In a final rule, the Department of Interior (DOI) has streamlined the process for approving leases for business and commercial development, including renewable energy projects, on nonagricultural Indian land.

As a trustee, the DOI manages about 56 million surface acres of Indian land.  Previous leasing regulations, established in 1961, are outdated and unworkable in today’s economy, notes the DOI.  They lacked a defined process or deadlines for review, which resulted in simple mortgage applications often languishing for several years awaiting approval from the federal government.  These types of delays have been significant obstacles to home ownership and economic development on tribal lands. 

Time frames

The revisions make critical changes to the amount of time DOI‘s Bureau of Indian Affairs (BIA) has available to review leases and subleases.  Specifically, the BIA will have no more than 30 days to issue decisions on residential leases, subleases, and mortgages.  For commercial or industrial development, the BIA will have 60 days to review leases and subleases.  If the BIA does not complete its review of subleases in that time frame, those agreements will automatically go into effect.

The rule also creates a new Subpart E (at 25 CFR Part 162) for wind energy evaluation leases (WEEL) and wind and solar resource (WSR) leases.  Particular attention is given to WEELs.  Specifically, the rule establishes a two-part process whereby developers may obtain BIA approval of a short-term lease for possession of Indian land for the purposes of installation and maintenance of wind evaluation equipment, such as meteorological towers.  The WEEL may provide the developer with an option to lease the Indian land for wind energy development purposes.  The environmental review conducted for the short-term lease, which would evaluate only the impacts of the evaluation equipment, not the full development of the wind project, may be incorporated by reference, as appropriate, into environmental reviews conducted for a lease for full development of the wind project. 

This two-part process is not necessary for solar resource development because solar resource evaluation does not require possession of the land.  The regulations provide for a 20-day time frame within which the BIA must issue a decision on a complete WEEL and a 60-day time frame within which the BIA must issue a decision on a complete WSR lease application.

Permits, taxes, political affiliation

Other changes effected by the final rule include:

• Elimination of BIA approval of permits for residential, business, or WSR uses of Indian land.
• Clarification of which taxes apply in the context of leasing Indian land. 
• Clarification that leases may include a provision giving preference to qualified tribal members based on their political affiliation with the tribe.
• Provision that the BIA must approve leases, amendments, assignments, leasehold mortgages, and subleases unless it finds a compelling reason not to, based on certain specified findings.
• Provision that the BIA will defer to the tribe’s determination that allowing alternative forms of rental (other than monetary) compensation for tribal land is in its best interest. 
• Allowing for direct pay to Indian landowners rather than to the BIA for residential, business, and wind and solar resource leasing only when there are 10 or fewer landowners and all landowners consent to direct pay.

The new rule complements and helps to implement the Helping Expedite and Advance Responsible Tribal Homeownership (HEATH) Act, which was signed into law by President Obama on July 30, 2012.  The HEATH Act is intended to allow federally recognized tribes to assume greater control of leasing on federal land.

The final BIA rule was published in the December 5, 2012, FR.