[Federal Register Volume 61, Number 117 (Monday, June 17, 1996)]
[Proposed Rules]
[Pages 30560-30570]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14640]



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DEPARTMENT OF THE INTERIOR
25 CFR Part 162

RIN 1076-AA29


Leasing and Permitting

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Proposed rule.

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SUMMARY: This rulemaking action will revise the leasing and permitting 
regulations in 25 CFR Part 162, and incorporate the general grazing 
permit regulations now found in 25 CFR Part 166. The rule will also 
implement the relevant provisions in a number of statutes of general 
application, including the American Indian Agricultural Resource 
Management Act (AIARMA). Finally, the rule will implement many policy 
decisions, legal opinions, and administrative actions which have been 
issued or implemented by the Bureau of Indian Affairs (BIA) since the 
last publication of these regulations in the 1960's.

DATE: Comments must be submitted on or before October 15, 1996.

ADDRESSES: Mail comments to: Mark Bradford, Bureau of Indian Affairs, 
Division of Land and Water, 1849 C Street, N.W., Mail Stop 4559 MIB, 
Washington, D.C. 20240.

FOR FURTHER INFORMATION CONTACT: Stan Webb, Branch of Real Estate 
Services, Phoenix Area Office, Bureau of Indian Affairs, at 602-379-
6781, or Virgil Dupuis, Lands Division, Confederated Salish and 
Kootenai Tribes of the Flathead Nation, at 406-675-2700.

SUPPLEMENTARY INFORMATION: Section 301 of the AIARMA requires that the 
act be implemented through the promulgation of final regulations within 
24 months, and that such regulations be ``developed by the Secretary 
with the participation of the affected Indian tribes.'' Four work 
groups (including a leasing and permitting group) were established by a 
steering committee, with the work groups and the steering committee 
each being comprised of BIA and tribal representatives. The work groups 
met in March 1994, and a first set of draft regulations was distributed 
for comment to some 3000 addressees on April 29, 1994. The first draft 
did not provide for a consolidation of the permitting provisions in 25 
CFR Parts 162 and 166, although such a consolidation had been planned 
by the BIA since 1988; it did, however, include a number of proposed 
revisions (unrelated to the AIARMA) intended to address questions 
raised during the past 25 years by other statutory enactments and 
various administrative actions and judicial decisions.
    After five formal hearings were conducted throughout the nation, a 
second mailing was distributed for comment on June 28, 1994. The second 
mailing included a cross-references summary sheet which indicated how 
most of the permitting provisions in the existing 25 CFR Part 166 would 
be incorporated in Subpart D of the proposed 25 CFR Part 162, but it 
did not include the text of the proposed Subpart D. The text of a 
revised Subpart D--and all of the other proposed regulations drafted to 
implement the AIARMA--were distributed for a final round of comments on 
November 30, 1994. The leasing and permitting work group met in 
September 1994 and March 1995, respectively, to review the written 
comments and public testimony received in response to the mass 
mailings.

[[Page 30561]]

The Statutory Framework

Early Statutes--Tribal Land

    Under the trade and intercourse acts which are codified at 25 
U.S.C. 177, valid leases of tribal land may be made only with specific 
statutory authorization. The first general leasing statute for Indian 
land was enacted on February 28, 1891 (26 Stat. 795, 25 U.S.C. 397), 
and a proviso in that act authorized tribal councils to lease tribal 
``purchased'' land (on treaty reservations) for grazing purposes, for 
up to five years. These tribal leases, unlike the leases of allotments 
authorized by the same statute, were expressly made subject to approval 
by we of the Interior. A proviso in an August 15, 1894, appropriations 
act (28 Stat. 305) authorized tribal councils to lease any unallotted 
``surplus'' land for farming purposes, for up to five years. By act 
dated July 3, 1926 (44 Stat. 894, 25 U.S.C. 402a), leases of irrigable 
tribal land were authorized for up to ten years, ``with the consent of 
the tribal council, business committee, or other authorized body.'' By 
Section 17 of the Indian Reorganization Act (IRA) of June 18, 1934 (48 
Stat. 988, 25 U.S.C. 477), tribes which did not vote to reject the IRA 
were authorized to adopt corporate charters (to be ``issued'' by us). 
Among other things, these charters initially allowed tribes to grant 
leases for up to ten years, without further secretarial approval. 
Section 17 of the IRA was amended on May 24, 1990 (104 Stat. 207), to 
eliminate the need for a special tribal election to support a proposed 
corporate charter, and to allow tribes which rejected the IRA to 
nonetheless adopt a charter pursuant to Section 17. The amendment also 
authorized 25-year leases of tribal land without secretarial approval, 
where such leases are authorized by a secretarially-issued charter. The 
legislative history of the amendment does not reveal why corporate 
leases were limited to 25 years, when longer terms would have been 
consistent with the long-term leasing statutes enacted between 1934 and 
1990.

Early Statutes--Allotted Land

    Leases and other dispositions of allotted land are generally 
prohibited by the treaties and statutes which authorized the allotments 
and established the periods during which the land would be held in 
trust or restricted status. These prohibitions were modified by a 
series of statutes which authorized the leasing of allotments, subject 
to various limitations as to the lease purpose, maximum lease term, the 
leasing authority of the individual Indian landowners, and our approval 
power. The Act of February 28, 1891, authorized an allottee who could 
not personally occupy and improve his land--``by reason of age or other 
disability''--to lease the allotment for farming and grazing purposes. 
The statute limited the maximum term of the authorized leases to three 
years, and the legislative history dictated that applications to lease 
be made directly to us (rather than to the ``agent in charge of any 
reservation'').
    In its August 15, 1894, appropriations act, Congress lessened the 
1891 act's restrictions by authorizing farming and grazing leases by 
any allottee with an ``inability'' to personally occupy and improve his 
land. In this statute, Congress also extended the maximum term of 
farming and grazing leases to five years, and authorized leases of up 
to ten years for business purposes. In appropriations acts from 1897 
and 1900, however, Congress vacillated in defining the restrictions to 
be imposed on the owners of allotted land. In the 1897 act (30 Stat. 
85), the ``inability'' provision was dropped, and the maximum terms for 
farming/grazing and business leases were reduced to three and five 
years, respectively. Then, in the 1900 act (31 Stat. 229, 25 U.S.C. 
395), the ``inability'' provision was restored, and five-year farming 
leases were re-authorized.
    A more expansive leasing statute was enacted on June 25, 1910 (36 
Stat. 856, 25 U.S.C. 403), authorizing five-year leases of allotments 
held under trust patents, without regard to the purpose of the lease or 
the Indian landowner's age, ``disability,'' or ``inability.'' This act 
also provided that lease ``proceeds'' could be paid directly to the 
allottee or his/her heirs, or expended for their benefit by us. 
Congress attempted to both expand and limit its leasing policy in the 
Act of May 18, 1916 (39 Stat. 128, 25 U.S.C. 394), which authorized 
leases of irrigable allotted land for up to ten years, but made such 
leases subject to the ``age or other disability'' restrictions set 
forth in the Act of February 28, 1891. By statute enacted on March 3, 
1921 (41 Stat. 1232, 25 U.S.C. 393), allottees and their heirs were 
authorized to grant farming and grazing leases of ``restricted'' 
allotments (which were not covered by trust patents, and thus fell 
outside the scope of the 1910 act). (In earlier statutes, the leasing 
authority of the heirs of allottees had been left to inference.) Leases 
granted under the 1921 act were expressly made subject to ``the 
approval of the superintendent or other officer in charge of the 
reservation where the land is located.'' A September 21, 1922, statute 
(42 Stat. 995, 25 U.S.C. 392) subsequently authorized us to approve 
leases of allotments wherever the patents covering such allotments 
prohibited any type of alienation without the consent of the President.
    When the IRA was enacted in 1934, its purposes included the 
prohibition of the further allotment of Indian reservations and the 
curtailment of the future alienation of allotted land. Although none of 
the provisions in the final version of the IRA specifically addressed 
the leasing or permitting of allotments, Section 6 (48 Stat. 986, 25 
U.S.C. 466) directed us to make rules ``to restrict the number of 
livestock grazed on Indian range units to the estimated carrying 
capacity * * *, to protect the range from deterioration, to prevent 
soil erosion, to assure full utilization of the range, and like 
purposes.''
    A statute was enacted on July 8, 1940 (54 Stat. 745, 25 U.S.C. 
380), to address questions which had arisen about our authority to 
approve leases that had not been executed by all of the individual 
Indian owners. This act expressly authorized us to grant leases of 
heirship land (owned by the heirs or devisees of the original allottee) 
under specific circumstances. The act provided, in its entirety, as 
follows:

    [R]estricted allotments of deceased Indians may be leased, 
except for oil and gas mining purposes, by the superintendent of the 
reservation within which the lands are located (1) when the heirs or 
devisees of such decedents have not been determined and (2) when the 
heirs or devisees of the decedents have been determined, and such 
lands are not in use by any of the heirs and the heirs have not been 
able during a three-months' period to agree upon a lease by reason 
of the number of the heirs, their absence from the reservation, or 
for other cause, under such rules and regulations as the Secretary 
of the Interior may prescribe. The proceeds derived from such leases 
will be credited to the estates or other accounts of the individuals 
entitled thereto in accordance with their respective interests.

    The 3 month negotiation period required by the 1940 act is now 
subject to modification by tribes, insofar as agricultural leases are 
concerned, through the enactment of the American Indian Agricultural 
Resource Management Act on December 3, 1993. The provisions of this act 
are described in some detail below.

The Long-Term Leasing Act

    Before 1955, leases for more than five years were generally 
prohibited on both tribal and individually-owned land; 10 year leases 
were authorized only where irrigable land was involved, or where the 
leases were made pursuant to a

[[Page 30562]]

tribal corporate charter or a reservation-specific statute. Section 1 
of the Act of August 9, 1955 (69 Stat. 539, 25 U.S.C. 415), authorized 
long-term leases of both tribal and individually-owned land, but 
Section 6 (25 U.S.C. 415d) expressly provided that previously-enacted 
statutes would not be repealed. Specifically, ten-year leases were 
authorized for grazing purposes, and 25-year leases were authorized 
``for public, religious, educational, recreational, residential, or 
business purposes, * * * and for those farming purposes which require 
the making of a substantial investment in the improvement of the land 
for the production of specialized crops.'' Single renewal periods of up 
to 25 years were authorized in leases made for purposes other than 
farming or grazing.
    Section 1 of the 1955 act authorized leases by the Indian 
landowners, subject to the approval of the Secretary, and Section 2 (25 
U.S.C. 415a) confirmed that long-term leases of heirship land could be 
granted by the Secretary pursuant to the Act of July 8, 1940. Section 2 
also provided that if this grant authority was delegated by the 
Secretary, any ``heirs and devisees'' whose interests were leased under 
such authority would have a right to appeal. Section 4 (25 U.S.C. 415b) 
generally prohibited the payment of rentals more than one year in 
advance of the rental period, and Section 5 (25 U.S.C. 415c) absolutely 
prohibited lease provisions which would prevent or delay a termination 
of federal trust responsibilities during the lease term.
    The legislative history of the 1955 act indicates that it was 
intended to facilitate the long-term financing of development on Indian 
land, and to thereby increase the rental income payable to Indian 
landowners. The House Report reflects that Section 4 was intended to 
serve the termination-era ``objective of removing restrictions from 
Indian lands as rapidly as the Indian owners become able to handle 
their own affairs without assistance from the Federal Government.'' The 
House Report also indicates that a statutory provision which would have 
mandated rental adjustment clauses in long-term leases (``to insure 
adjustments * * * reflecting appreciation or depreciation of real and 
personal property values'') was deleted in favor of a committee 
recommendation to that effect. Specifically, the House Committee on 
Interior and Insular Affairs recommended that adjustment provisions be 
included in leases wherever ``applicable and appropriate,'' and that 
decisions not to include such provisions be documented on a case-by-
case basis. Finally, the Conference Report indicates that the ten-year 
maximum term for grazing leases was established in the belief it would 
provide adequate security for private loans to livestock operators.
    To date, the 1955 act has been amended numerous times, and 99-year 
leasing authority now exists on several reservations. A June 2, 1970, 
amendment (84 Stat. 303) added the following sentence at the end of 
Section 1 of the 1955 act:

    Prior to approval of any lease or extension of an existing lease 
* * *, the Secretary of the Interior will first satisfy himself that 
adequate consideration has been given to the relationship between 
the use of the leased lands and the use of neighboring lands; the 
height, quality, and safety of any structures or other facilities to 
be constructed on such lands; the availability of police and fire 
protection and other services; the availability of judicial forums 
for all criminal and civil causes arising on the leased lands; and 
the effect on the environment of the uses to which the leased lands 
will be subject.

Miscellaneous Statutes--The American Indian Agricultural Resource 
Management Act

    The AIARMA was enacted on December 3, 1993 (107 Stat. 2011, 25 
U.S.C. 3701 et seq.), and amended on November 2, 1994 (108 Stat. 4572). 
Section 102(a) of the AIARMA requires that all ``land management 
activities''--defined in Section 4(12)(D) to include the 
``administration and supervision of agricultural leasing and permitting 
activities, including a determination of proper land use, * * * 
appraisal, advertisement, negotiation, contract preparation, 
collecting, recording, and distributing lease rental receipts''--
conform to agricultural resource management plans, integrated resource 
management plans, and all tribal laws and ordinances. Section 102(b) 
requires that we recognize and enforce all tribal laws and ordinances 
which regulate land use or pertain to Indian agricultural land, and 
provide notice of such laws and ordinances to individuals or groups 
``undertaking activities'' on any affected land. Section 102(c) 
authorizes--but does not require--waivers of federal regulations or 
administrative policies which conflict with an agricultural resource 
management plan or a tribal law. It should be noted, however, that 
Sections 102(a)-(c) expressly provide for the recognition of only those 
tribal enactments which are not contrary to federal law or our trust 
responsibility.
    Section 105 of the AIARMA confirms and expands the existing leasing 
and permitting authority of both us and Indian landowners, and it also 
limits the authority of tribes to regulate such activities under 
Section 102. First, Section 105(a)(1) extends the existing 25-year 
authority for farming leases requiring a ``substantial investment'' to 
grazing leases that meet the same requirement. Second, Section 
105(a)(2) confirms existing authority to grant or approve a lease or 
permit at less than the appraised rental value of the land, when the 
land has been advertised and it has been determined that the lease or 
permit would serve the best interests of the Indian landowners. Third, 
Section 105(b)(5) of the amended AIARMA confirms that tribes may 
determine the rentals to be paid under agricultural leases and permits 
of tribal land. Fourth, the negotiation rights of the owners of 
heirship land are expanded by Section 105(c)(2), which authorizes the 
owners of a ``majority interest'' to grant an agricultural lease or 
permit which will bind the remaining owners (so long as the minority 
owners receive ``fair market value'' for their interests). Finally, 
while Sections 105(b)(1)-(4) confirm the newly-recognized authority of 
tribes to supersede federal rules and regulations on preferences, 
bonding, and the leasing or permitting of heirship land, Section 
105(c)(3) allows individual landowners to exempt their land from these 
specific types of tribal actions where the owners of at least a 50 
percent interest in such land object in writing.
    Although renewals of farming and grazing leases and permits were 
not previously authorized by statute, Section 105(b)(1) of the AIARMA 
implicitly authorizes such renewals, at least on land under the 
jurisdiction of a tribe which has established preferences for 
individual Indian lessees and permittees. Moreover, the three-month 
negotiation period required by the Act of July 8, 1940, has been 
expressly made subject to modification by tribes under Section 
105(b)(4), insofar as ``highly fractionated'' heirship land is 
concerned; the three-month period may only be modified, however, where 
a tribe defines ``highly fractionated'' and establishes an alternative 
plan for providing the individual Indian owners of heirship land with 
notice of our intent to lease their land pursuant to the 1940 act. In 
an apparent reference to the newly-recognized authority of tribes to 
establish alternative notice/negotiation periods, Section 105(c)(1) 
originally confirmed the rights of individual ``allottees'' to use 
their own property and negotiate their own leases and permits. (By 
contrast, the 1940 act allowed the ``heirs and devisees'' of

[[Page 30563]]

allottees to prevent us from exercising our broad grant authority on 
heirship land, by putting the land to direct use or by entering into a 
lease or permit during a three-month negotiation period.) Section 
105(c)(1) was subsequently amended to clarify that nothing in the 
AIARMA should be construed as ``limiting or altering'' the use and 
negotiation rights of either an ``allottee'' or a tribe, but the 
amendment failed to address the question of whether the ``heirs and 
devisees'' of allottees (or individual Indian landowners who acquired 
their interests by deed) may exercise ``owner's use'' rights under the 
1940 act.

Interpretation and Implementation

Audits and Opinions

    Since 1984, the Department of the Interior's Office of Inspector 
General (OIG) has completed audit reports on: (1) Agricultural leasing 
and permitting activities in Montana, South Dakota, and North Dakota; 
(2) conservation problems on leased property within the Crow Indian 
Reservation in Montana; and (3) the administration of commercial leases 
on the Agua Caliente Indian Reservation in California. In the latter 
report (from 1992), the OIG expressed concern about whether lessees 
should benefit from favorable or subsidized lease rentals by entering 
into ``sandwich'' leases which allow them to retain all or part of the 
differential between market (sublease) and contract (lease) rents. 
While the Agua Caliente audit report criticized existing regulations as 
providing ``insufficient guidance for commercial leasing activities,'' 
it also asserted that such regulations now make us responsible for 
ensuring that: (1) All lease rentals (including percentage rentals and 
interest on delinquencies) are paid; (2) adequate security for such 
payments is maintained throughout the lease term; (3) negotiated leases 
provide for a fair rental throughout the lease term, without fixed (or 
capped) rental adjustments; and (4) all leases and subleases are 
recorded in accordance with 25 CFR 150.
    In three audit reports from 1984--1986, the OIG reviewed the 
agricultural leasing and permitting activities on six reservations in 
North and South Dakota. In two reports pertaining to the Fort Berthold 
Reservation, the OIG criticized the BIA's failure to: (1) Identify 
unleased agricultural land and advertise such land for lease or permit; 
(2) advertise land on which leases or permits will be expiring, where 
the landowners have not granted a new lease or permit (to the existing 
lessee/permittee or anyone else) within a three-month period; (3) issue 
timely notices of delinquent rentals; (4) require a minimum cash rental 
where cropshare rentals are authorized; and (5) monitor and document 
crop production where cropshare rentals are to be paid. In a 1986 
report pertaining to five other reservations in North and South Dakota, 
the OIG reiterated most of the Fort Berthold criticisms, and also 
recommended that: (1) Minimum grazing rentals be set at a higher rate, 
with adjustments to off-reservation market data based on such 
``factors'' as seasonal limitations, tribal taxes, interest on rental 
``advances,'' administrative fees, and bonding requirements; (2) the 
``brokering'' of unauthorized ``subleases'' on allocated range units be 
monitored, so that minimum grazing rentals are paid for all livestock 
owned by non-Indians; (3) the grazing rentals for the various tracts 
within a range unit reflect any differences in the production 
capabilities of such tracts; and (4) stocking rates be continuously 
reviewed and adjusted as range conditions warrant.
    In four audit reports from 1985--1988, the OIG reviewed selected 
leasing and permitting activities on three reservations in Montana (as 
well as the Turtle Mountain Chippewa allotments in eastern Montana), 
focusing primarily on trespass, conservation, and income collection 
issues. Two of these reports also reiterated the above-referenced 
concerns about unleased land, expiring leases, and delinquent rentals. 
Two of the reports dealt solely with conservation issues on the Crow 
Indian Reservation, with specific reference to (unapproved) leases 
granted by competent Indian landowners pursuant to the amended Crow 
allotment act. Based on its review of the legislative history--and its 
view of our continuing trust responsibility to the allotments in 
question--the OIG recommended that the BIA clarify its responsibility 
and authority over land under leases granted by competent Indian 
landowners, by legislation if necessary.

National Environmental Policy Act

    Sec. 162.16(c)(1) provides that the lessee must comply with the 
National Environmental Policy Act (42 U.S.C. 4371 et seq.). The courts 
have held in Davis v. Morton, 469 F.2d 593 (10th Cir. 1972), that the 
National Environmental Policy Act applies to the Bureau of Indian 
Affairs approval of leases of trust land.

List of Subjects in 25 CFR Part 162

    Agriculture and agricultural products; Grazing lands; Indian-lands.

    For the reasons set out in the preamble, we propose to revise Part 
162 of Title 25 of the Code of Federal Regulations, as follows:

PART 162--LEASING AND PERMITTING

Subpart A--General Provisions

Sec.
162.1  Definitions.
162.2  Objectives.
162.3  Scope.
162.4  Tribal laws.
162.5  Information collection.

Subpart B--Administrative Provisions

162.10  How are leasing and permitting units created?
162.11  How are leasing and permitting units advertised?
162.12  Can landowners grant leases or permits?
162.13  When do we grant leases or permits?
162.14  What land is exempt from leasing and permitting?
162.15  What administrative fees are required?
162.16  Who reviews and approves leases or permits?
162.17  What happens if you default?
162.18  When can leases or permits be canceled?

Subpart C--General Requirements

162.20  Who can obtain a lease or permit?
162.21  How do we describe leased or permitted areas?
162.22  What uses of leased or permitted areas are allowed?
162.23  For how long are leases or permits valid?
162.4  What provisions must be in every lease or permit?
162.25  How much will the lease or permit cost?
162.26  Will you have to provide a security deposit?
162.27  How can leases or permits be amended or modified?
162.28  Can leases or permits be assigned, transferred, or sublet?
162.29  Can you use a lease or permit as collateral for a loan?
162.30  What restrictions apply if you acquire interest in a lease 
or permit?
162.31  What fees, taxes and assessments must you pay?
162.32  What happens if your lease or permit includes improvements?
162.33  Do you need insurance?
162.34  What remedies are available if there is a default or 
dispute?
Subpart D--Special Provisions for Grazing Permits
162.40  How are grazing units established?
162.41  How many animals can you graze?
162.42  When do we issue grazing permits?
162.43  What happens when we implement a tribal allocation program?

[[Page 30564]]

162.44  When will we give stocking rate credit?
162.45  How much will grazing rental cost?
162.46  When will permits or tracts be revoked or withdrawn?
Subpart E--Special Provisions for Specific Reservations
162.50  Crow Reservation
162.51  Cabazon, Augustine, and Torres-Martinez Reservations
162.52  Salt River and San Xavier Reservations
162.53  Tulalip Reservation.

    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; 25 U.S.C. 380, 393, 
393a, 394, 395, 397, 402, 402a, 403, 403a, 403b, 403c, 413, 415, 
415a, 415b, 415c, 415d, 477, 635. 25 U.S.C. 3701, 3702, 3703, 3715, 
107 Stat. 2018, 108 Stat. 4572.

Subpart A--General Provisions


Sec. 162.1  Definitions.

    Adult means an individual Indian who is 18 years or older.
    Agricultural land means farmland, rangeland, or other land which is 
used in conjunction with farmland or rangeland.
    Agricultural lease or permit means a lease or permit or permit for 
farming and/or grazing purposes.
    Allocation means the apportionment of grazing units to tribal 
members or tribal entities, including the tribal designation of 
permittees and the number and kind of livestock to be grazed.
    Conservation plan means a statement of management objectives for an 
agricultural lessee or permittee, including contract stipulations 
defining required uses, operations, and improvements. A conservation 
plan may be prepared or adopted by us, and will be reviewable on an 
annual basis.
    Fair annual rental means consideration for a lease or permit which 
provides a reasonable return on land value, as may be determined by an 
appraisal of comparable properties, advertisement and/or competitive 
bidding, or a negotiated percentage of the income to be derived from 
the land. Fair annual rental will reflect the highest and best use of 
the land, consistent with applicable law, and will take into account 
the costs associated with the proposed use and the reversionary value 
of any improvements to be made by the lessee or permittee.
    Farmland means land which is used for the development of crops, 
pasture, or other agricultural products grown or harvested for personal 
consumption or for commercial purposes.
    Government land means the surface estate of a tract of land, or any 
interest therein, which is owned by the United States and administered 
by the Bureau of Indian Affairs, not including tribal land which has 
been reserved for the Bureau's administrative purposes but is not 
immediately needed for such purposes.
    Grazing permit means a permit of specified duration, granting the 
permittee a privilege to use tribal, individually-owned, and/or 
Government land for grazing purposes. Unless otherwise provided by 
agreement, a grazing permit will be assignable by the permittee, with 
the consent of the owners and our approval, and may only be canceled or 
revoked by us pursuant to Secs. 162.18 and 162.46 of this part, 
respectively.
    Grazing unit means one or more tracts which have been designated 
for grazing purposes, pursuant to Sec. 162.40.
    Heirship land means the surface estate of a tract of land having 
two or more owners, in which any interest is owned by an individual 
Indian in trust or restricted status. Any such interest will be 
characterized as individually-owned land, while the entire tract will 
be considered to be heirship land. Other interests in a tract of 
heirship land may be owned by Indian or non-Indian individuals or 
entities, in unrestricted status, or by tribes, in trust or restricted 
status.
    Individual Indian means any person for whom the United States holds 
title in trust status, or who holds title subject to federal 
restrictions against alienation or encumbrance.
    Individually-owned land means the surface estate of a tract of 
land, or any interest therein, which is held by the United States in 
trust for an individual Indian, or a tract of land, or any interest 
therein, which is owned by an individual Indian subject to federal 
restrictions against alienation or encumbrance.
    Interest means an undivided fractional share in the ownership of 
heirship land.
    Lease means a grant to a lessee of a right to possession of tribal 
and/or individually-owned land, for a specified purpose and duration.
    Majority interest means an aggregate of tribal and individually-
owned interests totaling more than 50 percent of the total ownership in 
heirship land.
    Owner means the tribe or individual Indian holding beneficial or 
restricted title to tribal or individually-owned land.
    Permit means a grant to a permittee of a privilege to enter on and 
use tribal, individually-owned, and/or Government land for a specified 
purpose.
    Rangeland means land on which the native vegetation is 
predominantly grasses, forbs, or shrubs suitable for grazing.
    Secretary means the Secretary of the Interior or his authorized 
representative, acting pursuant to delegated authority.
    Tract means a distinct parcel of Government or heirship land, or a 
distinct parcel of tribal or individually-owned land in which the full 
beneficial or restricted title is held by or on behalf of a single 
tribe or individual Indian owner. A tract may be leased or permitted 
either in all or in part, or it may be incorporated in a unit for 
leasing or permitting purposes.
    Tribal corporation means a corporation chartered by us under 
Section 17 of the Indian Reorganization Act of June 18, 1934 (48 Stat. 
984, 25 U.S.C. 477).
    Tribal land means a tract of land, or any interest therein, which 
is held by the United States in trust for a tribe or tribal 
corporation, or a tract of land, or any interest therein, which is 
owned by a tribe subject to federal restrictions against alienation or 
encumbrance.
    Tribal law means an ordinance or other enactment by a tribe, which 
applies to leasing and permitting activities on tribal land and/or 
individually-owned agricultural land and is applicable under 
Sec. 162.4.
    Tribe means any Indian tribe, band, nation, or other organized 
Indian group or community, including any Alaskan Native village, which 
is recognized by us as having special rights and responsibilities, and 
as being eligible for the services provided by the United States to 
Indians because of their status as Indians.
    Unit means two or more tracts which have been combined for leasing 
or permitting purposes, pursuant to Sec. 162.10 of this part.
    We means the Secretary of the Interior or a Federal official with 
delegated authority.


Sec. 162.2  Objectives.

    (a) We will prepare and administer leases and permits in accordance 
with tribal laws which are not contrary to Federal law or our trust 
responsibility to protect the resources of individual

[[Page 30565]]

Indian owners. That means we will manage tribal and individually owned 
agricultural land in a manner which is consistent with recognized 
principles of sustained yield management, integrated resource 
management planning, sound conservation practices, and other community 
goals as expressed in tribal laws.
    (b) We will assist owners in the granting of leases and permits 
through negotiation, advertisement, or allocation. We will also 
recognize the rights of owners to use their own land, if the other 
owners receive a fair annual rental for this use and the long term 
value of the land is preserved.
    (c) We will ensure that lessees and permittees comply with the 
terms of their leases and permits, through cancellation or other action 
necessary to protect the interest of the owners. If the effective use 
of the land requires, we may grant leases and permits on behalf of the 
owners and obtain a fair annual rental.


Sec. 162.3  Scope.

    (a) The regulations in this part prescribe the procedures, terms, 
and conditions under which non-mineral leases and permits covering 
tribal, individually owned, and government land may be granted, 
approved, and administered. The regulations in subparts A through C of 
this part apply to all leases and permits, except as otherwise 
indicated, and the regulations in subpart D also apply to grazing 
permits. Mineral leases and permits will be subject to the regulations 
in subchapter I of this chapter.
    (b) The regulations in subpart E prescribe certain procedures, 
terms, and conditions which apply to leasing and permitting activities 
on specific reservations. The provisions in subparts A through D will 
also apply on these reservations, unless superseded by subpart E.
    (c) The regulations in this part will not apply if a lease or 
permit is granted by an owner without our approval being required. Such 
leases and permits must be recorded according to part 150 of this 
chapter.


Sec. 162.4  Tribal laws.

    (a) Tribal laws may apply to tribal land and individually owned 
agricultural land under the jurisdiction of the enacting tribe. To be 
applicable, the law must apply equally to all land under the 
jurisdiction of the tribe.
    (b) Tribes must notify us of the content, record of public notices 
and hearings, and effective date of new tribal laws. If the new tribal 
law applies to individually owned agricultural land, we will notify the 
affected owners. Either actual or constructive notice may be provided, 
depending on whether the tribe afforded any notice and hearing rights 
to the owners before enactment. Actual notice is required if the tribal 
law is of the type described in paragraphs (c) (1) through (3) of this 
section.
    (c) A tribal law may supersede the regulations in this part, except 
when the law conflicts with a Federal statute or with the objectives in 
Sec. 162.2. Also, owners of individually-owned land or the owners of at 
least a 50 percent interest in heirship land may exempt their land from 
a tribal law if it:
    (1) Provides a preference for Indians or tribal members in issuing 
or renewing agricultural leases or permits;
    (2) Establishes specific security requirements for agricultural 
leases or permits, or waives our security requirements; or
    (3) Defines ``highly fractionated'' heirship land and establishes a 
plan to provide the owners with notice of our intent to grant an 
agricultural lease or permit under Sec. 162.13(b).
    (d) The owners of a tract of individually owned or 50 percent 
interest in heirship land may exempt their land from a tribal law by 
submitting a written statement or petition to us. We will notify the 
tribe of your request. The same procedure applies to changing your 
request for exemption.


Sec. 162.5  Information collection.

    The information collection requirements contained in this part do 
not require the review and approval of the Office of Management and 
Budget under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.).

Subpart B--Administrative Provisions


Sec. 162.10  How are leasing and permitting units created?

    We may establish a unit if it is consistent with prudent management 
or efficient administration of tribal, individually owned, or 
Government land. If the value of each tract is not identified in a 
lease or permit, the value of each tract will be proportionate to its 
acreage within the unit.


Sec. 162.11  How are leasing and permitting units advertised?

    (a) If necessary to establish a fair annual rental, we will 
advertise a tract of individually owned or heirship land before 
granting or approving a lease or permit. Advertisements will require 
sealed bids, and may also provide for competitive bidding among the 
potential lessees.
    (b) Advertisements will provide potential lessees with notice of 
the applicable tribal laws, and the basic terms and conditions of the 
lease or permit. Advertisements will state if there is preference for 
Indians or members of the tribe that has jurisdiction over the land.


Sec. 162.12  Can landowners grant leases or permits?

    (a) We will approve a lease or non grazing permit of individually 
owned land negotiated and granted by:
    (1) Adult owners, except those under a legal disability;
    (2) Parents and other persons standing in loco parentis to minor 
children owners; and
    (3) Guardians, conservators, and other fiduciaries appointed by 
courts of competent jurisdiction to act on behalf of individual Indian 
owners.
    (b) We will approve leases or permits of tribal land negotiated and 
granted by tribes and tribal corporations. If allowed by its charter, a 
tribal corporation may grant a lease or permit for up to 25 years, 
including any option period, without our approval. If tribal land 
assigned to a tribal member under tribal law or custom which authorizes 
further leasing and permitting, the assignee and tribe may jointly 
grant a lease or permit with our approval.
    (c) We will approve agricultural leases or permits granted by 
owners of a majority interest in heirship land to owners of a minority 
interest. The lease or permit must provide a fair annual rental to the 
other owners who do not grant the lease or permit.


Sec. 162.13  When do we issue leases or permits?

    (a) We may grant leases or non grazing permits, or join in 
agreements which have been negotiated by other owners under 
Sec. 162.12(a), on behalf of the following owners of individually owned 
land:
    (1) Adults who are legally disabled;
    (2) Orphaned minors;
    (3) The undetermined heirs or devisees of individual Indian 
decedents;
    (4) Individual Indians who have given us written authority to act 
on their behalf; and
    (5) Individual Indians whose whereabouts are unknown.
    (b) We may grant a lease or permit covering all tribal and 
individually owned interests in heirship land, if a lease or permit 
cannot be granted for each interest under paragraph (a) of this section 
and/or Sec. 162.12.
    (c) When a tribal law applies, we may only grant a lease or permit 
after providing the tribal and individual

[[Page 30566]]

Indian owners with written notice, and allowing owners 3 months to 
grant a lease or permit pursuant to Sec. 162.12. We may grant a non-
grazing permit covering all trust and restricted interests in a tract 
of heirship land if it is impractical to provide notice to the owners 
and no substantial injury to the land would occur. If we grant a lease 
or permit for 10 years or more, we will notify the owners of their 
right to appeal under part 2 of this chapter.
    (d) We will grant permits for Government land.


Sec. 162.14  What land is exempt from leasing and permitting?

    (a) The parent, guardian, or other person standing in loco parentis 
to minor children may use a tract of individually owned or heirship 
land without charge, if the minor children are the only owners and will 
directly benefit from the use. This use may continue until one of the 
owners becomes an adult.
    (1) In that event a lease or permit must be obtained for the use to 
continue.
    (2) The user must provide evidence of a direct benefit to the minor 
children, or we will proceed to lease or permit.
    (b) We will not grant a lease or permit pursuant to Secs. 162.13(b) 
or 162.42(b), if the land is used by an individual Indian owner and the 
other owners are receiving a fair annual rental. An individual Indian 
owner who is personally using heirship land must notify us of the use 
and provide evidence of an accounting to the other owners before the 
end of the applicable notice period.


Sec. 162.15  What administrative fees are required?

    (a) We will collect an administrative fee before we approve any 
lease, permit, sublease, assignment, encumbrance, modification, or 
other related document. The fee will be based on the annual rental 
payable by the lessee or permittee, calculated as follows: 3 percent of 
the first $500, 2 percent of the next $4500, and 1 percent of all 
rentals exceeding $5000. Grazing permittees will also pay an annual 
administrative fee for the duration of their permits, at the same 
rates. In no event will an administrative fee be less than $2, nor 
exceed $250.
    (b) For leases or permits with percentage rentals, we will collect 
an administrative fee based on the minimum annual rental or an 
estimated percentage rental. For crop share rental or another type of 
special consideration is authorized by a lease or permit, we will 
establish a cash rental value. We will collect an administrative fee 
based on the cash rental value.
    (c) If a tribe performs all or part of the administrative duties, 
the tribe may establish an alternate fee schedule. We must approve the 
alternative schedule if any of the fees collected will not be deposited 
in the U.S. Treasury.
    (d) If less than fair annual rental is payable under a lease or 
permit, or if a document is being processed primarily for the benefit 
of the owners, we will waive collection of the administrative fee. No 
refund of previously collected fees is allowed.


Sec. 162.16  Who reviews and approves leases or permits?

    (a) We must identify potential impacts and ensure compliance with 
all applicable environmental and land use laws and ordinances before we 
grant or approve a lease or permit. Usually a formal assessment of 
potential impacts is not required if the proposed action will not 
result in a physical alteration of the land or a change in the land 
use.
    (b) To assess potential impacts of approving a permit or lease, we 
will consider the following:
    (1) Relationship between the proposed land use and the use of 
adjoining land;
    (2) Type of improvements;
    (3) Availability of essential community services; and
    (4) Existence of appropriate regulatory controls and forums for 
adjudicating disputes.
    (c) We may conditionally approve a permit or lease and reserve the 
right to further modify or rescind it as necessary to mitigate 
significant environmental impacts. You must not take possession or 
start operations until:
    (1) You complete an environmental analysis under the National 
Environmental Policy Act (42 U.S.C. 4371 et seq.) and we approve it and 
decide to approve the permit or lease;
    (2) The lease or permit is modified to incorporate mitigation 
measures identified in the record of decision; and
    (3) We certify that all conditions in the original grant or 
approval are satisfied, and we authorize you to take possession and 
commence operations.
    (d) There is no standard format for a lease or permit. The 
provisions must conform to the general and special requirements in 
subparts (C) through (E) of this part. A lease or permit must include a 
citation of the authority used to grant or approve it and the 
delegation authority to the granting or approving official.
    (e) We will not grant or approve a lease or permit more than one 
year before its starting date. If a lease or permit is granted or 
approved after its starting date, it is retroactive to that starting 
date except when another date is stipulated.


Sec. 162.17  What happens if you default?

    (a) We will determine when a default occurs. We will then notify 
you and any sureties or encumbrancers.
    (b) You have 30 days from the receipt of the notice to cure the 
default or provide information to justify not canceling the lease or 
permit. We may grant you additional time to complete corrective 
actions, but you must immediately begin the work necessary to cure the 
default and diligently proceed to completion within the time allowed.
    (c) You have the right to appeal our decision on whether you 
defaulted under part 2 of this chapter.


Sec. 162.18  When can leases or permits be canceled?

    (a) We will cancel a lease or permit if you fail to justify extra 
time to correct or fail to complete required corrective actions. We 
will notify you and any sureties or encumbrancers of our decision to 
cancel.
    (b) In our notice, we will advise you of your right to appeal under 
part 2 of this chapter, and we will demand the payment of delinquent 
rentals and damages due. An appeal bond may be required, the amount of 
the bond will be the amount of delinquent rentals, damages, and 
additional rentals expected to accrue during the settlement of the 
appeal. An appeal filed without the required bond will be dismissed.

Subpart C--General Requirements


Sec. 162.20  Who can obtain a lease or permit?

    (a) The lease or permit must identify all parties, including the 
owners, the lessee or permittee, and representatives. If a 
representative executes a lease or permit, it must be clearly stated 
who is represented and under what authority the representation is 
allowed.
    (b) We may grant a lease or permit to an individual who has ability 
to contract under applicable law. If a lease or permit is granted to 
several individuals or an informal association of individuals, the 
lease or permit will be executed by each individual.
    (c) Where a lease or permit is granted to a partnership, all of the 
general partners must execute the lease or permit in the absence of 
evidence that all partners are not authorized to bind the lessee or 
permittee.
    (1) A lease or permit to a partnership will indicate whether 
general partners whose partnership interests are later

[[Page 30567]]

terminated will continue to be liable for the debts of the lessee or 
permittee.
    (2) A lease or permit to a limited partnership, corporation, or 
other limited liability company will identify the place where the 
organizational documents of the lessee or permittee have been filed.
    (d) If a lease or permit is granted to a governmental entity, that 
is prohibited by law from complying with any of the requirements in 
this part, we may waive those requirements. But, we must ensure that 
your sovereign immunity has been waived to the extent necessary to 
protect the interests of the owners.


Sec. 162.21  How do we describe leased or permitted areas?

    A legal description or the parcel number of the premises must be in 
the lease or permit. If you propose any development or a metes and 
bounds description is used, you must provide a current survey plat 
showing encroachments and the natural features of the land.


Sec. 162.22  What uses of leased or permitted areas are allowed?

    (a) A lease or permit must include:
    (1) Authorized uses;
    (2) Restricted uses;
    (3) Prohibited uses; and
    (4) Prohibition of creating a nuisance, any illegal activity, and 
negligent use or the waste of resources.
    (b) You must conduct farming and grazing operations in accordance 
with the principles of sustained yield management, integrated resource 
management planning, sound conservation practices, and other community 
goals as expressed in tribal laws.
    (c) You must comply with all applicable laws, ordinances, rules, 
regulations, and other legal requirements. You must also pay all costs 
if you do not comply.


Sec. 162.23  For how long are leases or permits valid?

    (a) Leases and permits will specify the beginning and ending dates. 
The length of time allowed will be the shortest possible considering 
the purpose, your investment, prudent management, and efficient 
administration.
    (b) The maximum term will depend on the purpose for the lease or 
permit, the location of the land, and the leasing and permitting 
authority.
    (1) The maximum primary term for public, religious, educational, 
recreational, residential, or business purposes is 25 years, unless a 
longer term is specifically authorized by Federal statute. The maximum 
term for renewals and extensions is 25 years.
    (2) We will usually grant agricultural leases or permits not to 
exceed 10 years including renewals and extensions. The maximum term is 
25 years, including renewals and extensions, if substantial investment 
in development or production of a specialized crop is required. To 
determine if a long term is justified, we will consider the feasibility 
of the proposed development or crop production.
    (3) The maximum term is 2 years when we grant a lease or permit for 
the undetermined heirs of an individual Indian decedent, under 
Sec. 162.13(a)(3).
    (c) You cannot extend a lease or permit by holdover. The only ways 
a lease or permit can be extended is by renewal or automatic extension. 
Only one extension is allowed. Leases or permits may provide multiple 
options for unilateral termination. The lease or permit must specify 
the time and manner an option to renew or terminate is allowed.


Sec. 162.24  What provisions must be in every lease or permit?

    A lease or permit must include provisions stating that:
    (a) If the land has trust or restricted status, you and your 
sureties obligations will be to the United States and the owners;
    (b) The lease will not delay or prevent the issue of a fee patent; 
and
    (c) If a fee patent is issued, our responsibilities are assumed by 
the owners; and
    (d) We will notify you of any change land status.


Sec. 162.25  How much will the lease or permit cost?

    (a) We will not approve leases or permits at less than fair annual 
rental by individual Indian owners or their representatives except:
    (1) For religious, educational, recreational, or other public 
purposes;
    (2) For a homesite for the owner's spouse, brother, sister, lineal 
ancestor, lineal descendent or co-owner.
    (3) When a special relationship exists between the parties; or
    (4) When we determine it is in the best interest of the owners.
    (b) We will not approve leases or permits at less than fair annual 
rental by a tribe or tribal corporation for tribal land, except:
    (1) For religious, educational, recreational, or other public 
purposes;
    (2) For housing or agriculture to a tribal member or tribal entity; 
or
    (3) For a business subsidy for a tribal member or tribal entity.
    (c) We will specify in the lease or permit the dates that rents are 
due and payable. We will also develop a formula for apportionment and/
or abatement of rent when you are unable to take possession for the 
entire rental period. We will not collect rent or other consideration 
more than one year before its due date unless agreed to by all parties.
    (d) We will specify who receives rental payments. If we do not 
receive the rental payments, you must provide us proof of payment. We 
may suspend direct payment provisions at any time. If an owner that 
receives direct payments dies, you must make all future payments to us 
until the estate is probated.
    (e) All leases or permits of more than 5 years duration must have 
periodic rental adjustments, except when the rental is less than fair 
annual rental, or if rentals are a percentage of income. We will 
specify how, and when the adjustments are made, who will make them, and 
how disputes will be settled. Unless agreed to before hand, adjustments 
will not:
    (1) Give consideration to the value of improvements or developments 
completed;
    (2) Be retroactive if not made on time; and
    (3) Be appealable under part 2 of this chapter.


Sec. 162.26  Will you have to provide a security deposit?

    (a) We will usually require that you provide a deposit of cash or 
marketable securities, a surety bond, an irrevocable letter of credit, 
a chattel mortgage on personal property located on the premises, or 
some other type of security, to ensure:
    (1) Payment of one year's rental;
    (2) Construction of improvements; and
    (3) Performance of additional obligations, including the 
restoration of the land to its original condition.
    (b) Tribal laws may establish specific security requirements for 
agricultural leases or permits, or waive our requirements.
    (c) We may waive security requirements for agricultural leases or 
permits if annual rental is payable in advance, and if performance is 
secured by compliance to a conservation plan and participation in 
conservation programs administered by other Federal agencies.
    (d) We can adjust security requirements at any time. If you 
default, we may apply the security and seek replenishment, or we may 
retain the security and proceed with a notice of default under 
Sec. 162.17. We may release a security required to ensure the

[[Page 30568]]

construction of improvements after completion of construction.


Sec. 162.27  How can leases or permits be amended or modified?

    (a) We will amend leases and permits the same way we approve them 
under Secs. 162.12 and 162.13(a).
    (b) Some owners of heirship land may designate one or more of their 
fellow owners to negotiate and/or agree to amendments or permits on 
their behalf. In these cases the designated owner:
    (1) May negotiate or agree to amendments or permits;
    (2) May consent to or approve other items as necessary; and
    (3) Cannot negotiate or agree to amendments that reduce the rentals 
payable to the other owners or terminate or modify the term of the 
lease or permit.


Sec. 162.28  Can leases or permits be assigned, transferred, or sublet?

    (a) We will approve subleases or assignments of a lease or permit 
only with the written consent of all parties and sureties.
    (b) Under a lease or permit for business purposes, you may sublet a 
portion of the premises without the consent of the owners, sureties, or 
us, if the owners receive a fair annual rental for this additional use. 
A sublease will not relieve you of any liability under the lease or 
permit, nor will it diminish our supervisory authority.
    (c) A tribal housing authority leasing tribal land may make 
assignments without the consent of the tribe or our approval, if the 
assignment is to a tribal member and associated with the transfer of a 
home.


Sec. 162.29  Can you use a lease or permit as collateral for a loan?

    Yes. You may use a lease or grazing permit as loan collateral if 
you get our approval and the written consent of the owners and 
sureties. The lease or permit then has an approved encumbrance.


Sec. 162.30  What restrictions apply if you acquire interest in a lease 
or permit?

    (a) If you acquire interest in a lease or permit by sale or 
foreclosure of an approved encumbrance:
    (1) You may give amortization of the loan priority over your rental 
payments; and
    (2) You may assign your interest without consent or approval, if 
the assignee agrees in writing to be bound by the terms of the lease or 
permit.
    (b) If you acquire interest in a lease or permit other than by sale 
of foreclosure of an approved encumbrance:
    (1) You need our approval and the consent of the owners and 
sureties before you may assign your interest; and
    (2) The assignee must agree in writing to be bound by the terms of 
the lease or permit.


Sec. 162.31  What fees, taxes and assessments must you pay?

    (a) If you lease or permit tribal land, you must pay all tribal 
fees, taxes, and assessments associated with the use of the premises. 
If you lease or permit individually owned land, you may have to pay 
also. You will make the payments to the appropriate tribal official.
    (b) If you lease or permit land within an Indian irrigation project 
or drainage district, you will have to pay all charges accruing during 
the term of the lease or permit, except if part 171 of this chapter 
supersedes this section. You will make payment to the appropriate 
Federal official.


Sec. 162.32  What happens if your lease or permit includes 
improvements?

    (a) We will set starting and ending dates for development of the 
premises or the construction of improvements. We will also require 
plans and specifications be submitted before work begins.
    (b) Permanent improvements will remain on the premises at the 
termination of a lease or permit. You can remove other improvements 
within a set time period if all parties agree. You must restore the 
premises after removal.


Sec. 162.33  Do you need insurance?

    You must provide enough insurance to protect all insurable 
improvements on the premises. You must also obtain liability insurance 
to protect the interests of the owners. All insurance policies must 
identify the individual Indian and tribal owners and the United States 
as insured parties.


Sec. 162.34  What remedies are available if there is a default or 
dispute?

    (a) A lease or permit covering a tract of tribal land may provide a 
tribe with self-help remedies such as a right of entry. Upon default, a 
tribe may elect to exercise its rights under the lease or permit, or it 
may request that we cancel the lease or permit pursuant to Sec. 162.18.
    (b) If a lease or permit covering a tract of tribal land authorizes 
termination pursuant to state or tribal law, or provides for the 
resolution of certain types of disputes through arbitration, the lease 
or permit provisions will govern the termination or dispute 
arbitration.

Subpart D--Special Provisions for Grazing Permits


Sec. 162.40  How are grazing units established?

    We will establish and modify grazing units boundaries to provide 
for the conservation, development, and effective use of Indian, and 
Government rangeland. We will consult with the tribe having 
jurisdiction to comply with tribal land management policies.


Sec. 162.41  How many animals can you graze?

    (a) We will prescribe the maximum number of livestock that can 
graze on a grazing unit, and the seasons of authorized grazing use 
consistent with tribal land management policies. We will continuously 
review stocking rates and adjust them to meet changing conditions.
    (b) A tribe may prescribe the kind of livestock that graze on 
rangeland within its jurisdiction. But, we may require other kinds of 
livestock if it is essential to the prudent management or efficient 
administration of the permitted land.


Sec. 162.42  When do we issue grazing permits?

    (a) We may include one or more tracts of individually owned 
rangeland in a grazing unit, and grant a grazing permit covering such 
land, on behalf of the following owners:
    (1) Adults who are legally disabled;
    (2) Orphaned minors;
    (3) The undetermined heirs or devisees of individual Indian 
decedents;
    (4) Individual Indians who have given us written authority to act 
on their behalf; and
    (5) Individual Indians whose whereabouts are unknown.
    (b) We must notify the Indian owners before we grant a grazing 
permit on heirship rangeland. They must have 90 days to agree to the 
permit, withdraw their tract from the grazing unit, or stipulate a 
higher rental than we proposed.
    (c) We may include tribal rangeland within a grazing unit, and 
grant a grazing permit if the tribe has given us written authority. 
Without tribal authority, we can only include tribal rangeland if it is 
essential to the prudent management or efficient administration of the 
land. We must give the tribe written notice 60 days before the start of 
a permit. We will not issue the permit if the tribe files a written 
objection to the proposed permit within the notice period.

[[Page 30569]]

Sec. 162.43  What happens when we implement a tribal allocation 
program?

    (a) A tribe may authorize us to allocate rangeland under its 
jurisdiction without negotiation or advertisement. We may grant permits 
under Sec. 162.42(a) and (b), to implement a tribal allocation program, 
despite there not being an applicable tribal law. The minimum grazing 
rentals established under Sec. 162.45(a) will generally be payable to 
any individual Indian owners of allocated land.
    (b) The tribe having jurisdiction will prescribe eligibility 
requirements with our concurrence. If a tribe fails to establish its 
eligibility requirements on time, we may establish the requirements 
after a 60-day notice.


Sec. 162.44  When will we give stocking rate credit?

    A grazing permit may grant a permittee a stocking rate credit where 
the permittee owns or controls other rangeland which adjoins or lies 
within the grazing unit, and which is grazed in common with the 
permitted land. The stocking rate credit will be reflected in the 
grazing capacity of the grazing unit, established pursuant to 
Sec. 162.40 of this part.


Sec. 162.45  How much will grazing rental cost?

    (a) We will determine fair annual rentals for reservations with 
rangeland by establishing its minimum grazing rental. These minimum 
grazing rentals will apply to all livestock owned by non Indians or 
nonmembers when their livestock grazes on tribal land.
    (b) Owners may set alternative minimum rentals, when we grant a 
grazing permit under Sec. 162.42(a) and (b). Except when lower rentals 
are authorized under Sec. 162.25(a), the alterative minimum rentals may 
not be lower than the minimum we set.


Sec. 162.46  When will permits or tracts be revoked or withdrawn?

    (a) If you default, we may cancel the grazing permit under 
Sec. 162.18, unless we agree to an alternative remedy.
    (b) We may revoke or withdraw tracts from a permit if the tribe 
wants to include the land in its allocation program or an individual 
Indian owner wants his/her land exempt from permitting under 
Sec. 162.14(b). The new user must compensate the previous user for any 
improvements completed before the revocation or withdrawal, and adopt 
an established conservation plan or develop a new plan acceptable to 
us. Owners may only withdraw a tract after it is fenced.
    (c) We must notify the user 180 days before a revocation or 
withdrawal is executed. The effective date will be the next anniversary 
date after notice period, unless a different date is agreed to.

Subpart E--Special Requirements for Specific Reservations


Sec. 162.50  Crow Reservation.

    (a) Some Crow Indians are classified as competent under the Act of 
June 4, 1920 (41 Stat. 751), as amended. They may lease their trust 
lands and the trust lands of their minor children for farming or 
grazing without our approval per the Act of May 26, 1926 (44 Stat. 
658), as amended by the Act of March 15, 1948 (62 Stat. 80). We must 
issue a public notice if competent Crow Indians authorize us to lease 
or permit, or assist in the leasing and permitting their lands. When 
this occurs, we will comply with the regulations in this part. We must 
approve leases or permits signed by non competent Crow Indians and 
leases or permits on inherited or devised trust lands owned by more 
than five competent devisees or heirs.
    (b) The Act of May 26, 1926 (44 Stat. 658), as amended by the Act 
of March 15, 1948 (62 Stat. 80), sets five years as the maximum lease 
term for farming or grazing. The maximum term for leases or permits of 
irrigable lands under the Big Horn Canal is 10. You will not have a 
preference right to future leases or permits if the total period of 
encumbrance would exceed the maximum terms allowed.
    (c) All leases or permits entered into by competent Crow Indians 
must be recorded at the Crow Agency. Recording will constitute public 
notice.
    (1) Under these special statutes, Crow Indians classified as 
competent are free to lease their property within certain limitations. 
The 5-year (10-year in the case of lands under the Big Horn Canal) 
limitation is intended to afford a protection to the Indians. The 
essence of this protection is the right to deal with the property free, 
clear, and unencumbered at intervals at least as frequent as those 
provided by law. If lessees or permittees are able to obtain new leases 
or permits long before the termination of existing leases or permits, 
they may set their own term. In these circumstances, lessees could 
perpetuate their leaseholds and bypass the statutory limitations on 
terms.
    (2) In implementation of the interpretation, in paragraph (c)(1) of 
this section we will not record any lease which:
    (i) On its face, violates statutory limitations or requirements;
    (ii) Is executed more than 12 months (if a grazing lease) or 18 
months (if a farming lease), before its term begins; or
    (iii) Purports to cancel an existing lease with the same lessee as 
of a future date and take effect upon cancellation.
    (3) Under a Crow tribal program, competent Crow Indians may enter 
into agreements which require that, for a specified term, their leases 
or permits be approved. Information about whether a competent Crow 
Indian has executed such an instrument is available at the office of 
the Superintendent of the Crow Agency, Bureau of Indian Affairs, Crow 
Agency, Montana. We will return without recordation any lease entered 
into with a competent Crow Indian during the time such instrument is in 
effect that is not in accordance with the instrument.
    (d) Where any of the following conditions are found to exist, 
leases will be recorded but the lessee and lessor will be notified upon 
discovery of the condition:
    (1) The lease in single or counterpart form has not been executed 
by all owners of the land described in the lease;
    (2) There is, of record, a lease on the land for all or a part of 
the same term;
    (3) The lease does not contain stipulations requiring sound land 
utilization plans and conservation practices; or
    (4) There are other deficiencies such as, but not limited to, 
erroneous land descriptions, and alterations which are not clearly 
endorsed by the lessor.
    (e) Any competent adult Crow Indian will have the full 
responsibility for obtaining compliance with the terms of any lease 
made by him/her under this section. This will not preclude action by us 
to ensure conservation and protection of these trust lands.
    (f) Leases made by competent Crow Indians will be subject to the 
right to issue permits and leases to prospect for, develop, and mine 
oil, gas, and other minerals, and to grant rights of way and easements, 
in accordance with applicable law and regulations. In issuing or 
granting of permits, leases, rights of way or easements we will give 
due consideration to the interests of lessees and to the adjustment of 
any damages to such interests. If there is a dispute over the amount of 
damage, the matter will be referred to us. Our determination of the 
amount of damage will be final.


Sec. 162.51  Cabazon, Augustine, and Torres-Martinez Reservations.

    (a) We may grant a lease of trust or restricted land on the 
Cabazon, Augustine, and Torres-Martinez Indian

[[Page 30570]]

reservations, if the land is irrigable by the Coachella Valley County 
Water District and we determine that the owners are not benefitting 
from its use.
    (b) You must file a lease of trust or restricted land on the 
Cabazon, Augustine, and Torres-Martinez Indian reservations with the 
appropriate county recorder. You must also file the lease with the 
Coachella Valley County Water District or other appropriate irrigation 
or water district.


Sec. 162.52  Salt River and San Xavier Reservations.

    (a) A lease of trust or restricted land on the Salt River or San 
Xavier reservation may authorize more than one renewal period, but the 
maximum term allowable by law can not be exceeded. A lease for public, 
religious, educational, recreational, residential, or business purposes 
may run for a maximum term of 99 years, and a lease for farming 
purposes may run for up to 40 years where a substantial investment in 
the development of the land or the production of a specialized crop is 
required.
    (b) If we determine that the governmental interests of a 
municipality contiguous to either the Salt River or San Xavier 
reservation would be substantially affected by the grant or approval of 
a lease, and these interests cannot be adequately assessed on the basis 
of the information available (under Sec. 162.16), we must notify the 
municipality of the proposed action and give them 30 days to comment.
    (c) The scenic, historic, and religious values of the Mission San 
Xavier del Bac on the San Xavier Reservation must be protected.


Sec. 162.53  Tulalip Reservation.

    The Tulalip Tribes may grant a lease without our approval, if the 
term of the lease does not exceed 15 years including renewal or 
extension periods. The Tulalip Tribes may grant a lease without our 
approval for up to 30 years, including renewal or extension periods, 
under tribal law approved by us.

    Date: May 31, 1996.
Ada E. Deer,
Assistant Secretary--Indian Affairs.
[FR Doc. 96-14640 Filed 6-14-96; 8:45 am]
BILLING CODE 4310-02-P