On December 5, 2012, the Bureau of Indian Affairs (BIA) published the final version of regulations codified at 25 C.F.R. Part 162 governing the leasing of Indian lands. 77 Fed. Reg. 72440 (Dec. 5, 2012). The final rule, as published in the FEDERAL REGISTER, may be accessed at www.gpo.gov/fdsys/pkg/FR-2012-12-05/pdf/2012-28926.pdf. The regulations will become effective on January 4, 2013.
The regulations improve, simplify, and expedite the process for approving surface leases for residential, business, and wind and solar resource (WSR) leasing on Indian land. The final regulations also eliminate the requirement that the BIA approve land-use permitting on Indian land for residential, business, and WSR purposes. The regulations now provide clarity on the required contents for, and the administrative processes applicable to, different types of leases. The previous regulatory scheme was essentially a one-size fits all method developed over 50 years ago that has proven to be a barrier to economic development, and ultimately to tribal self-determination.
Some of the more notable changes to the BIA leasing regulations are as follows:
- Elimination of the requirement that the BIA approve land-use permitting on Indian land for residential, business, and Wind and Solar Resource purposes.
- Imposition of deadlines for BIA leasing action and consequences for failing to meet those deadlines, including a “deemed approval” process for lease amendments and subleases.
- For decisions outside of the “deemed approval” process, when the agency fails to act, an aggrieved party may seek to compel agency action, and thereafter appeal the BIA inaction to the Interior Board of Indian Appeals.
- Requirement for the BIA to approve submitted lease documents, unless there is a compelling reason not to approve.
- Removal of the requirement for insurance or bonding for residential leases.
- Elimination of the requirement of periodic adjustment for lease rental rates for most leases on tribally owned land.
- Prohibition of state or local government taxation of permanent improvements and activities on the leased premises, and the leasehold interests itself.
Overall, we believe this comprehensive regulatory reform will encourage and create incentives for tribal governments to develop creative tribal leasing strategies and tribal law tailored to address the specific land-use priorities of individual tribes. Please let us know if you would like more detailed information.