J. Consultation and Coordination With 

Indian Tribal Governments (Executive 

Order 13175) 

Pursuant to Executive Order 13175 of 

November 6, 2000, Consultation and 

Coordination with Indian Tribal 

Governments, the Department has 

determined that because the proposed 

rulemaking will uniquely affect tribal 

governments it will follow Department 

and Administrative protocols in 

consulting with tribal governments on 

the rulemaking. Consequently, tribal 

governments will be notified through 

this Federal Register notice and through 

the BIA field offices, of the ramifications 

of this rulemaking. This will enable 

tribal officials and the affected tribal 

constituency throughout Indian country 

to have meaningful and timely input in 

the development of the final rule. This 

will reinforce good intergovernmental 

relations with tribal governments and 

better inform, educate and advise such 

tribal governments on compliance 

requirements of the rule making. We 

consulted with tribal representatives 

during the formulation of this proposed 

regulation. On June 5, 2002, the initial 

draft Residential Lease and Business 

Lease regulations were distributed to the 

Bureau of Indian Affairs’ Regional 

Offices, the National Congress of 

American Indians, and the Inter-Tribal 

Monitoring Association, requesting 

comments. The comments received 

through that distribution were 

considered in the development of the 

final draft regulations. We held Tribal 

Consultations (meetings) in Portland, 

Oregon, Phoenix, Arizona and 

Nashville, Tennessee, in September 

2002. The comments received from 

these consultations were taken into 

consideration in the formulation of the 

following proposed Residential and 

Business Leasing regulations. We have 

committed to consulting with tribal 

representatives in the formulation of a 

final rule for the Residential and 

Business Lease regulations. 

K. Paperwork Reduction Act (44 U.S.C. 

3501) 

This regulation requires an 

information collection from 10 or more 

parties, and therefore is subject to 

review under the Paperwork Reduction 

Act of 1995 (Pub. L. 104–13). Because 

the sections where the information 

collections occur has changed from the 

proposed rule of July 14, 2000 (65 FR 

43918) and the final rule of January 22, 

2001, we are including a table showing 

the section changes.

TABLE SHOWING CHANGES IN INFORMATION COLLECTION

Old CFR cite New CFR 

cite Section title Change incollection Explanation of change 

162.7 .................

162.205 * ...........

162.301

162.401

May individual Indian landowners 

exempt their land from tribal policies for leasing on Indian Agricultural lands? 

No Change ....... There is no change in collection of information. The 

regulatory requirements have been separated and 

clarified by providing separate regulations for Residential and Business Leases. 

162.8 .................

162.109 * ...........

162.204 * ...........

162.301

162.401

What notifications are required that 

tribal law applies to a lease on Indian Agricultural lands? 

No Change ....... There is no change in collection of information. The 

regulatory requirements have been separated and 

clarified by providing separate regulations for Residential and Business Leases. 

162.12 ...............

162.241 * ...........

162.309

162.409

How will the Secretary decide 

whether to grant and/or approve a 

lease? 

No Change ....... There is no change in collection of information. The 

regulatory requirements have been separated and 

clarified by separate regulations. 

162.14 ...............

162.246 * ...........

162.312

162.412

Must a lease be recorded? .............. No Change ....... There is no change in collection of information. The 

regulatory requirements have been separated and 

clarified by providing separate regulations for Residential and Business Leases. 

162.18 ...............

162.218 * ...........

162.313

162.413

Is there a standard lease form? ....... No Change ....... Same as above. 

162.20 ............... 162.316

162.416

How is leased land described? ........ No Change ....... Same as above. 

6504 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

TABLE SHOWING CHANGES IN INFORMATION COLLECTION—Continued

Old CFR cite New CFR 

cite Section title Change incollection Explanation of change 

162.22 ...............

162.610(c) * ......

162.325

162.425

May a lease be used as collateral 

for a leasehold? 

No Change ....... Same as above. 

162.30 ...............

162.608 * ...........

162.334

162.437

What happens to improvements constructed on Indian lands when the 

lease has been terminated? 

No Change ....... Same as above. 

162.32 ...............

162.613 * ...........

162.319

162.419

When must a lease payment be 

made? 

No Change ....... Same as above. 

162.37 ...............

162.614–616 * ...

162.320

162.420

Is there a penalty for late payment 

on a lease? 

No Change ....... Same as above. 

162.47 ...............

162.604 * ...........

162.339

162.442

What forms of bonds will the BIA accept? No Change ....... There is no change in collection of information. The 

regulatory requirements have been separated and 

clarified by providing separate regulations for Residential and Business Leases. 

162.52 ...............

162.604 * ...........

162.341

162.444

What types of insurance may be required? No Change ....... Same as above. 

162.61 ...............

162.605–606 * ...

162.302

162.402

How do I acquire a lease on Indian 

land? 

No Change ....... Same as above. 

162.68 ...............

162.603 * ...........

162.305

162.405

Must the parents or guardians of minors who own Indian land obtain a 

lease before using the land? 

No Change ....... Same as above. 

162.82 ...............

162.604 * ...........

162.213 * ...........

162.314

162.414

What supporting documents must I 

provide? 

No Change ....... Same as above. 

162.83 ...............

162.604 * ...........

162.317

162.417

How much rent must a lessee pay? No Change ....... Same as above. 

162.113 .............

162.611 * ...........

162.348

162.451

May the Secretary waive administrative fees? No Change ....... Same as above. 

162.126 .............

162.619 * ...........

162.348

162.451

What happens if you do not cure a 

lease violation? 

No Change ....... Same as above. 

162.164 .............

162.251 * ...........

162.352

162.455

What can I do if I receive a trespass 

notice? 

No Change ....... Same as above. 

Note: Section numbers followed by an * are from final rule. 

The table showing the burden of the 

information collection is included 

below for your information.

TABLE OF BURDEN FOR 25 CFR PART 162 (1076–0155) 

CFR section Number of

respondents 

Number of

annual

responses 

Hourly

burden per

response 

Total

annual

hourly

burden 

Salary 1

Federal

burden per

response 

Total

Federal

annual

burden

hours 

Salary 2

162.301 .....

162.401

500 500 30 min ....... 250 $4,630 30 min ....... 250 $4,630 

162.309 .....

162.409

14,500 14,500 2 hrs ......... 29,000 537,080 2 hrs ......... 29,000 537,080 

162.312 .....

162.412

14,500 14,500 1 hr ........... 14,500 268,540 1 hr ........... 14,500 268,540 

162.313 .....

162.413

0 0 0 ................ 0 0 0 ................ 0 0 

162.316 .....

162.416

14,500 14,500 30 min ....... 7,250 134,270 30 min ....... 7,250 134,270 

162.325 .....

162.425

0 0 0 ................ 0 0 0 ................ 0 0 

162.334 .....

162.437

0 0 0 ................ 0 0 0 ................ 0 0 

162.319 .....

162.419

14,500 14,500 15 min ....... 3,625 66,156 15 min ....... 3,625 66,156 

162.320 .....

162.420

3,625 3,625 15 min ....... 906 16,779 15 min ....... 906 16,779 

162.339 .....

162.442

14,500 14,500 30 min ....... 7,250 134,270 30 min ....... 7,250 134,270 

162.341 .....

162.444

14,500 14,500 15 min ....... 3,625 66,156 15 min ....... 3,625 66,156 

162.302 .....

162.402

14,500 14,500 1 hrs ......... 14,500 268,540 1 hrs ......... 14,500 268,540 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6505

TABLE OF BURDEN FOR 25 CFR PART 162 (1076–0155)—Continued

CFR section Number of

respondents 

Number of

annual

responses 

Hourly

burden per

response 

Total

annual

hourly

burden 

Salary 1

Federal

burden per

response 

Total

Federal

annual

burden

hours 

Salary 2

162.305 .....

162.405

0 0 0 ................ 0 0 0 ................ 0 0 

162.314 .....

162.414

7,250 7,250 3 hrs ......... 21,750 402,810 3 hrs ......... 21,750 402,810 

162.317 .....

162.417

725 725 30 min ....... 1,450 26,854 30 min ....... 1,450 26,854 

162.342 .....

162.445

7,250 7,250 15 min ....... 1,813 33,576 15 min ....... 1,813 33,576 

162.348 .....

162.451

145 145 30 min ....... 73 1,352 30 min ....... 73 1,352 

162.352 .....

162.455

145 145 30 min ....... 73 1,352 30 min ....... 73 1,352 

Totals 14,500 121,140 106,065 1,962,365 106,065 1,962,365 

1 $18.52 × total hourly burden = total hourly burden cost. 2 $18.52 × total hourly burden = total Federal burden cost. 

In addition, BIA collects fees for 

processing submitted documents, as set 

forth in sections 162.342 and 162.445, 

which can be considered as part of the 

information collection burden. 

DOI invites comments on the 

information collection requirements in 

the proposed regulation. You may 

submit comments by telefacsimile at 

(202) 395–5806 or by e-mail at 

Ruth_Solomon@omb.eop.gov. Please 

also send a copy of your comments to 

BIA at the location specified under the 

heading ADDRESSES. Note that requests 

for comments on the rule and the 

information collection are separate. 

You can receive a copy of BIA’s 

submission to OMB by contacting the 

person listed in the FOR FURTHER

INFORMATION CONTACT section, or by 

requesting the information from the BIA 

Information Collection Clearance 

Officer, 1951 Constitution Avenue, NW., 

Mail Stop 52 SIB, Washington, DC 

20240. 

Comments should address: (1) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the Program, including 

the practical utility of the information to 

BIA; (2) the accuracy of BIA’s burden 

estimates; (3) ways to enhance the 

quality, utility, and clarity of the 

information collected; and (4) ways to 

minimize the burden of the collection of 

information on the respondents, 

including the use of automated 

collection techniques or other forms of 

information technology. 

Please note that an agency may not 

sponsor or request, and an individual 

need not respond to, a collection of 

information unless it has a valid OMB 

Control Number. The valid OMB 

Control Number for this information 

collection is 1076–0155. However, OMB 

will assign a different temporary control 

number until the final rule is approved. 

At that time, the OMB Control Number 

will revert to 1076–0155. 

OMB must make a decision 

concerning the collection of information 

requirements in this proposed rule no 

sooner than 30 days, and no later than 

60 days, after it is published in the 

Federal Register. Therefore, a comment 

is best assured of having its maximum 

effect if OMB receives it within 30 days 

of publication. Comments on 

information collection requirements do 

not relate, however, to the deadline for 

general public comments on the 

proposed rule, indicated in the DATES

section.

Organizations and individuals who 

submit comments on the information 

collection requirements should be aware 

that BIA keeps such comments available 

for public inspection during regular 

business hours. If you wish to have your 

name and address withheld from public 

inspection, you must state this 

prominently at the beginning of any 

comments you make. BIA will honor 

your request to the extent allowable by 

law.

List of Subjects in 25 CFR Part 162 

Indians—lands.

Dated: January 6, 2004. 

Aurene M. Martin, 

Deputy Assistant Secretary—Indian Affairs.

For the reasons stated in the 

preamble, the Department of the 

Interior, Bureau of Indian Affairs, 

proposes to amend part 162 in Title 25 

of the Code of Federal Regulations as 

follows:

PART 162—LEASES AND PERMITS 

1. The authority citation for part 162 

is revised to read as follows:

Authority: 5 U.S.C. 301, R.S. 463 and 465; 

25 U.S.C. 2 and 9. Interpret or apply sec. 3, 

26 Stat. 795, sec. 1, 28 Stat. 305, secs. 1, 2, 

31 Stat. 229, 246, secs. 7, 12, 34 Stat. 545, 

34 Stat. 1015, 1034, 35 Stat. 70, 95, 97, sec. 

4, 36 Stat. 856, sec. 1, 39 Stat. 128, 41 Stat. 

415, as amended, 751, 1232, sec. 17, 43 Stat. 

636, 641, 44 Stat. 658, as amended, 894, 

1365, as amended, 47 Stat. 1417, sec. 17, 48 

Stat. 984, 988, 49 Stat. 115, 1135, sec. 55, 49 

Stat. 781, sec. 3, 49 Stat. 1967, 54 Stat. 745, 

1057, 60 Stat. 308, secs. 1, 2, 60 Stat. 962, 

sec. 5, 64 Stat. 46, secs. 1, 2, 4, 5, 6, 64 Stat. 

470, 69 Stat. 539, 540, 72 Stat. 968, 107 Stat. 

2011, 108 Stat. 4572, March 20, 1996, 110 

Stat. 4016; 25 U.S.C. 380, 393, 393a, 394, 395, 

397, 402, 402a, 403, 403a, 403b, 403c, 409a, 

413, 415, 415a, 415b, 415c, 415d, 477, 635, 

2218, 3701, 3702, 3703, 3712, 3713, 3714, 

3715, 3731, 3733, 4211; 44 U.S.C. 3101 et 

seq.

2. Revise paragraphs (b) and (c) and 

add paragraph (d) to § 162.100 to read 

as follows:

§ 162.100 What are the purposes of this 

part?

* * * * *

(b) This part includes five subparts, 

including separate, self-contained 

subparts relating to Agricultural Leases 

(Subpart B), Residential Leases (Subpart 

C), Business Leases (Subpart D), and 

Special Requirements for Certain 

Reservations (Subpart E). Subpart E 

identifies special provisions applicable 

only to leases made under special acts 

of Congress that apply only to certain 

Indian reservations. Leases covered by 

subpart E are also subject to subparts A 

through D, except to the extent that 

subpart A through D are inconsistent 

with:

6506 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

(1) The provisions in subpart E; or 

(2) Any act of Congress under which 

the leases are made. 

(c) These regulations apply to all 

leases in effect when the regulations are 

promulgated. 

(d) Unless otherwise agreed by the 

parties, this part will not affect the 

validity or terms of any existing lease or 

any restatement of an existing lease. 

3. Amend § 162.101 by: 

A. Revising the terms of ‘‘Immediate 

family;’’ ‘‘Lease;’’ ‘‘Life Estate;’’

‘‘Mortgage;’’ ‘‘Permit;’’and ‘‘Tribal 

land;’’ and 

B. Removing the term ‘‘Fair annual 

rental;’’ and 

C. Adding in alphabetical order the 

terms ‘‘Approval;’’ ‘‘Fair annual rental 

or fair market rental;’’ ‘‘Consent or 

consenting;’’ ‘‘Grant or granting;’’

‘‘Housing for public purposes;’’ ‘‘Singlefamily home;’’ and ‘‘Tribal land 

assignment,’’ to read as follows:

§ 162.101 What key terms do I need to 

know?

* * * * *

Approval means written authorization 

by the Secretary or a delegated official 

that is a part of the instrument being 

approved.

* * * * *

Consent or consenting means the 

execution of a lease by the Indian 

landowner or by the Secretary on behalf 

of an individual Indian landowner. 

Fair annual rental or fair market 

rental means the amount of rental 

income that a leased tract of Indian land 

would most probably command in a 

comparable open and competitive 

market.

* * * * *

Grant or granting means the process 

of consenting to a lease. 

Housing for public purposes means 

multi-family developments and single 

family residential developments 

administered by a Tribal Housing 

Authority (or other Tribally-Designated 

Housing Entity) or financed by a tribal/

federal/state housing program. 

Immediate family means a spouse, 

brother, sister, aunt, uncle, niece, 

nephew, first cousin, lineal ancestor, 

lineal descendant, or when some other 

special relationship exists between the 

lessor and lessee or special 

circumstances exist that in the opinion 

of the Secretary warrant the approval of 

the residential lease.

* * * * *

Lease means a written contract 

between Indian landowner(s) and a 

tenant or lessee, whereby the tenant or 

lessee is granted a right to possession of 

Indian land, for a specified purpose and 

duration. Unless otherwise provided, 

the use of this term will also include 

permits, as appropriate.

* * * * *

Life estate means an interest in Indian 

land that expires upon the death of the 

interest holder(s) or some other person. 

A life estate is also referred to as ‘‘life 

use.’’

* * * * *

Mortgage means a mortgage, deed of 

trust or other instrument that pledges a 

tenant’s leasehold interest as security 

for a debt or other obligation owed by 

the tenant to a lender or other 

mortgagee. A mortgage of a leasehold of 

Indian land cannot pledge the beneficial 

or restricted title to the land.

* * * * *

Permit means a written, nonassignable, contract between Indian 

landowners and the applicant for the 

permit, also referred to as a permittee, 

whereby the permittee is granted a 

revocable privilege to use Indian land or 

government land, for a specified 

purpose.

* * * * *

Single-family home means a building 

with one to four dwelling units on a 

tract of land under a single lease (also 

referred to as a homesite lease).

* * * * *

Tribal land means the surface estate 

of land, or any interest therein, held by 

the United States in trust for, or for the 

use and benefit of, a tribe, band, 

community, group or pueblo of Indians, 

or an Indian corporation chartered 

under 25 U.S.C. 477. The term also 

includes the surface estate of land or 

any interest therein held by a tribe, 

band, community, group or pueblo of 

Indians that is subject to federal 

restrictions against alienation or 

encumbrance.

Tribal land assignment means a 

contract or agreement that conveys to 

tribal members any rights for temporary 

use of tribal lands, assigned by the 

Indian tribes in accordance with tribal 

laws or customs.

* * * * *

4. Revise § 162.102 to read as follows:

§ 162.102 What land, or interests in land, 

are subject to this part? 

(a) This part applies to Indian land 

and government land, including any 

tract in which an individual Indian or 

tribe owns an interest in trust or 

restricted status. 

(b) Where a life estate and remainder 

interest are both owned in trust or 

restricted status, the life estate and 

remainder interest must both be leased 

under this part, unless the lease is for 

less than one year in duration. Unless 

otherwise provided by the document 

creating the life estate or by agreement, 

rent payable under the lease must be 

paid to the life tenant under part 179 of 

this chapter. 

(c) In approving a lease under this 

part, we will not lease any fee interest 

in Indian land, nor will we collect rent 

on behalf of any fee owners. The leasing 

of the trust and restricted interests of the 

Indian landowners will not be 

conditioned on a lease having been 

obtained from the owners of any fee 

interests. Where all of the trust or 

restricted interests in a tract are subject 

to a life estate held in fee status, we will 

approve a lease of the remainder 

interests only if such action is necessary 

to preserve the value of the land or 

protect the interests of the Indian 

landowners. 

(d) This section applies to tribal land 

leased under a corporate charter that we 

issue under 25 U.S.C. 477, or under a 

special act of Congress authorizing 

leases without our approval. This part 

does not apply to these leases except to 

the extent that the authorizing statutes 

require us to enforce the leases on 

behalf of the Indian landowners. 

5. Revise § 162.105 to read as follows:

§ 162.105 Can BIA combine for leasing 

purposes tracts that have different Indian 

landowners? 

(a) A lease negotiated by Indian 

landowners may cover more than one 

tract of Indian land, but the minimum 

consent requirements for leases granted 

by Indian landowners will apply to each 

tract separately. We may combine 

multiple tracts into a unit for leases 

negotiated by us, if we determine that 

unitization is in the Indian landowners’

best interests and consistent with the 

efficient administration of the land. 

(b) Unless otherwise provided in the 

lease, the rent or other consideration 

derived from a unitized lease will be 

distributed based on the size of each 

owner’s interest in proportion to the 

acreage within the entire unit. Unless 

otherwise agreed upon by the Indian 

landowners, market rent will be based 

on the value of the entire leased unit, 

without any consideration being given 

to the relative or contributive values of 

the individual tracts within the unit. 

6. Revise §§ 162.108, 162.109, and 

162.110 to read as follows:

§ 162.108 What are BIA’s responsibilities 

in administering and enforcing leases? 

(a) We will make reasonable efforts to 

see that lessees meet their payment 

obligations to Indian landowners 

through the collection of rent on behalf 

of the landowners and the prompt 

initiation of appropriate collection and 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6507

enforcement actions. Upon actual notice 

of a violation, we will also assist 

landowners in the enforcement of direct 

payment obligations, and in the exercise 

of any negotiated remedies that apply in 

addition to specific remedies made 

available to us under these or other 

regulations. 

(b) We will make reasonable efforts to 

see that lessees comply with the 

requirements in their leases through 

appropriate inspections and 

enforcement actions as needed to 

protect the interests of the Indian 

landowners and respond to concerns 

expressed by them. We will take 

emergency action as needed to preserve 

the value of the land. 

(c) In those cases where tribal law or 

ordinances are in place we may defer 

enforcement responsibilities to the tribe.

§ 162.109 What laws apply to leases 

granted or approved under this part? 

(a) Leases granted or approved under 

this part are subject to Federal laws of 

general applicability and any specific 

federal statutory requirements that are 

not incorporated in this part. 

(b) Tribal laws generally apply to land 

under the jurisdiction of the tribe 

enacting the laws, except to the extent 

that those tribal laws are substantially 

and materially inconsistent with this 

part or other applicable Federal law. 

This part may be superseded or 

modified by tribal laws, so long as: 

(1) The tribal laws are consistent with 

the enacting tribe’s governing 

documents; 

(2) The tribe has notified us of the 

superseding or modifying effect of the 

tribal laws; 

(3) The superseding or modifying of 

the regulation would not violate a 

Federal statute or judicial decision, or 

conflict with our general trust 

responsibility under Federal law; and 

(4) The superseding or modifying of 

the regulation applies only to tribal 

land. 

(c) Tribal laws may include laws 

assigning the responsibility for leasing 

to a Division, Department, or local 

governmental unit of a tribe, and any 

lease with that Division, Department, or 

local governmental unit is considered to 

be a lease with that tribe.

(d) State laws may apply to a lease of 

Indian land if the laws are expressly 

agreed to by the parties to the lease, and 

by the tribe, if the lease is for 

individually-owned land. Unless 

expressly provided in the lease of tribal 

land, or the tribe’s consent for a lease of 

individually owned land, the agreement 

does not waive the tribe’s sovereign 

immunity or provide its consent to state 

civil regulatory jurisdiction.

§ 162.110 Can tribes administer this part 

on behalf of the Secretary or BIA? 

Any tribe or tribal organization that is 

administering programs or services 

under 25 CFR part 900: 

(a) Can administer the provisions in 

this part that authorize or require us to 

take certain actions; and 

(b) Cannot administer the provisions 

of this part relating to the granting, 

approval, or enforcement of leases and 

permits. 

7. Add § 162.114 to read as follows:

§ 162.114 Who should I contact with 

questions concerning the leasing process? 

The Indian landowner or prospective 

tenant should contact the local BIA 

Realty Office or any tribal realty office 

for answers to questions about the 

leasing process. 

8. Add § 162.115 to read as follows:

§ 162.115 Does the information 

submission require approval by the Office 

of Management and Budget? 

Yes, information as requested in 

Subparts B, C, D and E requires 

approval by the Office of Management 

and Budget. OMB has assigned OMB 

Control Number 1076–0155. Please note 

that, as a federal agency, we 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. 

9. Add subparts C and D to read as 

follows:

Subpart C—Residential Leases 

General Provisions 

162.300 What types of leases does this 

subpart cover? 

162.301 How will the BIA accommodate 

tribal laws on land under a residential 

lease? 

How To Obtain a Lease 

162.302 Can a tenant negotiate a residential 

lease with the Indian landowners? 

162.303 When can the Indian landowners 

grant a residential lease? 

162.304 What are the consent requirements 

for a residential lease on a fractionated 

tract? 

162.305 Who can represent the Indian 

landowners in negotiating or granting a 

residential lease? 

162.306 When can BIA grant a permit for 

residential use? 

162.307 Must the land be appraised before 

BIA’s grant or approval of a residential 

lease? 

162.308 What documents must BIA review 

before granting or approving a residential 

lease? 

162.309 How and when will BIA decide 

whether to grant or approve a residential 

lease? 

162.310 When will a residential lease be 

effective? 

162.311 When is a decision to grant or 

approve a residential lease effective? 

162.312 Must a residential lease or permit 

be recorded? 

Lease Requirements 

162.313 Is there a standard residential lease 

form? 

162.314 Are there any provisions that must 

be included in a residential lease? 

162.315 What requirements must be 

satisfied in executing a residential lease? 

162.316 How should a residential lease 

describe the land? 

162.317 How much rent must be paid under 

a residential lease? 

162.318 Must the rent be adjusted under a 

residential lease? 

162.319 When are rental payments due 

under a residential lease? 

162.320 Will untimely rental payments 

incur interest charges or penalties? 

162.321 To whom can rental payments be 

made under a residential lease? 

162.322 What form of rental payment can 

be accepted under a residential lease? 

162.323 What other types of payments are 

required under a residential lease? 

162.324 How long can the term of a 

residential lease run? 

162.325 Can a residential lease be amended, 

assigned, sublet, or mortgaged? 

162.326 How will BIA decide whether to 

approve an amendment to a residential 

lease? 

162.327 Can a residential lease be assigned 

without the consent of the Indian 

landowners? 

162.328 May a residential lease be sublet 

without the consent of the Indian 

landowners? 

162.329 May a residential lease be 

mortgaged without the consent of the 

Indian landowners? 

162.330 May Indian landowners withhold 

their consent to an assignment, sublease, 

or mortgage? 

162.331 When will a decision to approve an 

amendment, assignment, sublease, or 

mortgage under a residential lease be 

effective? 

162.332 How can the leased premises be 

used under a residential lease? 

162.333 Can improvements be made under 

a residential lease? 

162.334 Who will own the improvements 

made under a residential lease? 

162.335 What indemnities are required 

under a residential lease? 

162.336 How will payment rights and 

obligations relating to residential land be 

allocated between the Indian landowners 

and the tenant? 

162.337 Can a residential lease provide for 

negotiated remedies in the event of a 

violation? 

162.338 Must a tenant provide a bond 

under a residential lease? 

162.339 What forms of bonds can be 

accepted under a residential lease? 

162.340 How will a bond be administered? 

162.341 Is insurance required under a 

residential lease? 

Lease Administration 

162.342 Are there administrative fees for 

actions relating to residential leases? 

6508 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

162.343 Will BIA notify a tenant when a 

rental payment is due under a residential 

lease? 

Lease Enforcement 

162.344 What will BIA do if rental 

payments are not made as required by a 

residential lease? 

162.345 What fees are assessed on 

delinquent rental payments due under a 

residential lease? 

162.346 How will BIA determine whether 

the activities of a tenant under a 

residential lease comply with the terms 

of the lease? 

162.347 What will BIA do about a violation 

under a residential lease? 

162.348 What will BIA do if a violation of 

a residential lease is not cured on time?

162.349 Will BIA’s appeal bond rules apply 

to cancellation decisions? 

162.350 When is a cancellation of a 

residential lease effective? 

162.351 Can BIA take emergency action if 

leased premises are threatened? 

162.352 What will BIA do if a tenant 

remains in possession after a lease 

expires or is canceled? 

162.353 May a lease be terminated before 

its expiration date? 

162.354 What happens if the tenant 

abandons or does not diligently develop 

the leased premises?

Subpart D—Business Leases 

General Provisions 

162.400 What types of leases are covered by 

this subpart? 

162.401 How will BIA accommodate tribal 

laws on land under a business lease? 

How To Obtain a Lease 

162.402 How and when can a business 

lease be obtained? 

162.403 When can the Indian landowners 

grant a business lease? 

162.404 What are the consent requirements 

for a business lease on a fractionated 

tract? 

162.405 Who can represent the Indian 

landowners in negotiating or granting a 

business lease? 

162.406 When can BIA grant a permit for 

business use? 

162.407 How will BIA estimate the fair 

market rental of Indian land? 

162.408 What documents must BIA review 

before granting or approving a business 

lease? 

162.409 How and when will BIA decide 

whether to approve a business lease? 

162.410 When will a business lease be 

effective? 

162.411 For purposes of appeal, when will 

a BIA decision to grant or approve a 

business lease be effective? 

162.412 Must a business lease or permit be 

recorded? 

Lease Requirements 

162.413 Is there a standard business lease 

form? 

162.414 Are there any provisions that must 

be included in a business lease? 

162.415 Are there any formal requirements 

that must be satisfied in the execution of 

a business lease? 

162.416 How should the land be described 

in a business lease? 

162.417 How much rent must be paid under 

a business lease? 

162.418 Must the rent be adjusted under a 

business lease? 

162.419 When are rental payments due 

under a business lease? 

162.420 Will untimely rental payments 

made under a business lease be subject 

to interest charges or late payment 

penalties? 

162.421 To whom can rental payments be 

made under a business lease? 

162.422 What form of rental payment can 

be accepted under a business lease? 

162.423 What other types of payments are 

required under a business lease? 

162.424 How long can the term of a 

business lease run? 

162.425 Can a business lease be amended, 

assigned, sublet, or mortgaged? 

162.426 How and when can a business 

lease be amended? 

162.427 May a lease be assigned without 

the consent of the Indian landowners? 

162.428 May a lease be subleased without 

the consent of the Indian landowners 

and the approval of the Secretary? 

162.429 How will BIA decide whether to 

approve an assignment or sublease under 

a business lease? 

162.430 May a lease be mortgaged without 

the consent of the Indian landowners? 

162.431 How will BIA decide whether to 

approve a leasehold mortgage under a 

business lease? 

162.432 When will a BIA decision to 

approve an amendment, assignment, 

sublease, or mortgage under a business 

lease be effective? 

162.433 Must an amendment, assignment, 

sublease, or mortgage approved under a 

business lease be recorded? 

162.434 When will BIA take action on an 

amendment, assignment, sublease, or 

mortgage under a business lease? 

162.435 How can the leased premises be 

used under a business lease? 

162.436 Can improvements be made under 

a business lease? 

162.437 Who will own the improvements 

made under a business lease? 

162.438 What indemnities are required 

under a business lease? 

162.439 How will payment rights and 

obligations relating to business leases be 

allocated between the Indian landowners 

and the lessee? 

162.440 Can a business lease provide for 

negotiated remedies in the event of a 

violation? 

162.441 Must a lessee or assignee provide a 

bond for a lease? 

162.442 What forms of bond can be 

accepted under a business lease? 

162.443 How will a bond be administered? 

162.444 Will we require insurance for a 

business lease? 

Lease Administration 

162.445 Will administrative fees be charged 

for actions relating to business leases? 

162.446 Will we notify a lessee when a 

rental payment is due under a business 

lease? 

Lease Enforcement 

162.447 What will we do if rental payments 

are not made in the time and manner 

required by a business lease? 

162.448 Will any special fees be assessed 

on delinquent rental payments due 

under a business lease? 

162.449 How will we determine whether 

the activities of a lessee under a business 

lease are in compliance with the terms 

of the lease? 

162.450 What will we do in the event of a 

violation under a business lease? 

162.451 What will we do if a violation of 

a business lease is not cured to our 

satisfaction within the requisite time 

period? 

162.452 Will BIA’s regulations concerning 

appeal bonds apply to cancellation 

decisions involving business leases? 

162.453 When will a cancellation of a 

business lease be effective? 

162.454 Can we take emergency action if 

the leased premises are threatened with 

immediate and significant harm? 

162.455 What will we do if a lessee holds 

over after the expiration or cancellation 

of a business lease? 

162.456 May a lease be terminated before 

its expiration date? 

162.457 What happens if the lessee 

abandons the lease?

Subpart C—Residential Leases 

General Provisions

§ 162.300 What types of leases does this 

subpart cover? 

(a) This subpart covers both ground 

leases (undeveloped land) and leases of 

developed land (together with the 

improvements thereon) on tribal or 

allotted land, for the purposes of Indian 

housing. The regulations in this subpart 

also apply to permits made for Indian 

housing purposes, if appropriate. Leases 

covered by this subpart would authorize 

the construction or use of: 

(1) A single-family home; and 

(2) Housing for public purposes. 

(b) Leases for other residential 

development (for example, multi-family 

developments and single family 

residential developments for profit) are 

covered under subpart D of this part.

§ 162.301 How will BIA accommodate 

tribal laws on land under a residential 

lease? 

(a) Unless prohibited by Federal law, 

we will recognize and accommodate 

tribal laws regulating activities on land 

under a residential lease, including 

tribal laws relating to land use, 

environmental protection, and historic 

or cultural preservation. 

(b) This paragraph applies when this 

subpart is inconsistent with a tribal law 

and § 162.109 prohibits tribal law to 

supersede or modify this subpart. We 

may waive provisions of this subpart 

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under 25 CFR part 1, if the waiver does 

not: 

(1) Violate a Federal statute or judicial 

decision; or

(2) Conflict with our general trust 

responsibility under Federal law. 

How To Obtain a Lease

§ 162.302 Can a tenant negotiate a 

residential lease with the Indian 

landowners? 

Yes, a tenant can obtain a residential 

lease through direct negotiation. We 

will assist prospective tenants in 

contacting the Indian landowners or 

their representatives to negotiate a lease, 

including providing the names and 

addresses of the Indian landowners 

upon written request. We will assist the 

Indian landowners in those negotiations 

upon request.

§ 162.303 When can the Indian landowners 

grant a residential lease? 

(a) Tribes may grant residential leases 

of tribally-owned land, including any 

tribally-owned undivided interest(s) in a 

fractionated tract, as evidenced by an 

appropriate tribal authorization and 

subject to our approval. Where tribal 

land is subject to a land assignment 

made to a tribal member or some other 

individual under tribal law or custom, 

the individual and the tribe must both 

grant the lease, subject to our approval. 

(b) Adult Indian landowners, or 

emancipated minors, may grant 

residential leases of their land, 

including undivided interests in 

fractionated tracts, subject to our 

approval. 

(c) In order to grant a residential lease 

of a fractionated tract, the Indian 

landowners must: 

(1) Obtain approval of the required 

percentage of the owners of the 

undivided interest in the tract as 

required by § 162.304; and 

(2) Obtain our approval. 

(d) The proceeds from a residential 

lease that we approve under paragraph 

(c) of this section must be distributed to 

all owners of undivided interests in the 

tract covered by the lease. 

(1) The amount of the proceeds 

distributed to each owner must be 

determined in accordance with the 

portion of the undivided interest in the 

tract covered under the lease owned by 

that owner. 

(2) This paragraph applies where the 

owners of the applicable percentage of 

interests under § 162.304 grant a 

residential lease on behalf of all of the 

Indian owners of a fractionated tract. 

The non-consenting Indian landowners 

(including those on whose behalf we 

have granted consent under 

§ 162.304(c)) must receive a fair market 

rental, even if the land is being leased 

at less than a fair market rental under 

§ 162.317. 

(e) Upon request of the Indian 

landowner, we will assist the tenant in 

obtaining the grant of the applicable 

percentage of interests under § 162.304 

of this subpart.

§ 162.304 What are the consent 

requirements for a residential lease on a 

fractionated tract? 

(a) Except for Alaska, the Indian 

landowners must determine the 

percentage referred to in the Indian 

Land Consolidation Act Amendments of 

2000, 25 U.S.C. section 2218, as follows:

If the number of owners of the undivided 

interest in the tract 

is. . . 

Then the percentage 

of owners who must 

approve of the lease 

is. . . 

(1) Five or fewer ....... 100 percent. 

(2) More than five but 

less than 11.

80 percent. 

(3) More than 10 but 

fewer than 20.

60 percent. 

(4) Twenty or more ... Over 50 percent. 

(b) In Alaska, residential leases of 

Indian lands may be negotiated by the 

Indian landowners, or their 

representatives who may execute leases 

under § 162.305, provided: 

(1) The owners of a majority of the 

interests have negotiated a lease 

satisfactory to us; 

(2) We grant the lease on behalf of 

those persons for whom we are 

authorized to grant leases under 

paragraph (c) of this section; and 

(3) The total combined consent of the 

owners and us provides 100 percent 

consent. 

(c) We may give written consent to a 

lease, and that consent must be counted 

in the percentage ownership described 

in paragraphs (a) or (b) of this section, 

on behalf of: 

(1) The individual owner if the owner 

is deceased and the heirs to, or devisees 

of, the interest of the deceased owner 

have not been determined; 

(2) Individuals whose whereabouts 

are unknown to us, after reasonable 

attempts are made to locate such 

individuals; 

(3) Individuals who are found to be 

non compos mentis, or determined to be 

an adult in need of assistance or under 

legal disability as defined in part 115 of 

this chapter; 

(4) Orphaned minors; 

(5) Individuals who have given us a 

written power of attorney to lease their 

land; and 

(6) The individual landowners of a 

fractionated tract where: 

(i) We have given the Indian 

landowners written notice of our intent 

to grant a lease on their behalf; 

(ii) The Indian landowners are unable 

to agree upon a lease during a 3-month 

negotiation period following the notice; 

and 

(iii) The land is not being used by an 

Indian landowner.

§ 162.305 Who can represent the Indian 

landowners in negotiating or granting a 

residential lease? 

The following individuals or entities 

may represent an individual Indian 

landowner: 

(a) An adult acting on behalf of his or 

her minor children; 

(b) A guardian, conservator, or other 

fiduciary appointed by a court of 

competent jurisdiction to act on behalf 

of an individual Indian landowner; 

(c) An adult or legal entity who has 

been given a written power of attorney 

that: 

(1) Meets all of the formal 

requirements of any applicable Federal, 

tribal, or state law; 

(2) Identifies the attorney-in-fact and 

the land to be leased; and 

(3) Describes the scope of the power 

granted and any limits thereon. 

(d) Any person who is authorized to 

practice before the Department of the 

Interior under 43 CFR Part 1.

§ 162.306 When can BIA grant a permit for 

residential use? 

(a) We may grant a permit for 

residential use in the same manner as 

we would grant a residential lease under 

§ 162.304(c), for example, to keep an 

Indian landowner’s house occupied 

while the landowner’s estate is going 

through probate. We may also grant a 

permit on behalf of individual Indian 

landowners, without prior notice, if it is 

impractical to provide notice to the 

owners and no substantial injury to the 

land will occur, or to protect the trust 

resource, but we must give the Indian 

landowners subsequent immediate 

notice and advise them of their right to 

appeal the decision under part 2 of this 

chapter. If the permit is granted to 

protect the trust resource, the permit 

will be effective immediately under part 

2 of this chapter. 

(b) We may grant a permit for 

residential use on government land. 

(c) A tribe may grant a permit, subject 

to our approval, in the same manner as 

it would grant a lease under § 162.303. 

(d) Permits may be revoked upon 

reasonable notice to the permittee, as 

specified in the permit.

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§ 162.307 Must the land be appraised 

before BIA’s grant or approval of a 

residential lease? 

(a) To support the Indian landowners 

in their negotiations, and to assist in our 

consideration of whether a residential 

lease is in the Indian landowners’ best 

interest, we must determine the fair 

market rental of the land before our 

grant or approval of the lease, even if 

the land may be leased at less than a fair 

market rental under § 162.317, except as 

provided in paragraph (c) of this 

section. 

(b) A fair market rental may be 

determined by referral to published 

residential rental rates in the area, 

appraisal, or any other appropriate 

valuation method. Where an appraisal 

or other valuation is needed to 

determine the fair market rental, the 

appraisal or valuation must be prepared 

in accordance with the Uniform 

Standards of Professional Appraisal 

Practice (USPAP). 

(c) Upon receipt of an appropriate 

Tribal Resolution, we may not require 

an appraisal for a lease on tribal land.

§ 162.308 What documents must BIA 

review before granting or approving a 

residential lease? 

(a) The Indian landowner and the 

tenant must provide an executed lease 

that complies with the requirements of 

this part. We will assist the Indian 

landowner in this process upon request. 

(b) In addition to the executed lease, 

the parties must provide the following 

supporting documents:

(1) If the tenant is a corporation, 

partnership or other legal entity, it must 

provide organizational and financial 

documents, as needed to show that the 

lease will be enforceable against the 

tenant and the tenant will be able to 

perform all of its lease obligations. 

(2) Where a bond is required under 

§ 162.338, the bond must be furnished 

before we consider the lease application 

complete under § 162.309(b). 

(3) The tenant should provide 

environmental and archaeological 

reports, surveys, and site assessments, 

as needed to facilitate BIA compliance 

with NEPA and other applicable Federal 

and tribal land use requirements. We 

will adopt any tribal environmental 

review as our NEPA review, to the 

extent such adoption is allowed under 

our procedure implementing NEPA. 

(4) The tenant may be required to 

provide proof that the proposed use is 

in conformance with applicable tribal 

ordinances.

§ 162.309 How and when will BIA decide 

whether to grant or approve a residential 

lease? 

(a) Before we grant or approve a lease, 

we must determine in writing that the 

lease is in the best interest of the Indian 

landowners. In making that 

determination, we will: 

(1) Review the lease and supporting 

documents; 

(2) Identify potential environmental 

impacts and ensure compliance with all 

applicable environmental laws, land use 

laws, and ordinances (including 

approval of the appropriate review 

documents under NEPA); 

(3) Assure ourselves that adequate 

consideration has been given, as 

appropriate, to: 

(i) The relationship between the use 

of the leased premises and the use of 

neighboring lands; 

(ii) The height, quality, and safety of 

any structures or other facilities to be 

constructed on the leased premises; 

(iii) The availability of police and fire 

protection, utilities, and other essential 

community services; 

(iv) The availability of judicial forums 

for all criminal and civil matters arising 

on the leased premises; and 

(v) The effect on the environment of 

the proposed land use. 

(4) Require any lease modifications or 

mitigation measures that are needed to 

satisfy any requirements, or any other 

Federal or tribal land use requirements. 

(b) We will take action on the lease 

within 30 days of the date of our receipt 

of the lease and supporting documents. 

(This deadline applies only if the lease 

is in an approved form and we have 

received all of the documents that we 

need to support the findings required by 

paragraph (a) of this section.) If we do 

not act within 30 days, the Indian 

landowner may take appropriate action 

under part 2 of this chapter. 

(c) If we approve or disapprove a 

lease, we will notify the parties 

immediately and advise them of their 

right to appeal the decision under part 

2 of this chapter. Upon grant or 

approval of a residential lease, we will 

provide a copy to the tenant and make 

the lease available to the Indian 

landowner(s) upon request.

§ 162.310 When will a residential lease be 

effective? 

Unless otherwise provided in the 

lease, a residential lease will be effective 

on the date on which the lease is 

granted or approved by us. A residential 

lease may be made effective on some 

past or future date, by agreement, but 

such a lease may not be granted or 

approved more than one year before the 

date on which the lease term is to 

commence. All approvals must be in 

writing.

§ 162.311 When is a decision to grant or 

approve a residential lease effective? 

Our decision to grant or approve a 

residential lease will be effective 

immediately, notwithstanding any 

appeal that may be filed under part 2 of 

this chapter.

§ 162.312 Must a residential lease or 

permit be recorded? 

(a) A residential lease or permit must 

be recorded in our Land Titles and 

Records Office with jurisdiction over 

the land. We will record the lease or 

permit immediately following our grant 

or approval under this subpart. 

(b) Residential leases of tribal land 

that do not require our approval, under 

§ 162.102 of this part, must be recorded 

by the tribe in our Land Titles and 

Records Office with jurisdiction over 

the land. 

Lease Requirements

§ 162.313 Is there a standard residential 

lease form? 

No, there is no standard residential 

lease form. We will assist the Indian 

landowners in drafting lease provisions 

that conform to the requirements of this 

part.

§ 162.314 Are there any provisions that 

must be included in a residential lease? 

Yes, in addition to the other 

requirements of this part, all residential 

leases must include the following 

provisions. 

(a) The obligations of the tenant 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. 

(b) Nothing in the lease must delay or 

prevent termination of Federal trust 

responsibilities for the land during the 

lease’s term. 

(c) Termination of Federal trust 

responsibilities for the land does not 

abrogate the lease. 

(d) The owners of the land and the 

tenant and its surety or sureties must be 

notified of any change in the status of 

the land. 

(e) There must not be any unlawful 

conduct, creation of a nuisance, illegal 

activity, or negligent use or waste of the 

leased premises. 

(f) The tenant must comply with all 

applicable laws, ordinances, rules, 

regulations, and other legal 

requirements, including tribal laws and 

leasing policies.

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§ 162.315 What requirements must be 

satisfied in executing a residential lease? 

(a) A residential lease must identify 

the Indian landowners and their 

respective interests in the leased 

premises, and the lease must be granted 

by or on behalf of each of the Indian 

landowners. One who executes a lease 

in a representative capacity under 

§ 162.305 must identify the owner being 

represented and the authority under 

which such action is being taken. 

(b) A residential lease must be 

executed by individuals having the 

necessary capacity and authority to bind 

the tenant under applicable law. 

(c) A residential lease must include a 

citation of the provisions in this subpart 

that authorize our grant or approval, 

along with a citation of the formal 

documents by which such authority has 

been delegated to the official taking 

such action.

§ 162.316 How should a residential lease 

describe the land? 

A residential lease should describe 

the leased premises by reference to a 

public survey, if possible. The lease 

must include a legal description or other 

description that is sufficient to identify 

the leased premises. Where there are 

undivided interests owned in fee status, 

the aggregate percentage of trust and 

restricted interests should be identified 

in the description of the leased 

premises.

§ 162.317 How much rent must be paid 

under a residential lease? 

(a) A residential lease must provide 

for the payment of a fair market rental 

at the beginning of the lease term and 

at specified times during the term of the 

lease, unless a lesser amount is 

permitted under paragraphs (b) or (c) of 

this section. The tenant’s rent payments 

will be in fixed amounts. 

(b) We will approve a residential lease 

of tribal land at a nominal rent, or at less 

than a fair market rental, if such a rent 

is negotiated or established by the tribe. 

(c) We will approve a residential lease 

of individually-owned land at a nominal 

rent or at less than a fair market rental, 

if the tenant is a member of the Indian 

landowner’s immediate family; a coowner in the lease tract; when some 

other special relationship exists 

between the lessor and lessee or special 

circumstances exist that in the opinion 

of the Secretary warrant the approval of 

the conveyance.

§ 162.318 Must the rent be adjusted under 

a residential lease? 

(a) A residential lease is not required 

to allow for rental adjustments, unless 

the parties agree to provide for periodic 

adjustments in the lease. 

(b) If rental adjustments are provided 

for, the lease must specify: 

(1) How adjustments are made; 

(2) Who makes the adjustments; 

(3) When the adjustments are 

effective; and 

(4) How disputes about the 

adjustments are resolved.

§ 162.319 When are rental payments due 

under a residential lease?

A residential lease must specify the 

dates on which all rental payments are 

due. Unless otherwise provided in the 

lease, rental payments may not be made 

or accepted more than one year in 

advance of the due date. Rent payments 

are due at the time specified in the 

lease, regardless of whether the tenant 

receives an advance billing or other 

notice that a payment is due.

§ 162.320 Will untimely rental payments 

incur interest charges or penalties? 

A residential lease must specify the 

rate at which interest will accrue on any 

rental payment not made by the due 

date or any other date specified in the 

lease. A lease may also identify 

additional late payment penalties that 

will apply if a rental payment is not 

made by a specified date. Unless 

otherwise provided in the lease, such 

interest charges and late payment 

penalties will apply in the absence of 

any specific notice to the tenant from us 

or the Indian landowners, and the 

failure to pay such amounts will be 

treated as a lease violation under 

§ 162.347.

§ 162.321 To whom can rental payments 

be made under a residential lease? 

(a) A residential lease must specify 

whether rental payments will be made 

directly to the Indian landowners or to 

us on behalf of the Indian landowners. 

If the lease provides for payment to be 

made directly to the Indian landowners, 

the lease must also require that the 

tenant retain specific documentation 

evidencing proof of payment, such as 

canceled checks, cash receipt vouchers, 

or copies of money orders or cashier’s 

checks. 

(b) Rental payments made directly to 

the Indian landowners must be made to 

the parties and addresses specified in 

the lease, unless the tenant receives 

notice of a change of ownership or 

address. Unless otherwise provided in 

the lease, rental payments may not be 

made payable directly to anyone other 

than the Indian landowners. 

(c) A lease that provides for rental 

payments to be made directly to the 

Indian landowners must also provide 

for such payments to be suspended and 

the rent thereafter paid to us, rather than 

directly to the Indian landowners, if: 

(1) An Indian landowner dies; 

(2) An Indian landowner requests that 

payment be made to us; 

(3) An Indian landowner is found by 

us to be in need of assistance in 

managing his/her financial affairs; or 

(4) We determine, in our discretion 

and after consultation with the Indian 

landowner(s), that direct payment 

should be discontinued.

§ 162.322 What form of rental payment can 

be accepted under a residential lease? 

(a) When rental payments are made 

directly to the Indian landowners, a 

residential lease must specify the type 

of payment that is acceptable to the 

owners. 

(b) Payments made to us may be 

delivered in person or by mail. We will 

not accept cash, foreign currency, or 

third-party checks. We will accept: 

(1) Personal or business checks drawn 

on the account of the tenant; 

(2) Money orders; 

(3) Cashier’s checks; 

(4) Certified checks; or 

(5) Electronic funds transfer 

payments.

§ 162.323 What other types of payments 

are required under a residential lease? 

(a) The tenant may be required to pay 

additional fees, taxes, and assessments 

associated with the use of the land, as 

determined by the tribe having 

jurisdiction over the land. The tenant 

must pay these amounts to the 

appropriate tribal office. 

(b) Except as otherwise provided in 

part 171 of this chapter, if the leased 

premises are within an Indian irrigation 

project or drainage district, the tenant 

must pay all operation and maintenance 

charges that accrue during the lease 

term. Payment must be to the 

appropriate office in charge of the 

irrigation project or drainage district.

§ 162.324 How long can the term of a 

residential lease run? 

(a) A residential lease must provide 

for a definite lease term, specifying the 

commencement date. The 

commencement date of the lease may 

not be more than one year after the date 

on which the lease is granted or 

approved. 

(b) The lease term must be reasonable, 

given the purpose of the lease and the 

level of investment required. Unless 

otherwise provided by statute, the 

maximum term may not exceed 50 

years. The lease may provide for a 

primary term of less than 50 years with 

a provision for renewal(s), so long as the 

maximum term, including the 

renewal(s), does not exceed 50 years. A 

residential lease may not be extended by 

holdover. 

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(c) Where the Secretary grants a lease 

under § 162.304(c)(1) on behalf of 

undetermined heirs or devisees of an 

individual Indian decedent owning 100 

percent interest in the land, the 

maximum term of that lease may not 

exceed 2 years. 

(d) If an option to renew is provided, 

the lease must specify: 

(1) The time and manner in which the 

option must be exercised; and 

(2) Any additional consideration 

which will be due upon the exercise of 

the option or the commencement of the 

renewal period.

§ 162.325 Can a residential lease be 

amended, assigned, sublet, or mortgaged?

Yes, a residential lease can be 

amended, assigned, sublet, or mortgaged 

in accordance with §§ 162.326 to 

162.331.

§ 162.326 How will BIA decide whether to 

approve an amendment to a residential 

lease? 

We will approve a residential lease 

amendment if: 

(a) The required consents have been 

obtained from the Indian landowners 

(under § 162.304) and any mortgagee or 

any other sureties; and 

(b) We find the amendment to be in 

the best interest of the Indian 

landowners, under the standards set 

forth in § 162.309.

§ 162.327 Can a residential lease be 

assigned without the consent of the Indian 

landowners? 

(a) The lease may be assigned without 

the consent of the Indian landowners if 

the assignee agrees in writing to assume 

all of the tenant’s obligations under the 

lease, including bonding requirements, 

and: 

(1) The lease provides for assignments 

without further consent of the 

landowners; 

(2) The assignee is a leasehold 

mortgagee or its designee, acquiring the 

lease either through foreclosure or by 

conveyance; or 

(3) As specified in the lease. 

(b) If the owners’ consent is required, 

it must be obtained in the same manner 

as a new lease, unless the lease 

authorizes one or more of the Indian 

landowners to consent on behalf of all 

such owners. 

(c) Consent must be obtained from the 

holders of any bonds or mortgages. 

(d) Except as provided in paragraph 

(e) of this section, the assignment must 

be approved by the Secretary. Such 

approval will not be withheld providing 

that our approval will protect the best 

interests of the Indian landowners. To 

make that determination we will 

consider whether: 

(1) The tenant is not in default, and 

will remain liable under the lease; 

(2) The assignee agrees to be bound by 

the terms of the lease; 

(3) The proposed use by the assignee 

will require an amendment of the lease; 

(4) The value of any part of the leased 

premises not covered by the assignment 

would be adversely affected; and 

(5) The assignee has provided 

supporting documents which 

demonstrate that the lease will be 

enforceable against the assignee, and 

that the assignee will be able to perform 

its obligations under the lease. 

(e) The lease may be assigned without 

our approval if: 

(1) The assignee is a leasehold 

mortgagee or its designee, acquiring the 

lease either through foreclosure or by 

conveyance; 

(2) The assignee agrees in writing to 

assume all of the obligations under the 

lease; and 

(3) The assignee agrees in writing that 

any tenant to whom it transfers the lease 

will be another member of the tribe, a 

person who is eligible to be a member, 

a Tribal Housing Authority (or other 

Tribally-Designated Housing Entity), or 

the tribe. If no tribal member or person 

who is eligible to be a member or Tribal 

Housing Authority (or other TriballyDesignated Housing Entity) or the tribe 

wishes to lease the property, the lease 

may be transferred to another Indian, 

consistent with tribal law. If no Indian 

wishes to lease the property, the lease 

may be transferred to a non-Indian, 

consistent with tribal law. 

(f) The assignment must be recorded 

under § 162.312. 

(g) If the lease was approved at less 

than fair market rent under § 162.317(c), 

and the assignee is not a co-owner or a 

member of the Indian landowner’s 

immediate family, the assignment must 

provide for the assignee to pay fair 

market rent to the Indian landowner.

§ 162.328 May a residential lease be sublet 

without the consent of the Indian 

landowners? 

(a) The lease may provide for 

subleasing without the consent of the 

Indian landowners when the sublease is 

part of a housing development for 

public purposes for which a general 

plan has been submitted and approved 

and we have approved a sublease form 

for use in the project. Unless otherwise 

specified in the lease, the Indian 

landowners must consent to a sublease 

of a single-family home in the same 

manner as the initial lease. 

(b) Consent to the sublease must be 

obtained from any sureties. 

(c) The subtenant must agree to be 

bound by the terms of the lease. 

(d) If the lease was approved at less 

than fair market rent under § 162.317(c), 

and the subtenant is not a co-owner or 

a member of the Indian landowner’s 

immediate family, the sublease must 

provide for the subtenant to pay fair 

market rent to the Indian landowner. 

(e) Except as provided in paragraph 

(e) of this section or as provided in the 

lease, we must approve the sublease. We 

will not withhold approval providing 

that our approval will protect the best 

interests of the Indian landowners. To 

make that determination we will 

consider whether: 

(1) The tenant is not in default, and 

will remain liable under the lease; 

(2) The subtenant agrees to be bound 

by the terms of the lease; 

(3) The Indian landowner should 

receive some or all of any income 

received by the tenant for the sublease; 

(4) The proposed use by the subtenant 

will require an amendment of the lease; 

(5) The value of any part of the leased 

premises not covered by the sublease 

would be adversely affected; and 

(6) The subtenant has provided 

supporting documents which 

demonstrate that the sublease will be 

enforceable against the subtenant, and 

that the subtenant will be able to 

perform its obligations under the 

sublease. 

(f) Part of the leased premises may be 

sublet without our approval when: 

(1) The sublease is for housing for 

public purposes; and 

(2) We have approved a sublease form 

and rent schedule for use in the project. 

(g) The sublease should be recorded 

under § 162.312. 

(h) A sublease under paragraph (f) of 

this section should be recorded under 

§ 162.312. All other subleases must be 

recorded.

§ 162.329 May a residential lease be 

mortgaged without the consent of the 

Indian landowners? 

(a) The residential lease may be 

mortgaged without further consent of 

the Indian landowners if the lease 

contains a general authorization for 

such a mortgage, and it states what law 

would apply in case of foreclosure. 

(b) We must approve the leasehold 

mortgage. We will approve a leasehold 

mortgage under a residential lease if: 

(1) The required consents have been 

obtained from the Indian landowners 

and the holders of the tenant’s bond; 

and 

(2) We find that our approval is in the 

best interests of the Indian landowners. 

(c) In making the finding required by 

paragraph (b)(4) of this section, we will 

consider whether:

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(1) The tenant’s ability to comply with 

the lease would be adversely affected by 

any new loan obligations; 

(2) Any lease provisions would 

require modification to be consistent 

with the mortgage; 

(3) The remedies available to us or to 

the Indian landowners would be limited 

(beyond any additional notice and cure 

rights to be afforded to the mortgagee) 

in the event of a lease violation; and 

(4) Any rights of the Indian 

landowners would be subordinated or 

adversely affected in the event of a loan 

default by the tenant.

§ 162.330 May Indian landowners withhold 

their consent to an assignment, sublease, 

or mortgage? 

Yes, Indian landowners may withhold 

their consent to an assignment, 

sublease, or mortgage. However, Indian 

landowners are encouraged not to 

withhold their consent unreasonably. 

(a) A lease may require that: 

(1) The Indian landowners specify 

their reasons for withholding consent; 

and 

(2) The owners’ consent will be 

deemed granted if a response to a 

request for consent is not given within 

a time period specified in the lease. 

(b) An attempt by the tenant to 

mortgage the leasehold interest or 

authorize possession by another party, 

without the necessary consent and 

approval, will be treated as a lease 

violation under § 162.347. 

(c) A residential lease may authorize 

us, one or more of the Indian 

landowners, or a designated 

representative of the Indian landowners, 

to consent to an amendment, 

assignment, sublease, mortgage, or other 

type of agreement, on the landowners’

behalf. A designated landowner or 

representative may not negotiate or 

consent to an amendment, assignment, 

or sublease that would: 

(1) Reduce the rentals payable to the 

other Indian landowners; 

(2) Increase or decrease the lease area; 

or 

(3) Terminate or modify the term of 

the lease. 

(d) Where the Indian landowners have 

not designated a representative for the 

purpose of consenting to an 

amendment, assignment, sublease, 

mortgage, or other type of agreement, 

such consent may be granted by or on 

behalf of the landowners in the same 

manner as a new lease, under § 162.304.

§ 162.331 When will a decision to approve 

an amendment, assignment, sublease, or 

mortgage under a residential lease be 

effective? 

Our decision to grant or approve an 

amendment, assignment, sublease, or 

mortgage under a residential lease will 

be effective immediately, 

notwithstanding any appeal that may be 

filed under part 2 of this chapter. Copies 

of approved documents will be 

provided to the party requesting 

approval, and made available to the 

Indian landowners upon request.

§ 162.332 How can the leased premises be 

used under a residential lease? 

A residential lease must describe the 

authorized uses of the leased premises. 

Any use of the leased premises for an 

unauthorized purpose, will be treated as 

a lease violation under § 162.347.

§ 162.333 Can improvements be made 

under a residential lease? 

(a) A residential lease must generally 

describe the type and location of any 

improvements to be constructed by the 

tenant. Unless otherwise provided in 

the lease, any specific plans for the 

construction of those improvements will 

not require the consent of the Indian 

landowners or our approval. 

(b) Construction of any improvements 

not described in the lease must be 

approved as an amendment to the lease 

under § 162.326. An attempt by the 

tenant to construct improvements, 

without the necessary consent and 

approval, will be treated as a lease 

violation under § 162.347.

§ 162.334 Who will own the improvements 

made under a residential lease? 

(a) A residential lease may specify 

who will own any improvements 

constructed by the tenant, during the 

lease term. The lease must indicate 

whether any improvements constructed 

by the tenant will remain on the leased 

premises upon the expiration or 

termination of the lease, providing for 

the improvements to either: 

(1) Remain on the leased premises, in 

a condition satisfactory to the Indian 

landowners and us; or 

(2) Be removed within a time period 

specified in the lease, at the tenant’s 

expense, with the leased premises to be 

restored as close as possible to their 

condition before construction of such 

improvements. 

(b) If the lease allows the tenant to 

remove the improvements, it must also 

provide the Indian landowners with an 

option to waive the removal 

requirement and take possession of the 

improvements if they are not removed 

within the specified time period. If the 

Indian landowners choose not to 

exercise this option, we will take 

appropriate enforcement action to 

ensure removal at the tenant’s expense. 

This obligation survives the termination 

or expiration of the lease.

§ 162.335 What indemnities are required 

under a residential lease? 

(a) A residential lease must require 

that the tenant indemnify and hold the 

United States and the Indian 

landowners harmless from any loss, 

liability, or damages resulting from the 

tenant’s use or occupation of the leased 

premises, unless the tenant would be 

prohibited by law from making such an 

agreement. 

(b) Unless the tenant would be 

prohibited by law from making such an 

agreement, a residential lease must 

specifically require that the tenant 

indemnify the United States and the 

Indian landowners against all liabilities 

or costs relating to the use, handling, 

treatment, removal, storage, 

transportation, or disposal of hazardous 

materials, or the release or discharge of 

any hazardous material from the leased 

premises that occurs during the lease 

term, regardless of fault.

§ 162.336 How will payment rights and 

obligations relating to residential land be 

allocated between the Indian landowners 

and the tenant? 

Unless otherwise provided in a 

residential lease, the Indian landowners 

will be entitled to receive any 

settlement funds or other payments 

arising from certain actions that 

diminish the value of the land or the 

improvements thereon. The amount of 

the payments that are distributed to 

each owner must be determined in 

accordance with the portion of the 

undivided interests in the tract covered 

under the lease owned by the land 

owner. Such payments may include: 

(a) Insurance proceeds; 

(b) Trespass damages; and 

(c) Condemnation awards.

§ 162.337 Can a residential lease provide 

for negotiated remedies in the event of a 

violation? 

(a) A residential lease of tribal land 

may provide the tribe with certain 

negotiated remedies in the event of a 

lease violation, including the power to 

terminate the lease. A residential lease 

of individually owned land may provide 

the individual Indian landowners with 

similar remedies, so long as the lease 

also specifies the manner in which 

those remedies may be exercised by or 

on behalf of the landowners. 

(b) The negotiated remedies described 

in paragraph (a) of this section will 

apply in addition to the cancellation 

remedy available to us under § 162.349. 

If the lease specifically authorizes us to 

exercise any negotiated remedies on 

behalf of the Indian landowners, the 

exercise of such remedies may 

substitute for cancellation. 

6514 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

(c) A residential lease may provide for 

lease disputes to be resolved in tribal 

court or any other court of competent 

jurisdiction, or through arbitration or 

some other alternative dispute 

resolution method. We may not be 

bound by decisions made in such 

forums, but we will defer to ongoing 

proceedings, as appropriate, in deciding 

whether to exercise any of the remedies 

available to us under § 162.349.

§ 162.338 Must a tenant provide a bond 

under a residential lease? 

(a) Except as provided in paragraph 

(b) of this section, the tenant must 

provide a bond to secure: 

(1) At least one rental payment under 

the terms of the lease; 

(2) The construction of any required 

improvements; 

(3) The performance of any additional 

lease obligations, including the payment 

of operation and maintenance charges 

under § 162.323(b); and 

(4) The restoration and reclamation of 

the leased premises, to their condition 

at the commencement of the lease term 

or some other specified condition.

(b) A bond may not be required, if 

specified in the lease and upon a 

determination under § 162.309 that such 

a waiver is in the best interest of the 

Indian landowner(s).

§ 162.339 What forms of bonds can be 

accepted under a residential lease? 

(a) Except as provided in paragraph 

(b) of this section, a bond must be 

deposited with us and made payable 

only to us, and the bond may not be 

modified or withdrawn without our 

approval. We will only accept a bond in 

one of the following forms. 

(1) Cash. 

(2) Negotiable Treasury securities 

that: 

(i) Have a market value at least equal 

to the bond amount; and 

(ii) Are accompanied by a statement 

granting full authority to us to sell them 

if the terms of the lease are violated. 

(3) Certificates of deposit that: 

(i) Indicate on their face that our 

approval is required before redemption 

by any party; 

(ii) Have a face value at least equal to 

the bond amount, plus any penalties for 

early redemption; and 

(iii) Are accompanied by a statement 

granting full authority to us to sell them 

in case of a violation of the terms of the 

lease. 

(4) Irrevocable letters of credit issued 

by Federally-insured financial 

institutions authorized to do business in 

the United States. A letter of credit 

must: 

(i) Contain a clause that grants us the 

authority to demand immediate 

payment if the tenant violates the lease 

or fails to replace the letter of credit at 

least 30 days before its expiration date; 

(ii) Be payable to BIA (or tribe if the 

bond is held by the tribe under 

paragraph (b) of this section); 

(iii) Be irrevocable during its term and 

have an initial expiration date of not 

less than one year following the date 

BIA receives it; and 

(iv) Be automatically renewable for a 

period of not less than one year, unless 

the issuing financial institution 

provides us with written notice that it 

will not be renewed, at least 90 calendar 

days before the letter of credit’s 

expiration date. 

(5) A surety bond issued by a 

company approved by the U.S. 

Department of the Treasury. 

(6) Assignment of a savings account. 

(7) Any other form of highly liquid, 

non-volatile security subsequently 

approved by us that is easily convertible 

to cash and for which our approval is 

required before redemption by any 

party. 

(b) A tribe may accept and hold any 

form of bond described in paragraph (a) 

of this section, to secure performance 

under a residential lease of tribal land.

§ 162.340 How will a bond be 

administered? 

(a) If a cash bond is submitted, we 

will retain the funds in an account 

established in the name of the tenant. 

(b) We will not pay interest on a cash 

performance bond. 

(c) If the bond is not forfeited under 

§§ 162.344 or 162.348, we will refund 

the bond to the tenant upon the 

expiration or termination of the lease.

§ 162.341 Is insurance required under a 

residential lease? 

When necessary to protect the 

interests of the Indian landowners, a 

residential lease must require that a 

tenant provide insurance. Such 

insurance should include property, 

liability and/or casualty insurance, 

depending on the interests to be 

protected. If insurance is required, it 

must identify both the Indian 

landowners and the United States as 

additional insured parties, and be 

sufficient to protect all insurable 

improvements on the leased premises. 

Lease Administration

§ 162.342 Are there administrative fees for 

actions relating to residential leases? 

(a) We will charge an administrative 

fee each time we approve a residential 

lease, amendment, assignment, 

sublease, mortgage, or related 

document. These fees will be paid by 

the tenant, assignee, or subtenant, to 

cover our costs in preparing or 

processing the documents and 

administering the lease. 

(b) Except as provided in paragraph 

(c) of this section, we will charge 

administrative fees based on the rent 

payable under the lease. The fee will be 

3 percent of the annual rent. 

(c) The minimum administrative fee is 

$10.00 and the maximum administrative 

fee is $500.00, and any administrative 

fees that have been paid will be nonrefundable. However, we may waive all 

or part of these administrative fees, in 

our discretion. 

(d) If all or part of the costs in 

preparing or processing the documents 

and administering the lease are paid 

from tribal funds, the tribe may 

establish an additional or alternate 

schedule of fees.

§ 162.343 Will BIA notify a tenant when a 

rental payment is due under a residential 

lease? 

We may issue bills or invoices to a 

tenant in advance of the dates on which 

rental payments are due under a 

residential lease, but the tenant’s 

obligation to make such payments in a 

timely manner will not be excused if 

such bills or invoices are not delivered 

or received. 

Lease Enforcement

§ 162.344 What will BIA do if rental 

payments are not made as required by a 

residential lease? 

(a) A tenant’s failure to pay rent in the 

time and manner required by a 

residential lease is a violation of the 

lease, and with will issue a notice of 

violation under § 162.347. 

(1) If the lease requires that rental 

payments be made to us, we will send 

the tenant and its sureties a notice of 

violation within 10 business days of the 

date on which the rental payment was 

due. 

(2) If the lease provides for payment 

directly to the Indian landowners, we 

will send the tenant and its sureties a 

notice of violation within 10 business 

days of the date on which we receive 

actual notice of non-payment from the 

landowners. 

(b) If a tenant fails to provide 

adequate proof of payment or cure the 

violation within the period required by 

§ 162.347, and the amount due is not in 

dispute, we may take any of the actions 

in this paragraph. 

(1) We may: 

(i) Take action to recover the unpaid 

rent and any associated interest charges 

or late payment penalties; 

(ii) Cancel the lease under § 162.348; 

or 

(iii) Invoke any other remedies 

available under the lease or applicable 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6515

law, including collection on any 

available bond or referral of the debt to 

the Department of the Treasury for 

collection.

(2) We do not have to cancel the lease 

or give any further notice to the tenant 

before taking action to recover any 

unpaid rent. 

(3) If we cancel the lease, we can still 

take action to recover any unpaid rent. 

(c) We or the Indian landowners may 

accept partial payments and 

underpayments, but acceptance does 

not waive any amounts remaining 

unpaid or any other existing lease 

violations. Unless otherwise provided in 

the lease, overpayments may be credited 

as an advance against future rent 

payments. 

(d) If a personal or business check is 

dishonored, and a rental payment is 

therefore not made by the due date, the 

failure to make the payment in a timely 

manner will be a violation of the lease, 

and a notice of violation will be issued 

under § 162.347. Any payment made to 

cure such a violation, and any future 

payments by the same tenant, must be 

made by one of the alternative payment 

methods listed in § 162.322.

§ 162.345 What fees are assessed on 

delinquent rental payments due under a 

residential lease? 

(a) The following special fees will be 

assessed if rent is not paid in the time 

and manner required, in addition to any 

interest or late payment penalties that 

must be paid to the Indian landowners 

under a residential lease. The following 

special fees will be assessed to cover 

administrative costs incurred by the 

United States in the collection of the 

debt:

The tenant will

pay . . . For . . . 

(1) $50.00 .................. Administrative fee for 

dishonored checks. 

(2) $15.00 .................. Administrative fee for 

BIA processing of 

each notice or demand letter. 

(3) 18 percent of balance due.Administrative fee 

charged by Treasury following referral for collection of 

delinquent debt. 

(b) If all or part of the costs incurred 

in collection of the debt are paid from 

tribal funds, the tribe may establish an 

additional or alternate schedule of fees.

§ 162.346 How will BIA determine whether 

the activities of a tenant under a residential 

lease comply with the terms of the lease? 

(a) Unless a residential lease provides 

otherwise, we may enter the leased 

premises at any reasonable time, 

without prior notice, to protect the 

interests of the Indian landowners and 

ensure that the tenant is in compliance 

with the operating requirements of the 

lease. 

(b) If an Indian landowner notifies us 

that a specific lease violation has 

occurred, we will initiate an appropriate 

investigation within 10 business days of 

that notification. If we find out from 

another source that a specific lease 

violation has occurred, we will initiate 

an appropriate investigation and make a 

reasonable attempt to notify the Indian 

landowners.

§ 162.347 What will BIA do about a 

violation under a residential lease? 

(a) If we determine that a residential 

lease has been violated, we will send 

the tenant and its sureties and any 

mortgagee a notice of violation within 5 

business days of that determination. The 

notice of violation must be provided by 

certified mail, return receipt requested. 

(b) Within 10 business days of the 

receipt of a notice of violation, the 

tenant must: 

(1) Cure the violation and notify us in 

writing that the violation has been 

cured; 

(2) Dispute our determination that a 

violation has occurred and/or explain 

why we should not cancel the lease; or 

(3) Request additional time to cure the 

violation.

§ 162.348 What will BIA do if a violation of 

a residential lease is not cured on time? 

(a) If the tenant does not cure a 

violation of a residential lease within 

the requisite time period, we will 

consult with the Indian landowners, as 

appropriate, and determine whether: 

(1) We should cancel the lease under 

paragraph (c) of this section and 

§§ 162.350 through 162.354; 

(2) We should invoke any other 

remedies available to us under the lease, 

including collecting on any available 

bond; 

(3) The Indian landowners wish to 

invoke any remedies available to them 

under the lease; or 

(4) The tenant should be granted 

additional time in which to cure the 

violation. 

(b) If we decide to grant a tenant 

additional time in which to cure a 

violation, the tenant must proceed 

diligently to complete the necessary 

corrective actions within a reasonable or 

specified time period from the date on 

which the extension is granted. 

(c) If we decide to cancel the lease, we 

will send the tenant and its sureties and 

any mortgagee a cancellation letter 

within 5 business days of that decision. 

The cancellation letter must be sent to 

the tenant by certified mail, return 

receipt requested. We will also provide 

actual or constructive notice of a 

cancellation decision to the Indian 

landowners, as appropriate. The 

cancellation letter will: 

(1) Explain the grounds for 

cancellation; 

(2) Notify the tenant of the amount of 

any unpaid rent, interest charges, or late 

payment penalties due under the lease; 

(3) Notify the tenant of its right to 

appeal under part 2 of this chapter, as 

modified by § 162.349, including the 

amount of any appeal bond that must be 

posted to perfect an appeal of the 

cancellation decision;

(4) Order the tenant to vacate the 

property within 30 days of the date of 

receipt of the cancellation letter, if an 

appeal is not perfected by that time; and 

(5) If the lease so provides, 

cancellation will be subject to the 

approval of the holder of any 

outstanding leasehold mortgage.

§ 162.349 Will BIA’s appeal bond rules 

apply to cancellation decisions? 

(a) The appeal bond provisions of part 

2 of this chapter will not apply to 

appeals from lease cancellation 

decisions made under § 162.348. 

Instead, when BIA decides to cancel a 

residential lease, we may require that 

the tenant post an appeal bond in order 

to perfect an appeal of the cancellation 

decision. The requirement to post an 

appeal bond will apply in addition to all 

of the other requirements in part 2 of 

this chapter. 

(b) An appeal bond should be set in 

an amount necessary to protect the 

Indian landowners against financial 

losses that will likely result from the 

delay caused by an appeal. Appeal bond 

requirements will not be separately 

appealable, but may be contested during 

the appeal of the lease cancellation 

decision. 

(c) If the appeal bond is not posted, 

BIA can dismiss the appeal. That 

dismissal will be final for the 

Department of the Interior.

§ 162.350 When is a cancellation of a 

residential lease effective? 

A cancellation decision involving a 

residential lease becomes stayed and not 

effective 30 days after either the tenant 

receives a cancellation letter from us, or 

40 days from the date the letter is 

mailed, whichever is earlier. The 

cancellation decision will be further 

stayed if the tenant perfects an appeal 

under §§ 162.348 and 162.349 and part 

2 of this chapter, unless the decision is 

made immediately effective under part 

2 of this chapter. While a cancellation 

decision is stayed, the tenant must 

6516 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

continue to pay rent and comply with 

the other terms of the lease. If an appeal 

is not perfected in accordance with 

§ 162.350 and part 2 of this chapter, the 

cancellation decision will be effective 

31 days after either the tenant receives 

a cancellation letter from us, or 41 days 

from the date the letter is mailed, 

whichever is earlier.

§ 162.351 Can BIA take emergency action 

if leased premises are threatened? 

We may take appropriate emergency 

action if there is a natural disaster or if 

a tenant or any other party causes or 

threatens to cause immediate and 

significant harm to the leased premises 

during the term of a residential lease. 

Emergency action may include judicial 

action seeking immediate cessation of 

the activity resulting in or threatening 

the harm. We will make reasonable 

efforts to notify the Indian landowners, 

either before or after the emergency 

action is taken.

§ 162.352 What will BIA do if a tenant 

remains in possession after a lease expires 

or is canceled? 

If a tenant remains in possession after 

the expiration or cancellation of a 

residential lease, we will treat the 

unauthorized use as a trespass. Unless 

we have been advised in writing by the 

applicable percentage of Indian 

landowners under § 162.304 that they 

are engaged in negotiations with the 

tenant to obtain a new lease, we will 

take action to recover possession on 

behalf of the Indian landowners, and 

pursue any additional remedies 

available under applicable law, such as 

forcible entry and detainer action.

§ 162.353 May a lease be terminated 

before its expiration date? 

(a) The lease may provide either party 

with one or more options to terminate, 

for any reason. If an option to terminate 

is provided, the lease must specify the 

time and manner in which the option 

must be exercised. 

(b) The lease may be mutually 

terminated by agreement between the 

lessee and the applicable percentage of 

Indian landowners under § 162.304, 

subject to our approval and notice to 

any approved encumbrancer. 

(c) If the lease so provides, 

termination will be subject to the 

approval of the holder of any 

outstanding leasehold mortgage.

§ 162.354 What happens if the tenant 

abandons or does not diligently develop the 

leased premises? 

(a) If the tenant does not diligently 

develop the leased premises or 

abandons the leased premises before 

expiration of the lease term, the tenant 

and its sureties continue to be 

responsible for the obligations 

contained in the lease. The lease may 

specify a time after which the leased 

premises must be developed or a period 

of non-use after which the lease 

premises will be considered abandoned. 

(b) We will treat the non-use as a 

violation of the lease under § 162.346, 

and may cancel the lease under 

§§ 162.347–162.350.

Subpart D—Business Leases 

General Provisions

§ 162.400 What types of leases are 

covered by this subpart? 

(a) This subpart covers both ground 

leases (undeveloped land) and leases of 

developed land (together with any 

improvements) on Indian land, 

authorizing the development or use of 

the leased premises. 

(b) Leases covered by this subpart 

may authorize the construction of 

single-purpose or mixed use projects 

designed for use by any number of 

tenants or occupants. These leases may 

include: 

(1) Leases for residential purposes 

that are not covered in subpart C; 

(2) Leases for public, religious, 

educational, and recreational purposes; 

and 

(3) Commercial or industrial leases for 

retail, office, manufacturing, storage, 

and/or other business purposes.

§ 162.401 How will BIA accommodate 

tribal laws on land under a business lease? 

(a) Unless prohibited by Federal law, 

we will recognize and accommodate 

tribal laws regulating activities on land 

under a residential lease, including 

tribal laws relating to land use, 

environmental protection, and historic 

or cultural preservation. 

(b) This paragraph applies when this 

subpart is inconsistent with a tribal law 

and § 162.109 prohibits tribal law to 

supersede or modify this subpart. We 

may waive provisions of this subpart 

under 25 CFR part 1, if the waiver does 

not: 

(1) Violate a Federal statute or judicial 

decision; or 

(2) Conflict with our general trust 

responsibility under Federal law. 

How To Obtain a Lease

§ 162.402 How and when can a business 

lease be obtained? 

If you are a potential lessee, you may 

negotiate a lease with an Indian 

landowner. The lease is subject to 

review and approval by the Secretary. 

Generally, business leases will not be 

advertised for competitive bid. You may 

request, in writing, the names and 

addresses of the Indian landowners or 

their representatives for the purpose of 

negotiating a lease.

§ 162.403 When can the Indian landowners 

grant a business lease? 

(a) We can approve business leases on 

tribal land only with the written consent 

of the tribe, as evidenced by an 

appropriate tribal resolution. Tribal 

written consent is also required for a 

lease of any tribally-owned undivided 

interest(s) in a fractionated tract, subject 

to our approval, except when the 

individual owners have consented in 

the percentages indicated in § 162.404. 

Where a tribal land assignment has been 

made to a tribal member or some other 

individual under tribal law or custom, 

and the assignee subsequently leases to 

another party, the assignee and the tribe 

must both consent to the lease, subject 

to our approval. 

(b) Adult Indian landowners, or 

emancipated minors, may consent to 

business leases of their land, including 

undivided interests in fractionated 

tracts, subject to our approval.

§ 162.404 What are the consent 

requirements for a business lease on a 

fractionated tract? 

(a) Except for Alaska, the Indian 

landowners must determine the 

percentage referred to in the Indian 

Land Consolidation Act Amendments of 

2000, 25 U.S.C. section 2218, as follows:

If the number of owners of the undivided 

interest in the tract 

is. . . 

Then the percentage 

of owners who must 

approve of the lease 

is. . . 

(1) Five or fewer ....... 100 percent. 

(2) More than five but 

less than 11.

80 percent. 

(3) More than 10 but 

fewer than 20.

60 percent. 

(4) Twenty or more ... Over 50 percent. 

(b) In Alaska, Indian landowners, or 

their representatives who may execute 

leases under § 162.405 of this part may 

negotiate business leases of Indian land 

only if: 

(1) The owners of a majority of the 

interests have negotiated a lease that we 

approve; 

(2) We grant the lease on behalf of 

those persons for whom we are 

authorized to grant leases under 

§ 162.404(c); and 

(3) Our consent when combined with 

the consent of the owners provides 100 

percent consent. 

(c) We may give written consent to a 

lease, and that consent must be counted 

in the percentage ownership described 

in paragraphs (a) and (b) of this section, 

on behalf of: 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6517

(1) The individual owner if the owner 

is deceased and the heirs to, or devisees 

of, the interest of the deceased owner 

have not been determined; 

(2) Any heir or devisee if the heir or 

devisee has been determined but after 

reasonable attempts have been made, 

cannot be located; 

(3) Individuals who are found to be 

non compos mentis, or determined to be 

an adult in need of assistance or under 

legal disability as defined in part 115 of 

this chapter; 

(4) Orphaned minors who do not have 

guardians duly appointed by a court of 

competent jurisdiction; 

(5) Individuals who have given us a 

written power of attorney to lease their 

land; and 

(6) The individual landowners of a 

fractionated tract where we have 

provided the Indian landowners with 

written notice of our intent to grant a 

lease on their behalf, but the Indian 

landowners are unable to agree upon a 

lease during a 3-month negotiation 

period immediately following such 

notice, and the land is not being used 

by an Indian landowner.

§ 162.405 Who can represent the Indian 

landowners in negotiating or granting a 

business lease? 

The following individuals or entities 

may represent an individual Indian 

landowner, provided that there are no 

Federal or tribal laws prohibiting this 

activity: 

(a) An adult with custody acting on 

behalf of his or her minor children; 

(b) A guardian, conservator, or other 

fiduciary appointed by a court of 

competent jurisdiction to act on behalf 

of an individual Indian landowner; 

(c) An adult, legal entity who has 

been given a written power of attorney 

that: 

(1) Meets all of the formal 

requirements of any applicable Federal, 

tribal or state law; 

(2) Identifies the attorney-in-fact and 

the land to be leased; and 

(3) Describes the scope of the power 

granted and any limits thereon. 

(d) Any representative who is 

authorized to practice before the 

Department of the Interior under 43 CFR 

part 1.3.

§ 162.406 When can BIA grant a permit for 

business use? 

(a) We may grant a permit for business 

use in the same manner as we would 

grant a business lease under § 162.404(c) 

of this part. We may also grant a permit 

on behalf of individual Indian 

landowners, without prior notice, if it is 

impractical to provide notice to the 

owners and no substantial injury to the 

land will occur, or to protect the trust 

resource, but we must give the Indian 

landowners subsequent immediate 

notice and advise them of their right to 

appeal the decision under part 2 of this 

chapter. If the permit is granted to 

protect the trust resource, the permit 

will be effective immediately under part 

2 of this chapter. 

(b) We may grant a permit for 

business use on government land. 

(c) We will not grant a permit for 

business use on tribal land, but a tribe 

may grant a permit, subject to our 

approval, in the same manner as it 

would grant a lease under § 162.403. 

(d) Permits may be revoked upon 

reasonable notice to the permittee, as 

specified in the permit. Decisions to 

revoke a permit may not be appealed 

under part 2 of this chapter. 

(e) Permits may not be assigned.

§ 162.407 How will BIA estimate the fair 

market rental of Indian land? 

We will use an appraisal to determine 

the fair market rental of land before we 

grant or approve a lease, except as 

provided in paragraph (d) of this 

section. 

(a) The purpose of the appraisal is to 

support the Indian landowners in their 

negotiations, and to assist in our 

consideration of whether a business 

lease is in the Indian landowners’ best 

interest. 

(b) We will either prepare the 

appraisal ourselves or use an appraisal 

from the Indian landowner or lessee 

subject to our approval. 

(c) The appraisal must be prepared in 

accordance with USPAP. 

(d) Upon a duly adopted Tribal 

Resolution, we will use some other type 

of valuation for a business lease on 

tribal land, subject to our approval.

§ 162.408 What documents must BIA 

review before granting or approving a 

business lease? 

If you are a lessee, you must submit 

the documents required by this section, 

unless we decide otherwise. 

(a) If you are a corporation, limited 

liability company, partnership, joint 

venture, or other legal entity, you must 

be in good standing, authorized to 

conduct business in the state where the 

land is located, or on the reservation, if 

applicable. You must provide 

organizational documents, certificates, 

filing records, and resolutions or other 

authorization documents, as needed to 

show that the lease will be enforceable 

against you and that you will be able to 

perform all of your lease obligations. 

(b) We may require you to pay for an 

independent appraisal, which we must 

review and approve, to support the 

negotiated rent and term provisions in 

the lease. 

(c) We may require you to provide, at 

a minimum, financial statements and 

credit reports or, where such records are 

not available, other appropriate 

documentation to show that you can 

meet the monetary obligations under the 

lease. 

(d) We may require you to provide 

proof that the proposed use is in 

conformance with applicable tribal 

ordinances. 

(e) If the proposed lease will authorize 

new construction, we may require you 

to provide: 

(1) Environmental reports, 

archaeological reports and other 

documents that we need to comply with 

environmental laws and land use 

requirements (if possible, we will adopt 

any tribal environmental review as our 

NEPA review); 

(2) A preliminary site plan identifying 

the proposed location of any new 

buildings, roads and utilities, and a 

construction schedule showing the 

tentative commencement and 

completion dates for those 

improvements; and 

(3) A certified survey plat of the 

leased premises that includes the legal 

description of the land encumbered by 

the lease, and a description of each tract 

of trust/restricted land in the lease and 

the acreage of each. Plats should show 

the tie-in to the nearest corner of a 

public survey, all courses and distances, 

exceptions, and tract acreages. 

(f) We may require you to provide 

additional documentation to 

demonstrate its ability to perform all of 

the lease obligations.

§ 162.409 How and when will BIA decide 

whether to approve a business lease? 

(a) Before we approve a business 

lease, we must determine in writing that 

the lease is in the best interest of the 

Indian landowners. In making that 

determination, we will: 

(1) Review the lease and supporting 

documents; 

(2) Identify potential environmental 

impacts and ensure compliance with all 

applicable environmental laws, land use 

laws, and ordinances (including 

preparation of the appropriate review 

documents under NEPA); 

(3) Assure ourselves that adequate 

consideration has been given to: 

(i) The relationship between the use 

of the leased premises and the use of 

neighboring lands; 

(ii) The height, quality, and safety of 

any structures or other facilities to be 

constructed on the leased premises; 

(iii) The availability of police and fire 

protection, utilities, and other essential 

community services; 

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(iv) The availability of judicial forums 

for all criminal and civil matters arising 

on the leased premises; and 

(v) The effect on the environment of 

the proposed land use. 

(4) Require any lease modifications or 

mitigation measures that are needed to 

satisfy any requirements, or any other 

Federal or tribal land use requirements; 

and 

(5) Receive notice from the tribe that 

all tribal procedures regarding tribal 

land development and land use have 

been satisfied. 

(b) When we receive a business lease 

and all of the supporting documents 

that conform to this part, we will 

approve, disapprove, or return the 

submission for revision within 60 days 

of the date of our receipt of the 

documents. If we do not act within 60 

days, the Indian landowner may take 

appropriate action under part 2 of this 

chapter. If we approve or disapprove a 

lease, we will notify the parties 

immediately and advise them of their 

right to appeal the decision under part 

2 of this chapter. Copies of business 

leases that have been granted or 

approved will be provided to the tenant, 

and made available to the Indian 

landowners upon request.

§ 162.410 When will a business lease be 

effective? 

Unless otherwise provided in the 

lease, a business lease will be effective 

on the date on which the lease is 

granted or approved by us. A business 

lease may be made effective on some 

past or future date, by agreement, but 

such a lease may not be granted or 

approved more than one year before the 

date on which the lease term is to 

commence. All approvals must be in 

writing.

§ 162.411 For purposes of appeal, when 

will a BIA decision to grant or approve a 

business lease be effective? 

Our decision to grant or approve a 

business lease will be effective 

immediately, notwithstanding any 

appeal that may be filed under part 2 of 

this chapter.

§ 162.412 Must a business lease or permit 

be recorded? 

(a) A business lease or permit must be 

recorded in the Land Titles and Records 

Office with jurisdiction over the land. 

We will record the lease or permit 

immediately following our approval 

under this subpart. The business lease 

or permit may also be recorded in the 

local county recorder’s office. 

(b) Business leases of tribal land that 

do not require our approval under 

§ 162.102 of this part must be recorded 

by the tribe in the Land Titles and 

Records Office with jurisdiction over 

the land. 

Lease Requirements

§ 162.413 Is there a standard business 

lease form? 

No, based on the need for flexibility 

in negotiating and drafting of 

appropriate lease terms and conditions, 

there is no standard business lease form 

that must be used. We will assist the 

Indian landowners in drafting lease 

provisions that conform to the 

requirements of this part.

§ 162.414 Are there any provisions that 

must be included in a business lease? 

In addition to the other requirements 

of this part, all business leases must 

provide that: 

(a) 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; 

(b) Nothing contained in this lease 

must operate to delay or prevent a 

termination of Federal trust 

responsibilities with respect to the land 

by the issuance of a fee patent or 

otherwise during the term of the lease; 

however, such termination must not 

serve to abrogate the lease. The owners 

of the land and the lessee and his surety 

or sureties must be notified of any such 

change in the status of the land; 

(c) There must not be any unlawful 

conduct, creation of a nuisance, illegal 

activity, or negligent use or waste of the 

leased premises; and 

(d) The lessee must comply with all 

applicable Federal, tribal, state and local 

laws, ordinances, rules, regulations, and 

other legal requirements.

§ 162.415 Are there any formal 

requirements that must be satisfied in the 

execution of a business lease? 

(a) A business lease must identify the 

Indian landowners and their respective 

interests in the leased premises. The 

requisite percentage of landowners must 

consent in writing to the lease. One who 

executes a lease in a representative 

capacity under § 162.405 must identify 

the owner being represented and the 

authority under which such action is 

being taken. 

(b) The lessee must provide evidence 

of appropriate authority to execute a 

business lease. 

(c) A business lease must include a 

citation of the provisions in this subpart 

that authorize our approval, along with 

a citation of the formal documents by 

which such authority has been 

delegated to the official taking such 

action. 

(d) All signatures of the landowner(s) 

and lessee(s) may be required to be 

either witnessed by two individuals or 

be notarized.

§ 162.416 How should the land be 

described in a business lease? 

A business lease must describe the 

leased premises by reference to a public 

survey. Where there are undivided 

interests owned in fee status, the 

aggregate portion of trust or restricted 

interests should be identified in the 

description of the leased premises.

§ 162.417 How much rent must be paid 

under a business lease? 

(a) The lease must require the initial 

payment of fair market rental, based on 

a fixed amount, a percentage of the 

projected income, or a combination of 

both unless paragraphs (c), (d) and (f) of 

this section permit a lesser amount. 

(b) Unless the lessee is paying 

nominal rental as described in 

paragraphs (c), (d) and (f) of this section, 

or unless the rental amount is based 

primarily on a percentage of income, the 

lease may be reviewed annually in 

accordance with § 162.418, but must 

provide for a review and possible 

adjustment of the rental, at a minimum, 

every fifth year.

(c) We will approve a negotiated lease 

of tribal land, or of any undivided tribal 

interest in a fractionated allotment, 

which provides for the payment of 

nominal rent, or less than a fair market 

rental, if the tribe provides a resolution 

containing an explanation why approval 

will serve the tribe’s best interest over 

the entire period in which the reduced 

rent will be paid. Unless otherwise 

specified, the reduced rent must be 

applied for the entire lease term. 

(d) We may approve a lease of 

individually-owned Indian land which 

provides for the payment of nominal 

rent, or less than a fair market rental, if: 

(1) The lease is for religious, 

educational, recreational, cultural, or 

other public purposes; 

(2) The lessee is a member of the 

individual Indian landowner’s 

immediate family or a co-owner; or 

(3) The lessee is a joint venture or 

other legal entity in which the Indian 

owners directly participate in the 

revenues or profits generated by the 

lease, and the distribution of profits or 

revenues to the owners is projected to 

exceed the rent that would otherwise be 

paid over the entire lease term. 

(e) We may grant on behalf of nonconsenting minority undivided interest 

owners only if the lease provides for 

payment of fair market value for their 

interest(s). 

(f) If new construction is required, the 

lease may provide for the payment of 

less than a fair annual rental during the 

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pre-development and construction 

periods specified in the lease.

§ 162.418 Must the rent be adjusted under 

a business lease? 

If rental adjustments are required by 

us, the lease must specify: 

(a) When adjustments are made. 

(b) Who makes the adjustments. 

(c) What the adjustments are based 

on. 

(d) How disputes arising from the 

adjustments are resolved.

§ 162.419 When are rental payments due 

under a business lease? 

A business lease must specify the 

dates on which all rental payments are 

due. Unless otherwise provided in the 

lease, rental payments may not be made 

or accepted more than one year in 

advance of the due date. Rental 

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.

§ 162.420 Will untimely rental payments 

made under a business lease be subject to 

interest charges or late payment penalties? 

A business lease must specify the rate 

at which interest will accrue on any 

rental payment not made by the due 

date or any other date specified in the 

lease. A lease may also identify 

additional late payment penalties that 

will apply if a rental payment is not 

made by a specified date. Unless 

otherwise provided in the lease, such 

interest charges and late payment 

penalties will apply in the absence of 

any specific notice to the lessee from us 

or the Indian landowners, and the 

failure to pay such amounts will be 

treated as a lease violation under 

§ 162.450.

§ 162.421 To whom can rental payments 

be made under a business lease? 

(a) A business lease must specify 

whether rental payments will be made 

directly to the Indian landowners or to 

us on behalf of the Indian landowners. 

Any changes to the direct pay provision 

of the lease must be made by 

amendment to the lease, but such 

amendment will only require the 

consent of the individual requesting 

direct pay and the lessee, and approval 

of the Secretary. If the lease provides for 

payment to be made directly to the 

Indian landowners, the lease must also 

require that the lessee either provide 

immediate proof of payment to us or 

retain specific documentation 

evidencing proof of payment, such as 

canceled checks, cash receipt vouchers, 

or copies of money orders or cashier’s 

checks, for the duration of the lease plus 

6 years and 90 days. 

(b) Rental payments made directly to 

the Indian landowners must be made to 

the parties specified in the lease, unless 

the lessee receives notice of a change of 

ownership. Unless otherwise provided 

in the lease, rental payments may not be 

made payable directly to anyone other 

than the Indian landowners. 

(c) A lease that provides for rental 

payments to be made directly to the 

Indian landowners must also provide 

for such payments to be suspended and 

the rent thereafter paid to us, rather than 

directly to the Indian landowners, if: 

(1) An Indian landowner dies; 

(2) An Indian landowner requests that 

payment be made to us; 

(3) An Indian landowner is found by 

us to be in need of assistance in 

managing his/her financial affairs; or 

(4) We determine after consultation 

with the Indian landowner(s), that 

direct payment should be discontinued.

§ 162.422 What form of rental payment can 

be accepted under a business lease? 

(a) When rental payments are made 

directly to the Indian landowners, the 

form of payment must be acceptable to 

the Indian landowners. 

(b) Payments made to us may be 

delivered in person or by mail. We will 

not accept cash, foreign currency, or 

third-party checks. We will accept: 

(1) Personal or business checks drawn 

on the account of the lessee; 

(2) Money orders; 

(3) Cashier’s checks; 

(4) Certified checks; or 

(5) Electronic funds transfer 

payments.

§ 162.423 What other types of payments 

are required under a business lease? 

(a) The lessee may be required to pay 

additional fees, taxes, and/or 

assessments associated with the use of 

the land, as determined by entities 

having jurisdiction over the land. The 

lessee must pay these amounts to the 

appropriate office. 

(b) Except as otherwise provided in 

part 171 of this chapter, if the leased 

premises are within an Indian irrigation 

project or drainage district, the lessee 

must pay all operation and maintenance 

charges that accrue during the lease 

term. The lessee must pay these 

amounts to the appropriate office in 

charge of the irrigation project or 

drainage district. Failure to make such 

payments will constitute a violation of 

the lease.

§ 162.424 How long can the term of a 

business lease run? 

(a) A lease will specify the term of the 

lease, as well as any option to renew, 

extend, or terminate. 

(b) The lease term, including any 

renewal period, must be reasonable, 

given the purpose of the lease and the 

type of financing and level of 

investment required. 

(c) Unless otherwise authorized by 

Federal statute, leases for business 

purposes will have a maximum primary 

term that does not exceed 25 years. An 

extension for one additional term not to 

exceed 25 years may be included. 

Leases of land on the following 

reservations may be made for terms of 

not to exceed 99 years, including any 

option to renew: the Gila River 

Reservation, AZ; the Hualapai 

Reservation, AZ; the San Carlos Apache 

Reservation, AZ; Yavapai-Prescott 

Community Reservation, land on the 

Colorado River Reservation, AZ and 

CA., the Navajo Reservation, AZ, NM, 

and UT; the Palm Springs Reservation, 

CA; the Soboba Indian Reservation, CA; 

the Viejas Indian Reservation, CA; the 

Cabazon Indian Reservation, CA; the 

Fort Mohave Reservation, CA, AZ, and 

NV; the Southern Ute Reservation, CO; 

Hollywood (formerly Dania) 

Reservation, FL; the Coeur d’Alene 

Indian Reservation, ID; The Mille Lacs 

Indian Reservation with respect to a 

lease between an entity established by 

the Mille Lacs Band of Chippewa 

Indians and the Minnesota Historical 

Society, MN; the Pueblos of Cochiti, 

Pojoaque, Tesuque, Santa Ana (with the 

exception of the lands known as the 

‘‘Santa Ana Pueblo Spanish Grant,’’), 

and Zuni, NM; The Pyramid Lake 

Reservation, NV; the Burns Paiute 

Reservation, OR; the Spokane 

Reservation, WA; the Kalispel Indian 

Reservation, WA; the Swinomish 

Reservation, WA; the Tulalip 

Reservation, WA; leases of the lands 

comprising the Moses Allotment 

Number 10, Chelan County, WA; and 

lands held in trust for: the Twenty-nine 

Palms Band of Luiseno Mission Indians, 

CA; the Torres Martinez Desert Cahuilla 

Indians, CA; the Guidiville Band of 

Pomo Indians of the Guidiville Indian 

Rancheria, CA; the Cahuilla Band of 

Indians of California, CA; the 

Confederated Salish and Kootenai 

Tribes of the Flathead Reservation, MT; 

leases to the Devils Lake Sioux Tribe, or 

any organization of such tribe, of land 

on the Devils Lake Sioux Reservation, 

ND; the Pueblo of Santa Clara, NM; the 

Las Vegas Paiute Tribe of Indians, NV; 

the Reno Sparks Indian Colony, NV; the 

Cherokee Nation of Oklahoma, OK; the 

Confederated Tribes of the Umatilla 

Indian Reservation, OR; the 

Confederated Tribes of the Grand Ronde 

Community of Oregon, OR; the 

Confederated Tribes of the Colville 

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Reservation, WA; and any other 

reservations as authorized by Congress.

(d) Where the Secretary grants a lease 

under § 162.404(c)(1) on behalf of 

undetermined heirs or devisees of an 

individual Indian decedent owning 100 

percent interest in the land, the 

maximum term of that lease may not 

exceed 2 years. 

(e) A lease can be extended only by 

one renewal or extension, not to exceed 

25 years. The exercise of the option 

must be in writing and the lease must 

specify: 

(1) The time and manner in which the 

option must be exercised; and 

(2) Any additional consideration, if 

any, which will be due upon the 

exercise of the option or the 

commencement of the renewal period. 

(f) The lease may not: 

(1) Be renewed or extended by 

holdover; or 

(2) Provide a right of first refusal or 

any other type of preference with 

respect to a new lease. 

(g) The Secretary must record in the 

Land Titles and Records Office the 

official notice to the lessee of the grant 

of extension or termination.

§ 162.425 Can a business lease be 

amended, assigned, sublet, or mortgaged? 

Yes, a business lease can be amended, 

assigned, sublet, or mortgaged in 

accordance with §§ 162.426 to 162.431.

§ 162.426 How and when can a business 

lease be amended? 

(a) A lease may authorize one or more 

of the Indian landowners, or a 

designated representative of the Indian 

landowners, to consent to an 

amendment on the landowners’ behalf, 

subject to our approval. The lease may 

also designate us as the landowners’

representative. A designated landowner 

or representative may not negotiate or 

consent to an amendment that would: 

(1) Reduce the payment obligations or 

terms to the Indian landowners; 

(2) Increase or decrease the lease area; 

or 

(3) Terminate or modify the term of 

the lease. 

(b) Where the Indian landowners have 

not designated a representative for the 

purpose of consenting to an 

amendment, such consent may be 

granted by or on behalf of the 

landowners in the same manner as a 

new lease.

§ 162.427 May a lease be assigned without 

the consent of the Indian landowners? 

(a) The lease may be assigned without 

the consent of the Indian landowners if: 

(1) The lease provides for assignments 

without further consent of the 

landowners; or 

(2) The assignee is a leasehold 

mortgagee or its designee, acquiring the 

lease either through foreclosure or by 

conveyance; and the assignee agrees in 

writing to assume all of the lessee’s 

obligations under the lease, including 

bonding requirements. 

(b) If the Indian landowners’ consent 

is required, it must be obtained in the 

same manner as a new lease, unless the 

lease authorizes one or more of the 

Indian landowners to consent on behalf 

of all such owners. 

(c) If the lease provides, consent must 

be obtained from any sureties or 

guarantors. 

(d) The assignment of a lease must be 

approved by the Secretary. Such 

approval will not be withheld providing 

that our approval will protect the best 

interests of the Indian landowners. To 

make that determination we will 

consider whether: 

(1) The proposed use by the assignee 

will require an amendment of the lease, 

(2) The value of any part of the leased 

premises not covered by the assignment 

would be adversely affected; and 

(3) The assignee has provided 

supporting documents which 

demonstrate that the lease will be 

enforceable against the assignee, and 

that the assignee will be able to perform 

its obligations under the lease. 

(e) The lease may provide that 

assignments may be made without the 

consent of the landowners, but the 

assignments must be approved by the 

Secretary.

§ 162.428 May a lease be subleased 

without the consent of the Indian 

landowners and the approval of the 

Secretary? 

(a) The lease may provide for 

subleasing without the consent of the 

Indian landowners when the sublease is 

part of a commercial development or 

residential development for which a 

general plan has been submitted and 

approved and we have approved a 

sublease form for use in the project. The 

lease may contain a provision 

authorizing the lessee to sublease the 

premises, in whole or in part, without 

further approval of the Secretary. A 

copy of the executed sublease must be 

provided to us. 

(b) If the owners’ consent is required, 

it must be obtained in the same manner 

as a new lease, unless the lease 

authorizes one or more of the Indian 

landowners to consent on behalf of all 

such owners. 

(c) Consent must be obtained from 

any sureties or guarantors. 

(d) The sublessee must agree to be 

subordinated to the terms of the lease. 

(e) If the lease requires that the 

sublease be approved by the Secretary, 

such approval will not be withheld 

providing that our approval will protect 

the best interests of the Indian 

landowners. To make that 

determination we will consider 

whether: 

(1) The proposed use by the sublessee 

will require an amendment of the lease;

(2) The value of any part of the leased 

premises not covered by the sublease 

would be adversely affected; and 

(3) The sublessee has bonded its 

performance and provided supporting 

documents which demonstrate that the 

sublease will be enforceable against the 

sublessee, and that the sublessee will be 

able to perform its obligations under the 

sublease.

§ 162.429 How will BIA decide whether to 

approve an assignment or sublease under 

a business lease? 

(a) We will approve an assignment or 

sublease under a business lease if: 

(1) The required consents have been 

obtained from the parties to the lease 

under § 162.404 and the tenant’s 

sureties and encumbrancers; 

(2) The tenant is not in violation of 

the lease; 

(3) The assignee agrees to be bound 

by, or the subtenant agrees to be 

subordinated to, the terms of the lease; 

and 

(4) We find no compelling reason to 

withhold our approval in order to 

protect the best interests of the Indian 

owners. 

(b) In making the finding required by 

paragraph (a)(4) of this section, we will 

consider whether: 

(1) The Indian landowners should 

receive any income derived by the 

tenant from the assignment or sublease, 

under the terms of the lease; 

(2) The proposed use by the assignee 

or subtenant will require an amendment 

of the lease; 

(3) The value of any part of the leased 

premises not covered by the assignment 

or sublease would be adversely affected; 

and 

(4) The assignee or subtenant has 

bonded its performance and provided 

supporting documents that demonstrate 

that the lease or sublease will be 

enforceable against the assignee or 

subtenant, and that the assignee or 

subtenant will be able to perform its 

obligations under the lease or sublease.

§ 162.430 May a lease be mortgaged 

without the consent of the Indian 

landowners? 

(a) The lease may be mortgaged 

without further consent of the Indian 

landowners for the purpose of 

borrowing capital for commercially 

reasonable purposes defined in the lease 

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if the lease contains a general 

authorization for such a mortgage. 

(b) The mortgage cannot secure any 

unrelated debts owed by the lessee to 

the mortgagee. 

(c) The mortgage may be refinanced. 

(d) The encumbrance instrument must 

be approved by us.

§ 162.431 How will BIA decide whether to 

approve a leasehold mortgage under a 

business lease? 

(a) We will approve a leasehold 

mortgage under a business lease if: 

(1) The required consents have been 

obtained from the parties to the lease 

under § 162.404 and the tenant’s 

sureties; 

(2) The mortgage covers only the 

tenant’s interest in the leased premises, 

and no unrelated collateral; and 

(3) We find no compelling reason to 

withhold our approval in order to 

protect the best interests of the Indian 

landowners. 

(b) In making the finding required by 

paragraph (a)(4) of this section, we will 

consider whether: 

(1) The tenant’s ability to comply with 

the lease would be adversely affected by 

any new loan obligations; 

(2) Any lease provisions would be 

modified by the mortgage; 

(3) The remedies available to us or to 

the Indian landowners would be limited 

(beyond any additional notice and cure 

rights to be afforded to the mortgagee), 

in the event of a lease violation; and 

(4) Any rights of the Indian 

landowners would be subordinated or 

adversely affected in the event of a loan 

default by the tenant.

§ 162.432 When will a BIA decision to 

approve an amendment, assignment, 

sublease, or mortgage under a business 

lease be effective? 

Our decision to approve an 

amendment, assignment, sublease, or 

mortgage under a business lease will be 

effective immediately, even though an 

appeal has been filed under part 2 of 

this chapter. Copies of approved 

documents will be provided to the party 

requesting approval, and made available 

to the Indian landowners upon request.

§ 162.433 Must an amendment, 

assignment, sublease, or mortgage 

approved under a business lease be 

recorded? 

An amendment, assignment, sublease, 

or mortgage approved under a business 

lease must be recorded in our Land 

Titles and Records Office that has 

jurisdiction over the leased premises. 

We will record the document 

immediately following our approval 

under this subpart.

§ 162.434 When will BIA take action on an 

amendment, assignment, sublease, or 

mortgage under a business lease? 

(a) We will take action on a business 

lease amendment, assignment, sublease, 

or mortgage within 60 days of the date 

of our receipt of the complete 

assignment and all supporting 

documents. If we do not act within 60 

days, any interested party may take 

appropriate action under part 2 of this 

chapter. If we approve or disapprove an 

amendment, assignment, sublease, or 

mortgage, we will notify the parties 

immediately and advise them of their 

right to appeal the decision under part 

2 of this chapter. Copies of business 

lease amendments, assignments, 

subleases or mortgages that have been 

granted or approved will be provided to 

the tenant, and made available to the 

Indian landowners upon request. 

(b) Copies of approved documents 

will be provided to the party requesting 

approval, and made available to the 

Indian landowners upon request.

§ 162.435 How can the leased premises be 

used under a business lease? 

A business lease must describe the 

authorized uses of the leased premises. 

Any use of the leased premises for an 

unauthorized purpose, or a failure by 

the lessee to maintain continuous 

operations throughout the lease term 

unless so provided in the lease, will be 

treated as a lease violation.

§ 162.436 Can improvements be made 

under a business lease? 

Yes, improvements can be made 

under a business lease. A business lease 

must: 

(a) Describe, or provide for 

development of, a plan that describes 

the type and location of any 

improvements to be constructed by the 

lessee. Development plans for the 

construction of those improvements will 

require the review and approval by 

tribal officials, if applicable, and must 

be filed with us before the 

commencement of construction, unless 

specifically exempted in the lease.

(b) Provide a construction schedule.

§ 162.437 Who will own the improvements 

made under a business lease? 

(a) A business lease must specify who 

will own any improvements constructed 

by the lessee during the lease term. The 

lease must indicate whether any 

improvements constructed by the lessee 

will remain on the leased premises 

upon the expiration or termination of 

the lease, providing for the 

improvements to either: 

(1) Remain on the leased premises, in 

a condition satisfactory to the Indian 

landowners and us; or 

(2) Be removed within a time period 

specified in the lease, at the lessee’s 

expense, with the leased premises to be 

restored as close as possible to their 

condition before construction of such 

improvements. 

(b) If the lease allows the lessee to 

remove the improvements, it must also 

provide the Indian landowners with an 

option to waive the removal 

requirement and take possession of the 

improvements if they are not removed 

within the specified time period. If the 

Indian landowners choose not to 

exercise this option, we will take 

appropriate enforcement action to 

ensure removal and restoration of the 

premises at the lessee’s expense. This 

obligation survives the termination or 

expiration of the lease. 

(c) A business lease may also contain 

alternative provisions for disposal of the 

leasehold improvements, including 

provision for reimbursement of the 

residual value of the improvements at 

the termination of the lease.

§ 162.438 What indemnities are required 

under a business lease? 

(a) A business lease must require that 

the lessee indemnify and hold 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, unless the lessee would be 

prohibited by law from making such an 

agreement. 

(b) Unless the lessee would be 

prohibited by law from making such an 

agreement, a business lease must 

specifically require that the lessee 

indemnify the United States and the 

Indian landowners against all liabilities 

or costs relating to the use, handling, 

treatment, removal, storage, 

transportation, or disposal of hazardous 

materials, or the release or discharge of 

any hazardous materials from the leased 

premises that occurs during the lease 

term, regardless of fault, unless the 

liability or cost arises from the gross 

negligence or wilful misconduct of the 

Indian landowner.

§ 162.439 How will payment rights and 

obligations relating to business leases be 

allocated between the Indian landowners 

and the lessee? 

The lease must specify the 

distribution of any settlement funds or 

other payments arising from certain 

actions that diminish the value of the 

land or the improvements thereon. Such 

payments may include, but are not 

limited to: 

(a) Insurance proceeds; 

(b) Trespass damages; and 

(c) Condemnation awards.

6522 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

§ 162.440 Can a business lease provide for 

negotiated remedies in the event of a 

violation? 

(a) A business lease of tribal land may 

provide the tribe with certain negotiated 

remedies in the event of a lease 

violation, including the power to 

terminate the lease. A business lease of 

individually-owned land may provide 

the individual Indian landowners with 

similar remedies, so long as the lease 

also specifies the manner in which 

those remedies may be exercised by or 

on behalf of the landowners. 

(b) The negotiated remedies described 

in paragraph (a) of this section will 

apply in addition to the cancellation 

remedy available to us under § 162.452. 

If the lease specifically authorizes us to 

exercise any negotiated remedies on 

behalf of the Indian landowners, the 

exercise of such remedies may 

substitute for cancellation. 

(c) A business lease may provide for 

lease disputes to be resolved in tribal 

court or any other court of competent 

jurisdiction, or through an alternative 

dispute resolution method. We may not 

be bound by decisions made in such 

forums, for example, if they conflict or 

diminish our trust responsibility to the 

Indian landowners or are contrary to 

Federal law, but we will defer to 

ongoing proceedings, as appropriate, in 

deciding whether to exercise any of the 

remedies available to us under 

§ 162.452.

§ 162.441 Must a lessee or assignee 

provide a bond for a lease? 

(a) Except as provided in paragraph 

(c) of this section, the lessee or assignee 

will be required to provide a bond to 

secure: 

(1) The payment of one year’s rental; 

(2) The construction of any required 

improvements; 

(3) The performance of any additional 

lease obligations, including the payment 

of operation and maintenance charges 

under § 162.424; 

(4) The restoration and reclamation of 

the leased premises, to their condition 

at the commencement of the lease term 

or some other specified condition; and 

(5) Applicable tribal laws and 

policies. 

(b) The lease may provide that we 

may adjust security or bond 

requirements at any time to reflect 

changing conditions. 

(c) The lease may provide that a bond 

is not required, however we must 

determine that this is in the best interest 

of the landowners.

§ 162.442 What forms of bond can be 

accepted under a business lease? 

We will only accept bonds in the 

following forms: 

(a) Negotiable Treasury securities that: 

(1) Have a market value at least equal 

to the bond amount; and 

(2) Are accompanied by a statement 

granting full authority to us to sell such 

securities in case of a violation of the 

terms of the lease. 

(b) Certificates of deposit that indicate 

on their face that our approval is 

required before redemption by any 

party; and 

(1) Have a face value at least equal to 

the bond amount, plus any penalties for 

early redemption; and 

(2) Are accompanied by a statement 

granting full authority to us to sell such 

securities in case of a violation of the 

terms of the lease. 

(c) Irrevocable letters of credit (LOC) 

issued by Federally-insured financial 

institutions authorized to do business in 

the United States. LOC’s must: 

(1) Contain a clause that grants us 

authority to demand immediate 

payment if the lessee defaults or fails to 

replace the LOC within 30 calendar 

days before its expiration date; 

(2) Be payable to the Department of 

the Interior, BIA; 

(3) Be irrevocable during its term and 

have an initial expiration date of not 

less than one year following the date 

BIA receives it; and 

(4) Be automatically renewable for a 

period of not less than one year, unless 

the issuing financial institution 

provides BIA with written notice at least 

90 calendar days before the letter of 

credit’s expiration date that it will not 

be renewed. 

(d) Surety bond issued by a company 

approved by the U.S. Department of the 

Treasury; 

(e) Assignment of savings account; or 

(f) Any other form of highly liquid, 

non-volatile security subsequently 

approved by us that is easily convertible 

to cash by us and for which Secretarial 

approval is required before redemption 

by any party.

§ 162.443 How will a bond be 

administered? 

(a) If a lease requires a bond or 

guaranty, the bond or guaranty must 

remain effective throughout the lease 

term and any renewal period. 

Alternatively, the lease may provide for 

the bond or guaranty to be modified or 

released: 

(1) After a specified period of time; 

(2) If we determine that the original 

bond or guaranty is no longer needed to 

secure the contractual obligations; or 

(3) If, for leases on tribal lands, the 

tribe requests the modification or 

release of the bond, and we approve the 

request. 

(b) If the lease does not initially 

require a bond or guaranty, or if it 

provides for modification or release at 

some future date, the lease must allow 

us to establish or reinstate a bond or 

guaranty requirement at any time we 

deem it necessary to secure the 

contractual obligations. A tribe may 

request that we establish or reinstate a 

bond or guaranty requirement.

(c) We may require that the surety or 

guarantor provide any supporting 

documents needed to show that the 

bond or guaranty will be enforceable, 

and that the surety or guarantor will be 

able to perform the guaranteed 

obligations. The surety or guarantor 

must provide notice of cancellation 

before canceling the bond. 

(d) The lease must require that the 

lessee or assignee obtain the consent of 

the surety or guarantor, with respect to 

any amendment, assignment, sublease, 

or leasehold mortgage that directly 

impacts or affects the obligations and 

liabilities of the surety or guarantor. The 

lease must also provide for the surety or 

guarantor to receive a copy of any notice 

of default issued to the lessee by us or 

by the Indian landowners.

§ 162.444 Will we require insurance for a 

business lease? 

We may require any or all of the 

following types of insurance depending 

upon the activity conducted under the 

lease: property, business interruption, 

liability, and casualty (such as for fire, 

hazard, or flood). If insurance is 

required, it must: 

(a) Be provided in an amount 

sufficient to: 

(1) Protect any improvements on the 

leased premises; 

(2) Cover losses such as personal 

injury or death; and 

(3) Protect the interest of the Indian 

landowner. 

(b) Identify the Indian landowners 

and the United States as additional 

insured parties. 

(c) Be provided by a nationally 

accredited insurance company, with a 

minimum insurer financial strength 

rating of ‘‘A’’ or its equivalent, 

authorized to do business in the state 

where the land is located. 

Lease Administration

§ 162.445 Will administrative fees be 

charged for actions relating to business 

leases? 

(a) We will charge an administrative 

fee each time we approve a business 

lease, amendment, assignment, 

sublease, mortgage, or related 

document. These fees will be paid by 

the lessee, assignee, or sublessee, to 

cover our costs in preparing or 

processing the documents and 

administering the lease. 

Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 6523

(b) We will charge administrative fees 

based on the rent payable under the 

lease. The fee will be 3 percent of the 

annual rent payable, including any 

percentage-based rent that can be 

reasonably estimated. The minimum 

administrative fee is $10.00 and the 

maximum administrative fee is $500.00, 

and any administrative fees that have 

been paid will be non-refundable. 

However, we may waive all or part of 

these administrative fees, in our 

discretion. 

(c) If all or part of the expenses of the 

work are paid from tribal funds, the 

tribe may establish an additional or 

alternate schedule of fees.

§ 162.446 Will we notify a lessee when a 

rental payment is due under a business 

lease? 

We may issue bills or invoices to a 

lessee in advance of the dates on which 

rental payments are due under a 

business lease, but the lessee’s 

obligation to make such payments in a 

timely manner will not be excused if 

such bills or invoices are not delivered 

or received. 

Lease Enforcement

§ 162.447 What will we do if rental 

payments are not made in the time and 

manner required by a business lease? 

(a) A lessee’s failure to pay rent in the 

time and manner required by a business 

lease will be a violation of the lease, and 

a notice of violation will be issued 

under § 162.450. If the lease requires 

that rental payments be made to us, we 

will send the lessee and its sureties a 

notice of violation within 10 business 

days after the date the rent was due. If 

the lease provides for payment directly 

to the Indian landowners, we will send 

the lessee and its sureties a notice of 

violation within 10 business days of the 

date on which we receive actual notice 

of non-payment from the landowners. 

(b) If a lessee fails to provide adequate 

proof of payment or cure the violation 

within the requisite time period 

described in § 162.450, and the amount 

due is not in dispute, we may 

immediately take action to recover the 

amount of the unpaid rent and any 

associated interest charges or late 

payment penalties. We may also cancel 

the lease under § 162.451, or invoke any 

other remedies available under the lease 

or applicable law, including collection 

on any available bond or referral of the 

debt to the Department of the Treasury 

for collection. An action to recover any 

unpaid amounts will not be conditioned 

on the prior termination of the lease or 

any further notice to the lessee, nor will 

such an action be precluded by a prior 

termination. 

(c) Partial payments may be accepted 

by the Indian landowners or us, but 

acceptance will not operate as a waiver 

with respect to any amounts remaining 

unpaid or any other existing lease 

violations. Unless otherwise provided in 

the lease, overpayments may be credited 

as an advance against future rental 

payments, or refunded. Lessee will not 

be entitled to any interest accrued on 

advanced payments. 

(d) If a personal or business check is 

dishonored, and a rental payment is 

therefore not made by the due date, the 

failure to make the payment in a timely 

manner will be a violation of the lease 

and a notice of violation will be issued 

under § 162.450. Any payment made to 

cure such a violation, and any future 

payments by the same lessee, must be 

made by one of the alternative payment 

methods listed in § 162.422.

§ 162.448 Will any special fees be 

assessed on delinquent rental payments 

due under a business lease? 

(a) The following special fees will be 

assessed if rent is not paid in the time 

and manner required, in addition to any 

interest or late payment penalties that 

must be paid to the Indian landowners 

under a business lease. The following 

special fees will be assessed to cover 

administrative costs incurred by us in 

the collection of the debt:

The lessee will

pay . . . For . . . 

(1) $50.00 .................. Administrative fee for 

dishonored checks. 

(2) $25.00 .................. Administrative fee for 

our processing of 

each notice or demand letter. 

(3) 18 percent of balance due.Administrative fee 

charged by Treasury following referral for collection of 

delinquent debt. 

(b) If all or part of the expenses of the 

work are paid from tribal funds, the 

tribe may establish an additional or 

alternate schedule of fees.

§ 162.449 How will we determine whether 

the activities of a lessee under a business 

lease are in compliance with the terms of 

the lease? 

(a) Unless a business lease provides 

otherwise, we may enter the leased 

premises at any reasonable time, 

without prior notice, to protect the 

interests of the Indian landowners and 

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 initiate an appropriate 

investigation within 5 business days of 

that notification. If we find out from 

another source that a specific lease 

violation has occurred, we will initiate 

an appropriate investigation and make a 

reasonable attempt to notify the Indian 

landowners.

§ 162.450 What will we do in the event of 

a violation under a business lease? 

(a) If we determine that there has been 

a violation of a business lease we will 

send the lessee and its sureties a notice 

of violation within 5 business days of 

that determination. The notice of 

violation must be provided by certified 

mail, return receipt requested. 

(b) Within 10 business days of the 

receipt of a notice of violation, the 

lessee must: 

(1) Cure the violation and notify us in 

writing that the violation has been 

cured; 

(2) Dispute our determination that a 

violation has occurred and/or explain 

why we should not cancel the lease; or 

(3) Request additional time to cure the 

violation.

§ 162.451 What will we do if a violation of 

a business lease is not cured to our 

satisfaction within the requisite time 

period? 

(a) If the lessee does not cure a 

violation of a business lease within the 

requisite time period, we will consult 

with the Indian landowners, as 

appropriate, and determine whether: 

(1) The lease should be canceled by us 

under paragraph (c) of this section and 

§§ 162.453 through 162.457; 

(2) We should invoke any other 

remedies available to us under the lease, 

including collecting on any available 

bond; 

(3) The Indian landowners wish to 

invoke any remedies available to them 

under the lease; or 

(4) The lessee should be granted 

additional time in which to cure the 

violation. 

(b) If we decide to grant a lessee 

additional time in which to cure a 

violation, the lessee must proceed 

diligently to complete the necessary 

corrective actions within a reasonable or 

specified time period from the date on 

which the extension is granted. 

(c) If we decide to cancel the lease, we 

will send the lessee, its encumbrancers, 

and its sureties a cancellation letter 

within 5 business days of that decision. 

The cancellation letter must be sent to 

the lessee by certified mail, return 

receipt requested. We will also provide 

actual or constructive notice of a 

cancellation decision to the Indian 

landowners. The cancellation letter will: 

(1) Explain the grounds for 

cancellation; 

6524 Federal Register / Vol. 69, No. 27 / Tuesday, February 10, 2004 / Proposed Rules 

(2) Notify the lessee of the amount of 

any unpaid rent, interest charges, or late 

payment penalties due under the lease; 

(3) Notify the lessee of its right to 

appeal under part 2 of this chapter, as 

modified by § 162.452, including the 

amount of any appeal bond that must be 

posted with an appeal of the 

cancellation decision; and 

(4) Order the lessee to vacate the 

property within 30 days of the date of 

receipt of the cancellation letter, if an 

appeal is not filed by that time.

§ 162.452 Will BIA’s regulations 

concerning appeal bonds apply to 

cancellation decisions involving business 

leases? 

(a) The appeal bond provisions in part 

2 of this chapter will not apply to 

appeals from lease cancellation 

decisions made under § 162.451. 

Instead, when we decide to cancel a 

business lease, we may require that the 

lessee post an appeal bond with an 

appeal of the cancellation decision. The 

requirement to post an appeal bond will 

apply in addition to all of the other 

requirements in part 2 of this chapter. 

(b) An appeal bond should be set in 

an amount necessary to protect the 

Indian landowners against financial 

losses that will likely result from the 

delay caused by an appeal. Appeal bond 

requirements will not be separately 

appealable, but may be contested during 

the appeal of the lease cancellation 

decision. 

(c) If the appeal bond is not posted, 

BIA can dismiss the appeal. That 

dismissal will be final for the 

Department of the Interior.

§ 162.453 When will a cancellation of a 

business lease be effective? 

A cancellation decision involving a 

business lease will not be effective until 

30 days after either the lessee receives 

a cancellation letter from us, or ten days 

from the date the letter is mailed, 

whichever is earlier. The cancellation 

decision will be stayed if the lessee files 

an appeal under §§ 162.451 and 162.452 

and part 2 of this chapter unless the 

decision is made immediately effective 

under part 2. While a cancellation 

decision is stayed, the lessee must 

continue to pay rent and comply with 

the other terms of the lease. If an appeal 

is not filed in accordance with § 162.453 

and part 2 of this chapter, the 

cancellation decision will be effective 

on the 31st day after either the lessee 

receives a cancellation letter from us, or 

10 days from the date the letter is 

mailed, whichever is earlier.

§ 162.454 Can we take emergency action if 

the leased premises are threatened with 

immediate and significant harm? 

In the event of a natural disaster, or 

if a lessee or any other party causes or 

threatens to cause immediate and 

significant harm to the leased premises 

during the term of a business lease, we 

may take appropriate emergency action. 

Emergency action may include judicial 

action seeking immediate cessation of 

the activity resulting in or threatening 

the harm. Reasonable efforts will be 

made to notify the Indian landowners, 

either before or after the emergency 

action is taken.

§ 162.455 What will we do if a lessee holds 

over after the expiration or cancellation of 

a business lease? 

If a lessee remains in possession after 

the expiration or cancellation of a 

business lease, we will treat the 

unauthorized use as a trespass. Unless 

we have been advised in writing by the 

applicable percentage of Indian 

landowners under § 162.404 that they 

are engaged in good faith negotiations 

with the lessee to obtain a new lease, we 

will take action to recover possession on 

behalf of the Indian landowners, and 

pursue any additional remedies 

available under applicable law, such as 

forcible entry and detainer action.

§ 162.456 May a lease be terminated 

before its expiration date? 

(a) Yes, the lease may provide either 

party with one or more options to 

terminate, for any reason. If an option to 

terminate is provided, the lease must 

specify the time and manner in which 

the option must be exercised. 

(b) The lease may be mutually 

terminated by agreement between the 

lessee and the Indian landowners, 

subject to our approval and notice to 

any approved encumbrancer. The 

percentage of consent by the 

landowners for termination must be in 

the same percentages as required to 

obtain a lease (see § 162.404).

§ 162.457 What happens if the lessee 

abandons the lease? 

(a) If a lessee abandons the leased 

premises, the lessee and its sureties will 

not be relieved of the obligations 

contained in the lease. 

(b) We may cancel the lease, effective 

immediately, and attempt to find a new 

lessee for the property.

Subpart E [Amended] 

9. The title for subpart E is revised to 

read as follows:

Subpart E—Special Requirements for 

Certain Reservations

Subpart F [Removed] 

10. Subpart F (§§ 162.600–162.633) is 

removed in its entirety.

[FR Doc. 04–2392 Filed 2–9–04; 8:45 am] 

BILLING CODE 4310–W7–P