[Federal Register Volume 66, Number 14 (Monday, January 22, 2001)]
[Rules and Regulations]
[Pages 7068-7145]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1419]



[[Page 7067]]

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Part IX





Department of the Interior





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Bureau of Indian Affairs



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25 CFR Part 15, et al.



Trust Management Reform: Leasing/Permitting, Grazing, Probate and Funds 
Held in Trust; Final Rule

  Federal Register / Vol. 66 , No. 14 / Monday, January 22, 2001 / 
Rules and Regulations  

[[Page 7068]]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Parts 15, 114, 115, 162 and 166

RIN 1076-AE00


Trust Management Reform: Leasing/Permitting, Grazing, Probate and 
Funds Held in Trust

AGENCY: Bureau of Indian Affairs.

ACTION: Final Rule.

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SUMMARY: The Department of the Interior, Bureau of Indian Affairs 
(BIA), revises its regulations in the areas of probate, funds held in 
trust for Indian tribes and individual Indians, leasing/permitting, and 
grazing. These revisions are meant to further fulfill the Secretary's 
fiduciary responsibility to federally-recognized tribes and individual 
Indians. Particularly, revisions to the probate regulations institute 
necessary procedures to expedite the probate process for Indian 
decedents' estates. Revisions to regulations dealing with funds held in 
trust standardize the process for collecting, distributing, and 
accounting for individual Indian monies and monies held in trust for 
tribal governments. Revisions to leasing/permitting regulations 
implement the Indian Agricultural Resource Management Act and address 
appropriate procedures for entering into leases and permits on Indian 
lands and, more importantly, aid in properly determining and accounting 
for the value of such leases to individual land owners and tribal 
entities. Revisions in the grazing permit regulations address similar 
concerns and further standardize the process and forms utilized in 
granting permits on Indian lands. In the interests of economy of 
administration, and because all the revisions clarify and standardize 
Departmental policy, they are illustrated in one rulemaking vehicle.

EFFECTIVE DATE: March 23, 2001.

FOR FURTHER INFORMATION CONTACT: Duncan L. Brown, Department of the 
Interior, Office of the Secretary, 1849 C Street, NW., MS 7412 MIB, 
Washington, DC 20240, telephone 202/208-4582.

SUPPLEMENTARY INFORMATION:
I. Background
II. Response to Comments
III. Part-by-Part Analysis
IV. Procedural Requirements
    A. Review Under Executive Order 12866
    B. Review Under Executive Order 12988
    C. Review Under the Regulatory Flexibility Act
    D. Review Under Small Businesses Regulatory Enforcement Fairness 
Act of 1996
    E. Review Under the Paperwork Reduction act
    F. Review Under Executive Order 13132--Federalism
    G. Review Under the National Environmental Policy Act
    H. Review Under the Unfunded Mandates Reform Act of 1995

I. Background

    Pursuant to the Department's ``Trust Management Improvement 
Project--High Level Implementation Plan,'' certain parts within 25 CFR 
were identified for immediate revision. These parts were identified 
through an internal review by the Bureau of Indian Affairs (BIA) in 
consultation with the Office of the Special Trustee for American 
Indians (OST), and from tribal responses to consultations held in the 
field over a period of years. Additionally, non-governmental Indian 
organizations were consulted on areas of BIA trust management needing 
clarification and more uniform application of policy and administration 
throughout Indian Country. This rulemaking was initiated as an 
appropriate response to the Administration's stated goal of improving 
the administration and management of individual Indian and tribal trust 
resources. The Final Rule was developed with attention to Secretarial 
Order 3215, ``Principles for the Discharge of the Secretary's Trust 
Responsibility,'' of April 28, 2000, which was converted to and made 
permanent in the Departmental Manual on October 31, 2000. See 303 DM 2.
    The proposed regulation was published in the Federal Register on 
July 14, 2000, (65 FR 43874) with a 90-day public comment period. 
During the comment period, the BIA held eight formal tribal 
consultation sessions to discuss the proposed regulations and receive 
oral comments on the record. Additionally, the BIA met informally with 
the interested organizations, such as the policies and procedures 
working group formed with the National Congress of American Indians 
(NCAI) and the Inter-Tribal Agricultural Council, and encouraged them 
to provide written comments.
    Comments were forwarded to a clearinghouse for compilation, and 
responses by the BIA to substantive comments are noted below. The 
comments and compilation documents were carefully reviewed by the 
regulation drafting teams, made up of BIA employees from central, 
regional and agency offices, and trust program attorneys from the 
Solicitor's Office. As noted in the part-by-part analysis below, in 
direct response to comments the regulations have been clarified and 
reorganized. Additionally, some sections have been deleted, while new 
provisions have been added to provide for increased clarity and 
precision. The regulations generally have been revised to afford 
greater recognition of tribal sovereignty and self-determination, as 
well as greater recognition of the inherent rights of the Indian 
landowners. Time frames for BIA or Departmental action have been added, 
as have provisions identifying the entity within the Department 
responsible for taking official action. Further, we have strengthened 
the provisions for the BIA's enforcement of leases and permits on trust 
and restricted lands, including collection of trust income. Further, we 
have revised and standardized the provisions in each part that address 
the creation and maintenance of trust records.
    As we explain below in the part-by-part analysis, the passage of 
the Indian Land Consolidation Act Amendments of 2000, Public Law 106-
462 (ILCA Amendments), extensively alters the legal framework governing 
activities on fractionated trust and restricted lands. As a result, at 
this time the Department will not issue new final regulations affecting 
business and residential leases. Such regulations will be re-proposed 
after the full impact of the ILCA Amendments is fully ascertained and 
more consultation with tribes is held.
    Lastly, as explained more fully below, in order to accommodate many 
of the comments pertaining to Individual Indian Money (IIM) accounts, 
including supervised accounts and the use of IIM accounts to secure 
loans, the BIA will not issue final regulations in part 115 that would 
directly address these subjects. These provisions will be re-proposed 
for further comment and consultations.
    To facilitate comparison between the Proposed Rule and the Final 
Rule, we have provided the following tables. Sections deleted from the 
Proposed Rule are denoted with asterisks (**) in the final regulation 
columns, and new sections added to the final regulations are denoted by 
their section numbers and a plus (+) sign in the column for final 
regulations.

[[Page 7069]]



                               25 CFR Part 15.--Probate of Indian Estates Except for Members of the Five Civilized Tribes
--------------------------------------------------------------------------------------------------------------------------------------------------------
                 Proposed                     Final   Proposed    Final   Proposed    Final   Proposed    Final   Proposed    Final   Proposed    Final
--------------------------------------------------------------------------------------------------------------------------------------------------------
  .1......................................        .1      .104      .106      .202      .202      .303      .303      .310      .310  ........     +.405
  .2......................................        .2      .105      .104      .203      .203      .304      .304      .311      .311      .405      .403
  .3......................................        .3      .106      .105      .204      .206      .305      .305      .312      .312      .501      .501
  .4......................................        .4      .107      .107      .205        **      .306      .306      .401      .401      .502      .502
.101......................................      .101      .108      .108      .206      .205      .307      .307      .402      .402      .503        **
.102......................................      .102      .109      .109      .301      .301      .308      .308      .403      .403  ........     +.503
.103......................................      .103      .201      .201      .302      .302      .309      .309      .404      .404  ........     +.504
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                                                                 25 CFR Part 115.--Trust Funds for Tribes and Individual Indians
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                           Proposed                               Final   Proposed    Final   Proposed    Final   Proposed    Final   Proposed    Final   Proposed    Final   Proposed    Final
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  .1..........................................................      .001      .208      .812      .311        **      .337      .502      .363        **      .389        **      .506      .607
  .2..........................................................      .002      .209        **      .312        **      .338      .503      .364      .418      .390        **      .507      .608
.100..........................................................      .700      .210      .806      .313        **      .339      .504      .365      .413      .400      .900      .508      .609
.101..........................................................      .701      .211      .814      .314      .409      .340      .403      .366      .428  ........     +.400      .509      .610
.102..........................................................      .103      .212      .818      .315      .416      .341        **      .367      .429      .401      .901      .510      .611
.102..........................................................      .702      .213      .819      .316        **      .342        **      .368      .430  ........     +.401      .511      .612
.103..........................................................      .805      .214      .820      .317        **      .343        **      .369        **      .402      .902      .512      .613
.104..........................................................        **      .215      .808      .318        **      .344      .422      .370      .431      .340     +.402      .513      .614
.105..........................................................        **      .216      .809      .319        **      .345      .423      .371        **      .403      .903      .514      .615
.106..........................................................      .703      .216      .813      .320        **      .346      .424      .372        **      .404      .904  ........     +.606
.107..........................................................      .705      .217      .810      .321        **      .347      .425      .373        **  ........     +.406  ........     +.616
.108..........................................................      .706      .218      .811      .322        **      .348      .102      .374        **      .314     +.407      .515      .617
.109..........................................................      .707      .219      .815      .323        **      .349        **      .375        **  ........     +.408      .516      .618
.110..........................................................      .708      .220      .816      .324        **      .350        **      .376        **  ........     +.412      .517      .619
.111..........................................................      .710      .221      .817      .325        **      .351        **      .377        **  ........     +.414      .518      .620
.112..........................................................      .711      .300        **      .326        **      .352        **      .378        **  ........     +.419      .600      .107
.113..........................................................      .712      .301        **      .327        **      .353        **      .379        **      .358     +.421      .700     .1000
.114..........................................................      .713      .302        **      .328      .102      .354        **      .380        **  ........     +.500      .701        **
.200..........................................................      .800      .303        **      .329      .410      .355        **      .381        **     +.501      .702     .1001
.201..........................................................      .801      .304      .404      .330      .411      .356        **      .382        **  ........     +.600     +.704
.202..........................................................      .802      .305      .709      .331        **      .357      .421      .383        **      .500      .601      .801      .105
.203..........................................................      .803      .306      .405      .332      .415      .358      .420      .384        **      .501        **      .802      .106
.204..........................................................      .709      .307        **      .333        **      .359      .417      .385      .104      .502      .602      .803      .100
.205..........................................................        **      .308        **      .334        **      .360      .427      .386        **      .503      .603  ........      .804
.206..........................................................        **      .309        **      .335        **      .361        **      .387        **      .504      .604  ........     +.807
.207..........................................................        **      .310        **      .336        **      .362        **      .388        **      .505      .605  ........  ........
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                                                              Part 162.--Leases and Permits
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                 Proposed                     Final   Proposed    Final   Proposed    Final   Proposed    Final   Proposed    Final   Proposed    Final
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 .1.......................................      .100       .23      .244       .42      .226       .83        **      .126      .252      .173        **
 .1.......................................      .103       .24      .230       .43      .227       .84        **      .126      .619      .174        **
 .2.......................................      .101       .25      .230       .44      .223       .85        **      .127      .240      .175        **
 .3.......................................      .103       .26      .219       .45      .234       .86        **      .127      .612      .176        **
                                               +.105       .26      .220       .46      .234       .87        **  ........     +.254      .177        **
                                               +.106       .26      .221       .47      .235       .88        **      .128      .255      .178        **
                                               +.107       .26      .223       .48      .236       .89        **  ........     +.256      .179        **
 .3.......................................      .200       .26      .231       .49      .236       .90        **      .129        **      .180      .111
 .4.......................................      .108       .26      .238       .50      .236       .91        **      .130      .620      .180      .112
                                               +.109       .27      .229       .51      .237      .100      .226      .140      .102  ........     +.300
 .5.......................................      .202       .28        **       .52      .237      .101      .226      .141        **  ........     +.400
 .6.......................................      .203  ........     +.231  ........     +.239      .102      .110      .142        **      .190      .500
 .7.......................................      .205       .29      .232       .60        **      .110      .228      .143        **      .191      .501
 .8.......................................      .204       .30      .233       .61        **      .110      .241      .144        **      .192      .502
 .9.......................................      .202       .31      .233       .62      .206      .111      .228      .145        **      .193        **
.10.......................................        **       .32      .224       .63        **      .111      .241      .146        **      .194      .503
.11.......................................      .201       .33        **       .64      .207      .112      .228      .147      .102      .195        **
.12.......................................      .214       .34      .224       .65        **      .112      .241      .150      .211  ........      .601
.12.......................................      .215       .34      .613       .66      .207      .113      .228      .151      .211  ........      .602
.13.......................................      .213       .35      .224       .66      .212      .113      .241      .152      .222  ........      .603
.14.......................................      .217       .35      .247       .67      .104      .114      .228      .160        **  ........      .604
.15.......................................      .217       .36      .248       .68      .104      .114      .241      .161        **  ........      .605
.16.......................................      .217       .36      .615       .70      .102      .120        **      .162        **  ........      .606
.17.......................................      .110       .37      .225       .70      .207      .121      .250      .163        **  ........      .607

[[Page 7070]]

 
.18.......................................      .218       .37      .249       .71      .208      .121      .617      .164        **  ........      .608
.19.......................................        **       .37      .614       .71      .209      .122      .251      .165        **  ........      .609
.20.......................................      .221       .37      .616       .72      .207      .122      .618      .166        **  ........      .610
.21.......................................      .230       .38      .248       .73      .210      .123      .251      .167        **  ........      .611
.21.......................................      .242       .38      .615       .74      .207      .123      .618      .168        **  ........     +.621
                                                 .22      .230       .39      .224       .75      .216      .124      .251      .169        **     +.622
                                               +.243       .40      .224       .80        **      .124      .253      .170        **  ........     +.623
                                               +.245  ........  ........       .81        **      .125      .252      .171        **  ........  ........
.22.......................................      .246       .41      .226       .82        **      .125      .619      .172        **  ........  ........
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                                                    25 CFR Part 166.--Grazing Permits on Indian Lands
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            Proposed               Final     Proposed    Final     Proposed    Final     Proposed    Final     Proposed    Final     Proposed    Final
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  .1...........................         .1       .122       .221  .........      +.308       .412       .418       .606       .607       .811       .811
                                       +.2       .123       .222       .206       .309       .413       .411       .607       .608       .812       .812
  .2...........................         .3       .124       .223       .207       .310       .414       .412       .700       .700       .813       .813
.100...........................       .200       .125       .224       .208       .316       .415       .419       .701       .701       .814       .814
.101...........................       .201       .126       .225       .209       .317       .416       .420  .........      +.702       .815       .815
.102...........................       .203       .127       .226       .210       .311       .417       .414       .702       .703       .816       .816
.103...........................       .204       .128         .1       .211       .312  .........      +.415       .703       .704       .817       .817
                                     +.205       .129         **        212       .313       .418       .413       .704       .706       .818       .818
.104...........................       .202       .130         **  .........      +.314       .419         **       .705       .606       .819       .819
.105...........................       .206       .131         **  .........      +.315       .420       .419       .706       .705       .900         **
.106...........................       .207       .132         **       .300       .100       .421       .416       .707         **      .1000      .1000
.107...........................       .208       .133         **       .301       .101       .422       .417  .........      +.707      .1000      .1001
.108...........................       .209       .134         **       .302       .102  .........       .421       .708       .708      .1100       .900
.109...........................       .209       .135         .1       .303       .103       .423       .422       .709         **      .1101       .901
.110...........................       .209       .136       .227       .304       .104       .424       .423  .........      +.709      .1102       .902
.111...........................       .212       .137       .228       .400       .400       .425       .424       .800       .800      .1103       .903
.112...........................       .213       .138       .229       .401       .401       .500       .500       .801       .801      .1104       .904
.113...........................       .214  .........      +.230       .402       .402       .501       .501       .802       .802      .1105       .905
.114...........................       .210  .........      +.231       .403       .403       .502       .502       .803       .803      .1106       .906
                                     +.211       .200       .300       .404       .404       .503       .503       .804       .804      .1107       .907
.115...........................       .215       .201       .301       .405       .405       .504       .504       .805         **      .1108       .908
.116...........................       .216       .202       .302       .406       .406       .600       .600  .........      +.805      .1109       .909
.117...........................       .217       .203       .303       .407       .407       .601       .601       .806       .806      .1110       .910
.118...........................       .218  .........      +.304       .408       .309       .602       .602       .807       .807  .........  .........
.119...........................       .219       .204       .305       .409       .408       .603       .603       .808       .808  .........  .........
.120...........................       .220  .........      +.306       .410       .409       .604       .604       .809       .809  .........  .........
.121...........................         **       .205       .307       .411       .410       .605       .605       .810       .810  .........  .........
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II. Response to Comments

    The Department solicited comments from all interested parties 
through its publication of the Proposed Rule on July 14, 2000, and 
further solicited informal comments through eight regional consultation 
sessions: Aberdeen, SD (August 7-8, 2000); Anchorage, AK (August 10, 
2000); Oklahoma City, OK (August 10, 2000); Bloomington, MN (August 17, 
2000); Albuquerque, NM (August 21 and 22, 2000) [two separate 
consultation meetings]; Billings, MT (August 24, 2000); and Reno, NV 
(August 28-29, 2000). Transcripts were made of these sessions in order 
to ensure that both oral and written comments were considered. 
Following the consultation meetings, several BIA regional and agency 
offices established informal local working groups with tribes to 
encourage discussion of the proposed regulations and submission of 
written comments. Throughout the comment period we met on an informal 
basis to discuss the regulations with interested organizations, 
including the NCAI working group and the Inter-Tribal Agricultural 
Council.
    The Department received a total of 317 written comments on all 
parts of the proposed rulemaking, representing 349 individual 
signatures. Written responses were received from respondents in 25 
states, although many responses were received in a format that did not 
reveal their geographic origin. The Department received 159 written 
responses from tribal governments (representing 168 signatures and 
including four tribal government resolutions), and 31 responses from 
non-governmental Indian organizations (representing 34 signatures). Six 
respondents identified themselves as tribal members. Additionally, one 
response was received from a state governmental entity, and five from 
business entities. The remaining respondents included unaffiliated 
individuals (57 responses) and federal agencies (58 responses, 
representing 78 individual signatures). All substantive comments were 
reviewed by the Department and, depending upon their merit, the 
Department accepted, accepted with revision, or rejected for reason 
particular comments made on each part of the rule. Substantive comments 
are summarized below.

A. General Comments--Overall Rulemaking

    Many tribes, tribal organizations and individuals expressed strong 
opinions that the Department should not finalize these regulations as 
planned. Primarily, respondents expressed concern that the process by 
which the regulations were

[[Page 7071]]

developed did not include sufficient time to analyze the scope of the 
regulations and identify and resolve issues, nor did it incorporate 
sufficient consultation with tribes and affected individuals. The 
regulations were proposed only after full communication of the 
Department's intentions after requesting information and opinions from 
the tribes and individual Indians affected by the regulations.
    The Department has committed to this schedule in response to the 
tremendous need to improve the execution of the Secretary's trust 
responsibility in accordance with the American Indian Trust Fund 
Management Reform Act, 25 U.S.C. Sec. 4001 et seq. We have committed to 
this schedule through the Department's High Level Implementation Plan, 
developed in cooperation with and under the oversight of the OST, and 
in response to ongoing litigation.
    Well before the proposed regulations were published in the Federal 
Register, the Department recognized the need to complete these 
revisions prior to the end of the current Administration in order to 
prevent delays caused by the upcoming presidential transition. Based on 
priorities identified by BIA trust program staff, we identified the 
regulatory reforms that could be accomplished within this time frame 
and developed a schedule that would ensure consultation with tribes and 
consideration of their opinions to the greatest extent possible. We 
invited the NCAI to convene a work group of tribal representatives and 
other interested persons to assist in developing the regulations. To 
assist the NCAI, the BIA provided funding and agreed to meet as many 
times as necessary to complete the job. Also, we conducted early 
consultations with tribal leaders, advising them of the specific trust 
regulations to be addressed first. These meetings provided an early 
opportunity for meaningful input into the rule making process.
    In a significant departure from past practice, the BIA distributed 
the preliminary drafts of the proposed regulations to the NCAI and to 
tribes through BIA regional directors, with a request for comments and 
recommendations. Several subsequent meetings were held with the NCAI 
working group to discuss the evolving draft regulations prior to 
publishing the proposed regulations on July 14, 2000. These meetings 
included the Assistant Secretary--Indian Affairs, the Deputy 
Commissioner of Indian Affairs, staff of the Trust Policies and 
Procedures (TPP) project, trust program managers, and trust program 
attorneys from the Solicitor's Office. Notably, tribal representatives 
from each BIA region and BIA managers participated in a three-day 
meeting in Mesa, AZ, in April 2000, to discuss the draft regulations.
    Following the publication of the proposed rules, as noted above TPP 
staff conducted eight regional consultation meetings with tribal 
leaders, individual Indians, and other interested parties. In sum, 
despite the accelerated schedule for developing and issuing these 
regulations, tribes and individual Indians have had an extraordinary 
opportunity to provide meaningful input on the proposed regulations 
through informal consultations on the early drafts, formal 
consultations, and the public comment period.
    Many respondents asserted that Executive Order 13084 required a 
negotiated rule-making process in developing and implementing the 
proposed regulations. Contrary to these assertions, Executive Order 
13084 does not require a negotiated rule-making process.
    We disagree with the concern expressed by several respondents that 
the proposed rules would create new processes and requirements in all 
areas of trust management, resulting in negative impacts to both tribes 
and individual Indians. Rather, these regulations strengthen the 
Department's exercise of its trust responsibility by codifying current 
practices and will provide an important measure of consistency and 
uniformity in these practices on a nationwide basis.
    Many commenters believe that the proposed regulations did not 
sufficiently address the issues of tribal sovereignty and principles of 
tribal self-determination. We agree that the proposed regulations did 
not go far enough to recognize tribal sovereignty and self-
determination, and have now made significant revisions within the 
bounds of existing law. However, many of the antiquated trust statutes 
that govern the actions of the Department predate the tribal self-
determination legislation. When amendatory legislation is enacted, we 
will revise the regulations accordingly.
    The management of trust records is integral to the performance of 
the trust responsibility, and must be carried out by all entities and 
individuals who undertake such activities, including tribes performing 
federal trust functions. It is essential that everyone managing trust 
assets, both tribes and the Department, be subject to the same 
requirements for the creation, maintenance, and retention of records 
that evidence the organization, functions, policies, decisions, 
procedures, operations, or other activities undertaken in the 
management of trust assets. Without a consistent nationwide system for 
creating and maintaining trust records, the United States will be 
unable to fulfill its trust responsibilities to tribes or individual 
Indians. Accordingly, the records language in the proposed regulations 
have been modified to be consistent across the board.
    Of particular importance are the provisions in each part that 
specify who owns trust records: Records are the property of the United 
States if they are made or received by a tribe or tribal organization 
in the conduct of a federal trust function under this part pursuant to 
Public Law 93-638 as amended, including the operation of a trust 
program, and evidence the organization, functions, policies, decisions, 
procedures, operations, or other activities undertaken in the 
performance of a federal trust function under the regulations. If 
records are not covered by the preceding definition, but are made or 
received by a tribe or tribal organization in the conduct of business 
with the Department of the Interior, they are the property of the 
tribe. If a tribe or tribal organization does not preserve records 
associated with its conduct of business with the Department of the 
Interior under these regulations, the tribe may be prevented from being 
able to adequately document essential transactions or furnish 
information necessary to protect its legal and financial rights or 
those of persons directly affected by its activities.
    The language is consistent in each part of the final regulations, 
and builds on the provisions that were proposed under part 115. The 
Department will provide more detailed direction on the management of 
trust records in 2001.
    Finally, we received comments requesting that the Department 
include in the regulations provisions for the establishment and 
maintenance of an accounts receivable system. The Department is 
building such a system in its Trust Asset and Accounting Management 
System. However, we believe the regulations are not an appropriate 
place to address an accounts receivable system; to define such a system 
by regulation would remove operational flexibility that is necessary to 
address the many complex factors involved in managing trust assets.

[[Page 7072]]

III. Part-by-Part Analysis

A. 25 CFR Part 15--Probate of Indian Estates

    The purpose of this regulation is to describe the authorities, 
policies and procedures the BIA uses to probate an Indian decedent's 
estate. This is a revision to the existing part and amends and replaces 
the part in its entirety.
    The regulation implements administrative procedures by which the 
BIA will process and determine certain probate cases where a hearing is 
not required nor requested. These procedures, embodying a return to the 
BIA of the responsibility to determine particular probate cases, are 
the result of the recommendations of the Department's Indian Probate 
Reinvention Lab (IPRL). Formed in 1999, the IPRL examined the 
Department's Indian probate process from a multi-agency perspective, 
including the BIA, the Office of Hearings and Appeals (OHA), which 
handles Indian probate cases requiring hearings, and the OST. The IPRL 
recommended, among other things, that the BIA establish attorney 
decision-makers at regional offices to handle certain probate cases 
under criteria to be established by regulation. This recommendation was 
based on an analysis that included reviewing reports from previous 
studies of Indian probate matters, site visits and interviews of 
customers and employees. The final revisions of part 15 will implement 
in the BIA the procedural aspects of the IPRL's recommendations. At the 
appropriate time, the OHA will amend its regulations to accommodate the 
BIA's responsibility for these probate cases and to ensure that the 
same standards and criteria for determining heirs and paying claims are 
consistently applied between the BIA and OHA.
    In addition to establishing the process by which the attorney 
decision makers in the BIA will decide certain probate cases, the 
regulations in part 15 also address the summary processing of Indian 
estates. Formerly handled only by agency superintendents, summary 
distribution of estates will also be decided by the attorney decision 
makers. See 65 FR 25449-25450 (May 2, 2000).
    The various subparts of part 15 address the purpose and scope of 
the Indian probate procedures; the definition of terms; the mechanics 
of initiating the probate process, including the appropriate 
notifications of the selection of the deciding official; the 
preparation of the probate package itself, including the identification 
of necessary documents to facilitate a timely process; the disposition 
of claims against an estate; the ultimate distribution of the 
decedent's assets to the determined heirs or devisees; and the 
procedures for appeals should a dispute arise during any stage of the 
probate process. Cross references have been made to the OHA's hearings 
and appellate procedures and disposition of funds held in trust for 
decedents.

General Observations Regarding Changes From Proposed Rule

    Overall, respondents commended the Department for its efforts to 
address a longstanding problem with the probate backlog primarily 
caused by a lack of staffing and resources over the years. Commenters 
focused on the need for devising specific time frames for each step of 
the probate process to ensure timely processing of the estates 
including the preparation and submission of the probate package, 
issuance of decisions, and the closing of estates. A primary concern 
for many commenters in adding a new BIA deciding official to expedite 
the probate process was that probable heirs or beneficiaries should be 
advised of the right to a hearing before an ALJ. These concerns were 
given great consideration and incorporated into the final regulations.
    Finally, to be consistent with the regulations published under 
parts 115, 162 and 166, we have added two sections addressing the 
maintenance of records relating to probate cases.

Subpart A--Introduction

Summary of Subpart

    This subpart addresses the purpose and scope of the Indian probate 
procedures, the definition of terms used in part 15, and process for 
probating estates. This subpart sets forth the limitation on the scope 
of the application of part 15 to the Five Civilized Tribes in Oklahoma 
and the Osage Nation. The overall process from notification of death to 
the appeal of decisions is described by reference to other subparts.

Comments

    The Secretary's jurisdiction to decide probate cases is limited to 
trust or restricted assets except as otherwise provided by federal laws 
for the Five Civilized Tribes and the Osage Nation. The Final Rule 
clarifies that trust lands of the Five Civilized Tribes and Osage 
Nation may be included in part 15. Several respondents requested more 
clarification of terms used in the regulations. In response to these 
requests, the definitions ``OTFM,'' ``probate clerk,'' ``trust land'' 
and ``restricted land'' have been added to Sec. 15.2.
    The Final Rule does not significantly depart from the Proposed Rule 
with respect to the basic steps in the probate process and the 
preparation of the probate package. In response to several comments, 
the steps in the probate process prior to the submission to a deciding 
official have been standardized and streamlined by requiring that all 
agencies and tribes prepare the probate package in the same manner as 
recommended by the IPRL. The final regulations reflect the addition of 
the attorney decision maker as a BIA deciding official to expedite the 
probate of estates in certain circumstances.

Subpart B--Starting the Probate Process

Summary of Subpart

    This subpart includes the procedures for starting the probate 
process by notifying the BIA of the death of an Indian with trust or 
restricted assets; the preparation of the probate package itself, 
including the identification, collection, and submission of the 
necessary documents to the BIA to facilitate the timely processing of a 
probate package; the circumstances in which the family of a decedent 
may apply for emergency assistance for funeral arrangements; the 
assignment of the responsibility to the BIA agency to process the 
package; and the procedures for the potential heirs' disclaimer of 
interest in the estate.

Comments

    We received several comments on the types of documents that should 
be acceptable as evidentiary documents to support the family heirship 
data. Of significant importance to these respondents is the reliability 
of documentation relied on for proof of death. In the Final Rule at 
Sec. 15.101, we have clarified the documents necessary to prove death 
by requiring that a certified copy of a death certificate must be 
provided to the BIA. Only in circumstances where a death certificate is 
non-existent will the BIA accept other documents. This section also 
allows for a tribe to verify a member's death. Where evidence other 
than a death certificate is submitted to verify a death, an affidavit 
of death must be submitted that is prepared by the tribe with whom the 
decedent associated or someone with direct personal knowledge about the 
decedent's death.
    Many comments addressed the provision that allows immediate 
assistance for funeral services from the

[[Page 7073]]

decedent's IIM account. To distinguish between emergency financial 
assistance to pay for funeral arrangements prior to the burial of the 
decedent and claims for funeral expenses against the decedent's estate, 
we added the word ``emergency'' to the question. Some commenters 
objected to obtaining receipts for traditional burial services such as 
payment of cooks and grave-diggers and the direct payment to the 
service providers. We weighed these objections against the Secretary's 
trust responsibility for proper accounting of the decedent's IIM 
account. Thus, we renumbered the section to Sec. 15.106 and divided it 
into four subparts to clarify the cost estimates for funeral 
arrangements and to achieve a compromise position between tribal 
traditions and the Secretary's trust responsibility to preserve the 
decedent's IIM account for the probable heirs and beneficiaries. In 
order to preserve the trust estate for probable heirs or beneficiaries, 
the BIA continues its long-standing practice of limiting the amount of 
money that may be distributed for funeral expenses prior to completion 
of the probate. Therefore, the Final Rule does not change the limit on 
the amount of money that can be disbursed for funeral expenses prior to 
the probate.
    One of the problems causing significant delays in the processing of 
probate files is the time-intensive gathering of evidence required as 
supporting documents for the probate package. In certain situations 
where the decedent's family resides in a remote area without 
transportation or telephonic communications, the collection of 
documents proceeds very slowly. Some respondents stated that the BIA 
should assume an affirmative role in assisting the family in collecting 
documents, rather than place the burden of obtaining all of the 
supporting documents entirely on the decedent's family. We accepted 
these comments, and have changed the wording in the Final Rule at 
Sec. 15.104 from ``must'' to ``should.''
    Section 15.104 lists the documents that must be included in a 
probate package. This section has been rearranged to provide for 
documents that must be obtained from a court of competent jurisdiction, 
which may be a tribal or state court. Name changes and orders requiring 
the payment of child support were added at the suggestion of the 
commenters. The Final Rule at Sec. 15.104 also provides that the 
probate package will contain all information provided by an interested 
party whether the BIA has requested it or not.
    We received several suggestions on the manner in which an agency or 
tribe is assigned the responsibility for preparing probate packages for 
non-enrolled decedents and decedents enrolled in more than one tribe. 
The proposed standard was the agency that has jurisdiction over the 
trust property of the decedent or the greater amount of trust property. 
Respondents suggested that we assign responsibility to the agency with 
the strongest contacts with the decedent and/or the agency where the 
IIM account is located. The existing BIA policy which assigns the 
probate to the agency with the strongest association with the decedent 
has been incorporated in the Final Rule at Sec. 15.108. The most 
expedient manner for processing the probate package is to maintain 
contact with a family member of the decedent who has lived nearby the 
decedent and is familiar with the family relationships of the decedent. 
This standard was continued because a decedent may reside within the 
jurisdiction or have more contacts with an agency that does not 
necessarily have jurisdiction over the greatest amount of the 
decedent's trust property. The likelihood of an agency or tribe 
obtaining the most information about the decedent comes from an agency 
with the strongest associations with the decedent.
    While Sec. 15.202(g) allows the submission of a disclaimer of 
interest to be filed with the probate order, the Final Rule at 
Sec. 15.109 provides that the probable heir or beneficiary may renounce 
their interest anytime up to the time a deciding official issues an 
order. The final regulation also incorporates the existing requirement 
in 43 CFR Part 4, Subpart D, that a disclaimer of any Indian interest 
requires a formal hearing before an ALJ.

Subpart C--Preparing the Probate Package

Summary of Subpart

    This subpart addresses the requisite documents that must be 
contained in a complete probate package; the selection of the deciding 
official and notice of this decision to the interested parties; the 
contents of the notice; the identification of the processing times; the 
right of the interested parties to request a formal hearing with an 
ALJ; the circumstances under which the BIA will refer a probate package 
to an ALJ; and the procedures for the summary distribution of an estate 
containing only trust cash assets of less than $5,000.

Comments

    We have revised this section to address similar comments on the 
selection of the BIA or OHA deciding official, and the notice of this 
selection. Incorporating many of the comments received, we provide in 
the Final Rule a more comprehensive notice scheme that identifies the 
probable intestate heirs; states whether a will has been submitted and 
provides a copy; and states whether any claims have been filed against 
the estate. In response to several comments, a new section at 
Sec. 15.204 has been added to clarify that the probable heirs or 
beneficiaries may request a hearing before an ALJ at any time before a 
decision has been made by an attorney decision maker.
    Many commenters were concerned over the clarity of the criteria 
used by the probate specialist to weigh in determining where to send 
the probate package. In response, we have added several new items in 
Sec. 15.205(c) to clarify the circumstances under which the probate 
package should be sent to an ALJ and to provide consistency with other 
sections. These items include questions involving paternity, 
disclaimers of interest by an Indian heir or beneficiary, and any 
challenges to the jurisdiction of a court that has issued an order 
which has been used as a supporting document in the probate. A new 
subsection (d) has been added to clarify that approval of settlement 
agreements among heirs must be by the OHA. To address the concern that 
a probate specialist may not foresee all of the kinds of problems 
identified in Sec. 15.205, the attorney decision maker must review the 
probate package and determine whether there are any issues of fact or 
law that would require a formal hearing. If so, then the attorney 
decision maker will immediately forward the case to the appropriate 
ALJ.
    In response to several requests for more clarity, the process for 
summary distribution has been reorganized and placed at the end of this 
subpart. The summary process provides that the BIA deciding officials 
(the superintendent, field representative, regional director in cases 
of self-governance tribes, or attorney decision maker) may decide cases 
that contain only trust cash assets of less than $5,000. Relocating 
this section clarifies that the criteria for selecting the deciding 
official applies to the expedited intestate and testate summary 
distribution process. Section 15.206 provides for 30 days for the 
probable heirs and beneficiaries to request a formal hearing before an 
ALJ; 60 days after notice has been sent for the BIA deciding official 
to assemble the probable heirs or beneficiaries and conduct an informal 
hearing; and 30 days for the BIA deciding official to issue a decision 
after the informal hearing. Under Sec. 15.206(c), the BIA

[[Page 7074]]

deciding official must apply Secs. 15.302-311 to determine the 
distribution of the Indian estate. As recommended, the incorporation of 
these sections in the summary distribution process ensures that the 
same standards will be applied on a national scale by every BIA 
deciding official. Lastly, many respondents stated that they were 
confused by the differing appeal procedures of the decision of the 
superintendent and the attorney decision maker, and that the same 
appellate process should be in place for all BIA deciding officials. 
The Final Rule incorporates in Sec. 15.206(d) a single appellate 
process for all BIA deciding officials.

Subpart D--Probate Processing, Claims and Distributions

Summary of Subpart

    This subpart states when the BIA must forward the probate package 
to an ALJ for a formal hearing or to an attorney decision maker for an 
informal hearing. The choice of law to be applied to the facts of the 
Indian estate is defined to standardize the deciding official's 
application of law. This subpart also includes the process for 
submitting claims against the estate; allowance and payment of claims; 
priority of claims; reduction of claims; use of future income to pay 
claims; the payment of interest; the contents of the BIA deciding 
official's written decision/order; and the handling of the estate while 
an appeal is pending.

Comments

    Numerous respondents requested that we clarify time frames and 
deadlines that the public and BIA must follow. Accordingly, Sec. 15.301 
imposes deadlines on the attorney decision maker for the regular 
processing of probate packages. The comments strongly recommend that if 
the attorney decision maker keeps the probate package, the attorney 
decision maker should hold informal hearings or conferences with the 
interested parties to identify any potential problems, will contests, 
or contested claims, which may prompt a formal hearing with an ALJ. 
Additionally, several commenters expressed a concern that the attorney 
decision maker should hold an informal hearing because many traditional 
Indian people may not feel comfortable or wish to make a written 
objection or request a formal hearing. We have accepted these comments. 
The Final Rule at Sec. 15.301 incorporates the informal hearing 
procedure for all probate proceedings in the same manner as the 
existing regulations at 43 CFR 4.271.
    Additional deadlines for the attorney decision maker have been 
incorporated in Sec. 15.301 and Sec. 15.310 to conduct an informal 
hearing and issue a decision. As many comments recommended, we will 
allow up to 180 days for an attorney decision maker to issue a 
decision.
    The comments provide considerable discussion of what law is to be 
applied to determine heirs, approve wills, and determine whether or how 
to pay claims. Some tribes suggested that the Uniform Probate Code, a 
code adopted in portion by many states, be used on a national basis. 
Other tribes suggested that tribal law and tribal courts administer the 
Secretary's trust responsibility for the probate of Indian estates. 
Questions were raised about how conflicting intestate processes and 
land fractionation would be reconciled under tribal and state laws. 
Some commenters objected to the application of the inheritance laws of 
all fifty states. Others suggested that the law to be applied should be 
the law of the state where the IIM account is located. Some commenters 
stressed that there are also federal statutes that direct inheritance 
procedures in certain circumstances (e.g., Indian Land Consolidation 
Act) or for specific tribes (e.g., Standing Rock Sioux Tribe), and that 
the application of state probate law has been preempted in these 
circumstances. In addition to the statutory inheritance laws, many 
noted that the Secretary has approved tribal inheritance codes for 
several tribes.
    These comments were considered in great depth. The Final Rule in 
Sec. 15.302 continues the existing practice by acknowledging that, 
unless provided otherwise by federal law or by tribal inheritance codes 
approved by the Secretary, the state law of the decedent's domicile 
will determine the distribution of the estate.
    There were nearly equal numbers of comments for and against the 
payment of any claims against an Indian decedent's estate. In 
particular, many were concerned that credit may not be extended if 
claims were precluded from Indian estates. The respondents opposing the 
allowance of any claims against the estate stated that in intestate 
situations an Indian decedent has not authorized any claims to be paid 
and that the assets of the estate rightfully belong to the heirs. Some 
tribes commented that the BIA should defer to any tribal law that 
addresses the filing and collection of creditors' claims. To the extent 
such requirements are included in a tribal inheritance code approved by 
the Secretary, the tribal laws will apply. Several commenters felt that 
trust assets should be used to pay debts only when there are no non-
trust assets available. The Final Rule in Sec. 15.303 allows the 
payment of claims out of trust cash assets only after evidence of 
exhaustion or non-existence of non-trust assets have been provided by 
the claimant.
    Many respondents were concerned about the standards to be applied 
by the deciding officials in paying claims, as well as the priority of 
claims to be paid. Many stated that tribal claims should be a priority 
claim because tribes are generally the major creditor on Indian 
reservations. Many were concerned that failure to pay tribal loans by 
the estate would dramatically reduce the availability of credit to 
Indians. Several comments also stated that claims reduced to judgment 
in a court of competent jurisdiction should also be a priority. The 
Final Rule at Sec. 15.305 incorporates both of these claims as 
priorities.
    Comments from tribes and tribal advocates stated that the inclusion 
of the United States' claims as priority claim confers an economic 
benefit on the trustee that is inconsistent with its fiduciary duty. We 
agree. The trustee is obligated to preserve the estate for the benefit 
of the heirs and beneficiaries, and permitting the federal trustee to 
reach into the Indian trust corpus and seize property for his own 
benefit raises a serious conflict of interest and is inconsistent with 
fundamental principles of trust law. After serious consideration of the 
United States' role as trustee in light of potentially conflicting 
statutory provisions for collection of debts owed to the United States, 
we have deleted claims of the United States as a priority claimant 
against trust estates in Sec. 15.305.
    In response to many concerns that there was no provision for 
prorating general claims, the Final Rule at Sec. 15.306 adds separate 
authority for the BIA deciding official to reduce or disallow both 
priority and general claims.
    The BIA proposed to allow estates to remain open up to five years 
to pay creditors of the estate. In comparison, the current regulations 
at 43 CFR 4.251(d) allow an estate to remain open up to seven years. 
The majority of the commenters, however, objected to holding estates 
open for the payment of any claims, regardless of priority or general 
claims. Commenters stated that the United States, as trustee, has 
placed the creditors of Indian individuals in a better position than 
creditors of other non-Indian citizens by holding the estates open to 
pay creditor claims. After serious consideration and the weighing of 
comments, the Final Rule

[[Page 7075]]

deletes the proposed section that holds estates open to pay claims.
    We received comments both in favor of and against the suspension of 
interest that may accumulate on a claim against the estate before it is 
paid. Comments favoring the payment of interest stated that non-payment 
would create another road block to an Indian's ability to obtain 
credit. Comments opposed to paying interest stated that the estate 
should be preserved for the heirs. The Final Rule at Sec. 15.309 leaves 
in place the Proposed Rule declining to pay interest or penalties on 
any type of claim that may accrue after the decedent's death.
    The Proposed Rule in Sec. 15.310 addressed the responsibility of 
the administrator of the estate to file tax returns. Many commenters 
noted an administrator is not generally appointed for Indian estates. 
Many also noted that the Secretary, as trustee, is the functional 
equivalent of the administrator of the estate and therefore the heirs 
should consult applicable tax laws to determine if there is any tax 
liability related to the estate. In response to these comments, this 
section was deleted in its entirety.
    Finally, many respondents stated that the official roles of the BIA 
and the OTFM should be specifically defined in executing probate cases 
decisions, including the distribution of income. In response, the Final 
Rule at Sec. 15.312 provides that in executing probate decisions, the 
BIA changes land title records as appropriate and the OTFM processes 
payments from IIM accounts and the distributes income in accordance 
with the probate decision.

Subpart E--Appeals

Summary of Subpart

    This subpart addresses the procedures for appeal of the decision of 
the BIA deciding official. The time for appeal, the status of the 
estate during appeal, and the standard of review of the decision are 
set forth in this subpart.

Comments

    Many respondents stated that it was too confusing to have two 
separate appellate processes for the superintendents and attorney 
decision makers. Two separate procedures might result in the interested 
parties filing an appeal with the wrong entity, which would adversely 
affect the exercise of their right to appeal. The Final Rule 
incorporates this recommendation and establishes only one route of 
appeal for probate decisions issued by BIA deciding officials.
    One commenter questioned the definition of ``known evidence'' in 
appeal proceedings. Further, the commenter was concerned that the right 
to appeal the decision of an attorney decision maker during the 60-day 
appeal period would not allow for the submission of new evidence, nor 
would it allow an appeal on the basis that known evidence was not 
included in the probate package. After careful consideration, the Final 
Rule at Sec. 15.403(b)(1) and (2) includes clarified provisions for 
requesting after-deadline appeals based on new or unknown evidence.
    Commenters suggested that the regulations specify that review of 
decisions of the attorney decision makers should be de novo. Due to the 
expedited procedure, informal hearing process, and absence of a full 
record to review, we accept this comment. The Final Rule at Sec. 15.405 
adds a new section for the de novo standard of review before the ALJ.

Subpart F--Information and Records

Summary of Subpart

    This subpart includes general questions regarding ex parte 
communications with a BIA deciding official and the contact persons for 
inquiries about the status of a probate case, and new provisions 
addressing applicable records ownership and retention requirements.

Comments

    We received several comments on the proposal that members of the 
public could not directly contact the attorney decision makers. The 
commenters generally recognized that there is clearly a need to avoid 
even the appearance of impropriety, but that trained adjudicative 
personnel understand and know the constraints of their offices. One 
commenter stated that no similar restriction is imposed upon agency 
superintendents who decide summary distributions. Other responses 
emphasized the need for the BIA to ensure that attorney decision makers 
are independent and impartial. After weighing these competing 
interests, we provide in the Final Rule at Sec. 15.501 a single 
standard for all BIA deciding officials that precludes off-the-record 
communications with the attorney decision maker that might be construed 
as attempting to influence the substance of the final probate decision.
    The comments suggested that references to the nationwide tracking 
system be deleted as the system was not in place and there is no date 
certain when the system would be in place. We agree. In the Final Rule 
we have deleted the references to the nationwide tracking system.
B. 25 CFR Part 114--Special Deposits
    The purpose of this part was to set forth the conditions governing 
the deposit, investment, and distribution of principal and interest on 
trust funds held by the Department in special deposit accounts. In 
addition, this part provided procedures required for determination of 
ownership and distribution of funds which are on deposit in account 
14X6703, ``Indian Moneys Proceeds of Labor Escrow Account--Pending 
Determination of Ownership.'' This special deposit account (IMPL Escrow 
Account) has been obsolete since September 30, 1987, as any unobligated 
balances were then deposited into miscellaneous receipts of the U.S. 
Treasury. Since this part dealt largely with this IMPL Escrow Account, 
the text of this part has been deleted in its entirety. Those 
provisions concerning other ``special deposit accounts'' are now 
referenced and explained in the newly revised part 115. It was the 
decision of the Department to move those provisions to part 115 because 
that part deals specifically with tribal and individual Indian trust 
funds. Part 114, therefore, has been ``reserved.''

Comments

    No comments were received on the deletion of part 114 and its 
subsequent reservation within 25 CFR.
C. 25 CFR 115--Trust Funds for Tribes and Individual Indians
    The purpose of this regulation is to describe how the Secretary, 
primarily through the BIA and the Office of Trust Funds Management 
(OTFM) within the Office of the Special Trustee (OST), carries out the 
trust duties owed to tribes and individual Indians in managing and 
administering trust assets for the exclusive benefit of tribes and 
individual Indian beneficiaries. The regulation also implements 
provisions of the American Indian Trust Fund Management Reform Act of 
1994, Pub. L. 103-412, 108 Stat. 4239, 25 U.S.C. 4001 (Trust Reform 
Act). The Final Rule removes and reserves the existing part 114 
(special deposit account provisions are incorporated into part 115) and 
amends and replaces part 115 in its entirety.
    As the section-by-section chart above illustrates, there have been 
changes to the Final Rule from the Proposed Rule of July 14, 2000. 
These changes are, however, reasonably limited by the decision by the 
BIA to remove those proposed provisions that relate to Individual 
Indian Money (IIM) accounts

[[Page 7076]]

for adults and to continue in large part with the language in the 
current 25 CFR 115 that addresses adult IIM accounts. This action was 
taken in response to the many comments received from tribes and 
individual Indians who were concerned with the rule's proposed 
supervised and encumbered IIM account provisions. In order to 
incorporate many of the recommendations, we believe that the 
Administrative Procedures Act requires that we re-propose those 
sections of the regulation for further public comment. Therefore, most 
of those sections included in subpart D of the proposed rule have been 
removed from the Final Rule, and will be re-proposed at a later time. 
The IIM account sections proposed for minors and estate accounts have 
been retained in the Final Rule. These sections have been amended or 
clarified to reflect many of the comments received. We have responded 
to the comment that suggested the Final Rule identify the 
responsibilities of OTFM and the BIA in managing and accounting for 
Indian trust funds, by specifying, where possible, whether OTFM or the 
BIA has the responsibility for an action. For more specific delegations 
of Secretarial authority regarding trust responsibility, we encourage 
interested parties to look on our web page at www.doi.gov. With respect 
to the numerous comments requesting language concerning how we will 
collect trust revenue, we refer you to parts 162 and 166.

Subpart A--Purpose, Definitions and Public Information

Summary of Subpart

    Subpart A addresses the purpose of the regulation in providing 
guidance for the administration and management of tribal and IIM trust 
accounts. Additionally, definitions and common terms used throughout 
the subpart are explained in some detail.

Comments

    Comments were received that encouraged the BIA to look to private 
sector trust management systems as a model for the Department's trust 
management system. Respondents also requested that the BIA designate a 
position of ultimate responsibility for the administration of trust 
property. The Secretary has the ultimate responsibility for the 
administration of trust property and a system of trust management is 
already in place with oversight provided by the Special Trustee as 
designated in the Trust Fund Reform Act. Comments received regarding 
the addition of more terms or clarification of definitions were 
accepted with more detail where appropriate, e.g., trust resources and 
legal disability. There were numerous calls seeking clarification of 
the definition of an ``adult in need of assistance'' while others 
strongly objected to the requirement of a court order as the only 
method to allow supervision of an account. Those comments were accepted 
in part and the definition of ``adult in need of assistance'' was 
amended to allow a determination either (a) through a BIA 
administrative process that is based on a finding by a licensed medical 
professional or licensed mental health professional, or (b) by an order 
or judgment of a court of competent jurisdiction. The determination 
must include language that the individual is ``incapable of managing or 
administering his or her property, including his or her financial 
affairs.''

Subpart B--IIM Accounts

Summary of Subpart

    As discussed above, the proposed rule had sections regarding adult 
IIM accounts that will require re-proposal of these provisions before 
we can issue a Final Rule. In the development of the provisions to be 
re-proposed, we will take into consideration comments received during 
the July 14-October 12, 2000 comment period. Subpart B of the Final 
Rule is largely the verbatim illustration of part 115 as it currently 
reads in 25 CFR. This subpart deals with specific provisions for 
particular tribes (Five Civilized Tribes and the Agua Caliente Band of 
Missions Indians); adults under legal disability; payment by other 
Federal agencies; restrictions; and appeals. However, provisions 
dealing with minors' accounts, estate accounts and the hearing process 
for restricting an IIM account (which were regulated in the current 
part 115) have been revised in accordance with the proposed rule and 
moved to the new subparts C, D, and E of part 115 of the Final Rule. In 
addition, provisions dealing with voluntary deposits and purchase 
orders (which were regulated in the current part 115) have been removed 
in accordance with the proposed rule and those sections are reserved 
for future use.

Comments

    Comments on the Proposed Rule generally concerned the supervised 
account and encumbered account sections of the proposal. In particular, 
the respondents focused on the requirement of an order from a court of 
competent jurisdiction in order for the BIA to (1) supervise an IIM 
account or (2) encumber an IIM account to pay a debt to a third party. 
We plan to re-propose these sections. In the interim, to maintain some 
standard for dealing with adult IIM accounts (which is an ongoing BIA 
function), the BIA decided to retain the sections concerning adult IIM 
accounts in the current part 115 in this subpart B. The one change that 
was made in the Final Rule that affects the provisions retained from 
the current part 115 is the addition of a definition for an ``adult in 
need of assistance'' which has been revised from the proposed rule as 
discussed in the comment section of the Subpart A discussion above.

Subpart C--IIM Accounts: Minors

Summary of Subpart

    This subpart deals in some detail with the procedures related to 
the management and supervision of a minor's account. A withdrawal from 
a minor's supervised account will be permitted only under a BIA 
approved distribution plan that provides for expenditures directly 
related to the minor's health, education, or welfare. A custodial 
parent, a legal guardian or a person who the BIA recognizes as having 
the control and custody of the minor, who withdraws funds from a 
minor's supervised account on behalf of the minor must account to the 
BIA with receipts for the use of those funds. The minor will not have 
access to information concerning his/her account. Procedurally, the 
provisions state that information about a minor's account will be 
provided to the custodial parent(s) or legal guardian(s) in a quarterly 
statement of performance; supervised accounts will be reviewed 
annually; and emancipated minors will have supervised accounts but will 
have access to account information and may receive funds on their own 
behalf.

Comments

    One comment noted that the BIA should not require minors (or 
adults) with supervised accounts to have a ``legal guardian.'' We 
respond by reminding the public that all minor's accounts will be 
automatically supervised and that legally, a minor should always have a 
``custodial parent'' or a ``legal guardian'', unless emancipated by a 
court of competent jurisdiction. There were comments that information 
about an account should not be provided to foster parents. We accepted 
those comments with revision. The BIA will only provide account 
information to parents, legal guardians and emancipated minors. We 
rejected those comments received that stated

[[Page 7077]]

that minors, specifically those who have reached the age of ten or 
thirteen, should have access to their account information. By law, 
minors are not legally capable of handling and managing their financial 
affairs. However, account information will be provided to emancipated 
minors although we do not accept the comment to allow emancipated 
minors unrestricted access to their account. All minors, including 
emancipated minors, will have supervised accounts. The BIA must be kept 
informed of the current address information for a minor, particularly 
if the minor's address is different from that of their parent or legal 
guardian.
    A concern was raised about the necessity of obtaining receipts for 
all purchases made from those funds disbursed from a minor's supervised 
account. In addition there were comments suggesting that we 
differentiate between parents and legal guardians when requiring 
receipts for expenditures from a minor's supervised account. In 
response, we note that under a minor's distribution plan a parent or 
legal guardian will be treated equally and that receipts will be 
required for all expenditures unless a specific provision in the plan 
permits a minimal disbursement for a minor's miscellaneous expenditures 
to be made without requiring receipts for purchases. However, we stress 
that it is important for the integrity of the minor's supervised 
account that all withdrawals be appropriately documented. Comments were 
received that encouraged involvement of a parent(s) or legal 
guardian(s) in the development of the minor's distribution plan. We 
note that under normal circumstances, the parent(s) or legal 
guardian(s) will be involved in the development of both the evaluation 
plan and the distribution plan, and should sign the distribution plan 
acknowledging that they have read/reviewed the plan. In addition, 
parents and guardians are responsible for meeting the obligations 
detailed in those signed plans. Respondents were concerned about the 
potential necessity to distribute emergency funds from a minor's 
supervised account where that amount was not included in the 
distribution plan. We note that distribution plans may be amended at 
any time for emergencies or a change in circumstances, depending upon 
the needs of the minor. We accept in part the comments received to 
place a limit on the amount of funds to be distributed from a minor's 
supervised account and on the purposes for which a distribution may be 
made. Funds will not be automatically disbursed from a minor's 
supervised account to create a flow through account to anyone including 
a parent or legal guardian. Rather, the BIA will consider all available 
resources to meet the minor's needs when evaluating a request for funds 
from a minor's supervised account and in the development of the 
distribution plan. As a matter of policy, we strongly discourage the 
use of a minor's trust funds to meet the basic needs of a minor. All 
distributions must be made pursuant to the terms of an approved 
distribution plan and receipts for expenditures must be provided to the 
BIA. Finally, there were numerous comments that the BIA needs to 
recognize that there are informal custody arrangements and foster care 
placements for minors with IIM accounts and that there may be a need 
for disbursements from a minor's supervised account to a caregiver 
(referenced in comments as a ``minor's payee'') to help meet the 
minor's needs. We recognize that minor account holders may be cared for 
in informal living arrangements or in foster care situations, and that 
the Secretary may, in certain circumstances, need to recognize the 
caregiver and authorize limited disbursements that are in the best 
interests of the minor from the minor's supervised account. Other 
concerns raised included access by the caregiver to account information 
for a minor's supervised account. Account information will not be 
provided to the caregiver due to legal limitations such as the Privacy 
Act.

Subpart D--IIM Accounts: Estate Accounts

Summary of Subpart

    This subpart reflects the notion in the current part 115 of 
providing for certain obligations and other expenditures that are 
attendant to an Indian decedent's estate. This is a new subpart in this 
Final Rule; however, its provisions were included in the Proposed Rule. 
The provisions in this subpart mirror the provisions contained within 
the Final Rule for 25 CFR part 15. Particularly, this subpart 
identifies when an estate account is established; how long an estate 
account remains open; refers to heirs to a decedent's account; 
establishes protocols for withdrawing monies prior to final probate; 
and dispositions to those having life estate interest in income-
producing trust or restricted property.

Comments

    Comments on Indian decedents' estates were captured in our 
discussions of part 15, Probate of Indian Estates above.

Subpart E--IIM Accounts: Hearing Process for Restricting an IIM 
Account

Summary of Subpart

    This subpart outlines the notice requirement and hearing process 
(so-called ``Kennerly'' process) associated with placing a restriction 
on an IIM account under current Secs. 115.102 and 115.104. This subpart 
outlines the circumstances under which the BIA will place a restriction 
on an IIM account; information that must be included in a notice to 
restrict an account; time lines for requesting a hearing to challenge 
BIA's decision to restrict an IIM account; pendency of a restriction 
during an appeal; and remedies available when an administrative error 
has been caused by BIA or OTFM.

Comments

    We received several comments on this subpart, including that the 
BIA should only require the ``Kennerly'' process, described in the 
final rule in this subpart, for restricting an IIM account if there is 
no valid non-BIA proceeding. We note in response that the notice 
requirement has been in place in the current regulation for the past 40 
years and, further, we must provide due process to all account holders 
before we take action against their account. We believe that due 
process is served (and our trust responsibility properly exercised) 
through the use of the notice and hearing process. Accordingly, we did 
not accept this comment for revision in the Final Rule. Other comments 
recommended that we not place a restriction on an account until after 
the hearing process is completed; that we add five (5) additional days 
to the time periods proposed for placing the restriction on an account; 
and that we extend the time period in which to request a hearing from 
40 days to 90 days. We did not accept these comments because due 
process is provided within the time periods proposed. The funds at 
issue when an account is restricted will be protected and will not be 
disbursed until after the hearing process and appeal period, if any, 
have ended. One comment stated that we should explain that social 
services staff should not have the responsibility for collecting debts 
from an IIM account. In response, we note that social service providers 
are only involved in the development of a distribution plan where the 
BIA's decision is to supervise an IIM account, not when the account is 
to be encumbered. Finally, there were comments involving BIA's 
recognition

[[Page 7078]]

of child support awards. Concerns included honoring excessive awards; 
limiting amounts awarded by a court of competent jurisdiction; and 
other comments stating that there should be no discretion to reduce the 
amount of a child support award to be paid from an IIM account. 
Consistent with federal policy, we believe that parents are responsible 
for providing support for their children and that child support awards 
are to be determined by courts of competent jurisdiction. If there is a 
dispute regarding a child support award and we are provided with notice 
of an appeal of a child support award, upon request we will postpone 
the hearing.

Subpart F--Trust Fund Accounts: General Information

Summary of Subpart

    This subpart discusses the sources of trust funds that may be 
deposited into the Secretary's trust funds management system. 
Particularly, this subpart explains which trust funds may be accepted 
for deposit into a tribal or an IIM account; the process for depositing 
money into an account; the requirement that the Secretary must conduct 
an annual audit on trust funds; and an explanation of how trust funds 
deposited in a trust account earn income.

Comments

    Several respondents suggested that this subpart should clearly 
state what money would be accepted into IIM accounts while others 
requested that we accept specific types of non-trust monies. In 
response, we have described in Sec. 115.702 what sources of trust funds 
may be accepted for deposit into a trust account. We note that the BIA 
must have specific authority to accept non-trust monies into a trust 
account. Therefore, we will not accept pension funds, retirement funds, 
conveyance fees and child support awards into trust as requested. Some 
respondents were concerned that an annual audit on trust accounts was 
not required and others wanted the inclusion of language specifying the 
accounting standards to be used in the audit.
    The Trust Reform Act requires that an annual audit be conducted on 
trust funds. Prescribed auditing standards will be used in conducting 
those audits. In addition, a number of comments concerned the 
timeliness of deposits of trust funds received by the Secretary into a 
trust account. Deposits received by the Secretary on behalf of a tribe 
or an individual will be deposited into a trust account within twenty-
four hours, or no later than the close of business on the next business 
day following the receipt of funds at a location with a designated 
federal depository. Another respondent stated that to require a 
compacting tribe to make deposits payable to the Secretary on behalf of 
tribes or individual Indians within a twenty-four hour time period 
would create problems because many tribes are isolated, live hours away 
from banks and ``it is not always practical to do banking but once a 
week.'' We respond that where a tribe has compacted or contracted with 
the federal government to operate a federal program and the tribe, 
operating the federal program on behalf of the Secretary, receives 
trust funds payable to the Secretary on behalf of the owner of the 
trust asset pursuant to a contract that specifies that payments are to 
be made to the Secretary, the tribe must follow the same standards as 
the Secretary under Sec. 115.708 for the deposit of the trust funds 
into a trust account. We also received an inquiry as to whether 
interest earned on trust funds are automatically reinvested. Interest 
earned on trust funds is automatically reinvested. Although we called 
for comments regarding income derived from tribal operations, we do not 
address this issue in the Final Rule. We have provided a list of all 
sources of trust funds that will be accepted by the Secretary for 
deposit within the trust fund management system in Sec. 115.702. 
Further, a tribe or individual Indian will not be allowed to deposit 
trust funds received through direct pay into a trust account, except 
when provided by law under 25 U.S.C. 3109. However, we have amended the 
regulation to allow the Secretary to accept for deposit trust funds 
made payable to the owner of the trust asset (direct pay) when 
submitted by the payor (e.g., lessee, permittee) when the payor 
presents evidence (i.e., an envelope marked by the United States Post 
Office ``undeliverable'') that shows attempted delivery to the tribe or 
individual owner of the trust asset. We are unable to respond in the 
regulation to the request for a listing of OTFM offices, however, a 
current list of OTFM offices may be obtained from Department's web page 
at www.doi.gov. There were several comments requesting that we identify 
the tax status of, and certain agency exemptions for, trust funds. We 
are unable to incorporate these recommendations as this rule regulates 
the Department of the Interior and not other federal agencies that have 
a trust responsibility to tribes and individual Indians. Comments also 
indicated that there was general confusion about when we would accept 
funds from another federal agency on behalf of an individual Indian. By 
law, we are only able to take funds from another federal agency when 
the federal agency has appointed the BIA as the representative payee to 
receive benefits on behalf of an individual Indian because there is no 
legal guardian to be appointed as representative payee.

Subpart G--Tribal Accounts

Summary of Subpart

    This subpart discusses the trust funds that are deposited into 
tribal accounts and their management by the BIA. Particularly, the 
subpart outlines when, and how, OTFM opens a tribal account; 
information regarding a statement of performance and when it is sent to 
a tribe; which trust funds may be deposited; tribal investments and how 
they are managed; procedures for withdrawing tribal trust funds; and 
what happens to unclaimed per capita funds.

Comments

    Respondents suggested that income under a 25 U.S.C. 450f et seq. 
contract or compact should be able to be deposited into tribal trust 
accounts so that they may be invested and the interest earned 
reinvested daily. Any funds appropriated to administer a 25 U.S.C. 450f 
et seq. contract or compact are not trust funds, and cannot be 
deposited into tribal IIM accounts. If trust funds are to be deposited 
into a trust account, the contract for the sale or use of trust lands 
or resources (e.g., lease, permit) must specify that payments be made 
payable to the Secretary on behalf of the trust owner regardless of 
whether the Secretary manages the program or a tribe has compacted or 
contracted with the Secretary to operate the federal program. If a 
tribe that is compacting or contracting the federal program which 
administers/manages the tribe's contract involving trust assets 
receives trust funds derived from those trust assets made payable to 
the Secretary, then the contracting or compacting tribe must deposit 
those funds into a Treasury General Account. Any payments made payable 
to a tribe (direct pay) will not be accepted for deposit into a tribal 
trust account.
    Another comment suggested that time lines should be prescribed for 
processing tribal account withdrawals. We have provided time lines in 
response to this comment. We are unable to accept the comments 
requesting that we give tribes authority over trust fund investments. 
By law, the Secretary is responsible for making all

[[Page 7079]]

trust fund investment decisions. However, we do accept with revision 
those comments requesting consultation with tribes on an annual basis 
because some tribes may not wish to meet with OTFM on an annual basis. 
Upon request by the tribe, OTFM will consult with a tribe annually 
regarding investments of tribal trust funds. Many respondents were 
concerned about a tribe requesting the return of unclaimed per capita 
funds. Unclaimed per capita funds will not automatically be returned to 
a tribe after six years. By law, a tribe may request, but is not 
required to request, the return of unclaimed per capita funds after six 
years. A decision to make a request for return of per capita funds is 
an internal tribal decision. Funds not returned to a tribe will remain 
in an ``unclaimed per capita account.'' We have decided to remove 
several of the provisions regarding tribal budgets and budget approvals 
in response to comments that these sections were confusing and seemed 
to add requirements that were not required by law. Tribes must continue 
to present budgets for the use of trust funds to the Secretary when 
required by law. Tribes are also encouraged to meet with OTFM to 
discuss cash flow needs so that OTFM may make informed investment 
decisions regarding tribal trust funds.

Subpart H--Special Deposit Accounts

Summary of Subpart

    This subpart, which replaces part 114, limits the types of monies 
that may be deposited into special deposit accounts. Particularly, this 
subpart includes an explanation of who receives the interest earned on 
trust funds in a special deposit account; when trust funds in a special 
deposit account are distributed to the owner of the funds; whether 
administrative or land conveyance fees paid as federal reimbursements 
can be deposited into special deposit accounts; and what other types of 
monies may be deposited into special deposit accounts.

Comments

    We received one comment on this section which requested that 
conveyance fees be allowed for deposit into special deposit accounts. 
In response, we restate that the Secretary only has authority to accept 
trust funds into a trust account. Conveyance fees are not trust funds.

Subpart I--Records

Comments

    As previously noted, the provisions addressing the ownership and 
maintenance of trust records associated with the performance of this 
part, contained in subpart H of the Proposed Rule, have been modified 
in response to comments. These provisions are found in subpart I of the 
Final Rule.
D. 25 CFR Part 162--Leases and Permits on Indian Lands
    The purpose of this regulation is to describe the authorities, 
policies and procedures the BIA uses to grant, approve and administer 
surface leases and permits on certain Indian land and Government land. 
It revises, amends and replaces the existing part 162 in its entirety, 
and implements the American Indian Agriculture Resource Management Act 
(AIARMA), 25 U.S.C. 3703, et seq. with regard to leases on Indian 
agricultural land. With respect to those regulations governing the 
administration of leases on specific reservation lands, the Final Rule 
will not effect any substantive changes, but renumbers those sections. 
The section pertaining to the Colorado River Reservation has been 
removed at the request of the tribe.
    This regulation balances the responsibilities the Secretary has as 
trustee of Indian land with the need for tribes and individual Indian 
landowners to exercise maximum control over their Indian agricultural 
lands. These regulations will apply to all leases in effect on the date 
the regulations take effect.

General Observations Regarding Changes From Proposed Rule

    The recent enactment of the ILCA Amendments affects the management 
of Indian lands held by multiple Indian landowners, including both 
tribes and individual Indians. The policies introduced by this 
legislation require extensive revisions to the Department's regulations 
affecting the leasing of individually owned allotted lands. 
Specifically, section 219 of the ILCA Amendments addresses all leases 
or other agreements affecting individually owned allotted lands or any 
other trust or restricted lands. Because section 219 of the new statute 
expressly provides that it does not amend or modify the AIARMA, the 
Department is now issuing final regulations in part 162 that address 
agricultural leasing under the authority of the AIARMA. The Department 
will extensively revise the regulations governing non-agricultural 
leases at a later date. Because the ILCA Amendments also affect tribes 
that own fractional shares of trust or restricted lands, the Department 
will not finalize new regulations affecting non-agricultural leasing on 
tribal lands until the full extent of the ILCA Amendments is determined 
and new regulations are re-proposed and additional tribal consultations 
are conducted.
    Nevertheless, leasing must be able to continue even on lands that 
are subject to the new provisions of the ILCA Amendments. For these 
lands, most of the provisions of the superseded version of part 162 are 
republished in subpart F, modified such that provisions that conflict 
with the new definitions or agricultural leases (now covered in subpart 
B) have been deleted. Subpart F will be replaced with future rules, as 
described above. Additionally, in response to many comments calling for 
the BIA to strengthen its enforcement of leases, sections are included 
in subpart F that address the BIA's duties to collect delinquent lease 
payments and enforce lease violations on trust and restricted lands. 
These sections are modeled directly on the related sections in subpart 
B. Both the general provisions applicable to all leases and the new 
subpart F note that, if any of the provisions of these regulations 
conflict with the ILCA Amendments, the statute will govern.
    A few respondents objected to the implementation of the AIARMA in 
the context of the part 162 regulations, requesting that separate 
regulations be issued. We reject this comment. Because agricultural 
leases are a specialized form of the BIA's overall leasing program and 
are administered under the authority of the AIARMA in combination with 
the Indian Long-Term Leasing Act, 25 U.S.C. 415, there is no need for 
stand-alone AIARMA regulations.
    Agricultural leases are administered in a manner that is 
significantly different from other types of leases on trust and 
restricted Indian lands, such as business and residential leases. The 
Department has responded to the majority of comments addressing both 
the proposed leasing and grazing regulations by significantly 
restructuring and clarifying the leasing regulations in order to 
address agricultural leases independently. Separate subparts C and D, 
for residential and business leases, respectively, are identified and 
reserved for future rulemaking after the impact of the ILCA Amendments 
is assessed.
    The process of separating provisions pertaining to agricultural 
leases from those that govern residential and business leases, and the 
consideration of public comments as described below, has resulted in 
extensive refinement, clarification and restructuring of the 
agricultural lease provisions. In its final form, the provisions 
pertaining to agricultural leases do not closely resemble the final 
grazing regulations at part 166 as much as they did in the

[[Page 7080]]

proposed regulations. Every effort has been made to ensure that both 
the agricultural lease provisions of part 162 and the grazing 
regulations at part 166 are substantively the same, to the greatest 
extent possible and practicable, insofar as they implement the 
provisions of the AIARMA. Additionally, specific provisions addressing 
trespass under the AIARMA that were contained in subpart L of the 
Proposed Rule have been deleted in favor of cross-referencing to the 
AIARMA trespass provisions in part 166.
    In response to the majority of comments, the final agricultural 
leasing provisions reflect significant deference to tribal and 
individual Indian landowners, such as deferral to tribal laws and 
requirements for consultation between the BIA and the Indian landowner 
on all facets of management and enforcement activities, including 
enforcing lease and permit violations and trespass. The final 
regulations also provide more flexibility to the Indian landowner to 
negotiate, with the assistance of the BIA, desirable and favorable 
provisions in their leases. The BIA will provide subsequent guidance, 
including model lease language, to assist Indian landowners in 
negotiating their own leases.
    The final leasing regulations provide for more pervasive deference 
to tribal law and tribal self-determination, not only as required under 
the AIARMA for grazing and agricultural leasing (subpart B), but also 
in the provisions that will apply to general leasing activities 
(subpart A). Several tribes and the NCAI pressed for more complete 
deference to tribal leasing decisions than the Department believes can 
be accommodated under current law, notwithstanding the Indian Self-
Determination and Education Assistance Act, 25 U.S.C. 450 et seq. For 
example, the NCAI requested that the Department adopt regulations that 
would provide for routine approvals of tribal short-term leases. 
However, existing statutory authorities require meaningful review by 
the Secretary in carrying out the trust responsibility. Moreover, a 
rule providing for such routine approvals of tribal short-term leases 
would fail to take into account those tribes that do not yet have 
sufficient policies and procedures in place to ensure that the trust 
assets are properly managed.
    Nevertheless, the Department is committed to speeding up its 
review, approval, administration and enforcement of leases. Throughout 
these regulations, reasonable time frames for action by the BIA have 
been inserted to strengthen the management of leases. For the reasons 
stated in the preceding paragraph, under existing law we must reject 
those comments seeking automatic lease approvals if the time frames are 
not met.
    A few commenters, particularly the NCAI, requested that the BIA 
identify with specificity the individual official responsible for 
taking action or making a decision in any given instance. We reject 
these comments, as we believe such matters are properly addressed in 
Bureau and Departmental delegations of authority, which may be changed 
as work load and other factors demand. To commit to such delegations in 
regulations would inflexibly bind the BIA and Department from 
addressing pressing workforce needs in an efficient and effective 
manner. The NCAI further requested that the BIA adopt a ``trust 
officer'' model for managing trust land, similar to that used in the 
private sector. We believe such a model already exists at the 
individual BIA agency and field office level; the agency superintendent 
and field representative effectively serve as the responsible ``trust 
officer'' responsible for the administration of trust land within their 
jurisdiction.
    Consistent with the majority of comments, the final regulations 
continue to provide for direct payment to Indian landowners for leases 
on their trust lands, as long as direct payment is a specific term in 
the lease or permit. In order to ensure that the Secretary can properly 
enforce lease and permit payment terms, leases and permits authorizing 
direct payments must require that tenants maintain documentary proof of 
payment. Several respondents suggested that the Secretary should 
require that proof of payment be submitted to the agency with every 
direct payment. However, such a requirement would be inconsistent with 
historic practice and would result in an unsustainable drain on agency 
resources. Absent a system for tracking such notices, the requirement 
would not produce the desired goal of ensuring prompt enforcement of 
payment of trust income. Further, it would be far less effective than 
relying on the Indian landowner to advise the BIA immediately upon 
discovering that a payment has not been made and requesting enforcement 
assistance. Therefore, the final regulations provide that the Indian 
landowner notify the Secretary that a required payment has not been 
made. The Secretary then will take prompt and effective action based on 
that specific information. The Department continues to recognize the 
advantages to Indian landowners of direct payments. However, this 
advantage necessarily brings with it increased responsibility of Indian 
landowners to assist in the enforcement of non-payment of their leases 
and permits. With this regulatory change, Indian landowners who opt for 
and negotiate direct payments are clearly notified of their 
responsibilities to notify the BIA of late payments. Similarly, tenants 
are notified both by these regulations and in the lease itself that 
documentary proof of payment will be necessary to demonstrate that a 
payment was timely made in the correct amount due, should there be any 
question about a payment.
    The Department is not taking on any obligation to manage or account 
for funds paid directly to Indian landowners that are not actually held 
in trust by the United States. This is consistent with section 102(a) 
of the American Indian Trust Management Reform Act of 1994, 25 U.S.C. 
4011. Although we invited the public to comment on the question of 
accounting for direct payments, no specific recommendations were 
received beyond a general recommendation to collect proof of payment.
    In both general lease and permit enforcement, as well as in 
trespass enforcement, the final leasing regulations reflect the 
suggestions of a large number of commenters to establish reasonable 
time frames in which the BIA will take appropriate enforcement action, 
and to reduce the amount of procedural steps necessary for effective 
enforcement. Significantly, the final rule includes new provisions 
identifying the BIA's responsibility for collecting delinquent rent 
payments.

Subpart A--General Provisions

Summary of Subpart

    Subpart A addresses the purpose and scope of part 162 and describes 
the general authorities, objectives and policies the BIA uses to 
approve, grant, administer and enforce surface leases of Indian land. 
This subpart also defines key terms used throughout part 162 and 
identifies the land, interests in land, and types of leases covered by 
part 162. This subpart describes how tribal laws will apply to leases, 
and how records are maintained that document the leasing of trust and 
restricted lands.

Comments

    Subpart A of this Final Rule now includes new provisions addressing 
the scope of part 162, policy statements, and other general provisions 
not found in the Proposed Rule. As noted above, many commenters 
suggested that the Final Rule include separate standards

[[Page 7081]]

for different types of leases, including agricultural, business and 
residential leases. In response, this Final Rule provides for separate 
subparts for agricultural leases (subpart B), residential leases 
(subpart C), and business leases (subpart D). Subparts C and D are 
reserved for publication at a later date. Accordingly, we will not 
address any of the provisions in subpart E or elsewhere in the Proposed 
Rule concerning residential or business leases, or the comments 
relating to those provisions.
    Section 162.101 of the Final Rule contains definitions of key terms 
used throughout part 162. In response to many comments, we have 
clarified and streamlined most of the definitions in concert with those 
used in the final rules at parts 151 and 166. We have added definitions 
for day, emancipated minor, fee interest, immediate family, interest, 
minor, mortgage, remainder, surety, and tenant. Several confusing terms 
have been deleted or revised. For example, we have deleted specific 
definitions of appeal bond and surety in favor of a single definition 
of bond. In response to many comments, we generally have discontinued 
using the term lessee in favor of tenant.
    Several respondents raised questions about the scope of the 
Proposed Rule. In response, Sec. 162.102 clarifies that only land and 
land interests held in trust or restricted status are covered, and 
Sec. 162.103 defines the types of agreements covered. Section 
162.102(b) sets forth the general rule with respect to the leasing of 
life estates and remainder interests, with a cross-reference to 25 CFR 
Part 179. The information in subpart J of the Proposed Rule concerning 
fee interests or ``non-trust'' interests has been relocated to 
Sec. 162.102(c) of this Final Rule. In addition, the provision in 
Sec. 162.70 of the Proposed Rule which recognized that tribes could 
lease tribal land without BIA approval under federal charters has been 
moved to Sec. 162.102(d) of this Final Rule. Finally, Sec. 162.102(e) 
of this Final Rule notes that to the extent part 162 conflicts with the 
recently-enacted ILCA Amendments, the provisions of the ILCA Amendments 
will govern. In Sec. 162.103, the Final Rule expands the cross-
references in Sec. 162.1(a) of the Proposed Rule, to distinguish the 
surface leases and permits covered by part 162 from other transactions 
involving trust or restricted land.
    Many questioned whether the individual Indian landowners of 
undivided interests in fractionated tracts would need leases from their 
co-owners (i.e., ``owner's use''), before taking possession. In 
response, Sec. 162.104(b) clarifies that an Indian landowner of an 
undivided interest may not take possession without a lease unless the 
Indian co-owners give their permission. We have not accepted the 
requests to eliminate the owner's use provision in its entirety. This 
provision is necessary to ensure protection for, and to foster 
cooperation and negotiation among, all Indian co-owners.
    Several commenters also expressed confusion as to how the trespass 
rules in subpart L of the Proposed Rule would apply to leases. As 
previously noted, some suggested that failure to pay rent be treated 
immediately as trespass. In response, the special provisions on 
trespass have been removed, but those provisions (as still incorporated 
in part 166) have been cross-referenced in Secs. 162.106(b) and 162.256 
of this Final Rule. We have rejected the comments requesting that we 
treat non payment as trespass, based on the availability of contract 
remedies prior to the cancellation of the lease. We have noted, 
however, that we will treat any possession of Indian land without a 
lease as a trespass, whether or not it occurs it occurs on Indian 
agricultural land.
    Several respondents indicated that the Proposed Rule did not 
sufficiently define the BIA's responsibilities in the leasing of trust 
and restricted land; promote tribal self-determination through the 
negotiation of tribal leases and the administration of reservation 
lands under self-determination contracts or self-governance compacts; 
or support tribal sovereignty through the formal recognition of tribal 
laws and leasing policies. We have accepted these comments. 
Accordingly, Secs. 162.107-162.108 define our objectives in granting or 
approving leases involving trust or restricted land and our 
responsibilities in the administration and enforcement of such leases, 
as noted above. The policies expressed in Secs. 162.107-162.108 are 
intended to reflect our strong support for the rights of Indian 
landowners, tribal governing authority, and tribal administration of 
BIA programs. In Sec. 162.109(b) we expressly recognize that tribal 
laws will broadly apply to all land under tribal jurisdiction, and 
generally allow tribal laws to supersede or modify the regulations in 
part 162 with respect to leases of tribal land.
    In the Proposed Rule, we invited comments with respect to the 
distribution of rents derived from unitized leases comprised of 
multiple tracts with different Indian landowners. In response to the 
small number of comments received, we have combined Secs. 162.17 and 
162.102 of the Proposed Rule in Sec. 162.105 of this Final Rule. We 
continue to provide that rents will be distributed based on the size of 
the Indian landowner's interest in proportion to the acreage in the 
entire lease tract, unless the lease provides otherwise. We also 
clarify that minimum Indian landowner consent requirements will apply 
to each tract separately rather than to the unitized lease tract as a 
whole.
    Finally, to be consistent with the regulations published under 
parts 15, 115, and 166, we have added two sections addressing the 
maintenance of records relating to probate cases. These provisions, 
Secs. 162.111 and 162.112, replace subpart M of the Proposed Rule.

Subpart B--Agricultural Leases

Summary of Subpart

    Subpart B, consisting of six groupings of sections, governs 
agricultural leases on Indian lands. Under ``General Provisions'' are 
sections addressing the applicability of tribal laws and policies to 
agricultural leases. The sections under ``How to Obtain a Lease'' set 
forth procedural requirements including who can grant agricultural 
leases, how the BIA approves such leases, the documentation and 
recording requirements for such leases, and the effective dates of 
leases and BIA decisions. ``Lease Requirements'' includes sections that 
describe mandatory lease provisions, the amount of rent to be paid and 
the manner of payment (including late payments and penalties), 
improvements, bonds, and insurance. Under ``Lease Administration'' are 
provisions governing administrative fees and amendments, assignments, 
subleases and mortgages. ``Lease Enforcement'' includes sections 
identifying the BIA's responsibilities and time frames for collection 
of delinquent rent payments and other violations of agricultural 
leases, lease cancellation procedures, emergency action and inspections 
by the BIA.

Comments

General Provisions
    A large number of commenters questioned provisions in the Proposed 
Rule that implemented the AIARMA. As we noted above and provide with 
respect to part 166, we have rejected the comments suggesting that 
special AIARMA regulations be promulgated independent of the BIA's 
leasing and grazing programs. As noted, the AIARMA-based trespass 
provisions in subpart L of the Proposed Rule have

[[Page 7082]]

been removed, leaving appropriate cross-references to 25 CFR Part 166. 
Many of the respondents were also concerned about the applicability of 
tribal laws and leasing policies. As indicated above, we have replaced 
Sec. 162.4 of the Proposed Rule with the more specific Sec. 162.109 in 
this Final Rule, to clarify that tribal laws will broadly apply to all 
types of leases, but will supersede or modify our regulations only in 
limited circumstances.
    We have moved the AIARMA-based provisions found in Secs. 162.5-
162.9 and Sec. 162.11 of the Proposed Rule to this heading in subpart B 
of the Final Rule. Consistent with the AIARMA, section 162.200 provides 
that subpart B will apply not only to agricultural leases, but also to 
business leases that support the Indian agricultural community. Section 
162.201 provides that lands be managed in accordance with any 
agricultural resource management plan that have been adopted. As 
required by AIARMA, Sec. 162.201(c) broadly authorizes waivers of 
regulations that are inconsistent with any agricultural resource 
management plan.
    The provisions in Secs. 162.5 and 162.9 of the Proposed Rule, 
relating to the implementation and enforcement of tribal laws affecting 
agricultural land, have been combined in Sec. 162.202 of this Final 
Rule. In response to comments, Sec. 162.202(b)(3) includes provisions 
that clarify that BIA appearances in tribal forums may be limited by 
Departmental regulations at 43 CFR Part 2, and by provisions in the 
AIARMA to preserve the sovereign immunity of the United States and 
limit tribal court review of BIA actions. Section 162.202(c) broadly 
authorizes waivers of regulations that are inconsistent with tribal 
laws.
    Section 162.6 of the Proposed Rule, addressing when our standard 
regulations can be superseded or modified by certain types of tribal 
leasing policies, has been slightly modified and redesignated as 
Sec. 162.203. It should also be noted that the broad AIARMA provision 
authorizing our approval of an agricultural lease of tribal land at any 
rate determined by tribal governing body has been incorporated in this 
Final Rule through standard regulations, at Sec. 162.222(b), as well as 
through tribal policies made applicable under Sec. 162.203 of the Final 
Rule. Although a number of commenters requested guidance as to how a 
superseding leasing policy might be adopted by a tribe, the Final Rule 
leaves the matter to the discretion of each tribe. The notice 
provisions in Sec. 162.8 of the Proposed Rule have been clarified and 
extended to Indian landowners in Sec. 162.204. Although some commenters 
objected to any notice requirement being placed on tribes, we continue 
to require that tribes provide us with notice of any tribal law or 
leasing policy that supersedes or modifies any of the regulations in 
part 162, so that we may provide the notices required by AIARMA. 
Finally, Sec. 162.205 clarifies the provisions in Sec. 162.7 of the 
Proposed Rule, authorizing individual Indian landowners to exempt their 
land from a leasing policy which supersedes or modifies one of our 
standard regulations prohibiting tenant preferences, requiring a bond, 
or guaranteeing three months notice before we grant a lease. Consistent 
with the AIARMA, we continue to require that at least 50% of the Indian 
landowners request the exemption and add a new provision that the 
exemption be requested each time a lease is granted or approved. 
Although numerous commenters objected to the exemption provision, these 
exemption rights are expressly provided for in AIARMA and have thus 
been retained in this Final Rule.
How To Obtain a Lease
    In response to many comments, we have clarified the circumstances 
under which leases can be obtained through negotiation or advertisement 
or granted or approved without an appraisal or other documented 
valuation. In doing so, we have reduced and consolidated the provisions 
in subpart C of the Proposed Rule into Secs. 162.206 and 162.212, 
respectively, in this Final Rule. Further, we have consolidated the 
provisions subpart D of the Proposed Rule into Secs. 162.207-162.210 of 
the Final Rule, with several corrective amendments. The provisions 
relating to fair annual rental determinations, proposed in 
Secs. 162.150-162.151 of the Proposed Rule, have been consolidated in 
Sec. 162.211 of the Final Rule, with a clarification that fair annual 
rental determinations are not needed in cases where a lease may be 
approved at less than a fair annual rental, unless the Indian 
landowners request such a determination. We have also clarified that 
the BIA will determine fair annual rental value for leases on Indian 
lands by appraisal, advertisement, competitive bidding, or any other 
appropriate method that complies with the USPAP. The BIA does not 
intend to specify in part 162 the particular method for appraising 
Indian land; rather, ensuring flexibility in choosing an appraisal 
method allows the Secretary to most effectively discharge his 
responsibility as trustee.
    Many respondents questioned the proposed provisions that addressed 
the granting of leases on fractionated tracts, including ``owner's 
use'' leases. In response, the provisions in the Proposed Rule that 
indicated that land being used by an Indian owner of a fractional 
interests could be leased to another party have been modified. Section 
162.209(b) provides that we will not exercise our authority under 25 
U.S.C. Sec. 380 to grant a lease on behalf of all of the Indian owners 
of a fractionated tract where the Indian co-owners have given one of 
the Indian landowners permission to possess the tract without a lease.
    A number of commenters objected to the provisions in Sec. 162.12 of 
the Proposed Rule that identified the factors to be used in applying 
the ``best interest'' standard of review for lease approvals. Some 
noted that the BIA incorrectly applied 25 U.S.C. Sec. 415(a). Others 
requested that the BIA consider additional factors beyond those 
provided in the statute. In response, Sec. 162.214(a)(3) provides that 
we must assure ourselves that adequate consideration has been given to 
the five factors identified in 25 U.S.C. Sec. 415, consistent with the 
statutory language. A sixth, non-statutory factor was suggested by the 
NCAI and identified in the Proposed Rule. This factor would require 
that we consider any tribal assessment of potential impacts on tribal 
culture and sovereignty. We received contradictory objections to this 
provision as being at once too paternalistic and yet too deferential to 
tribes. Because the sixth factor pertains primarily to long-term, 
business and residential leases, we have deleted it from the Final Rule 
for agricultural leases.
    Many commenters requested that we include a time frame in which we 
must make a decision whether to grant or approve a lease. In response, 
Sec. 162.214(b) requires action within 30 days, so long as the lease is 
in a form which has been previously accepted or approved, and all of 
the requisite supporting documents have been received. Those supporting 
documents are generally described in Sec. 162.213, including a cross-
reference to the bond requirement not found in proposed Sec. 162.13, 
the corresponding provision of the Proposed Rule.
    Many questions were raised about the effective dates of our 
decisions to grant or approve leases. With respect to the effective 
date of an agricultural lease, and the relation between the effective 
date of our decision to grant or approve the lease and the commencement 
date of the lease, the provisions in Secs. 162.12(c) and 162.28 of the 
Proposed Rule have been consolidated and clarified in

[[Page 7083]]

Sec. 162.215 of the Final Rule. This section confirms that our decision 
can be made retroactively effective.
    In response to numerous comments, we have significantly revised the 
applicability of the appeals process for decisions to grant or approve 
leases. Contrary to Sec. 162.75 and subpart I of the Proposed Rule, 
Sec. 162.216 makes a grant or approval decision effective immediately, 
notwithstanding any appeal that may be filed under 25 CFR Part 2.
    Finally, we received many inquiries as to why we proposed only to 
record leases greater than one year in duration. We agree with those 
concerns and will record all leases. The Proposed Rule omitted mention 
of recording permits; the final rule provides that all permits will be 
recorded, as well. The provisions in Secs. 162.14-162.16 of the 
Proposed Rule have been consolidated and clarified in Sec. 162.217, 
expressly exempting permits from the recording requirement.
Lease Requirements
    We received many comments requesting that the BIA be less 
prescriptive in mandatory lease requirements and allow for greater 
flexibility in negotiating leases that are favorable to the Indian 
landowner. We have balanced these concerns against the need for 
mandatory provisions that provide sufficient protection of Indian 
landowners. Accordingly, under the heading ``Lease Requirements'' are 
minimal mandatory provisions for agricultural leases, as well as 
provisions addressing matters that we strongly encourage be negotiated.
    The mandatory provisions listed in Sec. 162.26 of the Proposed Rule 
have been clarified and streamlined in Secs. 162.219 and 162.220 of 
this Final Rule. Many respondents criticized the provisions relating to 
the description of the leased premises, as found in Secs. 162.20 and 
162.26(i) of the Proposed Rule, as being too restrictive for business 
purposes. We agree with these comments. In consolidating these sections 
in Sec. 162.221 of the Final Rule, we state a clear preference for 
public or private surveys, but will accept any legal description that 
adequately identifies the property.
    As previously noted in the general discussion of the changes to 
part 162, we have responded to the numerous comments received regarding 
direct rent payments. We are retaining the authority for direct 
payments and requiring tenants to retain documentation evidencing proof 
of payment. The provisions in Secs. 162.41-162.42 and Secs. 162.100-
162.101 have been consolidated in Sec. 162.226 of this Final Rule.
    Section Sec. 162.225 addresses late payments, combining 
Secs. 162.34 and 162.36-162.37 from the Proposed Rule. In response to 
the majority of comments, this section provides that interest will 
begin to accrue immediately after a payment is missed, and that 
negotiated late payment penalties also may be imposed. Section 162.227 
allows payments made directly to the Indian landowners to be made by 
any method specified in the lease. This section also allows payment by 
personal or business checks, in accordance with virtually every comment 
received on this issue. To minimize the risk to Indian landowners where 
such checks are dishonored, we have added a provision in 
Sec. 162.248(d) stating that a lease is violated by the dishonoring of 
a check, and future payments must be made by one of the alternative 
methods identified in Sec. 162.227.
    Several commenters requested that the BIA allow greater flexibility 
in requirements for adjusting rental payments over the course of a 
lease. In response, Sec. 162.223 provides for a minimum of one 
adjustment during the term of an agricultural lease, but Indian 
landowners may negotiate additional adjustments. We received few 
comments addressing the adjustment method and have clarified that the 
parties may negotiate the method of adjustment, with assistance from 
the BIA.
    A number of comments also addressed the maximum lease term for 
agricultural leases. We have clarified this information in 
Sec. 162.229, consistent with the AIARMA, to state that the maximum 
term for an agricultural lease is ten years, unless otherwise provided 
by law, and unless substantial investment in improvement of the land 
justifies extending the term up to 25 years.
    Most commenters who addressed lease amendments, assignments, 
subleases, and leasehold mortgages requested that the BIA approve every 
such transaction. We agree that, with respect to agricultural leases, 
such approval continues to be necessary to protect Indian landowners. 
Section 162.230 has been amended accordingly, combining provisions in 
found in the Proposed Rule at Secs. 162.21-162.25 and 162.87-162.90.
    Many respondents requested additional clarity in the treatment of 
improvements to agricultural lands, both during and after the term of a 
lease. We have responded to these comments in Secs. 162.232 and 
162.233, by providing for negotiation of ownership of improvements in 
the lease, with suggestions for favorable terms, and provisions for BIA 
enforcement.
    Finally, in response to many comments seeking strengthened remedies 
protecting Indian landowners in the event of lease violations, 
Sec. 162.240 of the Final Rule amplifies the rights of Indian 
landowners to negotiate remedies that may be applied in addition to 
those taken by the BIA, including the possibility that the Indian 
landowner may cancel the lease. We also encourage Indian landowners to 
address the matter of tribal court jurisdiction for the resolution of 
lease disputes involving such negotiated remedies. However, this 
section provides that the BIA may not be bound by such decisions, but 
we generally will defer to tribal court proceedings as appropriate.
Lease Administration
    Some commenters found the organization of the Proposed Rule 
confusing because it failed to distinguish clearly between the review 
and processing of a lease, and subsequent lease amendments, 
assignments, subleases, and leasehold mortgages. In response, we have 
created this grouping of sections entitled ``Lease Administration,'' 
which combines the provisions relating to the review and processing of 
amendments, assignments, subleases, and leasehold mortgages, as 
contained in subpart B of the Proposed Rule, with the provisions 
relating to administrative fees, proposed in subpart G.
    With respect to administrative fees specifically, several 
commenters felt that the provisions in subpart G of the Proposed Rule 
were unclear as to the authority of tribes to charge and collect such 
fees, whether or not the tribe is administering the leasing program 
under a self-determination contract or self-governance compact. In 
response, Sec. 162.241 establishes a standard 3% fee, subject to 
modification by a tribe or a discretionary waiver by us, and clarifies 
who pays the fee, why it is paid, and when it is subject to tribal 
modification. This provision has a consistent counterpart in part 166. 
As indicated above, the provisions in Sec. 162.114 of the Proposed 
Rule, relating to the payment of other types of fees and charges, have 
been relocated to Sec. 162.228 of this Final Rule.
    Many respondents noted that subpart E of the Proposed Rule, which 
was intended to apply only to business leases, contained general 
provisions applicable to other types of leases. We believe the 
reorganized structure of part 162 will address these concerns. As

[[Page 7084]]

noted above in the general discussion of these Final Rules, numerous 
commenters suggested that the Final Regulations include time frames 
binding the BIA, with automatic approval of leases should BIA time 
frames be missed. With respect to agricultural leases, we added time 
frames to improve BIA review and approval procedures, but have rejected 
the comments suggesting automatic approval if the BIA fails to meet the 
specified time frames.
    We have retained the basic structure and content of the Proposed 
Rule's standard of review provisions for assignments, subleases and 
mortgages, respectively. Additionally, in response to several comments, 
we have added a standard of review provision for lease amendments at 
Sec. 162.242. We also eliminated the provision in the Proposed Rule 
that would have required that a tenant remain liable even after an 
assignment is approved, leaving such matters to negotiation between the 
parties. In Sec. 162.45, we have added a provision stating that 
amendments, assignments, subleases, and leasehold mortgages are 
immediately effective upon approval, notwithstanding any appeal which 
may be filed under 25 CFR Part 2.
    The recording requirement for leasehold mortgages, as found in 
Sec. 162.22 of the Proposed Rule, has been extended to all subsequently 
approved lease documents by Sec. 162.246 of this Final Rule.
Lease Enforcement
    Many respondents criticized the enforcement provisions in subpart H 
of the Proposed Rule, recommending that we employ stricter definitions 
of our enforcement responsibilities, including time frames for BIA 
action. In particular, commenters urged us to develop very specific 
enforcement provisions governing enforcement of a tenant's failure to 
pay rent. We have accepted these comments, and have combined some of 
the collection provisions in subpart B of the Proposed Rule with the 
enforcement provisions in subpart H of the Proposed Rule. In response 
to several commenters, Sec. 162.248 contains new provisions specifying 
the actions the BIA will take to enforce a tenant's failure to pay 
rent. These actions include a written notice of violation, immediate 
action to recover undisputed overdue rent prior to lease cancellation, 
and the acceptance of partial payments. Additionally, in Sec. 162.249 
we have added a new provision addressing the BIA's authority to assess 
against delinquent tenants special fees to cover the cost of 
collection. The inspection provision in Sec. 162.121 of the Proposed 
Rule has been strengthened in Sec. 162.250 of the Final Rule, providing 
that appropriate investigation will be initiated within five days of 
the date on which the BIA receives notice that a specific violation has 
occurred.
    Many respondents requested that we strengthen the provisions by 
which we cancel leases for violations. Specifically, commenters 
requested that we speed up the cancellation process to better protect 
Indian landowners against financial losses during the pendency of any 
appeal of a cancellation decision. We have accepted these comments in 
the Final Rule. First, the provisions relating to notices of 
violations, found in Secs. 162.122-162.124 of the Proposed Rule, have 
been consolidated and clarified in Sec. 162.251 of the Final Rule, by 
eliminating the right of a tenant to appeal a notice of violation other 
than by responding to the notice itself. The provisions in 
Secs. 162.123(c) and 162.125-162.127 of the Proposed Rule outlining the 
actions a tenant could take to cure a violation have been combined in 
Sec. 162.252 of the Final Rule, with the election of remedies to be 
based in part on consultation with the Indian landowners. Second, 
special streamlined appeal provisions will be applied to lease 
cancellations. For example, in Sec. 162.253, bonding requirements for 
decisions to cancel leases will differ from those in 25 CFR Part 2. 
Additionally, Sec. 162.254 provides that cancellation decisions will be 
stayed only for thirty days pending the filing of an appeal. Third, the 
provisions relating to emergency actions from Secs. 162.128-162.129 of 
the Proposed Rule have been consolidated and strengthened in 
Sec. 162.255 of the Final Rule. Finally, Sec. 162.256 provides that 
holdover tenants will be treated as trespassers.

Subpart C (Residential Leases) Is Reserved

Subpart D (Business Leases) Is Reserved

Subpart E--Special Requirements for Certain Reservations

Summary of Subpart

    Subpart E identifies special provisions applicable only to leases 
made under special acts of Congress that apply only to certain Indian 
reservations. These provisions were in subpart N of the proposed 
regulations. Except for the removal, at the request of the tribe, of 
the section pertaining to the Colorado River Reservation, there have 
been no changes from the superseded or proposed regulations.

Subpart F--Non-Agricultural Leases

Summary of Subpart

    As noted above, because of the enactment of the ILCA Amendments and 
the separation of agricultural leases into a distinct subpart, the BIA 
will promulgate new regulations for business and residential leases in 
the future. Until then, such leases must continue under existing 
authority. Therefore, new subpart F contains the general leasing 
authorities from the superseded regulations at 25 CFR 162.2-162.10, and 
Secs. 162.12-162.13. In response to the many comments requesting 
stronger provisions for collection of lease rent and enforcement of 
lease provisions, subpart F contains new collection and enforcement 
provisions for non-agricultural leases, modeled on those in subpart B. 
Subpart F will be withdrawn when the new business and residential lease 
subparts are issued.
E. 25 CFR Part 166--Grazing Permits on Indian Lands
    The purpose of this part is to describe the authorities, policies 
and procedures the Secretary uses to grant, approve and administer 
grazing permits on agricultural lands that are restricted against 
alienation or are held by the United States in trust for federally 
recognized Indian tribes and individual Indians, as well as certain 
lands owned by the federal government. It revises and entirely replaces 
the existing part 166, and implements the AIARMA with regard to grazing 
permits on Indian agricultural land and education in agriculture 
management. We have taken care to ensure consistency of related 
provisions in both parts 166 and 162 that implement the AIARMA.
    Part 166 balances the Secretary's responsibilities as trustee of 
Indian land and resources with the need for Indian tribes and 
individual Indian landowners to exercise control over their 
agricultural trust lands and business affairs. Part 166 is organized to 
include ten subparts for the convenience of the reader. The expanded 
sections clarify existing policies and procedures governing the 
administration of grazing permits on Indian agricultural lands and is 
intended to bring consistency to the administration of grazing permits 
by the BIA. Part 166 does not address leasing of any type, nor does it 
address permitting for purposes other than grazing. Leasing of Indian 
lands is covered in part 162 of 25 CFR.

General Observations Regarding Changes From Proposed Rule

    The Final Rule follows the format used in the Proposed Rule. 
Specific

[[Page 7085]]

changes and responses to significant comments are outlined below.

Subpart A--Purpose, Scope, and Definitions

Summary of Subpart
    Subpart A addresses the purpose and scope of part 166 and describes 
the authorities, policies, and procedures the Secretary uses to 
approve, grant, and administer grazing permits of Indian agricultural 
land. This subpart also defines key terms used throughout part 166. 
These terms are consistent with those found in the AIARMA.
Comments
    As we noted in our general discussion of the final regulation and 
our discussion of part 162, several commenters recommended that the BIA 
develop a stand-alone rule to implement the AIARMA exclusively. This 
recommendation was not accepted. Part 166 fully implements the AIARMA 
as it pertains to grazing permits on Indian land.
    One tribe recommended that the Final Rule not impact tribal grazing 
lands currently governed by other parts of Title 25 of the Code of 
Federal Regulations. This recommendation was accepted. Section 166.1(c) 
was added to clarify that tribal grazing programs authorized under 
separate statutory authority are not subject to part 166.
    Several respondents requested clarification of definitions 
including ``conservation practices,'' ``fair annual rental,'' 
``majority interest,'' ``on-and-off grazing permit,'' ``owner's use,'' 
and ``parcel.'' These comment were accepted and the revisions have been 
incorporated into the definitions found in subpart A. Also in response 
to several comments, all the definitions were reviewed and revised to 
maintain consistency with the AIARMA and part 162.

Subpart B--Tribal Policies and Laws Pertaining to Permits

Summary of Subpart
    Under subpart B, tribal laws and ordinances, including laws 
regulating the environment, cultural or historic preservation, land 
use, and other activities under tribal jurisdiction, apply to grazing 
permits on Indian agricultural lands unless such tribal laws and 
ordinances are prohibited by federal law. Tribes are responsible for 
enforcing tribal laws and ordinances pertaining to Indian agricultural 
lands with the assistance of the Secretary.
    Consistent with the AIARMA, this subpart makes clear that when 
authorized by an appropriate tribal resolution, the Secretary will 
comply with certain general tribal policies pertaining to permitting on 
Indian agricultural lands. Also consistent with the AIARMA, subpart B 
provides that individual Indian landowners who have at least a 50% 
interest in a fractionated tract of Indian land can exempt their Indian 
land from the Secretary's implementation of these certain general 
tribal policies by submitting a written request to the BIA.
Comments
    Similar to part 162, many comments questioned provisions of part 
166 that allow individual Indian land owners to exempt their lands from 
certain general tribal policies pertaining to permitting on Indian 
agricultural lands. Comments also recommended that tribes should not be 
authorized to define ``highly fractionated undivided heirship lands.'' 
These comments were not accepted. Section 3715(b) of the AIARMA 
authorizes tribes to establish certain general tribal policies 
pertaining to permitting on Indian agricultural lands through an 
appropriate tribal resolution which also includes the authorization of 
tribes to define ``highly fractionated undivided heirship lands'' for 
notification purposes. Section 3715(c)(3) of the AIARMA authorizes 
individual Indian landowners who have at least a 50% interest in a 
fractionated tract of Indian land to exempt their Indian land from the 
Secretary's implementation of these certain general tribal policies 
pertaining to permitting on Indian agricultural lands by submitting a 
written request to the BIA. Part 166 fully complies with these 
provisions of the AIARMA.
    Many comments recommended that tribes not be required to notify the 
BIA when new tribal laws or policies are enacted. These comments were 
not accepted. Section 3712(b) of the AIARMA requires the Secretary to 
provide notice of tribal laws or policies to persons or entities 
undertaking activities on Indian agricultural lands. It is reasonable 
to require tribes to notify the BIA of new applicable tribal laws or 
policies so that the Secretary may comply with the AIARMA. This notice 
requirement does not invalidate tribal laws or policies if tribes do 
not provide the BIA with notice of such new laws or policies. Finally, 
in response to comments, a provision was added in Sec. 166.104 that 
states the BIA will notify affected Indian landowners, in addition to 
permittees, of new applicable tribal laws or policies.

Subpart C--Permit Requirements

Summary of Subpart
    This subpart describes general requirements for obtaining a grazing 
permit, obtaining a grazing permit (leasehold) mortgage, modifying and 
assigning a grazing permit, and subpermitting of an existing grazing 
permit. This subpart also recognizes the authority of tribes to 
determine the duration of permits on tribal lands. Pursuant to the 
AIARMA, 25 USC 3715(a), subpart C provides that grazing permits would 
be generally granted for a period of ten years unless a longer term of 
up to 25 years is appropriate.
    Subpart C recognizes that the Secretary has authority to grant or 
approve only permits of trust interests in Indian lands. Subpart C also 
makes clear that to ensure the preservation and proper use of trust 
lands, the Secretary requires permittees to conduct grazing operations 
in accordance with tribal goals and priorities for multiple use, 
sustained yield, agricultural resource management planning, and sound 
conservation practices. This subpart further requires permittees to 
fulfill all financial obligations to the Indian landowners and to 
conduct only those activities authorized by the grazing permit. Failure 
by a permittee to meet these expectations may result in an imposition 
of fines or penalties under subpart H, ``Permit Violations,'' or 
subpart I, ``Trespass,'' in order to protect the interests of the 
Indian landowners.
Comments
    Several comments recommended a clarification of whether the BIA 
must approve tribal permits. The recommendation was accepted. 
Clarifications were made in Sec. 166.1 of subpart A which describe 
specific circumstances for which Secretarial approval is not required 
for tribal permits.
    Many respondents recommended that the regulations provide 
protection to Indian landowners so that their land may not be 
subpermitted at higher rates without a commensurate benefit to the 
Indian landowners. These recommendations were accepted. Section 166.229 
provides protection to the Indian landowner by requiring BIA approval 
and the written consent of all parties to the permit (including Indian 
landowners) prior to an amendment, modification, assignment, transfer, 
or subpermit.
    The proposal to eliminate the ``on-and-off'' grazing permit system 
that allowed for the administration of range units that involve both 
trust and non-trust lands was the subject of many

[[Page 7086]]

concerns. These respondents raised concerns about prudent range 
management practices where grazing trust land is permitted adjacent to 
non-trust land where grazing also occurs. These comments were accepted. 
A new provision, Sec. 166.308, was added to allow the modification of 
the number of animals on permitted Indian land in order to accommodate 
adjacent non-trust lands so long as the conservation plan and the 
permit for the permitted Indian land accounts for this practice. 
However, the Secretary has no management authority over non-trust lands 
and will not approve grazing on non-trust lands.
    The non-trust interest provisions previously located in subpart C 
of the Proposed Rule was eliminated. A discussion of the Secretary's 
responsibility regarding non-trust interest is now found in Sec. 166.1.
    A small number of comments recommended that leasehold mortgages not 
be allowed on grazing permits. Because such mortgages can be an 
important mechanism for economic development, these comments were not 
accepted. Section 166.223 preserves the option of mortgages on the 
permitted interest for those wishing to do so. Such mortgages apply 
only to the permit interest, not the interest in Indian land, and are a 
valid source of secured lending. The BIA recognizes that leasehold 
mortgages should be available where the parties to the permit agree. 
Mortgaging a permit interest is not required, and the parties to the 
permit remain free to negotiate a provision to allow or disallow such 
mortgages.
    Several comments recommended that part 166 contain a 30-day time 
frame for notifying permittees of the removal of tribal land from a 
range unit. These comments were not accepted. Permittees require a 
reasonable time to make other arrangements for their livestock when 
tribal lands are removed from a range unit. Thus, Sec. 166.228 
continues the current 180-day notice requirement.
    Several comments recommended that tribes be responsible for 
conducting their own appraisals and valuations. While the comments have 
merit, the Secretary has a trust responsibility to ensure that 
appropriate valuation is obtained for each permit. Tribes may conduct 
their own valuations in addition to valuations required by part 166.
    Several comments recommended that the BIA should not limit 
valuation methods to appraisals. These comments were accepted. Section 
166.401 was re-written to clarify that additional valuation methods may 
be employed as appropriate if consistent with the Uniform Standards of 
Professional Appraisal Practices (USPAP).
    Many comments recommended that emancipated minors be recognized as 
adults and be authorized to grant permits on their own behalf. These 
comments were accepted. Section 166.202 was re-written to enable 
emancipated minors to grant grazing permits on their own behalf.
    A number of respondents recommended that part 166 clarify the 
Indian landowner's responsibility in negotiating and advertising 
permits. These comments were accepted. Sections 166.220 and 166.221 
were clarified to reflect that Indian landowners may negotiate permits 
and advertise for bids. The BIA will continue to assist Indian 
landowners with negotiations and advertisement or negotiate or 
advertise on behalf of Indian landowners when requested.

Subpart D--Land and Operations Management

Summary of Subpart
    Subpart D, ``Land Operations and Management,'' describes how the 
BIA will establish range units and grazing capacity in consultation 
with Indian landowners.
    All grazing permits issued under subpart D must be consistent with 
an agricultural resource management plan prepared in accordance with 
Sec. 3711(b) of the AIARMA by a tribe or by the BIA in close 
consultation with a tribe. To ensure that a permittee's intended 
objectives regarding animal husbandry and other grazing issues 
represent sound practice, Sec. 166.312 requires that a conservation 
management plan be developed with the permittee for each permit. The 
conservation management plan must be consistent with the tribe's 
approved agricultural resource management plan.
Comments
    Several comments recommended that the Final Rule include an ``on-
and-off'' grazing permit that allows the number of animals and/or 
season of use to be modified on the permitted land if adjacent trust or 
non-trust rangelands are used. These comments were accepted. Section 
166.308 of this subpart describes how the number of animals and/or 
adjacent trust or non-trust rangelands may be included in an ``on-and-
off'' grazing permit.
    Several comments recommended that the final rule accommodate tribes 
that wish to decide livestock ownership requirements on tribal land, 
including those pertaining to non-Indian cattle owners and Indian 
cattle enterprises. These recommendations were accepted. A new 
provision, Sec. 166.309, was added to support the tribe's authority to 
determine tribal livestock ownership requirements on tribal lands.
    Several respondents recommended that conservation plans not be 
developed by permittees, and that tribes should be included when 
preparing and evaluating conservation plans. Many also recommended that 
part 166 provide greater specificity on how tribes should develop their 
agriculture resource management plans. Section 166.312 provides that 
conservation plans will be developed with the permittee for each permit 
and must be approved by the BIA prior to issuance of the permit. The 
conservation plan must also be consistent with the tribe's agriculture 
resource management plans in accordance with the AIARMA. As written, 
Sec. 166.312 does not mandate options by which tribes may fund or 
contract plan development in order to maintain flexibility.
    Several commenters recommended that part 166 identify who would be 
liable for completing or maintaining a conservation practice through a 
USDA cost share program or other similar program if the permittee no 
longer holds the permit. These comments were accepted. A new provision, 
Sec. 166.315, was added that requires the parties to the permit to 
negotiate and identify which party will be responsible for completing 
and/or maintaining a conservation practice should the permit expire or 
be canceled.

Subpart E--Grazing Rental Rates, Payments, and Late Payment Collections

Summary of Subpart
    Subpart E, ``Grazing Rental Rates, Payments, and Late Payment 
Collections'' preserves the ability of tribes to establish grazing 
rental rates on tribal lands. The BIA continues to set the grazing 
rental rates for individually owned Indian land. This subpart clarifies 
the procedures by which tribes may set grazing rental rates higher or 
lower than the BIA's established fair annual rental rate.
    As trustee, the Secretary must determine the fair annual rental 
value of Indian trust lands in order to assist Indian landowners in 
negotiating permits with potential permittees and to determine if a 
permit is in the best interest of the Indian landowner. Subpart E 
clarifies that the BIA will determine fair annual rental value for 
grazing permits on Indian agricultural lands by appraisal, 
advertisement,

[[Page 7087]]

competitive bidding, or any other appropriate method that complies with 
the USPAP. The BIA does not intend to specify in part 166 the 
particular method for appraising agricultural land; rather, ensuring 
flexibility in choosing an appraisal method allows the Secretary to 
most effectively discharge his responsibility as trustee.
    Subpart E continues the practice of direct payments to Indian 
landowners, and requires adequate proof of payment.
    In Sec. 166.424, the BIA will prorate grazing rental payments made 
to each Indian landowner according to the forage production that each 
parcel of Indian land contributes to the permit, annual rental rate of 
each parcel, and the Indian landowner's interest in each parcel.
Comments
    Many comments recommended that the BIA clarify and expand payment 
methods to allow greater flexibility for landowners such as by allowing 
rental payments by electronic funds transfer, personal, and business 
checks. These comments were accepted. In addition, Sec. 166.419(c) 
allows for partial rental payments only under special circumstances 
with the written consent of the parties to the permit and the BIA 
approval when necessary to obtain the maximum payment possible for the 
Indian landowner.
    Many comments were received about the BIA's obligation to collect 
late rental payments owed to Indian landowners. These comments were 
accepted. Part 166 includes new provisions that describe the BIA's 
responsibility in collecting late rental payments. For example, 
Sec. 166.419 describes the collection actions the BIA will take 
(including canceling the permit, assessing payment penalties, interest, 
and administrative fees, and referring unpaid debts to the United 
States Department of Treasury for collection) against a permittee to 
collect on a late payment. The NCAI recommended that the BIA adopt a 
collection process from another federal agency that would initiate 
trespass action immediately for non-payment of rental payments. This 
recommendation was not accepted because permits must be canceled before 
a permittee can be determined to be in trespass.

Subpart F--Administrative and Tribal Fees

Summary of Subpart
    Subpart F, ``Administrative and Tribal Fees,'' provides a schedule 
of administrative fees based on the dollar value of the permit. This 
subpart provides a minimum and maximum administrative fee amount. The 
BIA continues to be able to waive such administrative fees. This 
subpart also acknowledges that tribes may establish and collect their 
own administrative fees in addition to administrative fees assessed by 
the BIA.
Comments
    Several comments recommended that the BIA use a flat administrative 
fee rate to charge permittees for the administration of permits. These 
comments were accepted. The BIA will charge a flat three percent 
administrative fee based on the annual grazing rental to cover costs 
associated with the performance of administrative duties. The existing 
minimum and maximum administrative fees described in the proposed 
regulation were retained in Sec. 166.501(b).

Subpart G--Bonding and Insurance Requirements

Summary of Subpart
    Subpart G, ``Bonding and Insurance Requirements,'' clarifies 
current BIA practices by requiring that a bond be provided for each 
permit issued to ensure performance and compliance with permit terms. 
Upon request of an Indian landowner, the BIA may waive the bond 
requirement. For grazing permits on tribal lands, this subpart 
recognizes tribal authority to negotiate the form of the bond.
Comments
    Many comments recommended that part 166 include bonding 
requirements that address overgrazing on Indian lands. These comments 
were accepted. Section 166.601(a)(4) as described in the proposed 
regulation was retained and allows a bond to be applied to the costs of 
restoration and reclamation of Indian land damaged by a permittee. 
Also, Sec. 166.602(b) states that Indian landowners may negotiate a 
permit term that specifies the use of any bond forms described in 
Sec. 166.602(a).
    Several comments recommended that the BIA pay interest on cash 
bonds. These comments were not accepted. Cash bonds are not trust funds 
and are not administered as trust funds, and therefore are ineligible 
for interest payments without additional statutory authority.

Subpart H--Permit Violations

Summary of Subpart
    Subpart H, ``Permit Violations,'' provides for Secretarial action 
should the BIA learn that a violation of the terms of a grazing permit 
may have occurred.
Comments
    Several comments recommended that grazing unit inspections by the 
BIA for permit compliance be required more often than one time per 
year. These comments were not accepted. Due to the varying 
circumstances of each range unit, flexibility in grazing unit 
inspections must be maintained. While the BIA intends to increase its 
ability to monitor range units for permit compliance, the BIA must 
continue to rely on information provided by Indian landowners. Thus, 
Sec. 166.703(a) was added to clarify that Indian landowners may contact 
the BIA to request that appropriate enforcement action be taken by the 
BIA should an Indian landowner believe that a violation has occurred.
    Several comments recommended that the final rule support the 
tribe's authority to adopt its own appeal process for range unit 
violations. These comments were accepted. Section 166.702 was modified 
so that the parties to a grazing permit may negotiate a provision in 
the permit that would defer to tribal remedies for permit violations.

Subpart I--Trespass

Summary of Subpart
    Subpart I, ``Trespass,'' defines trespass under a grazing permit to 
include any unauthorized occupancy, use of or action on Indian 
agricultural or government lands assigned to the control of a tribe. 
This subpart describes the process for trespass notification, 
enforcement, actions, penalties, damages, and costs.
Comments
    Many comments recommended that part 166 should include a trespass 
inspection schedule. These comments were not accepted. As with grazing 
unit inspections under subpart H, flexibility in inspections must be 
maintained to take into account varying range unit circumstances and 
the need to rely on Indian landowners. Part 166 provides that the BIA 
will continue to act on specific information about trespass on Indian 
agricultural lands. Section 166.801 clarifies our obligation to 
investigate and respond to allegations of trespass.
    Several comments recommended that penalties received from a grazing 
trespass be paid directly to the permittee. These comments were 
partially accepted. Section 3713(c) of the AIARMA authorizes the 
payment of proceeds from trespass for the loss of forage or other 
damage. However, the

[[Page 7088]]

AIARMA is unclear as to whether permittees are to receive all or some 
of such proceeds. The BIA recognizes that the loss of forage or other 
damage is often sustained by the permittee. In order to provide for 
trespass payments to permittees (as an affected party under section 
166.818) for the loss of forage or damage due to trespass, the parties 
to the permit may include a trespass reimbursement provision in the 
permit that allows for such reimbursement.
    One comment recommended the final rule should not suggest that 
tribes are required to adopt the trespass provisions of part 166 in 
order to secure tribal trespass jurisdiction. This comment was 
accepted. Section 166.802(b) was added to specifically recognize the 
authority of tribes to take any trespass action tribal law may allow.

Subpart J--Agriculture Education, Education Assistance, Recruitment, 
and Training

Summary of Subpart
    Subpart J, Agriculture Education, Education Assistance, 
Recruitment, and Training, outlines the provisions for implementing 
subchapter II of the AIARMA, Education in Agriculture Management.
Comments
    Many comments recommended that students receive one year of funding 
for one year worked in the agricultural education program in accordance 
with the AIARMA. This comment was accepted. Section 166.901(f)(3) was 
changed to support the requirement that students enter into an 
obligated service agreement to serve as a professional resource manager 
or agriculture-related professional with an approved organization for 
one year in exchange for each year in the program.

Subpart K--Records

    As noted previously, new provisions have been added addressing the 
ownership and maintenance of trust records associated with the 
performance of this part. These provisions replace those in subpart K 
of the Proposed Rule.

IV. Procedural Requirements

A. Review Under Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), OMB 
must determine whether the regulatory action is ``significant'' and 
therefore subject to 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.
    Accordingly, OMB has determined that this rule is not a significant 
regulatory action and is largely administrative and technical in 
nature. The rule describes how the federal government will administer 
its trust responsibility in managing the trust fund accounts. Thus, the 
impact of the rule is confined to the federal government and the Indian 
trust beneficiaries and does not impose a compliance burden on the 
economy generally. The Department did submit the entire Proposed Rule 
for review by the Office of Information and Regulatory Affairs of the 
Office of Management and Budget (OMB) as a significant policy matter 
impacting all federally-recognized Indian tribes and individual 
Indians. This decision was made because of the magnitude of the monies 
involved in Indian trust matters and the notion that any revisions to 
existing regulations that impact trust account management could have 
significant impacts on tribal governments, communities and individual 
Indians. In particular, the Department conducted an economic analysis 
of the revisions to part 115 and found that there were significant 
benefits in management, security and reporting of trust accounts and 
only small increases on tribal governments or individual Indians. The 
increased benefits are better identification of funds, ability to gain 
performance reports on tribal or individual accounts, clarifications in 
what funds could be deposited into such accounts, better distribution 
procedures, and clarifications on when and how such accounts could be 
restricted or otherwise encumbered. The revisions to part 115 were 
found to have potential for administrative savings.

B. Review Under 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 affected 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 ensure that the regulation: (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 
affected conduct while promoting simplification and burden reduction; 
(4) specifies the retroactive effect, 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 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. The Department of the 
Interior has determined that, to the extent permitted by law, the 
proposed regulation meets the relevant standards of Executive Order 
12988.

C. Review Under the Regulatory Flexibility Act

    This rule was reviewed under the Regulatory Flexibility Act, 5 
U.S.C. 601 et seq., which requires preparation of a regulatory 
flexibility analysis for any rule which is likely to have significant 
economic impact on a substantial number of small entities. This rule 
streamlines the Department's policies, procedures, provisions and 
clauses that apply to certain Indian trust resources. Indian tribes are 
not small entities under the Regulatory Flexibility Act. Any impacts on 
identified small entities affected by this rulemaking are minimal as 
they would concern a small number of farmers, ranchers, and individuals 
doing business on Indian lands. Accordingly, the Department of the 
Interior has determined that this regulation will not have a 
significant economic impact on a substantial number of small entities, 
and, therefore, no regulatory flexibility analysis has been prepared.

[[Page 7089]]

D. Review Under the Small Business Regulatory Enforcement Fairness Act 
of 1996 (SBREFA)

    This rule is not a major rule as defined by section 804 of the 
Small Business Regulatory Enforcement Fairness Act of 1996. This rule 
will not result in an annual effect on the economy of $100 million or 
more. The revised parts represent programs that are ongoing within the 
BIA and no new monies are being introduced into the stream of commerce. 
This rule will not result in a major increase in costs or prices. The 
effect of this rulemaking will be to streamline ongoing policies, 
procedures and management operations of the BIA in their handling of 
tribal and individual Indian trust resources. No increases in costs for 
administration will, therefore, be realized and no prices would be 
impacted through these administrative and technical clarifications of 
existing field practice. This rulemaking will not result in any 
significant adverse effects on competition, employment, investment, 
productivity, innovation, or on the ability of the United States-based 
companies to compete with foreign-based companies in domestic and 
export markets. The impact of the rulemaking will be realized by tribal 
governments and individual Indians having a protected trust resource. 
These administrative and technical clarifications of Departmental 
policy and procedure will not otherwise have a significant impact on 
any other small businesses or enterprises.

E. Review Under the Paperwork Reduction Act

    This rulemaking requires an information collection from 10 or more 
parties and a submission under the Paperwork Reduction Act of 1995, 
Public Law 104-13, is required. Accordingly, the Department prepared an 
OMB form 83-I for review and approval by OMB. Having reviewed the 
submissions of the Department with respect to the burden hours of each 
part of this rulemaking, along with any comments that were submitted by 
the reviewing public, OMB has approved the information collection 
requirements contained in this rulemaking and has assigned OMB control 
number 1076-0154.

F. Review Under Executive Order 13132--Federalism

    This rule does not have substantial direct effects on the States, 
on the relationship between the national government and the States, or 
on the distribution of power and responsibilities among the various 
levels of government. While this 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 has no 
sufficient federalism implications to warrant the preparation of a 
Federalism Assessment.

G. Review Under the National Environmental Policy Act of 1969

    This rule does not constitute a major federal action significantly 
affecting the quality of the human environment. Therefore, neither an 
Environmental Assessment nor an Environmental Impact Statement is 
necessary for this rule.

H. Review Under the Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995, Public Law 
104-4, establishes requirements for federal agencies to assess the 
effects of their regulatory actions on state, local, and tribal 
governments and the private sector. Under section 202 of the Act, the 
Department generally must prepare a written statement, including a 
cost-benefit analysis, for proposed and final rules with ``federal 
mandates'' that may result in expenditures to state, local, and tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any one year. The Department, however, determined 
that the rulemaking would uniquely affect tribal governments and, 
accordingly, followed Departmental and Administration protocols in 
consulting with tribal governments on this rulemaking. See discussion 
on consultations found in the Background section of this preamble. 
These consultations were in keeping with the President's Executive 
Order 13084, ``Consultation and Coordination with Indian Tribal 
Governments.''

List of Subjects

25 CFR Part 15

    Estates, Indians--law.

25 CFR Part 114

    Accounting, Indians--business and finance.

25 CFR Part 115

    Administrative practice and procedure, Indians--business and 
finance.

25 CFR Part 162

    Indians--lands.

25 CFR Part 166

    Grazing lands, Indians--lands, Livestock.

    For the reasons stated in the preamble, the Department of the 
Interior, Bureau of Indian Affairs, amends 25 CFR as follows:

PART 15--PROBATE OF INDIAN ESTATES, EXCEPT FOR MEMBERS OF THE FIVE 
CIVILIZED TRIBES

    1. Part 15 is revised to read as follows:
Subpart A--Introduction
Sec.
15.1   What is the purpose of this part?
15.2   What terms do I need to know?
15.3   Will the Secretary probate all the property in Indian 
estates?
15.4   How does the probate process work?
Subpart B--Starting the Probate Process
15.101   How do I begin the BIA probate process?
15.102   May I notify the BIA of a death if I am not related to the 
decedent?
15.103   When should the BIA be notified of a death?
15.104   What other documents does the BIA need to process a probate 
package?
15.105   Will the BIA wait to begin the probate process until it is 
notified of the decedent's death?
15.106   Can I get emergency assistance for funeral services from 
the decedent's IIM account?
15.107   Who prepares an Indian probate package?
15.108   What agency prepares the probate package if the decedent 
was not an enrolled member of a tribe or is a member of more than 
one tribe?
15.109   Can a probable heir or beneficiary give up his/her interest 
in trust or restricted lands or trust funds?
Subpart C--Preparing the Probate Package
15.201   What will the BIA do with the documents that I provide?
15.202   What must the complete probate package contain?
15.203   What happens after the BIA prepares the probate package?
15.204   After the probate package has been sent to a BIA deciding 
official, may I still request a formal hearing with an ALJ?
15.205   When will the BIA refer a probate to the OHA?
15.206   Is there a summary process for distributing an estate with 
only trust cash assets?
Subpart D--Probate Processing, Claims and Distributions
15.301   What does the attorney decision maker do with the probate 
package?
15.302   What law is used by the deciding official to determine the 
distribution of the trust estate?
15.303   If the decedent owed me money, how do I file a claim 
against the estate?

[[Page 7090]]

15.304   How does the BIA deciding official determine if a claim 
will be allowed and paid?
15.305   What claims will be paid first?
15.306   Can the BIA deciding official reduce the amount of claims?
15.307   What if there is not enough money in the decedent's IIM 
account to pay all claims?
15.308   Will the BIA use future income to pay claims?
15.309   Will the BIA deciding official authorize payment of 
interest or penalties accruing after the date of death?
15.310   When will the BIA deciding official issue a decision on the 
probate?
15.311   What is in the written decision/order of the BIA deciding 
official?
15.312   What happens after the decision is made?
Subpart E--Appeals
15.401   May I appeal the decision of the BIA deciding official?
15.402   How do I file an appeal of the decision/order?
15.403   How long do I have to file an appeal?
15.404   What will happen to the estate if an appeal is filed?
15.405   How does the ALJ review a decision issued by a BIA deciding 
official?
Subpart F--Information and Records
15.501   If I have a question about a probate that has been assigned 
to a BIA deciding official, may I contact the deciding official 
directly?
15.502   How can I find out the status of a probate?
15.503   Who owns the records associated with this part?
15.504   How must records associated with this part be preserved?

    Authority: Secs. 1, 2, 36 Stat. 855, as amended, 856, as 
amended, sec. 1, 38 Stat. 588, 42 Stat. 1185, as amended, secs. 1, 
2, 56 Stat. 1021, 1022, 25 U.S.C. 372, 373, 374, 373a, 373b; Federal 
Records Act, as amended, 44 U.S.C. Sec. 3101, et seq. (1950).

    Cross reference: For special rules applying to proceedings in 
Indian Probate (Determination of Heirs and Approval of Wills, Except 
for Members of the Five Civilized Tribes and Osage Indians), 
including hearings and appeals within the jurisdiction of the Office 
of Hearings and Appeals, see Title 43, Code of Federal Regulations, 
Part 4, Subpart D; Funds of deceased Indians other than the Five 
Civilized Tribes, see Title 25 Code of Federal Regulations, Part 
115.

Subpart A--Introduction


Sec. 15.1  What is the purpose of this part?

    This part contains the procedures that the Secretary follows to 
initiate the probate of the trust estate of a deceased individual 
Indian who owned trust or restricted property. This part tells you how 
to file the necessary documents to probate the trust estate. This part 
also describes how probates will be processed by the BIA, and how 
probates may be sent to the OHA for disposition.


Sec. 15.2  What terms do I need to know?

    ALJ means an administrative law judge or other employee of the 
Department of the Interior's Office of Hearings and Appeals (OHA) upon 
whom authority has been conferred by the Secretary to conduct hearings 
in accordance with 43 CFR Part 4 Subpart D.
    BIA means the Bureau of Indian Affairs within the Department of the 
Interior.
    IIM account means Individual Indian Money Account.
    LTRO means the Land Titles and Records Office within the BIA.
    OHA means the Hearings Division, Office of Hearings and Appeals, 
Department of the Interior.
    OTFM means the Office of Trust Funds Management, within the Office 
of the Special Trustee for American Indians, Department of the 
Interior, or its authorized representative.
    Agency means the agency office or any other designated office in 
the BIA having jurisdiction over trust or restricted property and 
money. This term also means any office of a tribe which has contracted 
or compacted the BIA probate function under 25 U.S.C. Sec. 450f or 25 
U.S.C. Sec. 458cc.
    Attorney decision maker means an attorney with the BIA, who reviews 
a probate package, determines heirs, approves wills and beneficiaries 
of the will, determines creditors claims, and issues a written 
decision.
    Beneficiary means any individual who receives trust or restricted 
property or money in a decedent's will.
    Day means a calendar day, unless otherwise stated.
    Decedent means a person who is deceased.
    Deciding official means the official with the delegated authority 
to make a decision on a probate matter, and may include a BIA regional 
director, agency superintendent, field representative, or attorney 
decision maker (BIA deciding official); or an OHA ALJ or other OHA 
designated official (OHA deciding official).
    Decision/order means a written document issued by the deciding 
official determining heirs, approving wills and beneficiaries of the 
will, approving creditors claims, and ordering distribution of property 
and money.
    Domicile means the legal residence of the person.
    Estate means the trust cash assets, restricted or trust lands owned 
by the decedent at the time of his death.
    Form OHA-7 means a form issued by the OHA which lists data for 
heirship and family history, and provides information on any wills, 
trust and restricted property, adoptions, names and addresses of all 
interested parties.
    Heir means any individual who receives trust or restricted property 
or money from a decedent in an intestate proceeding.
    IIM account means funds held in an individual Indian monies account 
by the OTFM or a tribe performing this function under a contract or 
compact.
    Interested parties means any probable or actual heir, any 
beneficiary under a will, any party asserting a claim against a 
deceased Indian's estate, and any tribe having a statutory option to 
purchase the trust or restricted property interest of a decedent.
    Intestate means the decedent died without a will.
    Minor means an individual that has not reached age of majority as 
defined by the applicable tribal or state law.
    Probate means the legal process by which applicable tribal law, 
state law, or federal law that affects the distribution of the 
decedent's estate is applied to: (1) determine the heirs; (2) approve 
wills and beneficiaries; and (3) transfer any funds held in trust by 
the Secretary for a decedent to the heirs, beneficiaries, or other 
persons or entities entitled by law.
    Probate clerk means a BIA or tribal employee who is responsible for 
processing a probate package.
    Probate specialist means the BIA or tribal employee who is trained 
in Indian probate matters.
    Restricted land means land the title to which is held by an 
individual Indian or a tribe and which can only be alienated or 
encumbered by the owner with the approval of the Secretary because of 
limitations contained in the conveyance instrument pursuant to federal 
law.
    Secretary means the Secretary of the Interior or an authorized 
representative.
    Superintendent or Field Representative means an authorized 
representative of the Secretary of the Interior who is the officer in 
charge of a BIA agency or field office.
    Testate means the decedent executed a will before his death.
    Trust cash assets means the funds held in an IIM account.
    Trust land means the land, or an interest therein, for which the 
United States holds fee title in trust for the benefit of an individual 
Indian.
    Vendor or Creditor means any individual or company who submits a 
claim for payment from a decedent's estate.

[[Page 7091]]

    We/Us means either an official of the BIA or a tribe performing 
probate functions under a BIA contract or compact.
    Will means a written testamentary document, including any properly 
executed written changes, called codicils, which was signed by the 
decedent and was attested by two disinterested adult witnesses, that 
states who will receive the decedent's trust or restricted property.
    You/I means an interested party, as defined herein, with an 
interest in the decedent's estate unless a specific section says 
otherwise.


Sec. 15.3  Will the Secretary probate all the property in Indian 
estates?

    (a) No. We will probate only the trust or restricted property in 
the estate of an Indian decedent.
    (b) We will not probate:
    (1) Real or personal property in an estate of an Indian decedent 
that is not trust or restricted property;
    (2) Restricted property derived from allotments in the estates of 
members of the Five Civilized Tribes (Cherokee, Choctaw, Chickasaw, 
Creek and Seminole) in Oklahoma; and
    (3) Restricted interests derived from allotments made to Osage 
Indians in Oklahoma (Osage Nation) and Osage headright interests.
    (c) We will probate the estate of a deceased member of the Five 
Civilized Tribes or Osage Nation who owns an interest in land derived 
from an individual Indian other than the Five Civilized Tribes or Osage 
Nation.


Sec. 15.4  How does the probate process work?

    The basic steps of the probate process are:
    (a) We find out about a person's death (see subpart B for details);
    (b) We prepare a probate package which includes documents that you 
send us (see subpart C for details);
    (c) We refer the completed probate package to a deciding official 
in the BIA or the OHA (see subpart D for details);
    (d) The deciding official decides how to distribute the property 
and/or funds deposited in an IIM account (see subparts D and E for 
details).

Subpart B--Starting the Probate Process


Sec. 15.101  How do I begin the BIA probate process?

    As soon as possible you should contact the nearest BIA agency or 
regional office where the decedent was enrolled to inform us of the 
decedent's death. You must provide a certified copy of the death 
certificate, if one exists. If a death certificate does not exist, you 
may provide one or more of the following:
    (a) A copy of the obituary notice from a local newspaper; or
    (b) Any other document that we accept that verifies the death, such 
as a church record or a court record; and
    (c) An affidavit of death prepared by the tribe with whom the 
decedent was associated or someone who knows about the decedent's death 
that supports the information in paragraph (a) or (b) of this section.


Sec. 15.102  May I notify the BIA of a death if I am not related to the 
decedent?

    Yes. You do not need to be related to the decedent in order to 
notify us of the death. You can be a friend, neighbor, or any other 
interested party.


Sec. 15.103  When should the BIA be notified of a death?

    There is no deadline for notifying us of a death. However, you 
should notify us of a death as soon as possible after the person dies.


Sec. 15.104  What other documents does the BIA need to process a 
probate package?

    (a) You should provide us with the following documents and 
information before we can begin to process the probate package.
    (1) Social Security number of the decedent;
    (2) The birth certificate or other record of birth of the decedent;
    (3) All death records including those listed in Sec. 15.101;
    (4) A list of known creditors against the estate and their 
addresses;
    (5) Current names and addresses of potential heirs and 
beneficiaries;
    (6) Any statements renouncing an interest in the estate;
    (7) Documents from a court of competent jurisdiction, including but 
not limited to:
    (i) All marriage licenses of the decedent;
    (ii) All divorce decrees of the decedent;
    (iii) Adoption and guardianship records relevant to the decedent;
    (iv) Any sworn statements regarding the decedent's family, 
including any statements of paternity or maternity;
    (v) Any name changes; and
    (vi) Order requiring payment of child support;
    (8) All original or certified copies of wills and codicils, and any 
revocations; and
    (9) Any additional documents you provide or that we request.
    (b) You must inform us if any of the documents or information 
identified in this part are not available.


Sec. 15.105  Will the BIA wait to begin the probate process until it is 
notified of the decedent's death?

    No. We may find out about the death of a person without being 
notified by an interested party. If we do, and if the decedent meets 
the criteria in Sec. 15.3, we will initiate the process to collect the 
necessary documentation. You should not assume that we will find out 
about a death. To assure timely distribution of the estate, you should 
notify us as provided in Sec. 15.101.


Sec. 15.106  Can I get emergency assistance for funeral services from 
the decedent's IIM account?

    (a) If you are responsible for making the funeral arrangements on 
behalf of the family of a decedent who had an IIM account and you have 
an immediate need to pay for funeral arrangements prior to burial, you 
may make a request to the BIA for up to $1,000 from the decedent's IIM 
account if the decedent's IIM account has more than $2,500 in the 
account at the date of death.
    (b) You must apply for this assistance and submit to the BIA an 
original itemized estimate of the cost of the service to be rendered 
and the identification of the service provider.
    (c) We may approve reasonable costs up to $1,000 that are necessary 
for the burial services, taking into consideration the total amount in 
the account, the number of probable heirs or beneficiaries of whom we 
are aware, the amount of any claims against the account of which we are 
aware, and any other relevant factor.
    (d) We will make payments directly to the providers of the 
services.


Sec. 15.107  Who prepares an Indian probate package?

    The probate specialist or probate clerk at the agency or tribe 
where the decedent is an enrolled member will prepare the probate 
package in consultation with the probable heirs or beneficiaries who 
can be located.


Sec. 15.108  What agency prepares the probate package if the decedent 
was not an enrolled member of a tribe or is a member of more than one 
tribe?

    (a) If the decedent was not an enrolled member of a tribe, but owns 
interests in trust or restricted property, the agency that has 
jurisdiction over the tribe with the strongest association with the 
decedent will prepare the probate package, unless otherwise provided by 
federal law.
    (b) If the decedent was is a member of more than one tribe, the 
agency that has jurisdiction over the tribe with the strongest 
association with the decedent

[[Page 7092]]

will prepare the probate package, unless otherwise provided by federal 
law.


Sec. 15.109  Can a probable heir or beneficiary give up his/her 
interest in trust or restricted lands or trust funds?

    Unless otherwise provided by federal law or a tribal inheritance 
code approved by the Secretary, you must file a statement renouncing 
your interest with the BIA or the OHA before the deciding official 
issues an order.
    (a) If you are a non-Indian and 21 years or older, you may give up 
all or part of your interest by submitting a notarized statement in 
which you renounce your interest in the estate.
    (b) If you are an Indian and 21 years or older and you wish to give 
up all or part of your interest in the estate, we must refer your 
request to the OHA in accordance with 43 CFR 4.208.

Subpart C--Preparing the Probate Package


Sec. 15.201  What will the BIA do with the documents that I provide?

    Once we receive the documents that you provide us under 
Sec. 15.105, the probate specialist or probate clerk will:
    (a) Use the documents to prepare a probate package; and
    (b) Consult with you and any other sources to obtain any additional 
information needed for a complete package.


Sec. 15.202  What must the complete probate package contain?

    The complete probate package must contain all of the following:
    (a) A certified copy of the death certificate, if one exists, or 
some other reliable evidence of death as required by Sec. 15.101;
    (b) A completed Form OHA-7, ``Data for Heirship Findings and Family 
History,'' certified by the BIA;
    (c) A certified inventory of trust or restricted real property;
    (d) A statement describing all income generating activity;
    (e) A copy of the decedent's IIM account ledger showing:
    (1) The balance of the account at the date of death; and
    (2) The balance of the account at the date of probate package 
submission;
    (f) All original or certified copies of wills, codicils and any 
revocations of wills or codicils;
    (g) Any statements renouncing interest that have been submitted to 
the agency;
    (h) Claims of creditors against the estate;
    (i) All documentation of payment of claims paid prior to probate 
proceeding;
    (j) All other documents required in Sec. 15.105;
    (k) Tribal options to purchase interests of a decedent;
    (l) Affidavit of the probate clerk or probate specialist that all 
efforts to locate the probable heirs and beneficiaries have been 
exhausted; and
    (m) Any other documentation that may be required at the time of 
probate proceedings.


Sec. 15.203  What happens after the BIA prepares the probate package?

    Within 30 days after all the documents required by Sec. 15.105 and 
Sec. 15.202 are received, a probate specialist will review the probate 
package and determine who will be the appropriate deciding official.
    (a) If the decedent's estate contains only trust cash assets of a 
value less than $5,000 not including any interest that may have accrued 
after the death of the decedent, the probate package may be processed 
in accordance with Sec. 15.206 and may be referred to a BIA deciding 
official subject to the provisions in Sec. 15.205.
    (b) All other probate cases will be referred to a BIA attorney 
decision maker or an OHA deciding official subject to the provisions in 
Sec. 15.205.
    (c) We will notify all interested parties of:
    (1) The right of the probable heirs or beneficiaries to request a 
formal hearing before an ALJ;
    (2) The identification of the probable legal heirs; or
    (3) The submission of an original or certified copy of a will or 
revocation and listed beneficiaries;
    (4) Any known claims against the estate; and (5) The address of the 
designated office where the probate package has been sent.
    (d) If the deciding official is at the BIA and you have not 
requested a formal hearing before an ALJ, the probate specialist will 
send the probate package to the BIA deciding official within 30 days 
after the date the probate specialists mailed the notice to you.
    (e) If the deciding official is at the OHA, then we will send the 
probate package to the OHA deciding official and notify the probable 
heirs that they may ask the OHA for an in-person hearing at a site 
convenient to most of the parties, a video conference or teleconference 
hearing (if available), or a decision based on documents in the probate 
package.
    (f) On the same day that the probate specialist has determined who 
will be the designated deciding official, we will notify you of this 
determination by certified mail, return receipt requested.


Sec. 15.204  After the probate package has been sent to a BIA deciding 
official, may I still request a formal hearing with an ALJ?

    Yes, you may request a formal hearing before an ALJ at any time up 
until the date the BIA deciding official renders a decision.


Sec. 15.205  When will the BIA refer a probate to the OHA?

    We will refer a probate to the OHA under Sec. 15.203(d) if the 
probate specialist determines that a referral is appropriate. In 
determining whether to refer a probate to the OHA, the probate 
specialist will consider all of the criteria listed below:
    (a) Problems with the will. The probate specialist will refer the 
probate package to the OHA if it appears that the will:
    (1) Is likely to be contested;
    (2) Is complex or ambiguous; or
    (3) Is of questionable validity.
    (b) Contested claims. The probate specialist will refer the probate 
package to the OHA if you:
    (1) Contest a creditor claim; or
    (2) Contest a claim made by a family member.
    (c) Other problems. The probate specialist will be refer the 
probate package to the OHA if it appears there are:
    (1) Questions about family relationships;
    (2) Conflict in prior probate orders;
    (3) Problems with the evidence;
    (4) Questions about adoption of an heir;
    (5) Questions involving paternity;
    (6) Presumptions of death;
    (7) Rights of minor heirs that might be jeopardized;
    (8) Disclaimers of interests by Indian probable heirs or 
beneficiaries;
    (9) Determinations of escheat under 43 CFR Sec. 4.205;
    (10) Challenges to the jurisdiction of any court that issued an 
order that has been used as a supporting document; or
    (11) Questions concerning the decedent's domicile.
    (d) Approval of settlement agreements. The probate specialist will 
refer the case to the OHA if there is a settlement agreement between 
heirs or beneficiaries as to the disposition of the estate.


Sec. 15.206  Is there a summary process for distributing an estate with 
only trust cash assets?

    Yes. Unless otherwise provided by federal law or a tribal 
inheritance code approved by the Secretary, a decedent's estate that 
contains only trust cash assets of a value less than $5,000 not 
including any interest that may have

[[Page 7093]]

accrued after the death of the decedent, may be summarily processed by 
a BIA deciding official.
    (a) Within 30 days after notice under Sec. 15.203 has been sent, 
the probable heirs may request a formal hearing before an ALJ to 
determine the proper distribution of the trust cash assets. Upon notice 
of a request for a formal hearing, the probate specialist will forward 
the probate package to the appropriate ALJ within five days.
    (b) Within 60 days after notice under Sec. 15.203 has been sent and 
if the probable heirs have not requested a formal hearing with an ALJ, 
the BIA deciding official to whom the probate has been referred will 
assemble the probable heirs and hold an informal hearing to determine 
the distribution of the trust cash assets.
    (c) Within 30 days after the informal hearing, the BIA deciding 
official will prepare an order in accordance with Sec. 15.302 through 
Sec. 15.311.
    (d) Any interested party may appeal a summary distribution decision 
in accordance with subpart E of this part.

Subpart D--Probate Processing, Claims and Distributions


Sec. 15.301  What does an attorney decision maker do with the probate 
package?

    (a) Upon receipt of the probate package, the attorney decision 
maker reviews the probate package and determines whether there are 
issues of fact or law of the case that indicate that the probate 
package should be referred to the OHA. If any issues of fact or law 
that require a hearing are apparent from the review of the case, the 
attorney decision maker will refer the probate package to the 
appropriate ALJ within five days.
    (b) Within 30 days after notice under Sec. 15.203 has been sent, 
the probable heirs may request a formal hearing before an ALJ to 
determine the distribution of the estate. Within five days of the 
receipt of notice of a request for a formal hearing, the attorney 
decision maker will forward the probate package to the appropriate ALJ.
    (c) Within 120 days after the notice under Sec. 15.203 has been 
sent and if the probable heirs have not requested a formal hearing with 
an ALJ, the attorney decision maker will assemble the probable heirs 
and hold an informal hearing to determine the distribution of the 
estate.
    (d) Within 60 days after the informal hearing, the attorney 
decision maker will issue an written order in accordance with 
Sec. 15.310.


Sec. 15.302  What law is used by the deciding official to determine the 
distribution of the trust estate?

    Unless otherwise provided by federal law or a tribal inheritance 
code approved by the Secretary, the law of the state where the decedent 
was domiciled will determine the distribution of the estate.


Sec. 15.303  If the decedent owed me money, how do I file a claim 
against the estate?

    (a) If you wish to make a claim against the estate of a decedent, 
you must submit to us an original and two copies of an itemized 
statement of the debt showing the amount of the original debt and the 
remaining balance on the date of the decedent's death.
    (b) The itemized statement must state whether you have filed a 
claim against the decedent's non-trust assets.
    (c) We must receive your claim within 60 days from the date the BIA 
receives the verification of the decedent's death in Sec. 15.101 to be 
included as part of the probate package.


Sec. 15.304  How does the BIA deciding official determine if a claim 
will be allowed and paid?

    (a) The BIA deciding official may direct the payment of some or all 
of the debts of the decedent after reviewing the probate package in 
accordance with the standards provided at 43 CFR 4.250 (c) through (g), 
and no claim prohibited by 43 CFR 4.250 will be paid.
    (b) No claim will be paid from trust or restricted assets where the 
BIA deciding official is aware that the decedent's non-trust estate may 
be available to pay the claim.


Sec. 15.305  What claims will be paid first?

    (a) The first claims to be paid, referred to as priority claims, 
are paid in order of priority. The priority claims are:
    (1) Funeral expenses (including the cemetery marker);
    (2) Medical expenses for the last illness;
    (3) Nursing home or other care facility expenses;
    (4) A claim of an Indian tribe;
    (5) A claim reduced to judgment by a court of competent 
jurisdiction.
    (b) After payment of the priority claims, the BIA deciding official 
may authorize all remaining claims, referred to as general claims.


Sec. 15.306  Can the BIA deciding official reduce the amount of claims?

    The BIA deciding official has the discretion to decide that part or 
all of an otherwise valid claim is unreasonable, reduce the claim to a 
reasonable amount, or disallow the claim in its entirety.
    (a) If a claim is reduced, the BIA deciding official will order 
payment only of the reduced amount.
    (b) The BIA deciding official may reduce or disallow both priority 
claims and general claims.


Sec. 15.307  What if there is not enough money in the decedent's IIM 
account to pay all claims?

    (a) If there is not enough money in the IIM account to pay all 
claims, the BIA deciding official will order payment of the priority 
claims first in the order identified in Sec. 15.305.
    (b) If there is not enough in the IIM account to pay the priority 
claims, the BIA deciding official may order payment of the priority 
claims on a pro rata (reduced) basis.
    (c) If less than $1,000 remains in the IIM account after payment of 
priority claims is ordered, the general claims may be ordered paid on a 
pro rata basis or disallowed in their entirety.


Sec. 15.308  Will the BIA use future income to pay claims?

    No. The unpaid balance of any claims will not be enforceable 
against the estate after the estate is closed.


Sec. 15.309  Will the BIA deciding official authorize payment of 
interest or penalties accruing after the date of death?

    No. Interest or penalties charged against either priority or 
general claims after date of death will not be paid.


Sec. 15.310  When will the BIA deciding official issue a decision on 
the probate?

    Within 60 days after an informal hearing has been held, the BIA 
deciding official will issue a written decision/order in accordance 
with Sec. 15.311. Upon receipt of the decision/order, the BIA deciding 
official will send all interested parties a copy of the decision/order.


Sec. 15.311  What is in the written decision/order of the BIA deciding 
official?

    The BIA deciding official issues a written decision/order that:
    (1) In intestate cases: Lists the names, relationship to the 
decedent, and shares of the heirs; provides citations to the law of 
descent and distribution; or the fact that the decedent died leaving no 
legal heirs;
    (2) In testate cases: approves or disapproves a will; interprets 
provisions of the approved will; provides the names and relationship of 
the beneficiaries to the decedent; describes the property each 
beneficiary is to receive;
    (3) Allows or disallows claims against the estate; orders the 
amount of payment for all approved claims;
    (4) States whether the heirs or beneficiaries are Indian or non-
Indian;

[[Page 7094]]

    (5) Determines any rights of dower, curtesy or homestead which may 
constitute a burden upon the interest of the heirs;
    (6) Attaches a certified copy of the inventory of trust or 
restricted lands, if any; and
    (7) Advises all interested parties of their appeal rights in 
accordance with subpart E of this part.


Sec. 15.312  What happens after the decision is made?

    We will not pay claims, transfer title to land, or distribute trust 
cash assets for 75 days after the decision/order is mailed to the 
interested parties. After 75 days and if no appeal has been filed, the 
following actions will take place:
    (a) The LTRO will change its land title records for the trust and 
restricted property in accordance with the decision/order; and
    (b) The OTFM will pay claims and distribute the IIM account in 
accordance with the decision/order.

Subpart E--Appeals


Sec. 15.401  May I appeal the decision of the BIA deciding official?

    You have a right to appeal the decision made by the BIA deciding 
official if you are an interested party and are affected by the probate 
decision.


Sec. 15.402  How do I file an appeal of the decision/order?

    (a) To file an appeal of the decision/order, you may send or 
deliver a signed, written statement to the BIA deciding official where 
the probate package was sent that contains:
    (1) The name of the decedent;
    (2) A description of your relationship to the decedent;
    (3) An explanation of why you are appealing; and
    (4) Any errors you believe the BIA deciding official made.
    (b) Within ten days from the receipt of the appeal, the BIA 
deciding official will notify all other interested parties of the 
appeal and forward the case to the appropriate ALJ.


Sec. 15.403  How long do I have to file an appeal?

    (a) You must send or deliver your written appeal within 60 days of 
the date that appears on the decision mailed to you. If you mail your 
appeal, it must be postmarked within 60 days of the date of the 
decision.
    (b) If the 60-day appeal period is missed, you still have a right 
to file a written statement with the BIA deciding official asking to 
have the decision changed for one or more of the following reasons:
    (1) You did not receive notice of the probate;
    (2) You have obtained new evidence or information after the 
decision was made; or
    (3) You have evidence that was known at the time of the probate 
proceeding but was not included in the probate package.
    (c) After we have received your request, we will forward it to the 
appropriate ALJ within ten days for action in accordance with 43 CFR 
Part 4, Subpart D.


Sec. 15.404  What will happen to the estate if an appeal is filed?

    The BIA deciding official will refer your appeal to the appropriate 
ALJ in the same manner provided under 43 CFR Sec. 4.210. Until the 
appeal has been resolved, the BIA will not distribute any of the 
decedent's property or modify the land title records and the OTFM will 
not pay claims or distribute any funds in the decedent's IIM account.


Sec. 15.405  How does the ALJ review a decision issued by a BIA 
deciding official?

    The ALJ will conduct a de novo review; that is, conduct a formal 
hearing on the merits of the case.

Subpart F--Information and Records


Sec. 15.501  If I have a question about a probate that has been 
assigned to a BIA deciding official, may I contact the deciding 
official directly?

    In order to avoid off-the-record communications with the BIA 
deciding official about your specific case that might be interpreted as 
an attempt to influence final decision on the probate case, you should 
direct your questions to the BIA deciding official's clerk or the 
probate specialist or probate clerk who prepared your probate package.


Sec. 15.502  How can I find out the status of a probate?

    You may request information about the status of an Indian probate 
from any BIA agency or regional office.


Sec. 15.503  Who owns the records associated with this part?

    (a) Records are the property of the United States if they:
    (1) Are made or received by a tribe or tribal organization in the 
conduct of a federal trust function under this part, including the 
operation of a trust program pursuant to Public Law 93-638 as amended; 
and
    (2) Evidence the organization, functions, policies, decisions, 
procedures, operations, or other activities undertaken in the 
performance of a federal trust function under this part.
    (b) Records not covered by paragraph (a) of this section that are 
made or received by a tribe or tribal organization in the conduct of 
business with the Department of the Interior under this part are the 
property of the tribe.


Sec. 15.504  How must records associated with this part be preserved?

    (a) Any organization, including tribes and tribal organizations, 
that have records identified in Sec. 15.503(a) must preserve the 
records in accordance with approved Departmental records retention 
procedures under the Federal Records Act, 44 U.S.C. Chapters 29, 31 and 
33. These records and related records management practices and 
safeguards required under the Federal Records Act are subject to 
inspection by the Secretary and the Archivist of the United States.
    (b) A tribe or tribal organization should preserve the records 
identified in Sec. 15.503(b) for the period of time authorized by the 
Archivist of the United States for similar Department of the Interior 
records in accordance with 44 U.S.C. Chapter 33. If a tribe or tribal 
organization does not preserve records associated with its conduct of 
business with the Department of the Interior under this part, the tribe 
or tribal organization may be prevented from being able to adequately 
document essential transactions or furnish information necessary to 
protect its legal and financial rights or those of persons directly 
affected by its activities.

PART 114--SPECIAL DEPOSITS--[REMOVED AND RESERVED]

    2. Under authority of 25 U.S.C. 2, 25 U.S.C. 9; Pub. L. 97-100; and 
Pub. L. 97-257, part 114 is removed and reserved.

PART 115--TRUST FUNDS FOR TRIBES AND INDIVIDUAL INDIANS

    3. Part 115 is revised to read as follows:
Subpart A--Purpose, Definitions, and Public Information
Sec.
115.001   What is the purpose of this part?
115.002   What definitions do I need to know?
Subpart B--IIM Accounts
115.100  Osage Agency.
115.101   Individual accounts.
115.102   Adults under legal disability.
115.103   Payments by other Federal agencies.
115.104   Restrictions.
115.105   Funds of deceased Indians of the Five Civilized Tribes.
115.106   Assets of members of the Agua Caliente Band of Mission 
Indians.

[[Page 7095]]

115.107   Appeals.
Subpart C--IIM Accounts: Minors
 115.400   Will a minor's IIM account always be supervised?
115.401   What is a minor's supervised account?
115.402   Will a minor have access to information about his or her 
account?
115.403   Who will receive information regarding a minor's 
supervised account?
115.404   What information will be provided in a minor's statement 
of performance?
115.405   How frequently will a minor's statement of performance be 
mailed?
115.406   Who provides an address of record for a minor's supervised 
account?
115.407   How is an address of record for a minor's supervised 
account changed?
115.408   May a minor's supervised account have more than one 
address on file with the BIA?
115.409   How is an address for a minor's residence changed?
115.410   What types of identification will the BIA or OTFM accept 
as ``verifiable photo identification''?
115.411   What if the individual making a request regarding a 
minor's supervised account does not have any verifiable photo 
identification?
115.412   Will child support payments be accepted for deposit into a 
minor's supervised account?
115.413   Who may receive funds from a minor's supervised account?
115.414   What is an authorized disbursement request?
115.415   How will an authorized disbursement from a minor's 
supervised account be sent?
115.416   Will the United States post office forward mail regarding 
a minor's supervised account to a forwarding address left with the 
United States post office?
115.417   What portion of funds in a minor's supervised account may 
be withdrawn under a distribution plan?
115.418   What types of trust funds may a minor have?
115.419   Who develops a minor's distribution plan?
115.420   When developing a minor's distribution plan, what 
information must be considered and included in the evaluation?
115.421   What information will be included in the copy of the 
minor's distribution plan that will be provided to OTFM?
115.422   As a custodial parent, the legal guardian, the person who 
BIA has recognized as having control and custody of the minor, or an 
emancipated minor, what are your responsibilities if you receive 
trust funds from a minor's supervised account?
115.423   If you are a custodial parent, a legal guardian, or an 
emancipated minor, may BIA authorize the disbursement of funds from 
a minor's supervised account without your knowledge?
115.424   Who receives a copy of the BIA-approved distribution plan 
and any amendments to the plan?
115.425   What will we do if we find that a distribution plan has 
not been followed or an individual has acted improperly in regard to 
his or her duties involving a minor's trust funds?
115.426   What is the BIA's responsibility regarding the management 
of a minor's supervised account?
115.427   What is the BIA's annual review process for a minor's 
supervised account?
115.428   Will you automatically receive all of your trust funds 
when you reach the age of 18?
115.429   What do you need to do when you reach 18 years of age to 
access your trust funds?
115.430   Will your account lose its supervised status when you 
reach the age of 18?
115.431   If you are an emancipated minor may you withdraw trust 
funds from your account?
Subpart D--IIM Accounts: Estate Accounts
 115.500   When is an estate account established?
115.501   How long will an estate account remain open?
115.502   Who inherits the money in an IIM account when an account 
holder dies?
115.503   May money in an IIM account be withdrawn after the death 
of an account holder but prior to the end of the probate 
proceedings?
115.504   If you have a life estate interest in income-producing 
trust assets, how will you receive the income?
Subpart E--IIM Accounts: Hearing Process for Restricting an IIM Account
 115.600   If BIA decides to restrict your IIM account under 
Sec. 115.102 or Sec. 115.104, what procedures must the BIA follow?
115.601   Under what circumstances may the BIA restrict your IIM 
account through supervision or an encumbrance?
115.602   How will the BIA notify you or your guardian, as 
applicable, of its decision to restrict your IIM account?
115.603   What happens if BIA's notice of its decision to place a 
restriction on your IIM account that is sent by United States 
certified mail is returned to the BIA as undeliverable for any 
reason?
115.604   When will BIA authorize OTFM to place a restriction on 
your IIM account?
115.605   What information will the BIA include in its notice of the 
decision to restrict your IIM account?
115.606   What happens if you do not request a hearing to challenge 
BIA's decision to restrict your IIM account during the allotted time 
period?
115.607   How do you request a hearing to challenge the BIA's 
decision to restrict your IIM account?
115.608   If you request a hearing to challenge BIA's decision to 
restrict your IIM account, when will BIA conduct the hearing?
115.609   Will you be allowed to present testimony and/or evidence 
at the hearing?
115.610   Will you be allowed to present witnesses during a hearing?
115.611   Will you be allowed to question opposing witnesses during 
a hearing?
115.612   May you be represented by an attorney during your hearing?
115.613   Will the BIA record the hearing?
115.614   Why is the BIA hearing recorded?
115.615   How long after the hearing will BIA make its final 
decision?
115.616   What information will be included in BIA's final decision?
115.617   What happens when the BIA decides to supervise or encumber 
your IIM account after your hearing?
115.618   What happens if at the conclusion of the notice and 
hearing process we decide to encumber your IIM account because of an 
administrative error which resulted in funds that you do not own 
being deposited in your account or distributed to you or to a third 
party on your behalf?
115.619   If the BIA decides that the restriction on your IIM 
account will be continued after your hearing, do you have the right 
to appeal that decision?
115.620   If you decide to appeal the BIA's final decision pursuant 
to Sec. 115.107, will the BIA restrict your IIM account during the 
appeal?
Subpart F--Trust Fund Accounts: General Information
 115.700   Why is money held in trust for tribes and individual 
Indians?
115.701   What types of accounts are maintained for Indian trust 
funds?
115.702   What specific sources of money will be accepted for 
deposit into a trust account?
115.703   May we accept for deposit into a trust account money not 
specified in Sec. 115.702?
115.704   May we accept for deposit into a trust account retirement 
checks/payments or pension fund checks/payments even though those 
funds are not specified in Sec. 115.702?
115.705   May we accept for deposit into a trust account money 
awarded or assessed by a court of competent jurisdiction?
115.706   When funds are awarded or assessed by a court of competent 
jurisdiction in a cause of action involving trust assets, what 
documentation is required to deposit the trust funds into a trust 
account?
115.707   Will the Secretary accept administrative fees for deposit 
into a trust account?
115.708   How quickly will trust funds received by the Secretary on 
behalf of tribes or individual Indians be deposited into a trust 
account?
115.709   Will an annual audit be conducted on trust funds?

Investments and Interests

115.710   Does money in a trust account earn interest?
115.711   How is money in a trust account invested?
115.712   What is the interest rate earned on money in a trust 
account?
115.713   When does money in a trust account start earning interest?
Subpart G--Tribal Accounts
 115.800   When does OTFM open a tribal account?

[[Page 7096]]

115.801   How often will a tribe receive information about its trust 
account(s)?
115.802   May a tribe make a request to OTFM to receive information 
about its trust account more frequently?
115.803   What information will be provided in a statement of 
performance?
115.804   Will we account to a tribe for those trust funds the tribe 
receives through direct pay?
115.805   If a tribe is paid directly under a contract for the sale 
or use of trust assets, will we accept those trust funds for deposit 
into a tribal trust account?
115.806   How will the BIA assist in the administration of tribal 
judgment fund accounts?

Investing and Managing Tribal Trust Funds

115.807   Will OTFM consult with tribes about investments of tribal 
trust funds?
115.808   Could trust fund investments made by OTFM lose money?
115.809   May a tribe recommend to OTFM how to invest the tribe's 
trust funds?
115.810   May a tribe directly invest and manage its trust funds?
115.811   Under what conditions may a tribe redeposit funds with 
OTFM that were previously withdrawn under the Trust Reform Act?
115.812   Is a tribe responsible for its expenditures of trust funds 
that are not made in compliance with statutory language or other 
federal law?
115.813   Is there a limit to the amount of trust funds OTFM will 
disburse from a tribal trust account?
115.814   If a tribe withdraws money from its trust account for a 
particular purpose or project, may the tribe redeposit any money 
that was not used for its intended purpose?

Withdrawing Tribal Trust Funds

115.815   How does a tribe request trust funds from a tribal trust 
account?
115.816   May a tribe's request for a withdrawal of trust funds from 
its trust account be delayed or denied?
115.817   How does OTFM disburse money to a tribe?

Unclaimed Per Capita Funds

115.818   What happens if an Indian adult does not cash his or her 
per capita check?
115.819   What steps will be taken to locate an individual whose per 
capita check is returned as undeliverable or not cashed within 
twelve (12) months of issuance?
115.820   May OTFM transfer money in a returned per capita account 
to a tribal account?
Subpart H--Special Deposit Accounts
 115.900   Who receives the interest earned on trust funds in a 
special deposit account?
115.901   When will the trust funds in a special deposit account be 
credited or paid out to the owner of the funds?
115.902   May administrative or land conveyance fees paid as federal 
reimbursements be deposited in a special deposit account?
115.903   May cash bonds (e.g., performance bonds, appeal bonds, 
etc.) be deposited into a special deposit account?
115.904   Where earnest money is paid prior to Secretarial approval 
of a conveyance or contract instrument involving trust assets, may 
the BIA deposit that earnest money into a special deposit account?
Subpart I--Records
115.1000   Who owns the records associated with this part?
115.1001   How must records associated with this part be preserved?

    Authority: R.S. 441, as amended, R.S. 463, R.S. 465; 5 U.S.C. 
301; 25 U.S.C. 2; 25 U.S.C. 9; 43 U.S.C. 1457; 25 U.S.C. 4001; 25 
U.S.C. 161(a); 25 U.S.C. 162a; 25 U.S.C. 164; Pub. L. 87-283; Pub. 
L. 97-100; Pub. L. 97-257; Pub. L. 103-412; Pub. L. 97-458; 44 
U.S.C. 3101 et seq.

Subpart A--Purpose, Definitions, and Public Information


Sec. 115.001  What is the purpose of this part?

    This part sets forth guidelines for the Secretary of the Interior, 
including any tribe or tribal organization if that entity is 
administering specific programs, functions, services or activities, 
previously administered by the Secretary of the Interior, but now 
authorized under a Self-Determination Act contract (pursuant to 25 
U.S.C. Sec. 450f) or a Self-Governance compact (pursuant to 25 U.S.C. 
Sec. 558cc), to carry out the trust duties owed to tribes and 
individual Indians to manage and administer trust assets for the 
exclusive benefit of tribal and individual Indian beneficiaries 
pursuant to federal law, including the American Indian Trust Fund 
Management Reform Act of 1994, Public Law 103-412, 108 Stat. 4239, 25 
U.S.C. Sec. 4001 (Trust Reform Act).


Sec. 115.002  What definitions do I need to know?

    As used in this part:
    Account holder means a tribe or a person who owns the funds in a 
tribal or Individual Indian Money (IIM) account that is maintained by 
the Secretary.
    Account means a record of trust funds that is maintained by the 
Secretary for the benefit of a tribe or a person.
    Administratively restricted account means an IIM account that is 
placed on temporary hold by OTFM where an account holder's current 
address of record is unknown or where more documentation is needed to 
make a distribution from an account.
    Adult means an individual who has reached 18 years of age, except 
when the individual's tribe has determined the age for adulthood to be 
older than 18 for access to tribal trust fund per capita proceeds.
    Adult in need of assistance means an individual who has been 
determined to be ``incapable of managing or administering his or her 
property, including his or her financial affairs'' either (a) through a 
BIA administrative process that is based on a finding by a licensed 
medical professional or licensed mental health professional, or (b) by 
an order or judgment of a court of competent jurisdiction.
    BIA means the Bureau of Indian Affairs, Department of the Interior, 
or its authorized representative.
    Bond means security for the performance of certain obligations or a 
guaranty of such performance as furnished by a third-party surety. As 
used in this part, bonds may include cash bonds, performance bonds, and 
surety bonds.
    Court of competent jurisdiction means a federal or tribal court 
with jurisdiction; however, if there is no tribal court with 
jurisdiction, then a state court with jurisdiction.
    Day means a calendar day unless otherwise specified.
    Department means the Department of the Interior or its authorized 
representative.
    Deposits mean receiving funds, ordinarily through a Federal Reserve 
Bank, for credit to a trust fund account.
    Emancipated minor means a person under 18 years of age who is 
married or who is determined by a court of competent jurisdiction to be 
legally able to care for himself or herself.
    Encumber or encumbrance means to attach trust assets held by the 
Secretary with a claim, lien, or charge that has been approved by the 
Secretary.
    Encumbered account means a trust fund account where some portion of 
the proceeds are obligated to another party.
    Estate account means an account for a deceased IIM account holder.
    FOIA means the Freedom of Information Act, 5 U.S.C. Sec. 552.
    Guardian means a person who is legally responsible for the care and 
management of an individual and his or her estate. This definition 
includes, but is not limited to, conservator or guardian of the 
property. However, this definition does not apply to property subject 
to Sec. 115.106 of this part.
    Individual Indian Money (IIM) accounts means an interest bearing 
account for trust funds held by the Secretary that belong to a person 
who has an interest in trust assets. These accounts are under the 
control and management of the Secretary. There are three types of IIM 
accounts: unrestricted, restricted, and estate accounts.

[[Page 7097]]

    Legal disability means the lack of legal capability to perform an 
act which includes the ability to manage or administer his or her 
financial affairs as determined by a court of competent jurisdiction or 
another federal agency where the federal agency has determined that the 
adult requires a representative payee and there is no legal guardian to 
receive federal benefits on his or her behalf.
    MSW means a Master of Social Work degree from an accredited college 
or university.
    Minor means an individual who is not an adult as defined in this 
part.
    Non-compos mentis means a person who has been determined by a court 
of competent jurisdiction to be of unsound mind or incapable of 
managing his or her own affairs.
    OST means the Office of the Special Trustee for American Indians, 
Department of the Interior, or its authorized representative.
    OTFM means the Office of Trust Funds Management, within the Office 
of the Special Trustee for American Indians, Department of the 
Interior, or its authorized representative.
    Privacy Act means the Federal Privacy Act, 5 U.S.C. Sec. 552a.
    Restricted fee land(s) means land the title to which is held by an 
individual Indian or a tribe and which can only be alienated or 
encumbered by the owner with the approval of the Secretary because of 
limitations contained in the conveyance instrument pursuant to federal 
law.
    Secretary means the Secretary of the Interior or an authorized 
representative; it also means a tribe or tribal organization if that 
entity is administering specific programs, functions, services or 
activities, previously administered by the Secretary of the Interior, 
but now authorized under a Self-Determination Act contract (pursuant to 
25 U.S.C. Sec. 450f) or a Self-Governance compact (pursuant to 25 
U.S.C. Sec. 558cc).
    Special deposit account means a temporary account for the deposit 
of trust funds that cannot immediately be credited to the rightful 
account holders.
    Supervised account means a restricted IIM account, from which all 
disbursements must be approved by the BIA, that is maintained for 
minors, emancipated minors, adults who are in need of assistance, 
adults who under legal disability, or adults who are non-compos mentis.
    Tribal account or tribal trust account generally means a trust fund 
account for a federally recognized tribe that is maintained and held in 
trust by the Secretary.
    Tribe means any Indian tribe, nation, band, pueblo, rancheria, 
colony, or community, including any Alaska Native Village or regional 
or village corporation as defined or established under the Alaska 
Native Claims Settlement Act which is federally recognized by the 
United States government for special programs and services provided by 
the Secretary to Indians because of their status as Indians. Tribe also 
means two or more tribes joined for any purpose, the joint assets of 
which include funds held in trust by the Secretary.
    Trust account means a tribal account, an IIM account, or a special 
deposit account for trust funds maintained by the Secretary.
    Trust assets mean trust lands, natural resources, trust funds, or 
other assets held by the federal government in trust for Indian tribes 
and individual Indians.
    Trust funds means money derived from the sale or use of trust 
lands, restricted fee lands, or trust resources and any other money 
that the Secretary must accept into trust.
    Trust land(s) means any tract or interest therein, that the United 
States holds in trust status for the benefit of a tribe or an 
individual Indian.
    Trust Reform Act means the American Indian Trust Fund Management 
Reform Act of 1994, Pub. L. 103-412, 108 Stat. 4239, 25 U.S.C. 
Sec. 4001.
    Trust resources means any element or matter directly derived from 
Indian trust property.
    Unrestricted account means an IIM account in which an Indian 
account holder may determine the timing and amount of disbursements 
from the account.
    Voluntary hold means a request by an individual Indian with an 
unrestricted IIM account to keep his or her trust funds in a trust 
account instead of having the trust funds automatically disbursed.
    We or Us or Our means the Secretary as defined in this part.
    You or Your means an IIM account holder.

Subpart B--IIM Accounts


Sec. 115.100  Osage Agency.

    The provisions of this part do not apply to funds the deposit or 
expenditure of which is subject to the provisions of part 117 of this 
subchapter.


Sec. 115.101  Individual accounts.

    Except as otherwise provided in this part, adults shall have the 
right to withdraw funds from their accounts. Upon their application, or 
an application made in their behalf by the Secretary or his authorized 
representative, their funds shall be disbursed to them. All such 
disbursements will be made at such convenient times and places as the 
Secretary or his authorized representatives may designate.


Sec. 115.102  Adults under legal disability.

    The funds of an adult who is non compos mentis or under other legal 
disability may be disbursed for his benefit for such purposes deemed to 
be for his best interest and welfare, or the funds may be disbursed to 
a legal guardian or curator under such conditions as the Secretary or 
his authorized representative may prescribe.


Sec. 115.103  Payments by other Federal agencies.

    Moneys received from the Veterans Administration or other 
Government agency pursuant to the Act of February 25, 1933 (47 Stat. 
907; 25 U.S.C. 14), may be accepted and administered for the benefit of 
adult Indians under legal disability or minors for whom no legal 
guardian or fiduciary has been appointed.


Sec. 115.104  Restrictions.

    Funds of individuals may be applied by the Secretary or his 
authorized representative against delinquent claims of indebtedness to 
the United States or any of its agencies or to the tribe of which the 
individual is a member, unless such payments are prohibited by acts of 
Congress, and against money judgments rendered by courts of Indian 
offenses or under any tribal law and order code. Funds derived from the 
sale of capital assets which by agreement approved prior to such sale 
by the Secretary or his authorized representative are to be expended 
for specific purposes, and funds obligated under contractual 
arrangements approved in advance by the Secretary or his authorized 
representative or subject to deductions specifically authorized or 
directed by acts of Congress, shall be disbursed only in accordance 
with the agreements (including any subsequently approved modifications 
thereof) or acts of Congress. The funds of an adult whom the Secretary 
or his authorized representative finds to be in need of assistance in 
managing his affairs, even though such adult is not non compos mentis 
or under other legal disability, may be disbursed to the adult, within 
his best interest, under approved plans. Such finding and the basis for 
such finding shall be recorded and filed with the records of the 
account. For rules

[[Page 7098]]

governing the payment of judgments from individual Indian money 
accounts, see Sec. 11.208 of this chapter.


Sec. 115.105  Funds of deceased Indians of the Five Civilized Tribes.

    Funds of a deceased Indian of the Five Civilized Tribes may be 
disbursed to pay ad valorem and personal property taxes, Federal and 
State estate and income taxes, obligations approved by the Secretary or 
his authorized representative prior to death of decedent, expenses of 
last sickness and burial and claims found to be just and reasonable 
which are not barred by the statute of limitations, costs of 
determining heirs to restricted property by the State courts, and 
claims allowed pursuant to part 16 of this chapter.


Sec. 115.106  Assets of members of the Agua Caliente Band of Mission 
Indians.

    (a) The provisions of this section apply to money or other 
property, except real property, held by the United States in trust for 
such Indians, which may be used, advanced, expended, exchanged, 
deposited, disposed of, invested, and reinvested by the Director, Palm 
Springs Office, in accordance with the Act of October 17, 1968 (Pub. L. 
90-597). The management or disposition of real property is covered in 
other parts of this chapter.
    (b) Investments made by the Director, Palm Springs Office, under 
the Act of October 17, 1968, supra, shall be of such a nature as will 
afford reasonable protection of the assets of the individual Indian 
involved. The Director is authorized to enter into contracts for the 
management of the assets (except real property) of individual Indians. 
The consent of the individual Indian concerned must be obtained prior 
to the taking of actions affecting his assets, unless the Director 
determines, under the provisions of section (e) of the Act, that 
consent is not required.
    (c) The Director may, consistent with normal business practices, 
establish appropriate fees for reports he requires from guardians, 
conservators, or other fiduciaries appointed under State law for 
members of the Band.


Sec. 115.107  Appeals.

    Appeals from an action taken by an official of the Bureau of Indian 
Affairs may be taken pursuant to 25 CFR part 2, subject to the terms of 
subpart E.

Subpart C--IIM Accounts: Minors


Sec. 115.400  Will a minor's IIM account always be supervised?

    Yes, all IIM accounts established by BIA for minors will be a 
supervised by the BIA.


Sec. 115.401  What is a minor's supervised account?

    A minor's supervised account is a restricted IIM account from which 
all disbursements must be made pursuant to a distribution plan approved 
by the BIA that is established for:
    (a) A minor, or
    (b) An emancipated minor.


Sec. 115.402  Will a minor have access to information about his or her 
account?

    A minor will not have access to information about his or her IIM 
account without approval of the custodial parent(s) or legal guardian. 
However, an emancipated minor will have access to information about his 
or her IIM account.


Sec. 115.403  Who will receive information regarding a minor's 
supervised account?

    (a) The parent(s) with legal custody of the minor or the minor's 
legal guardian will receive a minor's statement of performance at the 
address of record for the minor's supervised account.
    (b) An emancipated minor will receive his or her statement of 
performance at the address of record for the minor's supervised 
account.


Sec. 115.404  What information will be provided in a minor's statement 
of performance?

    A minor's statement of performance will identify the source, type, 
and status of the funds deposited and held in the account; the 
beginning balance; the gains and losses; receipts and disbursements, if 
any; and the ending balance of the quarterly statement period for the 
minor's supervised account.


Sec. 115.405  How frequently will a minor's statement of performance be 
mailed?

    We will mail a minor's statement of performance to the address of 
record quarterly, within and no later than 20 business days after the 
close of the quarterly statement period.


Sec. 115.406  Who provides an address of record for a minor's 
supervised account?

    (a) The custodial parent or the legal guardian must provide an 
address to the BIA and this address will be the address of record for 
the minor's supervised account. Where applicable, a parent or legal 
guardian must provide a copy of the custodial order or guardianship 
order from a court of competent jurisdiction when providing the address 
of record for the minor's supervised IIM account.
    (b) The emancipated minor must provide his or her address of record 
to the BIA.
    (c) Upon receipt of the change of address of record from the parent 
or legal guardian, the BIA must provide the change of the address of 
record to the OTFM.


Sec. 115.407  How is an address of record for a minor's supervised 
account changed?

    (a) To change an address of record for a minor's supervised IIM 
account, a custodial parent(s), legal guardian, or emancipated minor 
must provide BIA with the following information:
    (1) The minor's or emancipated minor's name;
    (2) The name of the custodial parent(s) or legal guardian, if 
applicable;
    (3) A custody order from a court of competent jurisdiction or a 
copy of a guardianship, if applicable;
    (4) The new address of the custodial parent(s), legal guardian, or 
emancipated minor; and
    (5) The signature, mark or thumb print of a custodial parent, legal 
guardian, or emancipated minor that has been notarized by a notary 
public and/or witnessed by a DOI employee who has been shown verifiable 
photo identification. See Sec. 115.410
    (b) When requesting a change of an address of record, the following 
information will further assist us to identify the minor's account:
    (1) The minor's or emancipated minor's IIM account number;
    (2) The minor's or emancipated minor's date of birth;
    (3) The minor's or emancipated minor's tribal enrollment number; 
and
    (4) The minor's or emancipated minor's social security number.


Sec. 115.408  May a minor's supervised account have more than one 
address on file with the BIA?

    Yes, a minor's supervised account may have more than one address on 
file with the BIA. We request that the parent, legal guardian, or the 
person who has been recognized by the BIA as having control and custody 
of the minor, notify us of the following addresses for the minor:
    (a) The minor's residence;
    (b) The address of record where the statement of performance will 
be mailed;
    (c) The address where disbursement checks will be mailed or 
financial institution information for direct deposits of trust funds as 
authorized under an approved distribution plan.


Sec. 115.409  How is an address for a minor's residence changed?

    (a) To change an address for a minor's residence, the custodial 
parent, legal guardian, or the person who has been recognized by the 
BIA as having control and custody of the minor must provide BIA with 
the following information:

[[Page 7099]]

    (1) The minor's name;
    (2) The name of the custodial parent(s) or legal guardian;
    (3) A copy of a custodial order from a court of competent 
jurisdiction or a guardianship order, where applicable;
    (4) The new address of the minor's residence; and
    (5) The signature, mark or thumb print of the individual who is 
providing the updated address for the minor's residence that has been 
notarized by a notary public and/or witnessed by a DOI employee who has 
been shown verifiable photo identification. See Sec. 115.410
    (b) When requesting a change of an address for a minor's residence, 
the following information will further assist us to identify the 
minor's account:
    (1) The minor's IIM account number;
    (2) The minor's date of birth;
    (3) The minor's tribal enrollment number (if known); and
    (4) The minor's social security number (where known).


Sec. 115.410  What types of identification will the BIA or OTFM accept 
as ``verifiable photo identification''?

    BIA or OTFM will accept the following forms of identification as 
``verifiable photo identification'':
    (a) A valid driver's license;
    (b) A government-issued photo identification card, such as a 
passport, security badge, etc.; or
    (c) A tribal photo identification card.


Sec. 115.411  What if the individual making a request regarding a 
minor's supervised account does not have any verifiable photo 
identification?

    If the individual making a request regarding a minor's supervised 
account does not have any verifiable photo identification, the 
individual may make a request in person at the BIA and we will talk 
with the individual and review information in the minor's file to see 
if we can attest to the individual's identity. If we cannot establish 
the identity of the individual, we will not accept the request.


Sec. 115.412  Will child support payments be accepted for deposit into 
a minor's supervised account?

    The Secretary will not accept child support payments for deposit 
into a minor's supervised account.


Sec. 115.413  Who may receive funds from a minor's supervised account?

    A custodial parent, a legal guardian, a person who has been 
recognized by the BIA as having control and custody of the minor, or an 
emancipated minor may be eligible to withdraw funds from a minor's 
supervised account if there is an authorized disbursement request that 
is based upon the terms of a BIA-approved distribution plan.


Sec. 115.414  What is an authorized disbursement request?

    An authorized disbursement request is the form or letter that must 
be approved by the BIA that specifies the funds to be disbursed from an 
IIM account. The authorized disbursement request may not be issued to 
disburse funds from a minor's supervised account unless an approved 
distribution plan exists, the amount to be disbursed is in conformity 
with the distribution plan and the disbursement will be made to an 
individual or third party specified in the plan.


Sec. 115.415  How will an authorized disbursement from a minor's 
supervised account be sent?

    OTFM will make an authorized disbursement based on the approved 
distribution plan from a minor's supervised account by:
    (a) Making a direct deposit to a specified account at a financial 
institution (a direct deposit into the specified account will eliminate 
lost, stolen or damaged checks and will also eliminate delays 
associated with mailing the check);
    (b) Mailing a check to the address of record or to a specified 
disbursement address; or
    (c) Mailing a check to a specified third party's address.


Sec. 115.416  Will the United States post office forward mail regarding 
a minor's supervised account to a forwarding address left with the 
United States post office?

    (a) Federal law does not allow the United States post office to 
forward checks that are issued by the federal government. Therefore, a 
check from a minor's supervised account will not be forwarded to an 
address left with the United States post office. The new address of 
record must be provided directly to BIA.
    (b) Where a forwarding address has been provided to the United 
States post office, the United States post office will forward a 
statement of performance and general correspondence regarding a minor's 
supervised account that is mailed to the minor's address of record for 
a limited time period. However, it is the responsibility of a custodial 
parent, legal guardian, or emancipated minor to give BIA the new 
address of record for the minor's supervised account.


Sec. 115.417  What portion of funds in a minor's supervised account may 
be withdrawn under a distribution plan?

    Trust money in a minor's supervised account will not be distributed 
without a review of other resources that may be available to meet the 
needs of the minor. Any trust funds of a minor that are distributed 
must be used for the direct benefit of the minor and in accordance with 
any additional limitations (e.g., statutory, court order, tribal 
resolution, etc.) placed on the use of specific trust funds. Allowable 
uses may include health, education, or welfare when based upon a 
justified unmet need. The BIA will require receipts for expenditures of 
funds disbursed from a minor's account to a custodial parent, legal 
guardian, person who has been recognized by the BIA as having control 
and custody of the minor, or an emancipated minor.


Sec. 115.418  What types of trust funds may a minor have?

    A minor may have one or more of the following types of trust funds:
    (a) Judgment per capita funds: Withdrawals may only be made upon 
BIA approval of an application made under Public Law 97-458. See 25 CFR 
1.2.
    (b) Tribal per capita funds: Withdrawals may only be made under a 
BIA approved distribution plan and in accordance with the terms of the 
tribe's per capita resolution/document.
    (c) Other trust funds: Withdrawals may only be made under a minor's 
BIA-approved distribution plan that is based on a justified unmet need 
for the minor's health, education, or welfare.
    (d) Funds from other federal agencies (e.g., SSA, SSI, VA) received 
for the benefit of the minor: Withdrawals must be made only under a 
BIA-approved distribution plan that must be consistent with the 
disbursing agency's (e.g., SSA, SSI, VA) allowable uses for the funds.


Sec. 115.419  Who develops a minor's distribution plan?

    A social service provider will develop a minor's distribution plan 
for approval by the BIA after evaluating the needs of the minor in 
consultation with a custodial parent, a legal guardian, the person who 
has been recognized by the BIA as having control and custody of the 
minor, or emancipated minor. A minor's distribution plan may only 
provide for those expenditures outlined in part Sec. 115.417.


Sec. 115.420  When developing a minor's distribution plan, what 
information must be considered and included in the evaluation?

    When developing a minor's distribution plan, the following 
information must be considered and included in the evaluation:
    (a) Documentation which establishes who has physical custody of the 
minor

[[Page 7100]]

(e.g., home visits, school records, medical records, etc.);
    (b) A copy of any custodial orders or guardianship orders from a 
court of competent jurisdiction;
    (c) The name(s) of the person and his or her relationship to the 
minor, if any, who make a request for a disbursement from the minor's 
account;
    (d) An evaluation of other resources, including parental income, 
that may be available to meet the unmet needs of the minor;
    (e) A list of the amounts, purposes, and dates for which 
disbursements will be made;
    (f) The name(s) of the person to whom disbursements may be made, 
including, as applicable:
    (1) A custodial parent;
    (2) A legal guardian;
    (3) The person who has been recognized by the BIA as having control 
and custody of the minor;
    (4) An emancipated minor; and/or
    (5) Any third parties to whom the BIA will make direct payment for 
goods or services provided to the minor and supported by an invoice or 
bill of sale;
    (g) The date(s) (at least every six months) when the custodial 
parent, the legal guardian, the person who has been recognized by the 
BIA as having control and custody of the minor, or the emancipated 
minor must provide receipts to the BIA to show that expenditures were 
made in accordance with the approved distribution plan;
    (h) Additional requirements and justification for those 
requirements, as necessary to ensure that any distribution(s) will 
benefit the minor;
    (i) The dates the disbursement plan was developed, approved, and 
reviewed, and the date for the next scheduled review;
    (j) The date(s) the distribution plan was amended and an 
explanation for any amendment(s) to the distribution plan, when an 
amendment is necessary;
    (k) The signature of the BIA official approving the plan with the 
certification that the plan is in the best interest of the account 
holder; and
    (l) The signature(s) of the custodial parent, legal guardian, with 
date(s) signed, certifying that he or she has been consulted and has 
agreed to the terms of the evaluation and the distribution plan.


Sec. 115.421  What information will be included in the copy of the 
minor's distribution plan that will be provided to OTFM?

    A minor's distribution plan must contain the following:
    (a) A copy of any custodial order or guardianship order from a 
court of competent jurisdiction;
    (b) A list of the amounts, purposes, and dates for which 
disbursements will be made;
    (c) The name(s) of the person(s) to whom disbursements may be made, 
including, as applicable:
    (1) A custodial parent;
    (2) A legal guardian;
    (3) The person who has been recognized by the BIA as having control 
and custody of the minor and the address of that person;
    (4) An emancipated minor; and/or
    (5) Any third parties and the address(es) of the third parties to 
whom the direct payment will be made for goods or services provided to 
the minor and supported by an invoice or bill of sale, where 
applicable;
    (d) The date that the disbursement plan was approved and the 
expiration date of the distribution plan; and
    (e) The date and signature of the BIA official approving the plan 
with a certification that the plan is in the best interest of the 
account holder.


Sec. 115.422  As a custodial parent, the legal guardian, the person who 
BIA has recognized as having control and custody of the minor, or an 
emancipated minor, what are your responsibilities if you receive trust 
funds from a minor's supervised account?

    If you are a custodial parent, the legal guardian, the person who 
BIA has recognized as having control and custody of the minor, or an 
emancipated minor who receives funds from a minor's supervised account, 
you must:
    (a) Consult with the social service provider on the development of 
an evaluation;
    (b) Sign an acknowledgment that you have reviewed the evaluation;
    (c) Follow the terms of a distribution plan approved by the BIA;
    (d) Follow any applicable court order;
    (e) Provide receipts to the social services provider in accordance 
with terms of the evaluation for all expenses paid out of the minor's 
IIM funds;
    (f) Review the statements of performance for the supervised account 
for discrepancies, if applicable;
    (g) File tax returns on behalf of the account holder, if 
applicable; and
    (h) Notify the social service provider of any change in 
circumstances that impairs your performance of your obligations under 
this part or inform the social service provider of any information 
regarding misuse of a minor's trust funds.


Sec. 115.423  If you are a custodial parent, a legal guardian, or an 
emancipated minor, may BIA authorize the disbursement of funds from a 
minor's supervised account without your knowledge?

    At the Secretary's discretion, the BIA may authorize the 
disbursement of funds from a minor's supervised account for the benefit 
of the minor.


Sec. 115.424  Who receives a copy of the BIA-approved distribution plan 
and any amendments to the plan?

    The BIA-approved distribution plan will be provided to:
    (a) The custodial parent; or
    (b) A legal guardian; or
    (c) At the Secretary's discretion, in unusual circumstances, to a 
family member who has been recognized as having control and custody of 
the minor; or
    (d) An emancipated minor; and
    (e) OTFM.


Sec. 115.425  What will we do if we find that a distribution plan has 
not been followed or an individual has acted improperly in regard to 
his or her duties involving a minor's trust funds?

    If we find that a distribution plan has not been followed or that a 
custodial parent, a legal guardian, or the person who has been 
recognized by the BIA as having control and custody of the minor has 
failed to satisfactorily account for expenses or has not used the 
minor's funds for the primary benefit of the minor, we will:
    (a) Notify the individual; and
    (b) Take action to protect the interests of the minor, which may 
include:
    (1) Referring the matter for civil or criminal legal action;
    (2) Demanding repayment from the individual who has improperly 
expended trust funds or failed to account for the use of trust funds;
    (3) Liquidating a bond posted by the legal guardian, where 
applicable, to recover improperly expended trust funds up to the amount 
of the bond; or
    (4) Immediately modifying the distribution plan for up to sixty 
days, including suspending the authority of the individual to receive 
further disbursements.


Sec. 115.426  What is the BIA's responsibility regarding the management 
of a minor's supervised account?

    The BIA's responsibility in regard to the management of a minor's 
supervised account is to:
    (a) Review and approve the evaluation and the distribution plan;
    (b) Authorize OTFM to disburse IIM funds in accordance with an 
approved distribution plan; and
    (c) Conduct annual reviews of case records for minors' supervised 
accounts

[[Page 7101]]

to ensure that the social service providers have managed the accounts 
in accordance with the approved evaluation and distribution plan.


Sec. 115.427  What is the BIA's annual review process for a minor's 
supervised account?

    A BIA social worker with an MSW will conduct an annual review of 
minors' supervised accounts by:
    (a) Verifying that all receipts for disbursements made under a 
distribution plan were collected in accordance with the terms specified 
in the evaluation;
    (b) Reviewing the receipts for disbursements made from a minor's 
supervised account to ensure that all expenditures were made in 
accordance with the distribution plan;
    (c) Reviewing all case worker reports and notes;
    (d) Reviewing account records to insure that withdrawals and 
payments were made in accordance with the distribution plan;
    (e) Verifying current addresses, including the address of record, 
the address of the minor's residence, and the disbursement address; and
    (f) Deciding whether the distribution plan needs to be modified.


Sec. 115.428  Will you automatically receive all of your trust funds 
when you reach the age of 18?

    No, we will not automatically send your trust funds to you when you 
reach the age of 18.


Sec. 115.429  What do you need to do when you reach 18 years of age to 
access your trust funds?

    You must contact OTFM to request withdrawal of any or all of your 
trust funds that may be available to you. OTFM may require certain 
information from you to verify your identity, etc. prior to the release 
of your trust funds. All signatures must be notarized by a notary 
public or witnessed by a DOI employee. In addition, if you choose to 
have a check mailed to you, you must provide us with your address of 
record. If you choose to have your trust funds electronically 
transferred to you, you must provide your financial institution account 
information to OTFM.


Sec. 115.430  Will your account lose its supervised status when you 
reach the age of 18?

    Your account will no longer be supervised when you reach the age of 
18 unless statutory language or a tribal resolution specifies an age 
other than 18 years of age for access to specific trust funds. However, 
if a court of competent jurisdiction has found you to be non-compos 
mentis, under legal disability, or the BIA has determined you to be an 
adult in need of assistance, your account will remain supervised and 
you will be notified in accordance with subpart E.


Sec. 115.431  If you are an emancipated minor may you withdraw trust 
funds from your account?

    If you are an emancipated minor, you may have access to some or all 
of your trust funds as follows:
    (a) For judgment per capita funds: you may not make withdrawals 
from your account until you have reached the age specified in the 
judgment. Exceptions are only granted upon the approval of an 
application made under Public Law 97-458. See 25 CFR 1.2.
    (b) Tribal per capita funds: access to these funds will be 
determined by tribal resolution.
    (c) Other trust funds: You may be able to have supervised access to 
some or all of your funds, but the BIA must approve all requests for 
withdrawals from your account. You must work with the BIA to develop a 
distribution plan to access the funds in your account. In no instance 
will the BIA allow an emancipated minor to make unsupervised 
withdrawals.
    (d) For funds from other federal agencies (e.g., SSA, SSI, VA), you 
may be able to receive funds directly, but you must contact and make 
arrangements with the other federal agency. Direct receipt of funds 
from another federal agency will not change the supervised status of an 
emancipated minor's trust account.

Subpart D--IIM Accounts: Estate Accounts


Sec. 115.500  When is an estate account established?

    An estate account is established when we receive notice of an 
account holder's death.


Sec. 115.501  How long will an estate account remain open?

    An estate account will remain open until the funds have been 
distributed in accordance with the distribution and/or probate order.


Sec. 115.502  Who inherits the money in an IIM account when an account 
holder dies?

    At the end of all probate procedures, funds remaining in a 
decedent's estate account will be distributed from the decedent's 
estate account and paid directly to or deposited into an IIM account of 
the decedent's heirs, beneficiaries, or other persons or entities 
entitled by law to receive the funds, where applicable. See 25 CFR part 
15.


Sec. 115.503  May money in an IIM account be withdrawn after the death 
of an account holder but prior to the end of the probate proceedings?

    (a) If you are responsible for making the funeral arrangements of a 
decedent who had an IIM account and you have an immediate need for 
emergency assistance to pay for funeral arrangements prior to burial, 
you may make a request to the BIA for up to $1,000 from the decedent's 
IIM account if the decedent's IIM account has more than $2,500 in the 
account at the date of death.
    (b) You must apply for this assistance and submit to the BIA an 
original itemized estimate of the cost of the service to be rendered 
and the identification of the service provider.
    (c) We may approve reasonable costs up to $1,000 that are necessary 
for the burial services.
    (d) We will make payments directly to the providers of the 
service(s).


Sec. 115.504  If you have a life estate interest in income-producing 
trust assets, how will you receive the income?

    If you have a life estate interest in income-producing trust 
assets, which is earning income, OTFM will open an IIM-life estate 
account for you and funds will be distributed after BIA has certified 
ownership of the trust funds.

Subpart E--IIM Accounts: Hearing Process for Restricting an IIM 
Account


Sec. 115.600  If BIA decides to restrict your IIM account under 
Sec. 115.102 or Sec. 115.104, what procedures must the BIA follow?

    If under Sec. 115.102 or Sec. 115.104, the BIA has decided to limit 
your access to your IIM account (i.e., decided to supervise the IIM 
account), or if the BIA has decided to pay creditors with funds from 
your IIM account, including creditors with judgments from Courts of 
Indian Offenses for which preliminary procedures are prescribed in 25 
CFR 11.208, the BIA must notify you or your guardian, as applicable, to 
provide you or your guardian, as applicable, with an opportunity to 
challenge the BIA's decision to restrict your IIM account as specified 
in subpart E.


Sec. 115.601  Under what circumstances may the BIA restrict your IIM 
account through supervision or an encumbrance?

    (a) The BIA may restrict your IIM account through supervision if 
the BIA:
    (1) Receives an order from a court of competent jurisdiction that 
you are non-compos mentis; or
    (2) Receives an order or judgment from a court of competent 
jurisdiction that you are an adult in need of assistance because you 
are ``incapable of

[[Page 7102]]

managing or administering property, including your financial affairs;'' 
or
    (3) Determines through an administrative process that you are an 
adult in need of assistance based on a finding by a licensed medical or 
mental health professional that you are ``incapable of managing or 
administering property, including your financial affairs;'' or
    (4) Receives information from another federal agency that you are 
under a legal disability and that the agency has appointed a 
representative payee to receive federal benefits on your behalf.
    (b) The BIA may restrict your IIM account through an encumbrance if 
the BIA:
    (1) Receives an order from a court of competent jurisdiction 
awarding child support from your IIM account; or
    (2) Receives from a third party:
    (i) A copy of the original contract between you and the third party 
in which you used your IIM funds as security/collateral for the 
transaction;
    (ii) A copy of the document showing that the BIA approved in 
advance the use of your IIM funds as security/collateral for the 
contract;
    (iii) Proof of your default on the contract according to the terms 
of the contract; and
    (iv) A copy of the original assignment of IIM income as security/
collateral for the contract that is signed and dated by you and is 
notarized;
    (3) Receives a money judgment from a Court of Indian Offenses 
pursuant to 25 CFR 11.208 or under any tribal law and order code;
    (4) Is provided documentation showing that BIA or OTFM caused an 
administrative error which resulted in a deposit into your IIM account, 
or a disbursement to you, or to a third party on your behalf; or
    (5) Is provided with proof of debts owed to the United States 
pursuant to Sec. 115.104 of this part.


Sec. 115.602  How will the BIA notify you or your guardian, as 
applicable, of its decision to restrict your IIM account?

    The BIA will notify you or your guardian, as applicable, of its 
decision to restrict your IIM account by:
    (a) United States certified mail to your address of record;
    (b) Personal delivery to you or your guardian, as applicable, or to 
your address of record;
    (c) Publication for four consecutive weeks in your tribal newspaper 
if your whereabouts are unknown and in the local newspaper serving your 
last known address of record; or
    (d) United States certified mail to you in care of the warden, if 
you are incarcerated. The BIA may send a copy of the notification to 
your attorney, if known.


Sec. 115.603  What happens if BIA's notice of its decision to place a 
restriction on your IIM account that is sent by United States certified 
mail is returned to the BIA as undeliverable for any reason?

    If BIA's notice of its decision to place a restriction on your IIM 
account that is sent by United States certified mail is returned to the 
BIA as undeliverable for any reason, the BIA will remove the 
restriction on your account, which was placed five days after the 
notice was mailed, and will publish a notice in accordance with 
Sec. 115.602(c) and Sec. 115.605(b).


Sec. 115.604  When will BIA authorize OTFM to place a restriction on 
your IIM account?

    BIA will authorize OTFM to place a restriction on your IIM account 
after providing OTFM with supporting documentation (i.e., receipts, 
notice of publication, etc.) of the following:
    (a) Five (5) days after the date BIA mails you or your guardian, as 
applicable, notice of its decision to restrict your account by United 
States certified mail to your address of record;
    (b) One (1) day after BIA has made personal delivery to you or your 
guardian, as applicable, or to your address of record of its notice of 
the BIA's decision to restrict your account; or
    (c) Five (5) days after the fourth publication of the public notice 
of BIA's decision to restrict your account.


Sec. 115.605  What information will the BIA include in its notice of 
the decision to restrict your IIM account?

    (a) When the BIA provides notice of its decision to restrict your 
IIM account by certified mail or personal delivery to you or your 
guardian, as applicable, the notice must contain:
    (1) The name on the IIM account;
    (2) The reason for the restriction;
    (3) The amount to be encumbered, if applicable;
    (4) A statement that your IIM account will be restricted 5 days 
after the date the notice was sent United States certified mail to your 
address of record;
    (5) An explanation that you have 40 days from the date the notice 
was sent United States certified mail to request a hearing to challenge 
BIA's decision to restrict your IIM account;
    (6) An explanation of how to request a hearing;
    (7) A statement that the BIA will conduct the hearing and that you 
are assured a fair hearing;
    (8) A copy of the fair hearing guidelines;
    (9) A statement that you may contact the BIA to authorize immediate 
payment from your IIM account to pay the claim, if applicable;
    (10) The address and phone number of the BIA office that made the 
decision to restrict your IIM account and provided the notice; and
    (11) Other information as may be determined appropriate by the BIA.
    (b) When the BIA provides public notice of its decision to restrict 
your account, the only information the public notice will include is:
    (1) The name on the account;
    (2) The date of first publication of the public notice;
    (3) A statement that the BIA has decided to place a restriction on 
your IIM account;
    (4) A statement that the public notice will be published once a 
week for four consecutive weeks;
    (5) A statement that the BIA will place a restriction on your 
account five (5) days after the date of the fourth publication of the 
public notice;
    (6) A statement that your opportunity to request a hearing to 
challenge BIA's decision to restrict your account will expire 30 days 
after the date of the fourth publication of the public notice; and
    (7) An address and telephone number of the BIA office publishing 
the notice to request further information and instructions on how to 
request a hearing.


Sec. 115.606  What happens if you do not request a hearing to challenge 
BIA's decision to restrict your IIM account during the allotted time 
period?

    If you or your guardian, as applicable, do not request a hearing to 
challenge BIA's decision to restrict your IIM account during the 
allotted time period, BIA's decision to restrict your IIM account will 
become final. BIA will follow the procedures outlined in Sec. 115.616 
through Sec. 115.618, and Sec. 115.620, as applicable.


Sec. 115.607  How do you request a hearing to challenge the BIA's 
decision to restrict your IIM account?

    You or your guardian, as applicable, must request a hearing to 
challenge the BIA's decision to restrict your IIM account from the BIA 
office that made the decision and notified you of the restriction. Your 
request must:
    (a) Be in writing;
    (b) Specifically request a hearing to challenge the restriction; 
and
    (c) Be hand delivered to the BIA office or postmarked within:
    (i) 40 days of the date that BIA's notice was sent United States 
certified

[[Page 7103]]

mail or personally delivered to the address of record, or
    (ii) 30 days of the date of the final publication of the public 
notice.


Sec. 115.608  If you request a hearing to challenge BIA's decision to 
restrict your IIM account, when will BIA conduct the hearing?

    BIA will conduct a hearing within ten (10) working days from its 
receipt of a written request from you or your guardian, as applicable, 
for a hearing to challenge the decision to restrict your IIM account.


Sec. 115.609  Will you be allowed to present testimony and/or evidence 
at the hearing?

    Yes, you or your guardian, as applicable, will be provided the 
opportunity to present testimony and/or evidence as to the reasons the 
BIA should not restrict your IIM account, including information showing 
how an encumbrance may create an undue financial hardship, if 
applicable. You may not challenge a court order or judgment in this 
proceeding. However, if you have appealed an order or judgment from a 
court of competent jurisdiction, you or your guardian, as applicable, 
may present evidence of your appeal and the BIA hearing will be 
postponed until there is a final order from the court. The restriction 
on your IIM account will remain in place until after the hearing is 
concluded.


Sec. 115.610  Will you be allowed to present witnesses during a 
hearing?

    Yes, you or your guardian, as applicable, may present witnesses 
during a hearing. You are responsible for any and all expenses which 
may be associated with presenting witnesses.


Sec. 115.611  Will you be allowed to question opposing witnesses during 
a hearing?

    Yes, you or your guardian, as applicable, may question all opposing 
witnesses testifying during your hearing. You may also present 
witnesses to challenge opposing witness testimony.


Sec. 115.612  May you be represented by an attorney during your 
hearing?

    Yes, you may have an attorney or other person represent you during 
your hearing. However, you are responsible for any and all expenses 
associated with having an attorney or other person represent you.


Sec. 115.613  Will the BIA record the hearing?

    Yes, the BIA will record the hearing.


Sec. 115.614  Why is the BIA hearing recorded?

    The BIA hearing will be recorded so that it will be available for 
review if the hearing process is appealed under Sec. 115.107. The BIA 
hearing record must be preserved as a trust record.


Sec. 115.615  How long after the hearing will BIA make its final 
decision?

    BIA will make its final decision within 10 business days of the end 
of the hearing.


Sec. 115.616  What information will be included in BIA's final 
decision?

    BIA's final written decision to the parties involved in the 
proceeding will include:
    (a) BIA's decision to remove or retain the restriction on the IIM 
account;
    (b) A detailed justification for the supervision or encumbrance of 
the IIM account, where applicable;
    (c) The amount(s) to be paid, the name and address of a third party 
to whom payment will be made, and the time period for repayment 
established under 617(a) of this part, where applicable;
    (d) Any provision to allow for distributions to the account holder 
because of an undue financial hardship created by the encumbrance, if 
applicable; and
    (e) Any other information the hearing officer deems necessary.


Sec. 115.617  What happens when the BIA decides to supervise or 
encumber your IIM account after your hearing?

    BIA will provide OTFM with a copy of the distribution plan, after 
the BIA decides to:
    (a) Supervise your IIM account. BIA social services staff will 
consult with you and/or your guardian to develop a distribution plan. 
Upon BIA approval, the distribution plan will be valid for one year.
    (b) Encumber your IIM account. BIA will review your account balance 
and your future IIM income to develop a distribution plan that 
establishes the amount(s) to be paid and the dates payment(s) will be 
made to the specified party. Payments may need to be made over the 
course of one or more years if the amount owed to the specified party 
is greater than your current IIM account balance.


Sec. 115.618  What happens if at the conclusion of the notice and 
hearing process we decide to encumber your IIM account because of an 
administrative error which resulted in funds that you do not own being 
deposited in your account or distributed to you or to a third party on 
your behalf?

    If we decide at the conclusion of the notice and hearing process to 
encumber your account because of an administrative error which resulted 
in funds that you do not own being deposited into your IIM account or 
distributed to you or to a third party on your behalf, we will consult 
with you or your guardian, as applicable, to determine how the funds 
will be re-paid.


Sec. 115.619  If the BIA decides that the restriction on your IIM 
account will be continued after your hearing, do you have the right to 
appeal that decision?

    Yes, if the BIA decides after your hearing to continue the 
restriction on your IIM account, you or your guardian, as applicable, 
have the right to appeal the decision under the procedures proscribed 
in Sec. 115.107.


Sec. 115.620  If you decide to appeal the BIA's final decision pursuant 
to Sec. 115.107, will the BIA restrict your IIM account during the 
appeal?

    Yes, if under Sec. 115.107 you or your guardian, as applicable, 
decide to appeal the BIA's final decision to:
    (a) Supervise your IIM account, your IIM account will remain 
restricted during the appeal period.
    (b) Encumber your IIM account, your IIM account will remain 
restricted up to the amount at issue during the appeal period. If your 
account balance is greater than the amount encumbered, those funds will 
be available to you upon request to and by approval of the Secretary.

Subpart F--Trust Fund Accounts: General Information


Sec. 115.700  Why is money held in trust for tribes and individual 
Indians?

    Congress has passed a number of laws that require the Secretary to 
establish and administer trust fund accounts for Indian tribes and 
certain individual Indians who have an interest(s) in trust lands, 
trust resources, or trust assets.


Sec. 115.701  What types of accounts are maintained for Indian trust 
funds?

    Indian trust funds are deposited in tribal accounts, Individual 
Indian Money (IIM) accounts, and special deposit accounts. The 
illustration below provides information on each of these trust 
accounts.

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Sec. 115.703  May we accept for deposit into a trust account money not 
specified in Sec. 115.702?

    No, we will not accept funds from sources that are not identified 
in the table in Sec. 115.702 for deposit into a trust account.


Sec. 115.704  May we accept for deposit into a trust account retirement 
checks/payments or pension fund checks/payments even though those funds 
are not specified in Sec. 115.702?

    No, we will not accept retirement checks/payments or pension fund 
checks/payments or any funds from sources that are not identified in 
the table in Sec. 115.702 for deposit into a trust account.


Sec. 115.705  May we accept for deposit into a trust account money 
awarded or assessed by a court of competent jurisdiction?

    We will accept money awarded or assessed by a court of competent 
jurisdiction for a cause of action directly related to trust assets to 
be deposited into a trust account. Other funds awarded by a court of 
competent jurisdiction may not be deposited into a trust account.


Sec. 115.706  When funds are awarded or assessed by a court of 
competent jurisdiction in a cause of action involving trust assets, 
what documentation is required to deposit the trust funds into a trust 
account?

    When funds are awarded or assessed by a court of competent 
jurisdiction in a cause of action involving trust assets, we must 
receive the funds awarded as stipulated in the court order and a copy 
of the court's order.


Sec. 115.707  Will the Secretary accept administrative fees for deposit 
into a trust account?

    No. The Secretary will not accept administrative fees for deposit 
into a trust account because administrative fees are not trust funds. 
However, administrative fees may be deposited into a non-interest 
bearing, non-trust account with the BIA.


Sec. 115.708  How quickly will trust funds received by the Secretary on 
behalf of tribes or individual Indians be deposited into a trust 
account?

    Trust funds received by the Secretary on behalf of a tribe or 
individual Indians will be deposited into a trust account within 
twenty-four hours, or no later than the close of business on the next 
business day following the receipt of funds at a location with a 
designated federal depository.


Sec. 115.709  Will an annual audit be conducted on trust funds?

    Yes, in accordance with the Trust Reform Act an annual audit will 
be conducted on trust funds. Each tribe and IIM account holder will be 
notified when the Secretary has conducted an annual audit on a fiscal 
year basis of all the trust funds held by the United States for the 
benefit of tribes and individual Indians. This notice will be provided 
in the first quarterly statement of performance following the 
publication of the audit.

Investments and Interests


Sec. 115.710  Does money in a trust account earn interest?

    Yes, all money deposited in a trust account is invested and earns 
interest or yield returns, or both.


Sec. 115.711  How is money in a trust account invested?

    OTFM manages trust fund investments and its investment decisions 
are governed by federal statute. See 25 U.S.C. Secs. 161(a) and 162a.


Sec. 115.712  What is the interest rate earned on money in a trust 
account?

    The rate of interest on a trust account changes based on how the 
money is invested and how those investments perform.


Sec. 115.713  When does money in a trust account start earning 
interest?

    Funds must remain on deposit at least one business day before 
interest is earned. Interest earnings of less than one cent are not 
credited to any account.

Subpart G--Tribal Accounts


Sec. 115.800  When does OTFM open a tribal account?

    A tribal account is opened when OTFM receives income from the 
sources described in Sec. 115.702.


Sec. 115.801  How often will a tribe receive information about its 
trust account(s)?

    The OTFM is required to provide each tribe with a statement of 
performance quarterly, within or no later than 20 business days after 
the close of every quarterly statement period.


Sec. 115.802  May a tribe make a request to OTFM to receive information 
about its trust account more frequently?

    Yes, a tribe may contact OTFM at any time to:
    (a) Request information about account transactions and balances;
    (b) Make arrangements to access account information electronically; 
or
    (c) Receive a monthly statement.


Sec. 115.803  What information will be provided in a statement of 
performance?

    The statement of performance will identify the source, type, and 
status of the trust funds deposited and held in a trust account; the 
beginning balance; the gains and losses; receipts and disbursements; 
and the ending account balance of the quarterly statement period.


Sec. 115.804  Will we account to a tribe for those trust funds the 
tribe receives through direct pay?

    No, under the Trust Reform Act we are only responsible for 
accounting for those trust funds received into, and maintained by, the 
Department's trust funds management system.

[[Page 7108]]

Sec. 115.805  If a tribe is paid directly under a contract for the sale 
or use of trust assets, will we accept those trust funds for deposit 
into a tribal trust account?

    If a contract for the sale or use of trust assets specifies that 
payments are to be made directly to a tribe, we will not accept these 
trust funds into a tribal trust account. Where a tribe under 25 U.S.C. 
450f et seq. has contracted or compacted with the federal government to 
operate a federal program and the tribe, operating the federal program 
on behalf of the Secretary, receives trust funds for the sale or use of 
trust assets pursuant to a contract that specifies that payments are to 
be made to the Secretary on behalf of a tribe or an individual [the 
owner of the trust assets], the tribe must follow Sec. 115.708 for the 
deposit of the trust funds into the trust account.


Sec. 115.806  How will the BIA assist in the administration of tribal 
judgment fund accounts?

    (a) If the tribe requests assistance or if Congress directs the 
Secretary to provide assistance, BIA will provide technical assistance 
on developing a judgment use and distribution plan to a tribe.
    (b) BIA will review all tribal requests for distribution of tribal 
judgment funds to ensure that each request complies with any 
requirements associated with the use of that money found in statutory 
language, congressional directives, court orders, court-approved 
settlements, settlement agreements, use and distribution plans, or bond 
or loan payments.

Investing and Managing Tribal Trust Funds


Sec. 115.807  Will OTFM consult with tribes about investments of tribal 
trust funds?

    Upon the request of a tribe, OTFM will consult with the tribe 
annually to develop investment strategies to accommodate the cash flow 
needs of the tribe.


Sec. 115.808  Could trust fund investments made by OTFM lose money?

    The value of trust fund investments made by OTFM will vary 
depending on the type of investment and, including but not limited to, 
the following:
    (a) Current interest rates;
    (b) Whether the security/investment is held to its maturity; and
    (c) Original purchase price.
    However, as long as the purchase price of the security/investment 
is made at or below face value and the security/investment is held 
until maturity or payoff, the security/investment will not lose 
principal invested funds.


Sec. 115.809  May a tribe recommend to OTFM how to invest the tribe's 
trust funds?

    Tribes may recommend certain investments to OTFM, but the 
recommendations must be in accordance with the statutory requirements 
set forth in 25 U.S.C. Secs. 161a and 162a. The OTFM will make the 
final investment decision based on prudent investment practices.


Sec. 115.810  May a tribe directly invest and manage its trust funds?

    A tribe may apply to withdraw its trust funds from OTFM for 
investment and management by the tribe. The tribe's request to withdraw 
funds must be in accordance with the requirements of the Trust Reform 
Act and 25 CFR part 1200, subpart B, unless otherwise specified by 
statutory language or the controlling document which governs the use of 
the trust funds.


Sec. 115.811  Under what conditions may a tribe redeposit funds with 
OTFM that were previously withdrawn under the Trust Reform Act?

    Tribal trust funds withdrawn under the Trust Reform Act may be 
returned to OTFM under the following conditions:
    (a) A tribe must make a written request to OTFM to redeposit all or 
part of the withdrawn trust funds;
    (b) No tribal trust funds may be redeposited to a tribal trust 
account during the first six months after being withdrawn, except with 
the approval of the Secretary;
    (c) Tribal trust funds may only be returned to OTFM a maximum of 
twice a year, except with the approval of the Secretary; and
    (d) A tribe must return withdrawn trust funds in accordance with 
the requirements of the Trust Reform Act in 25 CFR, part 1200, subpart 
C.


Sec. 115.812  Is a tribe responsible for its expenditures of trust 
funds that are not made in compliance with statutory language or other 
federal law?

    If a tribe's use of trust funds is limited by statutory language or 
other federal law(s) and a tribe uses those trust funds in direct 
violation of those laws, absent an approved modification which allows 
for the expenditures, we will require the tribe to reimburse its trust 
fund account.


Sec. 115.813  Is there a limit to the amount of trust funds OTFM will 
disburse from a tribal trust account?

    OTFM will only disburse the available balance of the trust funds in 
a tribal trust account in accordance with a use and distribution plan, 
if applicable, and will not overdraw a tribal trust account. If a 
tribe's trust funds are invested in securities that have not matured, 
OTFM will only sell the asset to make cash available to the tribe if:
    (a) There are no restrictions against the sale, and
    (b) A tribe provides OTFM with a tribal resolution stating that:
    (1) The security must be sold;
    (2) The tribe acknowledges that they may incur a penalty when the 
security is sold; and
    (3) The tribe acknowledges that the security may lose value if it 
is sold prior to maturity.


Sec. 115.814  If a tribe withdraws money from its trust account for a 
particular purpose or project, may the tribe redeposit any money that 
was not used for its intended purpose?

    A tribe may redeposit funds not used for a particular purpose or 
project if:
    (a) The funds were withdrawn in accordance with:
    (1) The terms of Trust Reform Act;
    (2) The terms of the legislative settlement; or
    (3) The terms of a judgment use and distribution plan; and
    (b) The tribe can provide documentation showing the source of the 
funds to be redeposited.

Withdrawing Tribal Trust Funds


Sec. 115.815  How does a tribe request trust funds from a tribal trust 
account?

    To request trust funds from a tribal trust account, a tribe may:
    (a) Make a written request to the BIA or the OTFM that is signed by 
the proper authorizing official(s), list the amount of trust funds to 
be withdrawn, provide any additional documentation or information 
required by law to withdraw certain trust funds, and must include a 
tribal resolution approving the withdrawal of the specified amount of 
trust funds; or
    (b) Contact the OTFM to withdraw funds in accordance with the Trust 
Reform Act and 25 CFR part 1200.


Sec. 115.816  May a tribe's request for a withdrawal of trust funds 
from its trust account be delayed or denied?

    (a) Action on a tribe's request for a withdrawal of trust funds may 
be delayed or denied if:
    (1) The tribe did not submit all the necessary documentation;
    (2) The tribe's request is not signed by the proper authorizing 
official(s);
    (3) OTFM does not have documentation from the tribe certifying its 
recognized, authorizing officials;
    (4) The tribe's request is in conflict with statutory language or 
the controlling document governing the use of the trust funds; or

[[Page 7109]]

    (5) The BIA or OTFM requires clarification regarding the tribe's 
request.
    (b) If action on a tribe's request to withdraw trust funds will be 
delayed or denied, the BIA or the OTFM will:
    (1) Notify the tribe within ten (10) working days of the date of a 
request made under Sec. 115.815(a);
    (2) Notify the tribe under the time frames established in 25 CFR 
part 1200 for requests made under the Trust Reform Act; and
    (3) Provide technical assistance to the tribe to address any 
problems.


Sec. 115.817  How does OTFM disburse money to a tribe?

    Upon receipt of all necessary documentation, OTFM will process the 
request for disbursement and send the tribe the requested amount of 
trust funds within one business day. Whenever possible, trust funds 
will be disbursed electronically to an account in a financial 
institution designated by the tribe. If there are circumstances that 
preclude electronic payments, OTFM will mail a check.

Unclaimed Per Capita Funds


Sec. 115.818  What happens if an Indian adult does not cash his or her 
per capita check?

    (a) If an Indian adult does not cash his or her per capita check 
within twelve (12) months of the date the check was issued, the check 
will be canceled and the trust funds will be deposited into a 
``returned per capita account'' where the funds will be maintained 
until we receive a request for disbursement by the Indian adult or for 
disposition by a tribe pursuant to Sec. 115.820.
    (b) If an Indian adult's per capita check is returned to us as 
undeliverable, the trust funds will be immediately deposited into a 
``returned per capita account'' where the funds will be maintained 
until we receive a request for disbursement by the individual or for 
disposition by a tribe pursuant to Sec. 115.820.


Sec. 115.819  What steps will be taken to locate an individual whose 
per capita check is returned as undeliverable or not cashed within 
twelve (12) months of issuance?

    The OTFM will notify a tribe of the names of the individuals whose 
per capita checks were returned as undeliverable or not cashed within 
twelve (12) months of issuance and will take reasonable action, 
including utilizing electronic search tools, to locate the individual 
entitled to receive the per capita funds.


Sec. 115.820  May OTFM transfer money in a returned per capita account 
to a tribal account?

    Funds in a returned per capita account will not automatically be 
returned to a tribe. However, a tribe may apply under 25 U.S.C. 164 and 
Public Law 87-283, 75 Stat. 584 (1961), to have the unclaimed per 
capita funds transferred to its account for the tribe's use after six 
years have passed from the date of distribution.

Subpart H--Special Deposit Accounts


Sec. 115.900  Who receives the interest earned on trust funds in a 
special deposit account?

    Generally, any interest earned on trust funds in a special deposit 
account will follow the principal (i.e., the tribe or individual who 
owns the trust funds in the special deposit account will receive the 
interest earned).


Sec. 115.901  When will the trust funds in a special deposit account be 
credited or paid out to the owner of the funds?

    OTFM will disburse the trust funds from a special deposit account 
and deposit the trust funds in the owner's trust account following the 
BIA certification of the ownership of the funds and OTFM's receipt of 
such certification.


Sec. 115.902  May administrative or land conveyance fees paid as 
federal reimbursements be deposited in a special deposit account?

    No, administrative or land conveyance fees paid as federal 
reimbursements may not be deposited with OTFM, which includes special 
deposit accounts. These fees must be deposited in the Federal Financial 
System.


Sec. 115.903  May cash bonds (e.g., performance bonds, appeal bonds, 
etc.) be deposited into a special deposit account?

    No, cash bonds may not be deposited with OTFM, which includes the 
special deposit accounts at OTFM. Cash bonds held by the Secretary are 
to be deposited in non-interest bearing accounts until the term of the 
bonds expire.


Sec. 115.904  Where earnest money is paid prior to Secretarial approval 
of a conveyance or contract instrument involving trust assets, may the 
BIA deposit that earnest money into a special deposit account?

    No, any money received prior to Secretarial approval of conveyance 
or contract instrument involving trust assets must be deposited into a 
non-interest bearing, non-trust account. After the Secretary approves 
the conveyance or contract instrument involving trust assets, the money 
designated by the conveyance or contract instrument will be deposited 
into a trust fund account.

Subpart I--Records


Sec. 115.1000  Who owns the records associated with this part?

    (a) Records are the property of the United States if they:
    (1) Are made or received by a tribe or tribal organization in the 
conduct of a federal trust function under this part, including the 
operation of a trust program pursuant to 25 U.S.C. 450f et seq.; and
    (2) Evidence the organization, functions, policies, decisions, 
procedures, operations, or other activities undertaken in the 
performance of a federal trust function under this part.
    (b) Records not covered by paragraph (a) of this section that are 
made or received by a tribe or tribal organization in the conduct of 
business with the Department of the Interior under this part are the 
property of the tribe.


Sec. 115.1001  How must records associated with this part be preserved?

    (a) Any organization, including tribes and tribal organizations, 
that have records identified in Sec. 115.1000(a) must preserve the 
records in accordance with approved Departmental records retention 
procedures under the Federal Records Act, 44 U.S.C. Chapters 29, 31 and 
33. These records and related records management practices and 
safeguards required under the Federal Records Act are subject to 
inspection by the Secretary and the Archivist of the United States.
    (b) A tribe or tribal organization should preserve the records 
identified in Sec. 115.1000(b) for the period of time authorized by the 
Archivist of the United States for similar Department of the Interior 
records in accordance with 44 U.S.C. Chapter 33. If a tribe or tribal 
organization does not preserve records associated with its conduct of 
business with the Department of the Interior under this part, the tribe 
or tribal organization may be prevented from being able to adequately 
document essential transactions or furnish information necessary to 
protect its legal and financial rights or those of persons directly 
affected by its activities.

PART 162--LEASES AND PERMITS

    4. Part 162 is revised to read as follows:
Subpart A--General Provisions
Sec.
162.100  What are the purposes of this part?
162.101   What key terms do I need to know?

[[Page 7110]]

162.102   What land, or interests in land, are subject to these 
regulations?
162.103   What types of land use agreements are covered by these 
regulations?
162.104   When is a lease needed to authorize possession of Indian 
Land?
162.105   Can tracts with different Indian landowners be unitized 
for leasing purposes?
162.106   What will BIA do if possession is taken without an 
approved lease or other proper authorization?
162.107   What are BIA's objectives in granting or approving leases?
162.108   What are BIA's responsibilities in administering and 
enforcing leases?
162.109   What laws, other than these regulations, will apply to 
leases granted or approved under this part?
162.110   Can these regulations be administered by tribes, on the 
Secretary's or on BIA's behalf?
162.111   Who owns the records associated with this part?
162.112   How must records associated with this part be preserved?
162.113   May decisions under this part be appealed?
Subpart B--Agricultural Leases

General Provisions

162.200   What types of leases are covered by this subpart?
162.201   Must agricultural land be managed in accordance with a 
tribe's agricultural resource management plan?
162.202   How will tribal laws be enforced on agricultural land?
162.203   When can the regulations in this subpart be superseded or 
modified by tribal laws and leasing policies?
162.204   Must notice of applicable tribal laws and leasing policies 
be provided?
162.205   Can individual Indian landowners exempt their agricultural 
land from certain tribal leasing policies?

How To Obtain a Lease

162.206   Can the terms of an agricultural lease be negotiated with 
the Indian landowners?
162.207   When can the Indian landowners grant an agricultural 
lease?
162.208   Who can represent the Indian landowners in negotiating or 
granting an agricultural lease?
162.209   When can BIA grant an agricultural lease on behalf of an 
Indian landowner?
162.210   When can BIA grant a permit covering agricultural land?
162.211   What type of valuation or evaluation methods will be 
applied in estimating the fair annual rental of Indian land?
162.212   When will the BIA advertise Indian land for agricultural 
leases?
162.213   What supporting documents must be provided prior to BIA's 
grant or approval of an agricultural lease?
162.214   How and when will BIA decide whether to approve an 
agricultural lease?
162.215   When will an agricultural lease be effective?
162.216   When will a BIA decision to approve an agricultural lease 
be effective?
162.217   Must an agricultural lease or permit be recorded?

Lease Requirements

162.218   Is there a standard agricultural lease form?
162.219   Are there any provisions that must be included in an 
agricultural lease?
162.220   Are there any formal requirements that must be satisfied 
in the execution of an agricultural lease?
162.221   How should the land be described in an agricultural lease?
162.222   How much rent must be paid under an agricultural lease?
162.223   Must the rent be adjusted under an agricultural lease?
162.224   When are rent payments due under an agricultural lease?
162.225   Will untimely rent payments made under an agricultural 
lease be subject to interest charges or late payment penalties?
162.226   To whom can rent payments be made under an agricultural 
lease?
162.227   What form of rent payment can be accepted under an 
agricultural lease?
162.228   What other types of payments are required under an 
agricultural lease?
162.229   How long can the term of an agricultural lease run?
162.230   Can an agricultural lease be amended, assigned, sublet, or 
mortgaged?
162.231   How can the land be used under an agricultural lease?
162.232   Can improvements be made under an agricultural lease?
162.233   Who will own the improvements made under an agricultural 
lease?
162.234   Must a tenant provide a bond under an agricultural lease?
162.235   What form of bond can be accepted under an agricultural 
lease?
162.236   How will a cash bond be administered?
162.237   What insurance is required under an agricultural lease?
162.238   What indemnities are required under an agricultural lease?
162.239   How will payment rights and obligations relating to 
agricultural land be allocated between the Indian landowners and the 
tenant?
162.240   Can an agricultural lease provide for negotiated remedies 
in the event of a violation?

Lease Administration

162.241   Will administrative fees be charged for actions relating 
to agricultural leases?
162.242   How will BIA decide whether to approve an amendment to an 
agricultural lease?
162.243   How will BIA decide whether to approve an assignment or 
sublease under an agricultural lease?
162.244   How will BIA decide whether to approve a leasehold 
mortgage under an agricultural lease?
162.245   When will a BIA decision to approve an amendment, 
assignment, sublease, or mortgage under an agricultural lease be 
effective?
162.246   Must an amendment, assignment, sublease, or mortgage 
approved under an agricultural lease be recorded?

Lease Enforcement

162.247   Will BIA notify a tenant when a rent payment is due under 
an agricultural lease?
162.248   What will BIA do if rent payments are not made in the time 
and manner required by an agricultural lease?
162.249   Will any special fees be assessed on delinquent rent 
payments due under an agricultural lease?
162.250   How will BIA determine whether the activities of a tenant 
under an agricultural lease are in compliance with the terms of the 
lease?
162.251   What will BIA do in the event of a violation under an 
agricultural lease?
162.252   What will BIA do if a violation of an agricultural lease 
is not cured within the requisite time period?
162.253   Will BIA's regulations concerning appeal bonds apply to 
cancellation decisions involving agricultural leases?
162.254   When will a cancellation of an agricultural lease be 
effective?
162.255   Can BIA take emergency action if the leased premises are 
threatened with immediate and significant harm?
162.256   What will BIA do if a tenant holds over after the 
expiration or cancellation of an agricultural lease?
Subpart C--Residential Leases
[Reserved]    
Subpart D--Business Leases
[Reserved]    
Subpart E--Special Requirements for Certain Reservations 162.500 Crow 
Reservation.
162.500   Crow Reservation.
162.501   Fort Belknap Reservation.
162.502   Cabazon, Augustine, and Torres-Martinez Reservations, 
California.
162.503   San Xavier and Salt River Pima-Maricopa Reservations.
Subpart F--Non-Agricultural Leases
162.600   What types of leases are covered by this subpart?
162.601   Grants of leases by Secretary.
162.602   Grants of leases by owners or their representatives.
162.603   Use of land of minors.
162.604   Special requirements and provisions.
162.605   Negotiation of leases.
162.606   Advertisement.
162.607   Duration of leases.
162.608   Ownership of improvements.
162.609   Unitization for leasing.
162.610   Subleases and assignments.
162.611   Payment of fees and drainage and irrigation charges.
162.612   Can a lease provide for negotiated remedies in the event 
of a violation?
162.613   Will BIA notify a tenant when a rent payment is due under 
a lease?
162.614   Will untimely rent payments made under a lease be subject 
to interest charges or late payment penalties?
162.615   What will BIA do if rent payments are not made in the time 
and manner required by a lease?
162.616   Will any special fees be assessed on delinquent rent 
payments due under a lease?

[[Page 7111]]

162.617   How will BIA determine whether the activities of a tenant 
under a lease are in compliance with the terms of the lease?
162.618   What will BIA do in the event of a violation under a 
lease?
162.619   What will BIA do if a violation of a lease is not cured 
within the requisite time period?
162.620   Will BIA's regulations concerning appeal bonds apply to 
cancellation decisions involving leases?
162.621   When will a cancellation of a lease be effective?
162.622   Can BIA take emergency action if the leased premises are 
threatened with immediate and significant harm?
162.623   What will BIA do if a tenant holds over after the 
expiration or cancellation of a lease?

    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, 3701, 3702, 3703, 3712, 3713, 
3714, 3715, 3731, 3733; 44 U.S.C. 3101 et seq.

Subpart A--General Provisions


Sec. 162.100  What are the purposes of this part?

    (a) The purposes of this part are to:
    (1) Identify the conditions and authorities under which certain 
interests in Indian land and Government land may be leased;
    (2) Describe the manner in which various types of leases may be 
obtained;
    (3) Identify terms and conditions that may be required in various 
types of leases;
    (4) Describe the policies and procedures that will be applied in 
the administration and enforcement of various types of leases; and
    (5) Identify special requirements that apply to leases made under 
special acts of Congress that apply only to certain Indian 
reservations.
    (b) This part includes six subparts, including separate, self-
contained subparts relating to Agricultural Leases (Subpart B), 
Residential Leases (Subpart C, reserved), Business Leases (Subpart D, 
reserved), and Non-Agricultural Leases (Subpart F), respectively. 
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 the 
general provisions in subparts A through F, respectively, except to the 
extent those general provisions are inconsistent with any of the 
special provisions in subpart E or any special act of Congress under 
which those leases are made.
    (c) These regulations apply to all leases in effect when the 
regulations are promulgated; however, unless otherwise agreed by the 
parties, these regulations will not affect the validity or terms of any 
existing lease.


Sec. 162.101  What key terms do I need to know?

    For purposes of this part:
    Adult means an individual who is 18 years of age or older.
    Agricultural land means Indian land or Government land suited or 
used for the production of crops, livestock or other agricultural 
products, or Indian land suited or used for a business that supports 
the surrounding agricultural community.
    Agricultural lease means a lease of agricultural land for farming 
and/or grazing purposes.
    AIARMA means the American Indian Agricultural Resources Management 
Act of December 3, 1993 (107 Stat. 2011, 25 U.S.C. 3701 et seq.), as 
amended on November 2, 1994 (108 Stat. 4572).
    Assignment means an agreement between a tenant and an assignee, 
whereby the assignee acquires all of the tenant's rights, and assumes 
all of the tenant's obligations, under a lease.
    BIA means the Bureau of Indian Affairs within the Department of the 
Interior and any tribe acting on behalf of BIA under Sec. 162.109 of 
this part.
    Bond means security for the performance of certain lease 
obligations, as furnished by the tenant, or a guaranty of such 
performance as furnished by a third-party surety.
    Day means a calendar day.
    Emancipated minor means a person under 18 years of age who is 
married or who is determined by a court of competent jurisdiction to be 
legally able to care for himself or herself.
    Fair annual rental means the amount of rental income that a leased 
tract of Indian land would most probably command in an open and 
competitive market.
    Fee interest means an interest in land that is owned in 
unrestricted fee status, and is thus freely alienable by the fee owner.
    Fractionated tract means a tract of Indian land owned in common by 
Indian landowners and/or fee owners holding undivided interests 
therein.
    Government land means any tract, or interest therein, in which the 
surface estate is owned by the United States and administered by BIA, 
not including tribal land that has been reserved for administrative 
purposes.
    Immediate family means a spouse, brother, sister, lineal ancestor, 
lineal descendant, or member of the household of an individual Indian 
landowner.
    Indian land means any tract in which any interest in the surface 
estate is owned by a tribe or individual Indian in trust or restricted 
status.
    Indian landowner means a tribe or individual Indian who owns an 
interest in Indian land in trust or restricted status.
    Individually-owned land means any tract, or interest therein, in 
which the surface estate is owned by an individual Indian in trust or 
restricted status.
    Interest, when used with respect to Indian land, means an ownership 
right to the surface estate of Indian land that is unlimited or 
uncertain in duration, including a life estate.
    Lease means a written agreement between Indian landowners 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.
    Lessee means tenant, as defined in this section.
    Life estate means an interest in Indian land that is limited, in 
duration, to the life of the life tenant holding the interest, or the 
life of some other person.
    Majority interest means more than 50% of the trust or restricted 
interests in a tract of Indian land.
    Minor means an individual who is less than 18 years of age.
    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.
    NEPA means the National Environmental Policy Act (42 U.S.C. 
Sec. 4321, et seq.)
    Non compos mentis means a person who has been legally determined by 
a court of competent jurisdiction to be of unsound mind or incapable of 
managing his or her own affairs.
    Permit means a written agreement 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.

[[Page 7112]]

    Remainder means an interest in Indian land that is created at the 
same time as a life estate, for the use and enjoyment of its owner 
after the life estate terminates.
    Restricted land or restricted status means land the title to which 
is held by an individual Indian or a tribe and which can only be 
alienated or encumbered by the owner with the approval of the Secretary 
because of limitations contained in the conveyance instrument pursuant 
to federal law.
    Secretary means the Secretary of the Interior or an authorized 
representative.
    Sublease means a written agreement by which the tenant grants to an 
individual or entity a right to possession no greater than that held by 
the tenant under the lease.
    Surety means one who guarantees the performance of another.
    Tenant means a person or entity who has acquired a legal right of 
possession to Indian land by a lease or permit under this part.
    Trespass means an unauthorized possession, occupancy or use of 
Indian land.
    Tribal land means the surface estate of land or any interest 
therein held by the United States in trust for a tribe, band, 
community, group or pueblo of Indians, and land that is held by a 
tribe, band, community, group or pueblo of Indians, subject to federal 
restrictions against alienation or encumbrance, and includes such land 
reserved for BIA administrative purposes when it is not immediately 
needed for such purposes. The term also includes lands held by the 
United States in trust for an Indian corporation chartered under 
section 17 of the Act of June 18, 1934 (48 Stat. 984; 25 U.S.C. 
Sec. 476).
    Tribal laws means the body of law that governs land and activities 
under the jurisdiction of a tribe, including ordinances and other 
enactments by the tribe, tribal court rulings, and tribal common law.
    Trust land means any tract, or interest therein, that the United 
States holds in trust status for the benefit of a tribe or individual 
Indian.
    Undivided interest means a fractional share in the surface estate 
of Indian land, where the surface estate is owned in common with other 
Indian landowners or fee owners.
    Us/We/Our means the Secretary or BIA and any tribe acting on behalf 
of the Secretary or BIA under Sec. 162.110 of this part.
    USPAP means the Uniform Standards of Professional Appraisal 
Practice, as promulgated by the Appraisal Standards Board of the 
Appraisal Foundation to establish requirements and procedures for 
professional real property appraisal practice.


Sec. 162.102  What land, or interests in land, are subject to these 
regulations?

    (a) These regulations apply to Indian land and Government land, 
including any tract in which an interest is owned by an individual 
Indian or tribe 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 these regulations, 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 these regulations, 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) These regulations do not apply to tribal land that is leased 
under a corporate charter issued by us pursuant to 25 U.S.C. Sec. 477, 
or under a special act of Congress authorizing leases without our 
approval under certain conditions, except to the extent that the 
authorizing statutes require us to enforce such leases on behalf of the 
Indian landowners.
    (e) To the extent any regulations in this part conflict with the 
Indian Land Consolidation Act Amendments of 2000, Public Law 106-462, 
the provisions of that Act will govern.


Sec. 162.103  What types of land use agreements are covered by these 
regulations?

    (a) These regulations cover leases that authorize the possession of 
Indian land. These regulations do not apply to:
    (1) Mineral leases, prospecting permits, or mineral development 
agreements, as covered by parts 211, 212 and 225 of this chapter and 
similar parts specific parts specific to particular tribes;
    (2) Grazing permits, as covered by part 166 of this chapter and 
similar parts specific parts specific to particular tribes;
    (3) Timber contracts, as covered by part 163 of this chapter;
    (4) Management contracts, joint venture agreements, or other 
encumbrances of tribal land, as covered by 25 U.S.C. Sec. 81, as 
amended;
    (5) Leases of water rights associated with Indian land, except to 
the extent the use of such water rights is incorporated in a lease of 
the land itself; and
    (6) Easements or rights-of-way, as covered by part 169 of this 
chapter.
    (b) Where appropriate, the regulations in this part that 
specifically refer to leases will apply to permits that authorize the 
temporary, non-possessory use of Indian land or Government land, not 
including:
    (1) Land assignments and similar instruments authorizing temporary 
uses by tribal members, in accordance with tribal laws or custom; and
    (2) Trader's licenses issued under part 140 of this chapter.


Sec. 162.104  When is a lease needed to authorize possession of Indian 
Land?

    (a) An Indian landowner who owns 100% of the trust or restricted 
interests in a tract may take possession without a lease or any other 
prior authorization from us.
    (b) An Indian landowner of a fractional interest in a tract must 
obtain a lease of the other trust and restricted interests in the 
tract, under these regulations, unless the Indian co-owners have given 
the landowner's permission to take or continue in possession without a 
lease.
    (c) A parent or guardian of a minor child who owns 100% of the 
trust interests in the land may take possession without a lease. We may 
require that the parent or guardian provide evidence of a direct 
benefit to the minor child. When the child reaches the age of majority, 
a lease must be obtained under these regulations to authorize continued 
possession.
    (d) Any other person or legal entity, including an independent 
legal entity owned and operated by a tribe, must obtain a lease under 
these regulations before taking possession.


Sec. 162.105  Can tracts with different Indian landowners be unitized 
for leasing purposes?

    (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 under subparts B through D of this part 
will apply to each tract separately. We may combine multiple tracts 
into a unit for leases negotiated or advertised by us, if we determine 
that unitization is in the Indian landowners' best interests and

[[Page 7113]]

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 landowner's interest in proportion to the acreage 
within the entire unit.


Sec. 162.106  What will BIA do if possession is taken without an 
approved lease or other proper authorization?

    (a) If a lease is required, and possession is taken without a lease 
by a party other than an Indian landowner of the tract, we will treat 
the unauthorized use as a trespass. Unless we have reason to believe 
that the party in possession is engaged in negotiations with the Indian 
landowners to obtain a lease, we will take action to recover possession 
on behalf of the Indian landowners, and pursue any additional remedies 
available under applicable law.
    (b) Where a trespass involves Indian agricultural land, we will 
also assess civil penalties and costs under part 166, subpart I, of 
this chapter.


Sec. 162.107  What are BIA's objectives in granting or approving 
leases?

    (a) We will assist Indian landowners in leasing their land, either 
through negotiations or advertisement. In reviewing a negotiated lease 
for approval, we will defer to the landowners' determination that the 
lease is in their best interest, to the maximum extent possible. In 
granting a lease on the landowners' behalf, we will obtain a fair 
annual rental and attempt to ensure (through proper notice) that the 
use of the land is consistent with the landowners' wishes. We will also 
recognize the rights of Indian landowners to use their own land, so 
long as their Indian co-owners are in agreement and the value of the 
land is preserved.
    (b) We will recognize the governing authority of the tribe having 
jurisdiction over the land to be leased, preparing and advertising 
leases in accordance with applicable tribal laws and policies. We will 
promote tribal control and self-determination over tribal land and 
other land under the tribe's jurisdiction, through contracts and self-
governance compacts entered into under the Indian Self-Determination 
and Education Assistance Act, as amended, 25 U.S.C. Sec. 450f et seq.


Sec. 162.108  What are BIA's responsibilities in administering and 
enforcing leases?

    (a) We will ensure that tenants 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 
enforcement actions. We will also assist landowners in the enforcement 
of payment obligations that run directly to them, 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 ensure that tenants comply with the operating 
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 
immediate action to recover possession from trespassers operating 
without a lease, and take other emergency action as needed to preserve 
the value of the land.


Sec. 162.109  What laws, other than these regulations, will apply to 
leases granted or approved under this part?

    (a) Leases granted or approved under this part will be subject to 
federal laws of general applicability and any specific federal 
statutory requirements that are not incorporated in these regulations.
    (b) Tribal laws generally apply to land under the jurisdiction of 
the tribe enacting such laws, except to the extent that those tribal 
laws are inconsistent with these regulations or other applicable 
federal law. These regulations may be superseded or modified by tribal 
laws, however, 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) State law may apply to lease disputes or define the remedies 
available to the Indian landowners in the event of a lease violation by 
the tenant, if the lease so provides and the Indian landowners have 
expressly agreed to the application of state law.


Sec. 162.110  Can these regulations be administered by tribes, on the 
Secretary's or on BIA's behalf?

    Except insofar as these regulations provide for the granting, 
approval, or enforcement of leases and permits, the provisions in these 
regulations that authorize or require us to take certain actions will 
extend to any tribe or tribal organization that is administering 
specific programs or providing specific services under a contract or 
self-governance compact entered into under the Indian Self-
Determination and Education Assistance Act (25 U.S.C. Sec. 450f et 
seq.).


Sec. 162.111  Who owns the records associated with this part?

    (a) Records are the property of the United States if they:
    (1) Are made or received by a tribe or tribal organization in the 
conduct of a federal trust function under 25 U.S.C. Sec. 450f et seq., 
including the operation of a trust program; and
    (2) Evidence the organization, functions, policies, decisions, 
procedures, operations, or other activities undertaken in the 
performance of a federal trust function under this part.
    (b) Records not covered by paragraph (a) of this section that are 
made or received by a tribe or tribal organization in the conduct of 
business with the Department of the Interior under this part are the 
property of the tribe.


Sec. 162.112  How must records associated with this part be preserved?

    (a) Any organization, including tribes and tribal organizations, 
that have records identified in Sec. 162.111(a) must preserve the 
records in accordance with approved Departmental records retention 
procedures under the Federal Records Act, 44 U.S.C. Chapters 29, 31 and 
33. These records and related records management practices and 
safeguards required under the Federal Records Act are subject to 
inspection by the Secretary and the Archivist of the United States.
    (b) A tribe or tribal organization should preserve the records 
identified in Sec. 162.111(b) for the period of time authorized by the 
Archivist of the United States for similar Department of the Interior 
records in accordance with 44 U.S.C. Chapter 33. If a tribe or tribal 
organization does not preserve records associated with its conduct of 
business with the Department of the Interior under this part, it may 
prevent the tribe or tribal organization from being able to adequately 
document essential transactions or furnish information necessary to 
protect its legal and financial rights or those of persons directly 
affected by its activities.


Sec. 162.113  May decisions under this part be appealed?

    Yes. Except where otherwise provided in this part, appeals from 
decisions by the BIA under this part may be taken pursuant to 25 CFR 
part 2.

[[Page 7114]]

Subpart B--Agricultural Leases

General Provisions


Sec. 162.200  What types of leases are covered by this subpart?

    The regulations in this subpart apply to agricultural leases, as 
defined in this part. The regulations in this subpart may also apply to 
business leases on agricultural land, where appropriate.


Sec. 162.201  Must agricultural land be managed in accordance with a 
tribe's agricultural resource management plan?

    (a) Agricultural land under the jurisdiction of a tribe must be 
managed in accordance with the goals and objectives in any agricultural 
resource management plan developed by the tribe, or by us in close 
consultation with the tribe, under AIARMA.
    (b) A ten-year agricultural resource management and monitoring plan 
must be developed through public meetings and completed within three 
years of the initiation of the planning activity. Such a plan must be 
developed through public meetings, and be based on the public meeting 
records and existing survey documents, reports, and other research from 
federal agencies, tribal community colleges, and land grant 
universities. When completed, the plan must:
    (1) Determine available agricultural resources;
    (2) Identify specific tribal agricultural resource goals and 
objectives;
    (3) Establish management objectives for the resources;
    (4) Define critical values of the Indian tribe and its members and 
identify holistic management objectives; and
    (5) Identify actions to be taken to reach established objectives.
    (c) Where the regulations in this subpart are inconsistent with a 
tribe's agricultural resource management plan, we may waive the 
regulations under part 1 of this title, so long as the waiver does not 
violate a federal statute or judicial decision or conflict with our 
general trust responsibility under federal law.


Sec. 162.202  How will tribal laws be enforced on agricultural land?

    (a) Unless prohibited by federal law, we will recognize and comply 
with tribal laws regulating activities on agricultural land, including 
tribal laws relating to land use, environmental protection, and 
historic or cultural preservation.
    (b) While the tribe is primarily responsible for enforcing tribal 
laws pertaining to agricultural land, we will:
    (1) Assist in the enforcement of tribal laws;
    (2) Provide notice of tribal laws to persons or entities 
undertaking activities on agricultural land, under Sec. 162.204(c) of 
this subpart; and
    (3) Require appropriate federal officials to appear in tribal 
forums when requested by the tribe, so long as such an appearance would 
not:
    (i) Be inconsistent with the restrictions on employee testimony set 
forth at 43 CFR Part 2, Subpart E;
    (ii) Constitute a waiver of the sovereign immunity of the United 
States; or
    (iii) Authorize or result in a review of our actions by a tribal 
court.
    (c) Where the regulations in this subpart are inconsistent with a 
tribal law, but such regulations cannot be superseded or modified by 
the tribal law under Sec. 162.109 of this part, we may waive the 
regulations under part 1 of this chapter, so long as the waiver does 
not violate a federal statute or judicial decision or conflict with our 
general trust responsibility under federal law.


Sec. 162.203  When can the regulations in this subpart be superseded or 
modified by tribal laws and leasing policies?

    (a) The regulations in this subpart may be superseded or modified 
by tribal laws, under the circumstances described in Sec. 162.109(b) of 
this part.
    (b) When specifically authorized by an appropriate tribal 
resolution establishing a general policy for the leasing of tribal and 
individually-owned agricultural land, we will:
    (1) Waive the general prohibition against tenant preferences in 
leases advertised for bid under Sec. 162.212 of this subpart, by 
allowing prospective Indian tenants to match the highest responsible 
bid (unless the tribal leasing policy specifies some other manner in 
which the preference must be afforded);
    (2) Waive the requirement that a tenant post a bond under 
Sec. 162.234 of this subpart;
    (3) Modify the requirement that a tenant post a bond in a form 
described in Sec. 162.235 of this subpart;
    (4) Approve leases of tribal land at rates established by the 
tribe, as provided in Sec. 162.222(b) of this subpart.
    (c) When specifically authorized by an appropriate tribal 
resolution establishing a general policy for the leasing of ``highly 
fractionated undivided heirship lands'' (as defined in the tribal 
leasing policy), we may waive or modify the three-month notice 
requirement in Sec. 162.209(b) of this subpart, so long as:
    (1) The tribal law or leasing policy adopts an alternative plan for 
providing notice to Indian landowners, before an agricultural lease is 
granted by us on their behalf; and
    (2) A waiver or modification of the three-month notice requirement 
is needed to prevent waste, reduce idle land acreage, and ensure lease 
income to the Indian landowners.
    (d) Tribal leasing policies of the type described in paragraphs (b) 
through (c) of this section will not apply to individually-owned land 
that has been made exempt from such laws or policies under Sec. 162.205 
of this subpart.


Sec. 162.204  Must notice of applicable tribal laws and leasing 
policies be provided?

    (a) A tribe must provide us with an official copy of any tribal law 
or leasing policy that supersedes or modifies these regulations under 
Secs. 162.109 or 162.203 of this part. If the tribe has not already 
done so, we will provide notice of such a tribal law or leasing policy 
to affected Indian landowners and persons or entities undertaking 
activities on agricultural land. Such notice will be provided in the 
manner described in paragraphs (b) through (c) of this section.
    (b) We will provide notice to Indian landowners, as to the 
superseding or modifying effect of any tribal leasing policy and their 
right to exempt their land from such a policy. Such notice will be 
provided by:
    (1) Written notice included in a notice of our intent to lease the 
land, issued under Sec. 162.209(b) of this subpart; or
    (2) Public notice posted at the tribal community building or the 
United States Post Office, or published in the local newspaper that 
serves the area in which the Indian owners' land is located, at the 
time the tribal leasing policy is adopted.
    (c) We will provide notice to persons or entities undertaking 
activities on agricultural land, as to the general applicability of 
tribal laws and the superseding or modifying effect of particular 
tribal laws and leasing policies. Such notice will be provided by:
    (1) Written notice included in advertisements for lease, issued 
under Sec. 162.212 of this subpart; or
    (2) Public notice posted at the tribal community building or the 
United States Post Office, or published in a local newspaper of general 
circulation, at the time the tribal law is enacted or the leasing 
policy adopted.


Sec. 162.205  Can individual Indian landowners exempt their 
agricultural land from certain tribal leasing policies?

    (a) Individual Indian landowners may exempt their agricultural land 
from the application of a tribal leasing policy of a type described in 
Sec. 162.203(b) through (c) of this subpart, if the Indian owners

[[Page 7115]]

of at least 50% of the trust or restricted interests in the land submit 
a written objection to us before a lease is granted or approved.
    (b) Upon our receipt of a written objection from the Indian 
landowners that satisfies the requirements of paragraph (a) of this 
section, we will notify the tribe that the owners' land has been 
exempted from a specific tribal leasing policy. If the exempted land is 
part of a unitized lease tract, such land will be removed from the unit 
and leased separately, if appropriate.
    (c) The procedures described in paragraphs (a) and (b) of this 
section will also apply to withdrawing an approved exemption.

How to Obtain a Lease


Sec. 162.206  Can the terms of an agricultural lease be negotiated with 
the Indian landowners?

    An agricultural lease may be obtained through negotiation. We will 
assist prospective tenants in contacting the Indian landowners or their 
representatives for the purpose of negotiating a lease, and we will 
assist the landowners in those negotiations upon request.


Sec. 162.207  When can the Indian landowners grant an agricultural 
lease?

    (a) Tribes grant leases of tribally-owned agricultural land, 
including any tribally-owned undivided interest(s) in a fractionated 
tract, 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 owners, or emancipated minors, may grant 
agricultural leases of their land, including undivided interests in 
fractionated tracts, subject to our approval.
    (c) An agricultural lease of a fractionated tract may be granted by 
the owners of a majority interest in the tract, subject to our 
approval. Although prior notice to non-consenting individual Indian 
landowners is generally not needed prior to our approval of such a 
lease, a right of first refusal must be offered to any non-consenting 
Indian landowner who is using the entire lease tract at the time the 
lease is entered into by the owners of a majority interest. Where the 
owners of a majority interest grant such a lease on behalf of all of 
the Indian owners of a fractionated tract, the non-consenting Indian 
landowners must receive a fair annual rental.
    (d) As part of the negotiation of a lease, Indian landowners may 
advertise their land to identify potential tenants with whom to 
negotiate.


Sec. 162.208  Who can represent the Indian landowners in negotiating or 
granting an agricultural lease?

    The following individuals or entities may represent an individual 
Indian landowner:
    (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 or legal entity who has been given a written power of 
attorney that:
    (1) Meets all of the formal requirements of any applicable 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.


Sec. 162.209  When can BIA grant an agricultural lease on behalf of an 
Indian landowner?

    (a) We may grant an agricultural lease on behalf of:
    (1) Individuals who are found to be non compos mentis by a court of 
competent jurisdiction;
    (2) Orphaned minors;
    (3) The undetermined heirs and devisees of deceased Indian owners;
    (4) Individuals who have given us a written power of attorney to 
lease their land; and
    (5) Individuals whose whereabouts are unknown to us, after 
reasonable attempts are made to locate such individuals; and
    (6) The individual Indian landowners of fractionated Indian land, 
when necessary to protect the interests of the individual Indian 
landowners.
    (b) We may grant an agricultural lease on behalf of all of the 
individual Indian owners of a fractionated tract, where:
    (1) 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 three-month negotiation 
period immediately following such notice, or any other notice period 
established by a tribe under Sec. 162.203(c) of this subpart; and
    (2) The land is not being used by an Indian landowner under 
Sec. 162.104(b) of this part.


Sec. 162.210  When can BIA grant a permit covering agricultural land?

    (a) We may grant a permit covering agricultural land in the same 
manner as we would grant an agricultural lease under Sec. 162.209 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.
    (b) We may grant a permit covering agricultural land, but not an 
agricultural lease, on government land.
    (c) We will not grant a permit on tribal agricultural land, but a 
tribe may grant a permit, subject to our approval, in the same manner 
as it would grant a lease under Sec. 162.207(a) of this subpart.


Sec. 162.211  What type of valuation or evaluation methods will be 
applied in estimating the fair annual rental of Indian land?

    (a) To support the Indian landowners in their negotiations, and to 
assist in our consideration of whether an agricultural lease is in the 
Indian landowners' best interest, we must determine the fair annual 
rental of the land prior to our grant or approval of the lease, unless 
the land may be leased at less than a fair annual rental under 
Sec. 162.222(b) through (c) of this subpart.
    (b) A fair annual rental may be determined by competitive bidding, 
appraisal, or any other appropriate valuation method. Where an 
appraisal or other valuation is needed to determine the fair annual 
rental, the appraisal or valuation must be prepared in accordance with 
USPAP.


Sec. 162.212  When will the BIA advertise Indian land for agricultural 
leases?

    (a) We will generally advertise Indian land for agricultural 
leasing:
    (1) At the request of the Indian landowners; or
    (2) Before we grant a lease under Sec. 162.209(b) of this subpart.
    (b) Advertisements will provide prospective tenants with notice of 
any superseding tribal laws and leasing policies that have been made 
applicable to the land under Secs. 162.109 and 162.203 of this part, 
along with certain standard terms and conditions to be included in the 
lease. Advertisements will prohibit tenant preferences, and bidders at 
lease sales will not be afforded any preference, unless a preference in 
favor of individual Indians is required by a superseding tribal law or 
leasing policy.
    (c) Advertisements will require sealed bids, and they may also 
provide for further competitive bidding among the prospective tenants 
at the conclusion of the bid opening. Competitive bidding should be 
supported, at a minimum, by a market study or rent survey that is 
consistent with USPAP.

[[Page 7116]]

Sec. 162.213  What supporting documents must be provided prior to BIA's 
grant or approval of an agricultural lease?

    (a) 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.
    (b) Where a bond is required under Sec. 162.234 of this subpart, 
the bond must be furnished before we grant or approve the lease.
    (c) The tenant must provide environmental and archaeological 
reports, surveys, and site assessments, as needed to document 
compliance with NEPA and other applicable federal and tribal land use 
requirements.


Sec. 162.214  How and when will BIA decide whether to approve an 
agricultural lease?

    (a) Before we 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 preparation 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 of this subpart, or any other 
federal or tribal land use requirements.
    (b) Where an agricultural lease is in a form that has previously 
been accepted or approved by us, and all of the documents needed to 
support the findings required by paragraph (a) of this section have 
been received, we will decide whether to approve the lease within 30 
days of the date of our receipt of the lease and supporting documents. 
If we decide to 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 agricultural leases 
that have been approved will be provided to the tenant, and made 
available to the Indian landowners upon request.


Sec. 162.215  When will an agricultural lease be effective?

    Unless otherwise provided in the lease, an agricultural lease will 
be effective on the date on which the lease is approved by us. An 
agricultural lease may be made effective on some past or future date, 
by agreement, but such a lease may not be approved more than one year 
prior to the date on which the lease term is to commence.


Sec. 162.216  When will a BIA decision to approve an agricultural lease 
be effective?

    Our decision to approve an agricultural lease will be effective 
immediately, notwithstanding any appeal that may be filed under part 2 
of this chapter.


Sec. 162.217  Must an agricultural lease or permit be recorded?

    (a) An agricultural 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 approval under 
this subpart.
    (b) Agricultural leases of tribal land that do not require our 
approval, under Sec. 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


Sec. 162.218  Is there a standard agricultural lease form?

    Based on the need for flexibility in advertising, negotiating and 
drafting of appropriate lease terms and conditions, there is no 
standard agricultural lease form that must be used. We will assist the 
Indian landowners in drafting lease provisions that conform to the 
requirements of this part.


Sec. 162.219  Are there any provisions that must be included in an 
agricultural lease?

    In addition to the other requirements of this part, all 
agricultural leases must provide that:
    (a) The obligations of the tenant and its sureties to the Indian 
landowners will also be enforceable by the United States, so long as 
the land remains in trust or restricted status;
    (b) Nothing contained in this lease shall 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 shall not serve to abrogate the 
lease. The owners of the land and the lessee and his surety or sureties 
shall 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 tenant must comply with all applicable laws, ordinances, 
rules, regulations, and other legal requirements, including tribal laws 
and leasing policies.


Sec. 162.220  Are there any formal requirements that must be satisfied 
in the execution of an agricultural lease?

    (a) An agricultural 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 Sec. 162.208 of 
this subpart must identify the owner being represented and the 
authority under which such action is being taken.
    (b) An agricultural lease must be executed by individuals having 
the necessary capacity and authority to bind the tenant under 
applicable law.
    (c) An agricultural 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.


Sec. 162.221  How should the land be described in an agricultural 
lease?

    An agricultural lease should describe the leased premises by 
reference to a public or private survey, if possible. If the land 
cannot be so described, the lease must include a legal description or 
other description that is sufficient to identify the leased premises, 
subject to our approval. Where there are undivided interests owned in 
fee status, the aggregate portion of trust and restricted interests 
should be identified in the description of the leased premises.


Sec. 162.222  How much rent must be paid under an agricultural lease?

    (a) An agricultural lease must provide for the payment of a fair 
annual rental at the beginning of the lease term, unless a lesser 
amount is permitted under paragraphs (b) through (d) of this section. 
The tenant's rent payments may be:
    (1) In fixed amounts; or
    (2) Based on a share of the agricultural products generated by the 
lease, or a

[[Page 7117]]

percentage of the income to be derived from the sale of such 
agricultural products.
    (b) We will approve an agricultural lease of tribal land at a 
nominal rent, or at less than a fair annual rental, if such a rent is 
negotiated or established by the tribe.
    (c) We will approve an agricultural lease of individually-owned 
land at a nominal rent or at less than a fair annual rental, if:
    (1) The tenant is a member of the Indian landowner's immediate 
family, or a co-owner in the lease tract; or
    (2) The tenant is a cooperative or other legal entity in which the 
Indian landowners directly participate in the revenues or profits 
generated by the lease.
    (d) We will grant or approve a lease at less than a fair annual 
rental, as previously determined by an appraisal or some other 
appropriate valuation method, if the land is subsequently advertised 
and the tenant is the highest responsible bidder.


Sec. 162.223  Must the rent be adjusted under an agricultural lease?

    (a) Except as provided in paragraph (c) of this section, an 
agricultural lease must provide for one or more rental adjustments if 
the lease term runs more than five years, unless the lease provides for 
the payment of:
    (1) Less than a fair annual rental, as permitted under 
Sec. 162.222(b) through (c) of this part; or
    (2) A rental based primarily on a share of the agricultural 
products generated by the lease, or a percentage of the income derived 
from the sale of agricultural products.
    (b) If rental adjustments are required, 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.
    (c) An agricultural lease of tribal land may run for a term of more 
than five years, without providing for a rental adjustment, if the 
tribe establishes such a policy under Sec. 162.203(b)(4) and negotiates 
such a lease.


Sec. 162.224  When are rent payments due under an agricultural lease?

    An agricultural lease must specify the dates on which all rent 
payments are due. Unless otherwise provided in the lease, rent 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.


Sec. 162.225  Will untimely rent payments made under an agricultural 
lease be subject to interest charges or late payment penalties?

    An agricultural lease must specify the rate at which interest will 
accrue on any rent 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 rent 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 
Sec. 162.251 of this subpart.


Sec. 162.226  To whom can rent payments be made under an agricultural 
lease?

    (a) An agricultural lease must specify whether rent 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, consistent with the provisions of Secs. 162.112 and 
162.113 of this part.
    (b) Rent payments made directly to the Indian landowners must be 
made to the parties specified in the lease, unless the tenant receives 
notice of a change of ownership. Unless otherwise provided in the 
lease, rent payments may not be made payable directly to anyone other 
than the Indian landowners.
    (c) A lease that provides for rent 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.


Sec. 162.227  What form of rent payment can be accepted under an 
agricultural lease?

    (a) When rent 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 tenant;
    (2) Money orders;
    (3) Cashier's checks;
    (4) Certified checks; or
    (5) Electronic funds transfer payments.


Sec. 162.228  What other types of payments are required under an 
agricultural lease?

    (a) The tenant may be required to pay additional fees, taxes, and/
or 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 official.
    (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. The tenant must pay these amounts to 
the appropriate official in charge of the irrigation project or 
drainage district. Failure to make such payments will constitute a 
violation of the lease under Sec. 162.251.


Sec. 162.229  How long can the term of an agricultural lease run?

    (a) An agricultural 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 
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 ten years, unless a 
substantial investment in the improvement of the land is required. If 
such a substantial investment is required, the maximum term may be up 
to 25 years.
    (c) Where all of the trust or restricted interests in a tract are 
owned by a deceased Indian whose heirs and devisees have not yet been 
determined, the maximum term may not exceed two years.
    (d) An agricultural lease may not provide the tenant with an option 
to renew, and such a lease may not be renewed or extended by holdover.


Sec. 162.230  Can an agricultural lease be amended, assigned, sublet, 
or mortgaged?

    (a) An agricultural lease may authorize amendments, assignments, 
subleases, or mortgages of the leasehold interest, but only with the 
written consent of the parties to the lease in the

[[Page 7118]]

same manner the original lease was approved, and our approval. 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 Sec. 162.251 of 
this subpart.
    (b) An agricultural 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; or
    (2) Terminate or modify the term of the lease.
    (c) 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 Secs. 162.207 through 162.209 of this 
subpart.


Sec. 162.231  How can the land be used under an agricultural lease?

    (a) An agricultural 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 tenant to maintain continuous operations 
throughout the lease term, will be treated as a lease violation under 
Sec. 162.251 of this subpart.
    (b) An agricultural lease must require that farming and grazing 
operations be conducted in accordance with recognized principles of 
sustained yield management, integrated resource management planning, 
sound conservation practices, and other community goals as expressed in 
applicable tribal laws, leasing policies, or agricultural resource 
management plans. Appropriate stipulations or conservation plans must 
be developed and incorporated in all agricultural leases.


Sec. 162.232  Can improvements be made under an agricultural lease?

    An agricultural lease must generally describe the type and location 
of any improvements to be constructed by the lessee. Unless otherwise 
provided in the lease, any specific plans for the construction of those 
improvements will not require the consent of the Indian owners or our 
approval.


Sec. 162.233  Who will own the improvements made under an agricultural 
lease?

    (a) An agricultural 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 prior to 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.


Sec. 162.234  Must a tenant provide a bond under an agricultural lease?

    Unless otherwise provided by a tribe under Sec. 162.203 of this 
subpart, or waived by us at the request of the owners of a majority 
interest in an agricultural lease tract, the tenant must provide a bond 
to secure:
    (a) The payment of one year's rental;
    (b) The construction of any required improvements;
    (c) The performance of any additional lease obligations, including 
the payment of operation and maintenance charges under Sec. 162.228(b) 
of this subpart; and
    (d) The restoration and reclamation of the leased premises, to 
their condition at the commencement of the lease term or some other 
specified condition.


Sec. 162.235  What form of bond can be accepted under an agricultural 
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 such a 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 such securities in case of a violation of the terms of the 
lease.
    (3) Certificates of deposit that indicate on their face that our 
approval is required prior to redemption by any party;
    (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 prior to its expiration date;
    (ii) Be payable to us;
    (iii) Be irrevocable during its term and have an initial expiration 
date of not less than one year following the date of issuance; 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; or
    (6) Any other form of highly liquid, non-volatile security that is 
easily convertible to cash and for which our approval is required prior 
to 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 an 
agricultural lease of tribal land.


Sec. 162.236  How will a cash 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 Sec. 162.252(a) of this 
subpart, we will refund the bond to the tenant upon the expiration or 
termination of the lease.


Sec. 162.237  What insurance is required under an agricultural lease?

    When necessary to protect the interests of the Indian landowners, 
an agricultural lease must require that a tenant provide insurance. 
Such insurance may include property, crop, liability and/or casualty 
insurance. If insurance is required, it must identify both the Indian 
landowners and the United States as insured parties, and be sufficient 
to protect all insurable improvements on the leased premises.

[[Page 7119]]

Sec. 162.238  What indemnities are required under an agricultural 
lease?

    (a) An agricultural 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:
    (1) The tenant would be prohibited by law from making such an 
agreement; or (2) The interests of the Indian landowners are adequately 
protected by insurance.
    (b) Unless the tenant would be prohibited by law from making such 
an agreement, an agricultural 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 materials from the leased 
premises that occurs during the lease term, regardless of fault.


Sec. 162.239  How will payment rights and obligations relating to 
agricultural land be allocated between the Indian landowners and the 
tenant?

    (a) Unless otherwise provided in an agricultural 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. Such payments may include (but are 
not limited to) :
    (1) Insurance proceeds;
    (2) Trespass damages; and
    (3) Condemnation awards.
    (b) An agricultural lease may provide for the tenant to assume 
certain cost-share or other payment obligations that have attached to 
the land through past farming and grazing operations, so long as those 
obligations are specified in the lease and considered in any 
determination of fair annual rental made under this subpart.


Sec. 162.240  Can an agricultural lease provide for negotiated remedies 
in the event of a violation?

    (a) A lease of tribal agricultural land may provide the tribe with 
certain negotiated remedies in the event of a lease violation, 
including the power to terminate the lease. An agricultural 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 Sec. 162.252(c) of this subpart. 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) An agricultural 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 Sec. 162.252 of 
this subpart.

Lease Administration


Sec. 162.241  Will administrative fees be charged for actions relating 
to agricultural leases?

    (a) We will charge an administrative fee each time we approve an 
agricultural 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% of the annual rent payable, including any 
percentage-based rent that can be reasonably estimated.
    (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 non-refundable. However, we may waive all or part of 
these administrative fees, in our discretion.
    (d) 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.


Sec. 162.242  How will BIA decide whether to approve an amendment to an 
agricultural lease?

    We will approve an agricultural lease amendment if:
    (a) The required consents have been obtained from the parties to 
the lease under Sec. 162.230 and any sureties; and
    (b) We find the amendment to be in the best interest of the Indian 
landowners, under the standards set forth in Sec. 162.213 of this 
subpart.


Sec. 162.243  How will BIA decide whether to approve an assignment or 
sublease under an agricultural lease?

    (a) We will approve an assignment or sublease under an agricultural 
lease if:
    (1) The required consents have been obtained from the parties to 
the lease under Sec. 162.230 and the tenant's sureties;
    (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.


Sec. 162.244  How will BIA decide whether to approve a leasehold 
mortgage under an agricultural lease?

    (a) We will approve a leasehold mortgage under an agricultural 
lease if:
    (1) The required consents have been obtained from the parties to 
the lease under Sec. 162.230 and the tenant's sureties;
    (2) The mortgage covers only the tenant's interest in the leased 
premises, and no unrelated collateral;
    (3) The loan being secured by the mortgage will be used only in 
connection with the development or use of the leased premises, and the 
mortgage does not secure any unrelated debts owed by the tenant to the 
mortgagee; and
    (4) 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:

[[Page 7120]]

    (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.


Sec. 162.245  When will a BIA decision to approve an amendment, 
assignment, sublease, or mortgage under an agricultural lease be 
effective?

    Our decision to approve an amendment, assignment, sublease, or 
mortgage under an agricultural 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.


Sec. 162.246  Must an amendment, assignment, sublease, or mortgage 
approved under an agricultural lease be recorded?

    An amendment, assignment, sublease, or mortgage approved under an 
agricultural 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.

Lease Enforcement


Sec. 162.247  Will BIA notify a tenant when a rent payment is due under 
an agricultural lease?

    We may issue bills or invoices to a tenant in advance of the dates 
on which rent payments are due under an agricultural 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.


Sec. 162.248  What will BIA do if rent payments are not made in the 
time and manner required by an agricultural lease?

    (a) A tenant's failure to pay rent in the time and manner required 
by an agricultural lease will be a violation of the lease, and a notice 
of violation will be issued under Sec. 162.251 of this subpart. If the 
lease requires that rent payments be made to us, we will send the 
tenant and its sureties a notice of violation within five business days 
of the date on which the rent payment was due. If the lease provides 
for payment directly to the Indian landowners, we will send the tenant 
and its sureties a notice of violation within five 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 requisite time period described in 
Sec. 162.251(b) of this subpart, 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 Sec. 162.252 of this subpart, 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 cancellation of the 
lease or any further notice to the tenant, nor will such an action be 
precluded by a prior cancellation.
    (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 rent payments, or refunded.
    (d) If a personal or business check is dishonored, and a rent 
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 Sec. 162.251 of this subpart. 
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 Sec. 162.227(b) of this subpart.


Sec. 162.249  Will any special fees be assessed on delinquent rent 
payments due under an agricultural lease?

    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 an 
agricultural 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 * * *
------------------------------------------------------------------------
(a) $50.00.............................  Administrative fee for
                                          dishonored checks.
(b) $15.00.............................  Administrative fee for BIA
                                          processing of each notice or
                                          demand letter.
(c) 18% of balance due.................  Administrative fee charged by
                                          Treasury following referral
                                          for collection of delinquent
                                          debt.
------------------------------------------------------------------------

Sec. 162.250  How will BIA determine whether the activities of a tenant 
under an agricultural lease are in compliance with the terms of the 
lease?

    (a) Unless an agricultural 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 five business days of that notification.


Sec. 162.251  What will BIA do in the event of a violation under an 
agricultural lease?

    (a) If we determine that an agricultural lease has been violated, 
we will send the tenant and its sureties a notice of violation within 
five business days of that determination. The notice of violation must 
be provided by certified mail, return receipt requested.
    (b) Within ten 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.


Sec. 162.252  What will BIA do if a violation of an agricultural lease 
is not cured within the requisite time period?

    (a) If the tenant does not cure a violation of an agricultural 
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 Secs. 162.253 through 162.254 of this subpart;
    (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

[[Page 7121]]

    (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 a cancellation letter within five 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 Sec. 162.253 of this subpart, including the 
amount of any appeal bond that must be posted with an appeal of the 
cancellation decision; and
    (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 filed 
by that time.


Sec. 162.253  Will BIA's regulations concerning appeal bonds apply to 
cancellation decisions involving agricultural leases?

    (a) The appeal bond provisions in Sec. 2.5 of part 2 of this 
chapter will not apply to appeals from lease cancellation decisions 
made under Sec. 162.252 of this subpart. Instead, when we decide to 
cancel an agricultural lease, we may require that the tenant 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.


Sec. 162.254  When will a cancellation of an agricultural lease be 
effective?

    A cancellation decision involving an agricultural lease will not be 
effective until 30 days after the tenant receives a cancellation letter 
from us. The cancellation decision will remain ineffective if the 
tenant files an appeal under Sec. 162.253 of this subpart and part 2 of 
this chapter, unless the decision is made immediately effective under 
part 2. While a cancellation decision is ineffective, the tenant must 
continue to pay rent and comply with the other terms of the lease. If 
an appeal is not filed in accordance with Sec. 162.253 of this subpart 
and part 2 of this chapter, the cancellation decision will be effective 
on the 31st day after the tenant receives the cancellation letter from 
us.


Sec. 162.255  Can BIA take emergency action if the leased premises are 
threatened with immediate and significant harm?

    If a tenant or any other party causes or threatens to cause 
immediate and significant harm to the leased premises during the term 
of an agricultural lease, we will take appropriate emergency action. 
Emergency action may include trespass proceedings under part 166, 
subpart I, of this chapter, or 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.


Sec. 162.256  What will BIA do if a tenant holds over after the 
expiration or cancellation of an agricultural lease?

    If a tenant remains in possession after the expiration or 
cancellation of an agricultural lease, we will treat the unauthorized 
use as a trespass. Unless we have reason to believe that the tenant is 
engaged in negotiations with the Indian landowners 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, including the assessment of civil penalties and costs 
under part 166, subpart I, of this chapter.

Subpart C--Residential Leases

    [Reserved]

Subpart D--Business Leases

    [Reserved]

Subpart E--Special Requirements for Certain Reservations


Sec. 162.500  Crow Reservation.

    (a) Notwithstanding the regulations in other sections of this part 
162, Crow Indians classified as competent under the Act of June 4, 1920 
(41 Stat. 751), as amended, may lease their trust lands and the trust 
lands of their minor children for farming or grazing purposes without 
the approval of the Secretary pursuant to the Act of May 26, 1926 (44 
Stat. 658), as amended by the Act of March 15, 1948 (62 Stat. 80). 
However, at their election Crow Indians classified as competent may 
authorize the Secretary to lease, or assist in the leasing of such 
lands, and an appropriate notice of such action shall be made a matter 
of record. When this prerogative is exercised, the general regulations 
contained in this part 162 shall be applicable. Approval of the 
Secretary is required on leases signed by Crow Indians not classified 
as competent or made on inherited or devised trust lands owned by more 
than five competent devisees or heirs.
    (b) The Act of May 26, 1926 (44 Stat. 658), as amended by the Act 
of March 15, 1948 (62 Stat. 80), provides that no lease for farming or 
grazing purposes shall be made for a period longer than five years, 
except irrigable lands under the Big Horn Canal; which may be leased 
for periods of ten years. No such lease shall provide the lessee a 
preference right to future leases which, if exercised, would thereby 
extend the total period of encumbrance beyond the five or ten years 
authorized by law.
    (c) All leases entered into by Crow Indians classified as 
competent, under the above-cited special statutes, must be recorded at 
the Crow Agency. Such recording shall constitute notice to all persons. 
Under these special statutes, Crow Indians classified as competent are 
free to lease their property within certain limitations. The five-year 
(ten-year in the case of lands under the Big Horn Canal) limitation is 
intended to afford a protection to the Indians. The essence of this 
protection is the right to deal with the property free, clear, and 
unencumbered at intervals at least as frequent as those provided by 
law. If lessees are able to obtain new leases long before the 
termination of existing leases, they are in a position to set their own 
terms. In these circumstances lessees could perpetuate their leaseholds 
and the protection of the statutory limitations as to terms would be 
destroyed. Therefore, in implementation of the foregoing 
interpretation, any lease which, on its face, is in violation of 
statutory limitations or requirements, and any grazing lease executed 
more than 12 months, and any farming lease executed more than 18 
months, prior to the commencement of the term thereof or any lease 
which purports to cancel an existing lease with the same lessee as of a 
future date and take effect upon such cancellation will not be 
recorded. Under a Crow tribal program, approved by the Department of 
the Interior, competent Crow Indians may, under certain circumstances, 
enter into agreements

[[Page 7122]]

which require that, for a specified term, their leases be approved. 
Information concerning whether a competent Crow Indian has executed 
such an instrument is available at the office of the Superintendent of 
the Crow Agency, Bureau of Indian Affairs, Crow Agency, Montana. Any 
lease entered into with a competent Crow Indian during the time such 
instrument is in effect and which is not in accordance with such 
instrument will be returned without recordation.
    (d) Where any of the following conditions are found to exist, 
leases will be recorded but the lessee and lessor will be notified upon 
discovery of the condition:
    (1) The lease in single or counterpart form has not been executed 
by all owners of the land described in the lease;
    (2) There is, of record, a lease on the land for all or a part of 
the same term;
    (3) The lease does not contain stipulations requiring sound land 
utilization plans and conservation practices; or
    (4) There are other deficiencies such as, but not limited to, 
erroneous land descriptions, and alterations which are not clearly 
endorsed by the lessor.
    (e) Any adult Crow Indian classified as competent shall have the 
full responsibility for obtaining compliance with the terms of any 
lease made by him pursuant to this section. This shall not preclude 
action by the Secretary to assure conservation and protection of these 
trust lands.
    (f) Leases made by competent Crow Indians shall be subject to the 
right to issue permits and leases to prospect for, develop, and mine 
oil, gas, and other minerals, and to grant rights-of-way and easements, 
in accordance with applicable law and regulations. In the issuance or 
granting of such permits, leases, rights-of-way or easements due 
consideration will be given to the interests of lessees and to the 
adjustment of any damages to such interests. In the event of a dispute 
as to the amount of such damage, the matter will be referred to the 
Secretary whose determination will be final as to the amount of said 
damage.


Sec. 162.501  Fort Belknap Reservation.

    Not to exceed 20,000 acres of allotted and tribal lands (non-
irrigable as well as irrigable) on the Fort Belknap Reservation in 
Montana may be leased for the culture of sugar beets and other crops in 
rotation for terms not exceeding ten years.


Sec. 162.502  Cabazon, Augustine, and Torres-Martinez Reservations, 
California.

    (a) Upon a determination by the Secretary that the owner or owners 
are not making beneficial use thereof, restricted lands on the Cabazon, 
Augustine, and Torres-Martinez Indian Reservations which are or may be 
irrigated from distribution facilities administered by the Coachella 
Valley County Water District in Riverside County, California, may be 
leased by the Secretary in accordance with the regulations in this part 
for the benefit of the owner or owners.
    (b) All leases granted or approved on restricted lands of the 
Cabazon, Augustine, and Torres-Martinez Indian Reservations shall be 
filed for record in the office of the county recorder of the county in 
which the land is located, the cost thereof to be paid by the lessee. A 
copy of each such lease shall be filed by the lessee with the Coachella 
Valley County Water District or such other irrigation or water district 
within which the leased lands are located. All such leases shall 
include a provision that the lessee, in addition to the rentals 
provided for in the lease, shall pay all irrigation charges properly 
assessed against the land which became payable during the term of the 
lease. Act of August 25, 1950 (64 Stat. 470); Act of August 28, 1958 
(72 Stat. 968).


Sec. 162.503  San Xavier and Salt River Pima-Maricopa Reservations.

    (a) Purpose and scope. The Act of November 2, 1966 (80 Stat. 1112), 
provides statutory authority for long-term leasing on the San Xavier 
and Salt River Pima-Maricopa Reservations, Arizona, in addition to that 
contained in the Act of August 9, 1955 (69 Stat. 539), as amended (25 
U.S.C. 415). When leases are made under the 1955 Act on the San Xavier 
or Salt River Pima-Maricopa Reservations, the regulations in part 162 
apply. The purpose of this section is to provide regulations for 
implementation of the 1966 Act. The 1966 Act does not apply to leases 
made for purposes that are subject to the laws governing mining leases 
on Indian lands.
    (b) Duration of leases. Leases made under the 1966 Act for public, 
religious, educational, recreational, residential, or business purposes 
may be made for terms of not to exceed 99 years. The terms of a grazing 
lease shall not exceed ten years; the term of a farming lease that does 
not require the making of a substantial investment in the improvement 
of the land shall not exceed ten years; and the term of a farming lease 
that requires the making of a substantial investment in the improvement 
of the land shall not exceed 40 years. No lease shall contain an option 
to renew which extends the total term beyond the maximum term permitted 
by this section.
    (c) Required covenant and enforcement thereof. Every lease under 
the 1966 Act shall contain a covenant on the part of the lessee that he 
will not commit or permit on the leased land any act that causes waste 
or a nuisance or which creates a hazard to health of persons or to 
property wherever such persons or property may be.
    (d) Notification regarding leasing proposals. If the Secretary 
determines that a proposed lease to be made under the 1966 Act for 
public, religious, educational, recreational, residential, or business 
purposes will substantially affect the governmental interests of a 
municipality contiguous to the San Xavier Reservation or the Salt River 
Pima-Maricopa Reservation, as the case may be, he shall notify the 
appropriate authority of such municipality of the pendency of the 
proposed lease. The Secretary may, in his discretion, furnish such 
municipality with an outline of the major provisions of the lease which 
affect its governmental interests and shall consider any comments on 
the terms of the lease affecting the municipality or on the absence of 
such terms from the lease that the authorities may offer. The notice to 
the authorities of the municipality shall set forth a reasonable 
period, not to exceed 30 days, within which any such comments shall be 
submitted.
    (e) Applicability of other regulations. The regulations in part 162 
of this title shall apply to leases made under the 1966 Act except 
where such regulations are inconsistent with this section.
    (f) Mission San Xavier del Bac. Nothing in the 1966 Act authorizes 
development that would detract from the scenic, historic, and religious 
values of the Mission San Xavier del Bac owned by the Franciscan Order 
of Friars Minor and located on the San Xavier Reservation.

Subpart F--Non-Agricultural Leases


Sec. 162.600  What types of leases are covered by this subpart?

    The regulations in this subpart apply to any leases other than 
agricultural leases, as defined in this part. To the extent that any of 
the regulations in this subpart conflict with the provisions of the 
Indian Land Consolidation Act Amendments of 2000, Pub. Law. 106-462, 
the provisions of that Act will govern.

[[Page 7123]]

Sec. 162.601  Grants of leases by Secretary.

    (a) The Secretary may grant leases on individually owned land on 
behalf of:
    (1) Persons who are non compos mentis;
    (2) Orphaned minors;
    (3) The undetermined heirs of a decedent's estate;
    (4) The heirs or devisees to individually owned land who have not 
been able to agree upon a lease during the three-month period 
immediately following the date on which a lease may be entered into; 
provided, that the land is not in use by any of the heirs or devisees; 
and
    (5) Indians who have given the Secretary written authority to 
execute leases on their behalf.
    (b) The Secretary may grant leases on the individually owned land 
of an adult Indian whose whereabouts is unknown, on such terms as are 
necessary to protect and preserve such property.
    (c) The Secretary may grant permits on Government land.


Sec. 162.602  Grants of leases by owners or their representatives.

    The following may grant leases:
    (a) Adults, other than those non compos mentis,
    (b) Adults, other than those non compos mentis, on behalf of their 
minor children, and on behalf of minor children to whom they stand in 
loco parentis when such children do not have a legal representative,
    (c) The guardian, conservator or other fiduciary, appointed by a 
state court or by a tribal court operating under an approved 
constitution or law and order code, of a minor or persons who are non 
compos mentis or are otherwise under legal disability,
    (d) Tribes or tribal corporations acting through their appropriate 
officials.


Sec. 162.603  Use of land of minors.

    The natural or legal guardian, or other person standing in loco 
parentis of minor children who have the care and custody of such 
children may use the individually owned land of such children during 
the period of minority without charge for the use of the land if such 
use will enable such person to engage in a business or other enterprise 
which will be beneficial to such minor children.


Sec. 162.604  Special requirements and provisions.

    (a) All leases made pursuant to the regulations in this part shall 
be in the form approved by the Secretary and subject to his written 
approval.
    (b) Except as otherwise provided in this part no lease shall be 
approved or granted at less than the present fair annual rental.
    (1) An adult Indian owner of trust or restricted land may lease his 
land for religious, educational, recreational or other public purposes 
to religious organizations or to agencies of the federal, state or 
local government at a nominal rental. Such adult Indian may lease land 
to members of his immediate family with or without rental 
consideration.
    (2) In the discretion of the Secretary, tribal land may be leased 
at a nominal rental for religious, educational, recreational, or other 
public purposes to religious organizations or to agencies of federal, 
state, or local governments; for purposes of subsidization for the 
benefit of the tribe; and for homesite purposes to tribal members 
provided the land is not commercial or industrial in character.
    (3) Leases may be granted or approved by the Secretary at less than 
the fair annual rental when in his judgment such action would be in the 
best interest of the landowners.
    (c) Unless otherwise provided by the Secretary a satisfactory 
surety bond will be required in an amount that will reasonably assure 
performance of the contractual obligations under the lease. Such bond 
may be for the purpose of guaranteeing:
    (1) Not less than one year's rental unless the lease contract 
provides that the annual rental shall be paid in advance.
    (2) The estimated construction cost of any improvement to be placed 
on the land by the lessee.
    (3) An amount estimated to be adequate to insure compliance with 
any additional contractual obligations.
    (d) The lessee may be required to provide insurance in an amount 
adequate to protect any improvements on the leased premises; the lessee 
may also be required to furnish appropriate liability insurance, and 
such other insurance as may be necessary to protect the lessor's 
interest.
    (e) No lease shall provide the lessee a preference right to future 
leases nor shall any lease contain provisions for renewal, except as 
otherwise provided in this part. No lease shall be entered into more 
than 12 months prior to the commencement of the term of the lease. 
Except with the approval of the Secretary no lease shall provide for 
payment of rent in advance of the beginning of the annual use period 
for which such rent is paid. The lease contract shall contain 
provisions as to the dates rents shall become due and payable.
    (f) Leases granted or approved under this part shall contain 
provisions as to whether payment of rentals is to be made direct to the 
owner of the land or his representative or to the official of the 
Bureau of Indian Affairs having jurisdiction over the leased premises.
    (g) All leases issued under this part shall contain the following 
provisions:
    (1) While the leased premises are in trust or restricted status, 
all of the lessee's obligations under this lease, and the obligations 
of his sureties, are to the United States as well as to the owner of 
the land.
    (2) Nothing contained in this lease shall 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 shall not serve to abrogate the 
lease. The owners of the land and the lessee and his surety or sureties 
shall be notified of any such change in the status of the land.
    (3) The lessee agrees that he will not use or cause to be used any 
part of the leased premises for any unlawful conduct or purpose.
    (h) Leases granted or approved under this part on individually 
owned lands which provide for payment of rental direct to the owner or 
his representative shall contain the following provisions:
    (1) In the event of the death of the owner during the term of this 
lease and while the leased premises are in trust or restricted status, 
all rentals remaining due or payable to the decedent or his 
representative under the provisions of the lease shall be paid to the 
official of the Bureau of Indian Affairs having jurisdiction over the 
leased premises.
    (2) While the leased premises are in trust or restricted status, 
the Secretary may in his discretion suspend the direct rental payment 
provisions of this lease in which event the rentals shall be paid to 
the official of the Bureau of Indian Affairs having jurisdiction over 
the leased premises.


Sec. 162.605  Negotiation of leases.

    (a) Leases of individually owned land or tribal land may be 
negotiated by those owners or their representatives who may execute 
leases pursuant to Sec. 162.602 of this subpart.
    (b) Where the owners of a majority interest, or their 
representatives, who may grant leases under Sec. 162.602 of this 
subpart, have negotiated a lease satisfactory to the Secretary he may 
join in the execution of the lease and thereby commit the interests of 
those persons in whose behalf he is authorized to grant leases under 
Sec. 162.601(a)(1), (2), (3), and (5) of this subpart.

[[Page 7124]]

    (c) Where the Secretary may grant leases under Sec. 162.601 of this 
subpart he may negotiate leases when in his judgment the fair annual 
rental can thus be obtained.


Sec. 162.606  Advertisement.

    Except as otherwise provided in this part, prior to granting a 
lease or permit as authorized under Sec. 162.601 of this subpart the 
Secretary shall advertise the land for lease. Advertisements will call 
for sealed bids and will not offer preference rights.


Sec. 162.607  Duration of leases.

    Leases granted or approved under this part shall be limited to the 
minimum duration, commensurate with the purpose of the lease, that will 
allow the highest economic return to the owner consistent with prudent 
management and conservation practices, and except as otherwise provided 
in this part shall not exceed the number of years provided for in this 
section. Except for those leases authorized by Sec. 162.604(b)(1) and 
(2) of this subpart, unless the consideration for the lease is based 
primarily on percentages of income produced by the land, the lease 
shall provide for periodic review, at not less than five-year 
intervals, of the equities involved. Such review shall give 
consideration to the economic conditions at the time, exclusive of 
improvement or development required by the contract or the contribution 
value of such improvements. Any adjustments of rental resulting from 
such review may be made by the Secretary where he has the authority to 
grant leases, otherwise the adjustment must be made with the written 
concurrence of the owners and the approval of the Secretary.
    (a) Leases for public, religious, educational, recreational, 
residential, or business purposes shall not exceed 25 years but may 
include provisions authorizing a renewal or an extension for one 
additional term of not to exceed 25 years, except such leases of land 
on the Hollywood (formerly Dania) Reservation, Fla.; the Navajo 
Reservation, Ariz., N. Mex., and Utah; the Palm Springs Reservation, 
Calif.; the Southern Ute Reservation, Colo.; the Fort Mohave 
Reservation, Calif., Ariz., and Nev.; the Pyramid Lake Reservation, 
Nev.; the Gila River Reservation, Ariz.; the San Carlos Apache 
Reservation, Ariz.; the Spokane Reservation, Wash.; the Hualapai 
Reservation, Ariz.; the Swinomish Reservation, Wash.; the Pueblos of 
Cochiti, Pojoaque, Tesuque, and Zuni, N. Mex.; and land on the Colorado 
River Reservation, Ariz., and Calif.; which leases may be made for 
terms of not to exceed 99 years.
    (b) Leases granted by the Secretary pursuant to Sec. 162.601(a)(3) 
of this subpart shall be for a term of not to exceed two years except 
as otherwise provided in Sec. 162.605(b) of this subpart.


Sec. 162.608  Ownership of improvements.

    Improvements placed on the leased land shall become the property of 
the lessor unless specifically excepted therefrom under the terms of 
the lease. The lease shall specify the maximum time allowed for removal 
of any improvements so excepted.


Sec. 162.609  Unitization for leasing.

    Where it appears advantageous to the owners and advantageous to the 
operation of the land a single lease contract may include more than one 
parcel of land in separate ownerships, tribal or individual, provided 
the statutory authorities and other applicable requirements of this 
part are observed.


Sec. 162.610  Subleases and assignments.

    (a) Except as provided in paragraphs (b), (c), and (d) of this 
section, a sublease, assignment, amendment or encumbrance of any lease 
or permit issued under this part may be made only with the approval of 
the Secretary and the written consent of all parties to such lease or 
permit, including the surety or sureties.
    (b) With the consent of the Secretary, the lease may contain a 
provision authorizing the lessee to sublease the premises, in whole or 
in part, without further approval. Subleases so made shall not serve to 
relieve the sublessor from any liability nor diminish any supervisory 
authority of the Secretary provided for under the approved lease.
    (c) With the consent of the Secretary, the lease may contain 
provisions authorizing the lessee to encumber his leasehold interest in 
the premises for the purpose of borrowing capital for the development 
and improvement of the leased premises. The encumbrance instrument, 
must be approved by the Secretary. If a sale or foreclosure under the 
approved encumbrance occurs and the encumbrancer is the purchaser, he 
may assign the leasehold without the approval of the Secretary or the 
consent of the other parties to the lease, provided, however, that the 
assignee accepts and agrees in writing to be bound by all the terms and 
conditions of the lease. If the purchaser is a party other than the 
encumbrancer, approval by the Secretary of any assignment will be 
required, and such purchaser will be bound by the terms of the lease 
and will assume in writing all the obligations thereunder.
    (d) With the consent of the Secretary, leases of tribal land to 
individual members of the tribe or to tribal housing authorities may 
contain provisions permitting the assignment of the lease without 
further consent or approval where a lending institution or an agency of 
the United States makes, insures or guarantees a loan to an individual 
member of the tribe or to a tribal housing authority for the purpose of 
providing funds for the construction of housing for Indians on the 
leased premises; provided, the leasehold has been pledged as security 
for the loan and the lender has obtained the leasehold by foreclosure 
or otherwise. Such leases may with the consent of the Secretary also 
contain provisions permitting the lessee to assign the lease without 
further consent or approval.


Sec. 162.611  Payment of fees and drainage and irrigation charges.

    (a) Any lease covering lands within an irrigation project or 
drainage district shall require the lessee to pay annually on or before 
the due date, during the term of the lease and in the amounts 
determined, all charges assessed against such lands. Such charges shall 
be in addition to the rental payments prescribed in the lease. All 
payments of such charges and penalties shall be made to the official 
designated in the lease to receive such payments.
    (b) We will charge an administrative fee each time we approve an 
agricultural 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.
    (c) Except as provided in paragraph (d) of this section, we will 
charge administrative fees based on the rent payable under the lease. 
The fee will be 3% of the annual rent payable, including any percentage 
or cropshare rent that can be reasonably estimated.
    (d) 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.
    (e) 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.


Sec. 162.612  Can a lease provide for negotiated remedies in the event 
of a violation?

    (a) A lease of tribal land may provide the tribe with certain 
negotiated

[[Page 7125]]

remedies in the event of a lease violation, including the power to 
terminate the lease. A 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 Sec. 162.619(c) of this subpart. 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 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 Sec. 162.619 of this subpart.


Sec. 162.613  Will BIA notify a tenant when a rent payment is due under 
a lease?

    We may issue bills or invoices to a tenant in advance of the dates 
on which rent payments are due under a 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.


Sec. 162.614  Will untimely rent payments made under a lease be subject 
to interest charges or late payment penalties?

    A lease must specify the rate at which interest will accrue on any 
rent 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 rent 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 Sec. 162.618 of 
this subpart.


Sec. 162.615  What will BIA do if rent payments are not made in the 
time and manner required by a lease?

    (a) A tenant's failure to pay rent in the time and manner required 
by a lease will be a violation of the lease, and a notice of violation 
will be issued under Sec. 162.618 of this subpart. If the lease 
requires that rent payments be made to us, we will send the tenant and 
its sureties a notice of violation within five business days of the 
date on which the rent payment was due. If the lease provides for 
payment directly to the Indian landowners, we will send the tenant and 
its sureties a notice of violation within five 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 requisite time period described in 
Sec. 162.618(b) of this subpart, 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 Sec. 162.619 of this subpart, 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 cancellation of the 
lease or any further notice to the tenant, nor will such an action be 
precluded by a prior cancellation.
    (c) Partial payments and underpayments 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 rent payments, or 
refunded.
    (d) If a personal or business check is dishonored, and a rent 
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 Sec. 162.618 of this subpart. 
Any payment made to cure such a violation, and any future payments by 
the same tenant, must be made by an alternative payment method approved 
by us.


Sec. 162.616  Will any special fees be assessed on delinquent rent 
payments due under a lease?

    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 
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 * * *
------------------------------------------------------------------------
(a) $50.00.............................  Administrative fee for
                                          dishonored checks.
(b) $15.00.............................  Administrative fee for BIA
                                          processing of each notice or
                                          demand letter.
(c) 18% of balance due.................  Administrative fee charged by
                                          Treasury following referral
                                          for collection of delinquent
                                          debt.
------------------------------------------------------------------------

Sec. 162.617  How will BIA determine whether the activities of a tenant 
under a lease are in compliance with the terms of the lease?

    (a) Unless a 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 five business days of that notification.


Sec. 162.618  What will BIA do in the event of a violation under a 
lease?

    (a) If we determine that a lease has been violated, we will send 
the tenant and its sureties a notice of violation within five business 
days of that determination. The notice of violation must be provided by 
certified mail, return receipt requested.
    (b) Within ten 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.


Sec. 162.619  What will BIA do if a violation of a lease is not cured 
within the requisite time period?

    (a) If the tenant does not cure a violation of a 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 Secs. 162.620 through 162.621 of this subpart;
    (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

[[Page 7126]]

    (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 a cancellation letter within five 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 Sec. 162.620 of this subpart, including the 
amount of any appeal bond that must be posted with an appeal of the 
cancellation decision; and
    (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 filed 
by that time.


Sec. 162.620  Will BIA's regulations concerning appeal bonds apply to 
cancellation decisions involving leases?

    (a) The appeal bond provisions in Sec. 2.5 of part 2 of this 
chapter will not apply to appeals from lease cancellation decisions 
made under Sec. 162.619 of this subpart. Instead, when we decide to 
cancel an agricultural lease, we may require that the tenant 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.


Sec. 162.621  When will a cancellation of a lease be effective?

    A cancellation decision involving an agricultural lease will not be 
effective until 30 days after the tenant receives a cancellation letter 
from us. The cancellation decision will remain ineffective if the 
tenant files an appeal under Sec. 162.620 of this subpart and part 2 of 
this chapter, unless the decision is made immediately effective under 
part 2. While a cancellation decision is ineffective, the tenant must 
continue to pay rent and comply with the other terms of the lease. If 
an appeal is not filed in accordance with Sec. 162.620 of this subpart 
and part 2 of this chapter, the cancellation decision will be effective 
on the 31st day after the tenant receives the cancellation letter from 
us.


Sec. 162.622  Can BIA take emergency action if the leased premises are 
threatened with immediate and significant harm?

    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 lease, we will 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.


Sec. 162.623  What will BIA do if a tenant holds over after the 
expiration or cancellation of a lease?

    If a tenant remains in possession after the expiration or 
cancellation of a lease, we will treat the unauthorized use as a 
trespass. Unless we have reason to believe that the tenant is engaged 
in negotiations with the Indian landowners 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.

PART 166--GRAZING PERMITS

    5. Part 166 is revised to read as follows:
Subpart A--Purpose, Scope, and Definitions
Sec.
166.1  What is the purpose and scope of this part?
166.2  Can the BIA waive the application of these regulations?
166.3  May decisions under this part be appealed?
166.4  What terms do I need to know?
Subpart B--Tribal Policies and Laws Pertaining to Permits
166.100  What special tribal policies will we apply to permitting on 
Indian agricultural lands?
166.101  May individual Indian landowners exempt their land from 
certain tribal policies for permitting on Indian agricultural lands?
166.102  Do tribal laws apply to permits?
166.103  How will tribal laws be enforced on Indian agricultural 
land?
166.104  What notifications are required that tribal laws apply to 
permits on Indian agricultural lands?
Subpart C--Permit Requirements

General Requirements

166.200  When is a permit needed to authorize possession of Indian 
land for grazing purposes?
166.201  Must parents or guardians of Indian minors who own Indian 
land obtain a permit before using land for grazing purposes?
166.202  May an emancipated minor grant a permit?
166.203  When can the Indian landowners grant a permit?
166.204  Who may represent an individual Indian landowner in 
granting a permit?
166.205  When can the BIA grant a permit on behalf of Indian 
landowners?
166.206  What requirements apply to a permit on a fractionated 
tract?
166.207  What provisions will be contained in a permit?
166.208  How long is a permit term?
166.209  Must a permit be recorded?
166.210  When is a decision by the BIA regarding a permit effective?
166.211  When are permits effective?
166.212  When may a permittee take possession of permitted Indian 
land?
166.213  Must I comply with any standards of conduct if I am granted 
a permit?
166.214  Will the BIA notify the permittee of any change in land 
title status?

Obtaining a Permit

166.215  How can I find Indian land available for grazing?
166.216  Who is responsible for permitting Indian land?
166.217  In what manner may a permit on Indian land be granted?
166.218  How do I acquire a permit through tribal allocation?
166.219  How do I acquire a permit through negotiation?
166.220  What are the basic steps for acquiring a permit through 
negotiation?
166.221  How do I acquire an advertised permit through competitive 
bidding?
166.222  Are there standard permit forms?

Permit (Leasehold) Mortgage

166.223  Can I use a permit as collateral for a loan?
166.224  What factors does the BIA consider when reviewing a 
leasehold mortgage?
166.225  May a permittee voluntarily assign a leasehold interest 
under an approved encumbrance?
166.226  May the holder of a leasehold mortgage assign the leasehold 
interest after a sale or foreclosure of an approved encumbrance?

Modifying a Permit

166.227  How can Indian land be removed from an existing permit?
166.228  How will the BIA provide notice if Indian land is removed 
from an existing permit?
166.229  Other than to remove land, how can a permit be amended, 
assigned, subpermitted, or mortgaged?

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166.230  When will a BIA decision to approve an amendment, 
assignment, subpermit, or mortgage under a permit be effective?
166.231  Must an amendment, assignment, subpermit, or mortgage 
approved under a permit be recorded?
Subpart D--Land and Operations Management
166.300  How is Indian agricultural land managed?
166.301  How is Indian land for grazing purposes described?
166.302  How is a range unit created?
166.303  Can more than one parcel of Indian land be combined into 
one permit?
166.304  Can there be more than one permit for each range unit?
166.305  When is grazing capacity determined?
166.306  Can the BIA adjust the grazing capacity?
166.307  Will the grazing capacity be increased if I graze adjacent 
trust or non-trust rangelands not covered by the permit?
166.308  Can the number of animals and/or season of use be modified 
on the permitted land if I graze adjacent trust or non-trust 
rangelands under an on-and-off grazing permit?
166.309  Who determines livestock class and livestock ownership 
requirements on permitted Indian land?
166.310  What must a permittee do to protect livestock from exposure 
to disease?

Management Plans and Environmental Compliance

166.311  Is an Indian agricultural resource management plan 
required?
166.312  Is a conservation plan required?
166.313  Is environmental compliance required?

Conservation Practices and Improvements

166.314  Can a permittee apply a conservation practice on permitted 
Indian land?
166.315  Who is responsible for the completion and maintenance of a 
conservation practice if the permit expires or is canceled before 
the completion of the conservation practice?
166.316  Can a permittee construct improvements on permitted Indian 
land?
166.317  What happens to improvements constructed on Indian lands 
when the permit has been terminated?
Subpart E--Grazing Rental Rates, Payments, and Late Payment Collections

Rental Rate Determination and Adjustment

166.400  Who establishes grazing rental rates?
166.401  How does the BIA establish grazing rental rates?
166.402  Why must the BIA determine the fair annual rental of Indian 
land?
166.403  Will the BIA ever grant or approve a permit at less than 
fair annual rental?
166.404  Whose grazing rental rate will be applicable for a permit 
on tribal land?
166.405  Whose grazing rental rate will be applicable for a permit 
on individually-owned Indian land?
166.406  Whose grazing rental rate will be applicable for a permit 
on government land?
166.407  If a range unit consists of tribal and individually-owned 
Indian lands, what is the grazing rental rate?
166.408  Is the grazing rental rate established by the BIA adjusted 
periodically?

Rental Payments

166.409  How is my grazing rental payment determined?
166.410  When are grazing rental payments due?
166.411  Will a permittee be notified when a grazing rental payment 
is due?
166.412  What if the permittee does not receive an invoice that a 
grazing rental payment is due?
166.413  To whom are grazing rental payments made?
166.414  What forms of grazing rental payments are acceptable?
166.415  What will the BIA do if the permittee fails to make a 
direct payment to an Indian landowner?
166.416  May a permittee make a grazing rental payment in advance of 
the due date?
166.417  May an individual Indian landowner modify the terms of the 
permit on a fractionated tract for advance grazing rental payment?
166.418  When is a grazing rental payment late?

Late Rental Payment Collections

166.419  What will the BIA do if grazing rental payments are not 
made in the time and manner required by the permit?
166.420  Will any special fees be assessed on delinquent grazing 
rental payments due under a permit?
166.421  If a permit is canceled for non-payment, does that 
extinguish the permittee's debt?

Compensation to Indian Landowners

166.422  What does the BIA do with grazing rental payments received 
from permittees?
166.423  How do Indian landowners receive grazing rental payments 
that the BIA has received from permittees?
166.424  How will the BIA determine the grazing rental payment 
amount to be distributed to each Indian landowner?
Subpart F--Administrative and Tribal Fees
166.500  Are there administrative fees for a permit?
166.501  How are annual administrative fees determined?
166.502  Are administrative fees refundable?
166.503  May the BIA waive administrative fees?
166.504  Are there any other administrative or tribal fees, taxes, 
or assessments that must be paid?
Subpart G--Bonding and Insurance Requirements
166.600  Must a permittee provide a bond for a permit?
166.601  How is the amount of the bond determined?
166.602  What form of bonds will the BIA accept?
166.603  If cash is submitted as a bond, how is it administered?
166.604  Is interest paid on a cash performance bond?
166.605  Are cash performance bonds refunded?
166.606  What happens to a bond if a violation occurs?
166.607  Is insurance required for a permit?
166.608  What types of insurance may be required?
Subpart H--Permit Violations
166.700  What permit violations are addressed by this subpart?
166.701  How will the BIA determine whether the activities of a 
permittee under a permit are in compliance with the terms of the 
permit?
166.702  Can a permit provide for negotiated remedies in the event 
of a permit violation?
166.703  What happens if a permit violation occurs?
166.704  What will a written notice of a permit violation contain?
166.705  What will the BIA do if a permit violation is not cured 
within the required time period?
166.706  Will the BIA's regulations concerning appeal bonds apply to 
cancellation decisions involving permits?
166.707  When will a cancellation of a permit be effective?
166.708  Can the BIA take emergency action if the rangeland is 
threatened with immediate, significant, and irreparable harm?
166.709  What will the BIA do if a permittee holds over after the 
expiration or cancellation of a permit?
Subpart I--Trespass
166.800  What is trespass?
166.801  What is the BIA's trespass policy?
166.802  Who can enforce this subpart?

Notification

166.803  How are trespassers notified of a trespass determination?
166.804  What can I do if I receive a trespass notice?
166.805  How long will a written trespass notice remain in effect?

Actions

166.806  What actions does the BIA take against trespassers?
166.807  When will we impound unauthorized livestock or other 
property?
166.808  How are trespassers notified if their unauthorized 
livestock or other property are to be impounded?
166.809  What happens after my unauthorized livestock or other 
property are impounded?

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166.810  How do I redeem my impounded livestock or other property?
166.811  How will the sale of impounded livestock or other property 
be conducted?

Penalties, Damages, and Costs

166.812  What are the penalties, damages, and costs payable by 
trespassers on Indian agricultural land?
166.813  How will the BIA determine the value of forage or crops 
consumed or destroyed?
166.814  How will the BIA determine the value of the products or 
property illegally used or removed?
166.815  How will the BIA determine the amount of damages to Indian 
agricultural land?
166.816  How will the BIA determine the costs associated with 
enforcement of the trespass?
166.817  What happens if I do not pay the assessed penalties, 
damages and costs?
166.818  How are the proceeds from trespass distributed?
166.819  What happens if the BIA does not collect enough money to 
satisfy the penalty?
Subpart J--Agriculture Education, Education Assistance, Recruitment, 
and Training
166.900  How are the Indian agriculture education programs operated?
166.901  How will the BIA select an agriculture intern?
166.902  How can I become an agriculture educational employment 
student?
166.903  How can I get an agriculture scholarship?
166.904  What is agriculture education outreach?
166.905  Who can get assistance for postgraduate studies?
166.906  What can happen if we recruit you after graduation?
166.907  Who can be an intern?
166.908  Who can participate in continuing education and training?
166.909  What are my obligations to the BIA after I participate in 
an agriculture education program?
166.910  What happens if I do not fulfill my obligation to the BIA?
Subpart K--Records
166.1000  Who owns the records associated with this part?
166.1001  How must records associated with this part be preserved?

    Authority: 5 U.S.C. 301; R.S. 463, 25 U.S.C. 2; R.S. 465, 25 
U.S.C. 9; Sec. 6, 96 Stat. 986, 25 U.S.C. 466. Interpret or apply 
R.S. 2078, 25 U.S.C. 68; R.S. 2117, 25 U.S.C. 179; Sec. 3, 26 Stat. 
795, 25 U.S.C. 397; Sec. 1, 28 Stat. 305, 25 U.S.C. 402; Sec. 4, 36 
Stat. 856, 25 U.S.C. 403; Sec. 1, 39 Stat. 128, 25 U.S.C. 394; Sec. 
1, 41 Stat. 1232, 25 U.S.C. 393; Sec. 16, 17, 48 Stat. 987, 988, 25 
U.S.C. 476, 477; Sec. 1, 2, 4, 5, 6, 69 Stat. 539, 540, 25 U.S.C. 
415, 415a, 415b, 415c, 415d, 25 U.S.C. 3701, 3702, 3703, 3711, 3712, 
3713, 3714, 3731, 3732, 3733, 3734, 3741, 3742, 3743, 3744, 3745, 
107 Stat. 2011; 44 U.S.C. Sec. 3101, et seq.)

Subpart A--Purpose, Scope, and Definitions


Sec. 166.1  What is the purpose and scope of this part?

    (a) The purpose of this part is to describe the authorities, 
policies, and procedures the BIA uses to approve, grant, and administer 
a permit for grazing on tribal land, individually-owned Indian land, or 
government land.
    (b) If the BIA's approval is not required for a permit, these 
regulations will not apply.
    (c) These regulations do not apply to any tribal land which is 
permitted under a corporate charter issued by us pursuant to 25 U.S.C. 
Sec. 477, or under a special act of Congress authorizing permits 
without our approval under certain conditions, except to the extent 
that the authorizing statutes require us to enforce such permits on 
behalf of the Indian landowners.
    (d) To the extent that any provisions of this part conflict with 
Section 213 of the Indian Land Consolidation Act Amendments of 2000, 
the provisions of that act will govern.
    (e) In approving a permit on behalf of the Indian landowners, the 
BIA will not permit for fee interest owners nor will we collect rent on 
behalf of fee interest owners. Our permitting of the trust and 
restricted interests of the Indian landowners will not be conditioned 
on a permit having been obtained from any fee interest owners. However, 
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 permit of the 
remainder interests of the Indian landowners only if such action is 
necessary to preserve the value of the land or protect the interests of 
the Indian landowners. Where a life estate and remainder interest are 
both owned in trust or restricted status, the life estate and remainder 
interest must both be permitted under these regulations, unless the 
permit 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 permit must be paid to the holder of the life estate under 
part 179 of this title.


Sec. 166.2  Can the BIA waive the application of these regulations?

    Yes. In any case in which these regulations conflict with the 
objectives of the agricultural resource management plan provided for in 
Sec. 166.311 of this part, or with a tribal law, the BIA may waive the 
application of such regulations unless the waiver would constitute a 
violation of a federal statute or judicial decision or would conflict 
with the BIA's general trust responsibility under federal law.


Sec. 166.3  May decisions under this part be appealed?

    Yes. Except where otherwise provided in this part, appeals from 
decisions by the BIA under this part may be taken pursuant to 25 CFR 
part 2.


Sec. 166.4  What terms do I need to know?

    Adult means an individual Indian who is 18 years of age or older.
    Agency means the agency or field office or any other designated 
office in the Bureau of Indian Affairs (BIA) having jurisdiction over 
trust or restricted property or money.
    Agricultural product means:
    (1) Crops grown under cultivated conditions whether used for 
personal consumption, subsistence, or sold for commercial benefit;
    (2) Domestic livestock, including cattle, sheep, goats, horses, 
buffalo, swine, reindeer, fowl, or other animals specifically raised 
and used for food or fiber or as a beast of burden;
    (3) Forage, hay, fodder, food grains, crop residues and other items 
grown or harvested for the feeding and care of livestock, sold for 
commercial profit, or used for other purposes; and
    (4) Other marketable or traditionally used materials authorized for 
removal from Indian agricultural lands.
    Agricultural resource management plan means a ten-year plan 
developed through the public review process specifying the tribal 
management goals and objectives developed for tribal agricultural and 
grazing resources. Plans developed and approved under AIARMA will 
govern the management and administration of Indian agricultural 
resources and Indian agricultural lands by the BIA and Indian tribal 
governments.
    AIARMA means American Indian Agricultural Resources Management Act 
of December 3, 1993 (107 Stat. 2011, 25 U.S.C. 3701 et seq.), and 
amended on November 2, 1994 (108 Stat. 4572).
    Allocation means the apportionment of grazing privileges without 
competition to tribal members or tribal entities, including the tribal 
designation of permittees and the number and kind of livestock to be 
grazed.
    Animal Unit Month (AUM) means the amount of forage required to 
sustain one cow or one cow with one calf for one month.
    Approving/approval means the action taken by the BIA to approve a 
permit.
    Assign/assignment means an agreement between a permittee and an 
assignee, whereby the assignee acquires all of the permittee's rights, 
and

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assumes all of the permittee's obligations under a permit.
    Assignee means the person to whom the permit rights for use of 
Indian land are assigned.
    BIA means the Bureau of Indian Affairs within the Department of the 
Interior and any tribe acting on behalf of the BIA under this part.
    Bond means security for the performance of certain permit 
obligations, as furnished by the permitee, or a guaranty of such 
performance as furnished by a third-party surety.
    Conservation plan means a statement of management objectives for 
grazing, including contract stipulations defining required uses, 
operations, and improvements.
    Conservation practice means a management action to protect, 
conserve, utilize, and maintain the sustained yield productivity of 
Indian agricultural land.
    Day means a calendar day.
    Encumbrance means mortgage, deed of trust or other instrument which 
secures a debt owed by a permittee to a lender or other holder of a 
leasehold mortgage on the permit interest.
    Emancipated minor means a person under 18 years of age who is 
married or who is determined by a court of competent jurisdiction to be 
legally able to care for himself or herself.
    Fair annual rental means the amount of rental income that a 
permitted parcel of Indian land would most probably command in an open 
and competitive market.
    Farmland means Indian land, excluding Indian forest land, that is 
used for production of food, feed, fiber, forage, and seed, oil crops, 
or other agricultural products, and may be either dry land, irrigated 
land, or irrigated pasture.
    Fee interest means an interest in land that is owned in 
unrestricted fee status, and is thus freely alienable by the fee owner.
    Fractionated tract means a tract of Indian land owned in common by 
Indian landowners and/or fee owners holding undivided interests 
therein.
    Government land means any tract, or interest therein, in which the 
surface estate is owned by the United States and administered by the 
BIA, not including tribal land which has been reserved for 
administrative purposes.
    Grant/granting means the process of the BIA or the Indian landowner 
agreeing or consenting to a permit.
    Grazing capacity means the maximum sustainable number of livestock 
that may be grazed on a defined area and within a defined period, 
usually expressed in an Animal Unit Month (AUM).
    Grazing rental payment means the total of the grazing rental rate 
multiplied by the number of AUMs or acres in the permit.
    Grazing rental rate means the amount you must pay for an AUM or 
acre based on the fair annual rental.
    I/You means the person to whom these regulations directly apply.
    Immediate family means the spouse, brothers, sisters, lineal 
ancestors, lineal descendants, or members of the household of an 
individual Indian landowner.
    Indian agricultural land means Indian land, including farmland and 
rangeland, excluding Indian forest land, that is used for production of 
agricultural products, and Indian lands occupied by industries that 
support the agricultural community, regardless of whether a formal 
inspection and land classification has been conducted.
    Indian land means any tract in which any interest in the surface 
estate is owned by a tribe or individual Indian in trust or restricted 
status.
    Indian landowner means a tribe or individual Indian who owns an 
interest in Indian land in trust or restricted status.
    Individually-owned Indian land means any tract, or interest 
therein, in which the surface estate is owned by an individual Indian 
in trust or restricted status.
    Interest means, when used with respect to Indian land, an ownership 
right to the surface estate of Indian land that is unlimited or 
uncertain in duration, including a life estate.
    Life estate means an interest in Indian land which is limited in 
duration to the life of the permittor holding the interest, or the life 
of some other person.
    Majority interest means the ownership interest(s) that are greater 
than 50 percent of the trust or restricted ownership interest(s) in a 
tract of Indian land.
    Minor means an individual who is less than 18 years of age.
    Mortgage means a mortgage, deed of trust or other instrument which 
pledges a permittee's permit (leasehold) interest as security for a 
debt or other obligation owed by the permittee to a lender or other 
mortgagee.
    Non compos mentis means a person who has been legally determined by 
a court of competent jurisdiction to be of unsound mind or incapable of 
transacting or conducting business and managing one's own affairs.
    On-and-off grazing permit means a written agreement with a 
permittee for additional grazing capacity for other rangeland not 
covered by the permit.
    Permit means a written agreement between Indian landowners and a 
permittee, whereby the permittee is granted a revocable privilege to 
use Indian land or Government land, for a specified purpose.
    Permittee means an a person or entity who has acquired a legal 
right of possession to Indian land by a permit for grazing purposes 
under this part.
    Range unit means rangelands consolidated to form a unit of land for 
the management and administration of grazing under a permit. A range 
unit may consist of a combination of tribal, individually-owned Indian, 
and/or government land.
    Rangeland means Indian land, excluding Indian forest land, on which 
native vegetation is predominantly grasses, grass-like plants, half-
shrubs or shrubs suitable for grazing or browsing use, and includes 
lands re-vegetated naturally or artificially to provide a forage cover 
that is managed as native vegetation.
    Restricted land or restricted status means land the title to which 
is held by an individual Indian or a tribe and which can only be 
alienated or encumbered by the owner with the approval of the Secretary 
because of limitations contained in the conveyance instrument pursuant 
to federal law.
    Subpermit means a written agreement, whereby the permittee grants 
to an individual or entity a right to possession (i.e., pasturing 
authorization), no greater than that held by the permittee under the 
permit.
    Surety means one who guarantees the performance of another.
    Sustained yield means the yield of agricultural products that a 
unit of land can produce continuously at a given level of use.
    Trespass means any unauthorized occupancy, use of, or action on 
Indian lands.
    Tribal land means the surface estate of land or any interest 
therein held by the United States in trust for a tribe, band, 
community, group or pueblo of Indians, and land that is held by a 
tribe, band, community, group or pueblo of Indians, subject to federal 
restrictions against alienation or encumbrance, and includes such land 
reserved for BIA administrative purposes when it is not immediately 
needed for such purposes. The term also includes lands held by the 
United States in trust for an Indian corporation chartered under 
section 17 of the Act of June 18, 1934 (48 Stat. 984; 25 U.S.C. 476).
    Tribal law means the body of non-federal law that governs lands and

[[Page 7130]]

activities under the jurisdiction of a tribe, including ordinances or 
other enactments by the tribe, tribal court rulings, and tribal common 
law.
    Trust land means any tract, or interest therein, that the United 
States holds in trust status for the benefit of a tribe or individual 
Indian.
    Undivided interest means a fractional share in the surface estate 
of Indian land, where the surface estate is owned in common with other 
Indian landowners or fee owners.
    Us/We/Our means the BIA and any tribe acting on behalf of the BIA 
under 166.1 of this part.
    Uniform Standards of Professional Appraisal Practices (USPAP) means 
the standards promulgated by the Appraisal Standards Board of the 
Appraisal Foundation to establish requirements and procedures for 
professional real property appraisal practice.
    Written notice means a written letter mailed by way of United 
States mail, certified return receipt requested, postage prepaid, or 
hand-delivered letter.

Subpart B--Tribal Policies and Laws Pertaining to Permits


Sec. 166.100  What special tribal policies will we apply to permitting 
on Indian agricultural lands?

    (a) When specifically authorized by an appropriate tribal 
resolution establishing a general policy for permitting of Indian 
agricultural lands, the BIA will:
    (1) Waive the general prohibition against Indian operator 
preferences in permits advertised for bid under Sec. 166.221 of this 
part, by allowing prospective Indian operators to match the highest 
responsible bid (unless the tribal law or leasing policy specifies some 
other manner in which the preference must be afforded);
    (2) Waive or modify the requirement that a permittee post a surety 
or performance bond;
    (3) Provide for posting of other collateral or security in lieu of 
surety or other bonds; and
    (4) Approve permits of tribally-owned agricultural lands at rates 
determined by the tribal governing body.
    (b) When specifically authorized by an appropriate tribal 
resolution establishing a general policy for permitting of Indian 
agricultural lands, and subject to paragraph (c) of this section, the 
BIA may:
    (1) Waive or modify any general notice requirement of federal law; 
and
    (2) Grant or approve a permit on ``highly fractionated undivided 
heirship lands'' as defined by tribal law.
    (c) The BIA may take the action specified in paragraph (b) of this 
section only if:
    (1) The tribe defines by resolution what constitutes ``highly 
fractionated undivided heirship lands'';
    (2) The tribe adopts an alternative plan for notifying individual 
Indian landowners; and
    (3) The BIA's action is necessary to prevent waste, reduce idle 
land acreage and ensure income.


Sec. 166.101  May individual Indian landowners exempt their land from 
certain tribal policies for permitting on Indian agricultural lands?

    (a) The individual Indian landowners of Indian land may exempt 
their land from our application of a tribal policy referred to under 
Sec. 166.100 of this part if:
    (1) The Indian landowners have at least a 50% interest in such 
fractionated tract; and
    (2) The Indian landowners submit a written objection to the BIA of 
all or any part of such tribal policies to the permitting of such 
parcel of land.
    (b) Upon verification of the written objection we will notify the 
tribe of the Indian landowners' exemption from the specific tribal 
policy.
    (c) The procedures described in paragraphs (a) and (b) of this 
section will also apply to withdrawing an approved exemption.


Sec. 166.102  Do tribal laws apply to permits?

    Tribal laws will apply to permits of Indian land under the 
jurisdiction of the tribe enacting such laws, unless those tribal laws 
are inconsistent with applicable federal law.


Sec. 166.103  How will tribal laws be enforced on Indian agricultural 
land?

    (a) Unless prohibited by federal law, we will recognize and comply 
with tribal laws regulating activities on Indian agricultural land, 
including tribal laws relating to land use, environmental protection, 
and historic or cultural preservation.
    (b) While the tribe is primarily responsible for enforcing tribal 
laws pertaining to Indian agricultural land, we will:
    (1) Assist in the enforcement of tribal laws;
    (2) Provide notice of tribal laws to persons or entities 
undertaking activities on Indian agricultural land, under 
Sec. 166.104(b) of this part; and
    (3) Require appropriate federal officials to appear in tribal 
forums when requested by the tribe, so long as such an appearance would 
not:
    (i) Be inconsistent with the restrictions on employee testimony set 
forth at 43 CFR Part 2, Subpart E;
    (ii) Constitute a waiver of the sovereign immunity of the United 
States; or
    (iii) Authorize or result in a review of our actions by a tribal 
court.
    (c) Where the regulations in this subpart are inconsistent with a 
tribal law, but such regulations cannot be superseded or modified by 
the tribal law under Sec. 166.2 of this part, we may waive the 
regulations under part 1 of this title, so long as the waiver does not 
violate a federal statute or judicial decision or conflict with our 
general trust responsibility under federal law.


Sec. 166.104  What notifications are required that tribal laws apply to 
permits on Indian agricultural lands?

    (a) Tribes must notify us of the content and effective dates of new 
tribal laws.
    (b) We will then notify affected Indian landowners and any persons 
or entities undertaking activities on Indian agricultural lands of the 
superseding or modifying effect of the tribal law. We will:
    (1) Provide individual written notice; or
    (2) Post public notice. This notice will be posted at the tribal 
community building, U.S. Post Office, and/or published in the local 
newspaper nearest to the Indian lands where activities are occurring.

Subpart C--Permit Requirements

General Requirements


Sec. 166.200  When is a permit needed to authorize possession of Indian 
land for grazing purposes?

    (a) Unless otherwise provided for in this part, any person or legal 
entity, including an independent legal entity owned and operated by a 
tribe, must obtain a permit under these regulations before taking 
possession of Indian land for grazing purposes.
    (b) An Indian landowner who owns 100% of the trust or restricted 
interests in a tract may take possession of that Indian land without a 
permit or any other prior authorization from us.
    (c) If an Indian landowner does not own 100 percent (%) of his or 
her Indian land and wants to use the Indian land for grazing purposes, 
a permit must be granted by the majority interest of the fractionated 
tract.

[[Page 7131]]

Sec. 166.201  Must parents or guardians of Indian minors who own Indian 
land obtain a permit before using land for grazing purposes?

    Parents or guardians need not obtain a permit for Indian lands 
owned by their minor Indian children if:
    (a) Those minor children own 100 percent (%) of the land; and
    (b) The minor children directly benefit from the use of the land. 
We may require the user to provide evidence of the direct benefits to 
the minor children. When one of the minor children becomes an adult, 
the permit will have to be obtained from the majority interest.


Sec. 166.202  May an emancipated minor grant a permit?

    Yes. An emancipated minor may grant a permit.


Sec. 166.203  When can the Indian landowners grant a permit?

    (a) Tribes grant permits of tribal land, including any tribally-
owned undivided interest(s) in a fractionated tract. A permit granted 
by the tribe must be approved by us, unless the permit is authorized by 
a charter approved by us under 25 U.S.C. Sec. 477, or unless our 
approval is not required under other applicable federal law. In order 
to permit tribal land in which the beneficial interest has been 
assigned to another party, the assignee and the tribe must both grant 
the permit, subject to our approval.
    (b) Individual Indian landowners may grant a permit of their land, 
including their undivided interest in a fractionated tract, subject to 
our approval. Except as otherwise provided in this part, these Indian 
landowners may include the owner of a life estate holding 100 percent 
(%) interest in their land.
    (c) The owners of a majority interest in the Indian ownership of a 
fractionated tract may grant a permit, subject to our approval, without 
giving prior notice to the minority Indian landowners as long as the 
minority interest owners receive fair annual rental.


Sec. 166.204  Who may represent an individual Indian landowner in 
granting a permit?

    The following individuals or entities may represent an individual 
Indian landowner in granting a permit:
    (a) An adult with custody acting on behalf of their 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 tribal 
or state law;
    (2) Identifies the attorney-in-fact and the land to be permitted; 
and
    (3) Describes the scope of the power granted and any limits 
thereon.


Sec. 166.205  When can the BIA grant a permit on behalf of Indian 
landowners?

    (a) We may grant a permit on behalf of:
    (1) An individual who is adjudicated to be non compos mentis by a 
court of competent jurisdiction;
    (2) An orphaned minor;
    (3) An Indian landowner who has granted us written authority to 
permit his or her land;
    (4) The undetermined heirs and devisees of a deceased Indian 
landowner;
    (5) An Indian landowner whose whereabouts are unknown to us after a 
reasonable attempt is made to locate the Indian landowner;
    (6) Indian landowners, where:
    (i) We have provided written notice of our intent to grant a permit 
on their behalf, but the Indian landowners are unable to agree upon a 
permit during a three-month negotiation period immediately following 
such notice, or any other notice period established by a tribe under 
Sec. 166.100(c)(2) of this part; and
    (ii) The land is not being used by an individual Indian landowner 
under Sec. 166.200 of this part.
    (7) The individual Indian owners of fractionated Indian land, when 
necessary to protect the interests of the individual Indian landowners.


Sec. 166.206  What requirements apply to a permit on a fractionated 
tract?

    We may grant a permit on behalf of all Indian landowners of a 
fractionated tract as long as the owners receive fair annual rental. 
Before granting such a permit, we may offer a preference right to any 
Indian landowner who:
    (a) Is in possession of the entire tract;
    (b) Submits a written offer to permit the land, subject to any 
required or negotiated terms and conditions, prior to our granting a 
permit to another party; and
    (c) Provides any supporting documents needed to demonstrate the 
ability to perform all of the obligations under the proposed permit.


Sec. 166.207  What provisions will be contained in a permit?

    A permit, at a minimum, must include:
    (a) Authorized user(s);
    (b) Conservation plan requirements;
    (c) Prohibition against creating a nuisance, any illegal activity, 
and negligent use or waste or resources;
    (d) Numbers and types of livestock allowed;
    (e) Season(s) of use;
    (f) Grazing rental payment, payment schedule, and late payment 
interest and penalties;
    (g) Administrative fees;
    (h) Tribal fees, if applicable;
    (i) Payment method;
    (j) Range unit number or name;
    (k) Animal identification requirements;
    (l) A description (preferably a legal description) of the permitted 
area;
    (m) Term of permit (including beginning and ending dates of the 
term allowed, as well as any option to renew, extend or terminate);
    (n) Conditions for making improvements, if any;
    (o) A right of entry by the BIA for purposes of inspection or 
enforcement purposes;
    (p) A provision concerning the applicability of tribal 
jurisdiction;
    (q) A provision stating how trespass proceeds are to be 
distributed; and
    (r) A provision for the permittee to 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 permitted premises that occur during the 
permit term, regardless of fault.


Sec. 166.208  How long is a permit term?

    (a) The duration must be reasonable given the purpose of the permit 
and the level of investment required by the permittee to place the 
property into productive use.
    (b) On behalf of the undetermined heirs of an individual Indian 
decedent owning 100 percent (%) interest in the land, we will grant or 
approve permits for a maximum term of two years.
    (c) Permits granted for agricultural purposes will not usually 
exceed ten years. A term longer than ten years, but not to exceed 25 
years unless authorized by other federal law, may be authorized when a 
longer term is determined by us to be in the best interest of the 
Indian landowners and when such permit requires substantial investment 
in the development of the lands by the permittee.
    (d) A tribe may determine the duration of permits composed entirely 
of its tribal land or in combination with government land, subject to 
the same

[[Page 7132]]

limitations provided in paragraph (d) of this section.
    (e) A permit will specify the beginning and ending dates of the 
term allowed, as well as any option to renew, extend, or terminate.
    (f) Permits granted by us for protection of the Indian land will be 
for no more than two years.


Sec. 166.209  Must a permit be recorded?

    A permit must be recorded in our Land Titles and Records Office 
which has jurisdiction over the land. We will record the permit 
immediately following our approval under this subpart.


Sec. 166.210  When is a decision by the BIA regarding a permit 
effective?

    Our decision to approve a permit will be effective immediately, 
notwithstanding any appeal which may be filed under Part 2 of this 
title. Copies of the approved permit will be provided to the permitee 
and made available to the Indian landowners upon request.


Sec. 166.211  When are permits effective?

    Unless otherwise provided in the permit, a permit will be effective 
on the date on which the permit is approved by us. A permit may be made 
effective on some past or future date, by agreement, but such a permit 
may not be granted or approved more than one year prior to the date on 
which the permit term is to commence.


Sec. 166.212  When may a permittee take possession of permitted Indian 
land?

    The permittee may take possession of permitted Indian land on the 
date specified in the permit as the beginning date of the term, but not 
before we approve the permit.


Sec. 166.213  Must I comply with any standards of conduct if I am 
granted a permit?

    Yes. Permittees are expected to:
    (a) Conduct grazing operations in accordance with the principles of 
sustained yield management, agricultural resource management planning, 
sound conservation practices, and other community goals as expressed in 
tribal laws, agricultural resource management plans, and similar 
sources.
    (b) Comply with all applicable laws, ordinances, rules, 
regulations, and other legal requirements. You must also pay all 
applicable penalties that may be assessed for non-compliance.
    (c) Fulfill all financial obligations of your permit owed to the 
Indian landowners and the United States.
    (d) Conduct only those activities authorized by the permit.


Sec. 166.214  Will the BIA notify the permittee of any change in land 
title status?

    Yes. We will notify the permittee if a fee patent is issued or if 
restrictions are removed. After we notify the permittee our obligation 
under Sec. 166.228 of this part ceases.

Obtaining A Permit


Sec. 166.215  How can I find Indian land available for grazing?

    You may contact a local BIA office or tribal office to determine 
what Indian land may be available for grazing permits.


Sec. 166.216  Who is responsible for permitting Indian land?

    The Indian landowner is primarily responsible for granting permits 
on their Indian land, with the assistance and approval of the BIA, 
except where otherwise provided by law. You may contact the local BIA 
or tribal office for assistance in obtaining a permit for grazing 
purposes on Indian land.


Sec. 166.217  In what manner may a permit on Indian land be granted?

    (a) A tribe may grant a permit on tribal land through tribal 
allocation, negotiation, or advertisement in accordance with 
Sec. 166.203 of this part. We must approve all permits of tribal land 
in order for the permit to be valid, except where otherwise provided by 
law.
    (b) Individual Indian landowners may grant a permit on their Indian 
land through negotiation or advertisement in accordance with 
Sec. 166.203 of this part. We must approve all permits of Individual 
Indian land in order for the permit to be valid.
    (c) We will grant permits through negotiation or advertisement for 
range units containing, in whole or part, individually-owned Indian 
land and range units that consist of, or in combination with 
individually-owned Indian land, tribal or government land, under 
Sec. 166.205 of this part. We will consult with tribes prior to 
granting permits for range units that include tribal land.


Sec. 166.218  How do I acquire a permit through tribal allocation?

    (a) A tribe may allocate grazing privileges on range units 
containing trust or restricted land which is entirely tribally-owned or 
which contains only tribal and government land under the control of the 
tribe.
    (b) A tribe may allocate grazing privileges to its members and to 
tribally-authorized entities without competitive bidding on tribal and 
tribally-controlled government land.
    (c) We will implement the tribe's allocation procedure by 
authorizing the grazing privileges on individually-owned Indian land 
and government land, subject to the rental rate provisions in 
Sec. 166.400(b) and (c) of this part.
    (d) A tribe may prescribe the eligibility requirements for 
allocations 60 days before granting a new permit or before an existing 
permit expires.
    (e) 120 days before the expiration of existing permits, we will 
notify the tribe of the 60-day period during which the tribe may 
prescribe eligibility requirements.
    (f) We will prescribe the eligibility requirements after the 
expiration of the 60-day period in the event satisfactory action is not 
taken by the tribe.
    (g) Grazing rental rates for grazing privileges allocated from an 
existing permit, in whole or in part, must equal or exceed the rates 
paid by the preceding permittee(s). Tribal members will pay grazing 
rental rates established by the tribe on tribal lands.


Sec. 166.219  How do I acquire a permit through negotiation?

    (a) Permits may be negotiated and granted by the Indian landowners 
with the permittee of their choice. The BIA may negotiate and grant 
permits on behalf of Indian landowners pursuant to Sec. 166.205 of this 
part.
    (b) Upon the conclusion of negotiations with the Indian landowners 
or their representatives, and the satisfaction of any applicable 
conditions, you may submit an executed permit and any required 
supporting documents to us for appropriate action. Where a permit is in 
a form that has previously been accepted or approved by us, and all of 
the documents needed to support the findings required by this part have 
been received, we will decide whether to approve the permit within 30 
days of the date of our receipt of the permit and supporting documents. 
If we decide to approve or disapprove a permit, we will notify the 
parties immediately and advise them of their right to appeal the 
decision under part 2 of this title.
    (c) In negotiating a permit, the Indian landowners may choose to 
include their land in the permit in exchange for their receipt of a 
share of the revenues or profits generated by the permit. Under such an 
arrangement, the permit may be granted to a joint venture or other 
legal entity owned, in part, by the Indian landowners.
    (d) Receipt of permit payments based upon income received from the 
land will not, of itself, make the Indian

[[Page 7133]]

landowner a partner, joint venturer, or associate of the permittees.
    (e) We will assist prospective permittees in contacting the Indian 
landowners or their representatives, for the purpose of negotiating a 
permit.


Sec. 166.220  What are the basic steps for acquiring a permit through 
negotiation?

    The basic steps for acquiring a permit by negotiation are as 
follows:
    (a) The BIA or the Indian landowner will:
    (1) Receive a request to permit from an Indian landowner or the 
potential permittee;
    (2) Prepare the permit documents; and
    (3) Grant the permit.
    (b) A potential permittee will complete the requirements for 
securing a permit, (e.g., bond, insurance, payment of administrative 
fee, etc.);
    (c) We will:
    (1) Review the permit for proper documentation and compliance with 
all applicable laws and regulations;
    (2) Approve the permit after our review;
    (3) Send the approved permit to the permittee and, upon request, to 
the Indian landowner; and
    (4) Record and maintain the approved permit.


Sec. 166.221  How do I acquire an advertised permit through competitive 
bidding?

    (a) As part of the negotiation of a permit, Indian landowners may 
advertise their Indian land to identify potential permittees with whom 
to negotiate.
    (b) When the BIA grants and approves a permit on behalf of an 
individual Indian landowner using an advertisement for bids, we will:
    (1) Prepare and distribute an advertisement of lands available for 
permit that identifies the terms and conditions of the permit sale, 
including, for agricultural permits, any preference rights;
    (2) Solicit sealed bids and conduct the public permit sale;
    (3) Determine and accept the highest or best responsible bidder(s), 
which may require further competitive bidding after the bid opening; 
and
    (4) Prepare permits for successful bidders.
    (c) After completion of the steps in paragraph (b) of this section, 
the successful bidder must complete and submit the permit and satisfy 
all applicable requirements, (e.g., bond, insurance, payment of 
administrative fee, etc.).
    (d) After review of the permit documentation for proper completion 
and compliance with all applicable laws and regulations, within 30 days 
we will:
    (1) Grant and approve the permit on behalf of Indian landowners 
where we are authorized to do so by law;
    (2) Distribute the approved permit to the permittee(s) and, upon 
request, to the Indian landowner(s); and
    (3) Record and maintain the approved permit.


Sec. 166.222  Are there standard permit forms?

    Yes. Standard permit forms, including bid forms, permit forms, and 
permit modification forms are available at our agency offices.

Permit (Leasehold) Mortgage


Sec. 166.223  Can I use a permit as collateral for a loan?

    We may approve a permit containing a provision that authorizes the 
permittee to encumber the permit interest, known as a leasehold 
mortgage, for the development and improvement of the permitted Indian 
land. We must approve the leasehold mortgage that encumbers the permit 
interest before it can be effective. We will record the approved 
leasehold mortgage instrument.


Sec. 166.224  What factors does the BIA consider when reviewing a 
leasehold mortgage?

    (a) We will approve the leasehold mortgage if:
    (1) All consents required in the permit have been obtained from the 
Indian landowners and any surety or guarantor;
    (2) The mortgage covers only the permit interest, and no unrelated 
collateral belonging to the permittee;
    (3) The financing being obtained will be used only in connection 
with the development or use of the permitted premises, and the mortgage 
does not secure any unrelated obligations owed by the permittee to the 
mortgagee; and
    (4) We find no compelling reason to withhold our approval, in order 
to protect the best interests of the Indian landowner.
    (b) In making the finding required by paragraph (a)(4) of this 
section, we will consider whether:
    (1) The ability to perform the permit obligations would be 
adversely affected by the cumulative mortgage obligations;
    (2) Any negotiated permit provisions as to the allocation or 
control of insurance or condemnation proceeds would be modified;
    (3) The remedies available to us or the Indian landowners would be 
limited (beyond the additional notice and cure rights to be afforded to 
the mortgagee), if the permittee defaults on the permit;
    (4) Any rights of the Indian landowners would be subordinated or 
adversely affected in the event of a foreclosure, assignment in lieu of 
foreclosure, or issuance of a ``new permit'' to the mortgagee.
    (c) We will notify the Indian landowners of our approval of the 
leasehold mortgage.


Sec. 166.225  May a permittee voluntarily assign a leasehold interest 
under an approved encumbrance?

    With our approval, under an approved encumbrance, a permittee 
voluntarily may assign the leasehold interest to someone other than the 
holder of a leasehold mortgage if the assignee agrees in writing to be 
bound by the terms of the permit. A permit may provide the Indian 
landowners with a right of first refusal on the conveyance of the 
leasehold interest.


Sec. 166.226  May the holder of a leasehold mortgage assign the 
leasehold interest after a sale or foreclosure of an approved 
encumbrance?

    Yes. The holder of a leasehold mortgage may assign a leasehold 
interest obtained by a sale or foreclosure of an approved encumbrance 
without our approval if the assignee agrees in writing to be bound by 
the terms of the permit. A permit may provide the Indian landowners 
with a right of first refusal on the conveyance of the permit interest 
(leasehold).

Modifying a Permit


Sec. 166.227  How can Indian land be removed from an existing permit?

    (a)We will remove Indian land from the permit if:
    (1)The trust status of the Indian land terminates;
    (2) The Indian landowners request removal of their interest, with 
the written approval of the majority interest of the fractionated tract 
to be removed, and we determine that the removal is beneficial to such 
interests;
    (3) A tribe allocates grazing privileges for Indian land covered by 
your permit under Sec. 166.218 of this part;
    (4) The permittee requests removal of the Indian land, the owners 
of the majority interest of the Indian land provides written approval 
of the removal of the Indian land, and we determine that the removal is 
warranted; or
    (5) We determine that removal of the Indian land is appropriate, 
with the written approval of the owners of the majority interest of the 
Indian land.
    (b) We will revise the grazing capacity to reflect the removal of 
Indian land and show it on the permit.

[[Page 7134]]

Sec. 166.228  How will the BIA provide notice if Indian land is removed 
from an existing permit?

    If the reason for removal is:
    (a) Termination of trust status. We will notify the parties to the 
permit in writing within 30 days. The removal will be effective on the 
next anniversary date of the permit.
    (b) A request from Indian landowners or the permittee, or our 
determination. We will notify the parties to the permit in writing 
within 30 days of such request. The removal will be effective 
immediately if all sureties, Indian landowners, and permittee agree. 
Otherwise, the removal will be effective upon the next anniversary date 
of the permit. If our written notice is within 180 days of the 
anniversary date of the permit, the removal of Indian land will be 
effective 180 days after the written notice.
    (c) Tribal allocation under Sec. 166.218 of this part. We will 
notify the parties to the permit in writing within 180 days of such 
action. The removal of tribal land will be effective on the next 
anniversary date of the permit. If our written notice is within 180 
days of the anniversary date of the permit, the removal of Indian land 
will be effective 180 days after the written notice.


Sec. 166.229  Other than to remove land, how can a permit be amended, 
assigned, subpermitted, or mortgaged?

    (a) We must approve an amendment, assignment, subpermit, or 
mortgage with the written consent of the parties to the permit in the 
same manner that the permit was approved, and the consent of the 
sureties.
    (b) Indian landowners may designate in writing one or more of their 
co-owners or representatives to negotiate and/or agree to amendments on 
their behalf.
    (1) The designated landowner or representative may:
    (i) Negotiate or agree to amendments; and
    (ii) Consent to or approve other items as necessary.
    (2) The designated landowner or representative may not:
    (i) Negotiate or agree to amendments that reduce the grazing rental 
payments payable to the other Indian landowners; or
    (ii) Terminate the permit or modify the term of the permit.
    (c) We may approve a permit for tribal land to individual members 
of a tribe which contains a provision permitting the assignment of the 
permit by the permittee or the lender without our approval when a 
lending institution or an agency of the United States:
    (1) Accepts the interest in the permit (leasehold) as security for 
the loan; and
    (2) Obtains the interest in the permit (leasehold) through 
foreclosure or otherwise.
    (d) We will revise the grazing capacity and modify the permit.


Sec. 166.230  When will a BIA decision to approve an amendment, 
assignment, subpermit, or mortgage under a permit be effective?

    Our decision to approve an amendment, assignment, subpermit, or 
mortgage under a permit will be effective immediately, notwithstanding 
any appeal which may be filed under Part 2 of this title. Copies of 
approved documents will be provided to the party requesting approval, 
and made available to the Indian landowners upon request.


Sec. 166.231  Must an amendment, assignment, subpermit, or mortgage 
approved under a permit be recorded?

    An amendment, assignment, subpermit, or mortgage approved under a 
permit must be recorded in our Land Titles and Records Office which has 
jurisdiction over the Indian land. We will record the document 
immediately following our approval.

Subpart D--Land and Operations Management


Sec. 166.300  How is Indian agricultural land managed?

    Tribes, individual Indian landowners, and the BIA will manage 
Indian agricultural land either directly or through contracts, 
compacts, cooperative agreements, or grants under the Indian Self-
Determination and Education Assistance Act (Public Law 93-638, as 
amended).


Sec. 166.301  How is Indian land for grazing purposes described?

    Indian land for grazing purposes should be described by legal 
description (e.g., aliquot parts, metes and bounds) or other acceptable 
description. Where there are undivided interests owned in fee status, 
the aggregate portion of trust and restricted interests should be 
identified in the description of the permitted land.


Sec. 166.302  How is a range unit created?

    We create a range unit after we consult with the Indian landowners 
of rangeland, by designating units of compatible size, availability, 
and location.


Sec. 166.303  Can more than one parcel of Indian land be combined into 
one permit?

    Yes. A permit may include more than one parcel of Indian land. 
Permits may include tribal land, individually-owned Indian land, or 
government land, or any combination thereof.


Sec. 166.304  Can there be more than one permit for each range unit?

    Yes. There can be more than one permit for each range unit.


Sec. 166.305  When is grazing capacity determined?

    Before we grant, modify, or approve a permit, in consultation with 
the Indian landowners, we will establish the total grazing capacity for 
each range unit based on the summation of each parcel's productivity. 
We will also establish the season(s) of use on Indian lands.


Sec. 166.306  Can the BIA adjust the grazing capacity?

    Yes. In consultation with the Indian landowners or in the BIA's 
discretion based on good cause, we may adjust the grazing capacity 
using the best evaluation method(s) relevant to the ecological region.


Sec. 166.307  Will the grazing capacity be increased if I graze 
adjacent trust or non-trust rangelands not covered by the permit?

    No. You will not receive an increase in grazing capacity in the 
permit if you graze trust or non-trust rangeland in common with the 
permitted land. Grazing capacity will be established only for Indian 
land covered by your permit.


Sec. 166.308  Can the number of animals and/or season of use be 
modified on the permitted land if I graze adjacent trust or non-trust 
rangelands under an on-and-off grazing permit?

    Yes. The number of animals and/or season of use may be modified on 
permitted Indian land with an on-and-off grazing permit only when a 
conservation plan includes the use of adjacent trust or non-trust 
rangelands not covered by the permit and when that land is used in 
common with permitted land.


Sec. 166.309  Who determines livestock class and livestock ownership 
requirements on permitted Indian land?

    (a) Tribes determine the class of livestock and livestock ownership 
requirements for livestock that may be grazed on range units composed 
entirely of tribal land or which include government land, subject to 
the grazing capacity prescribed by us under Sec. 166.305 of this part.
    (b) For permits on range units containing, in whole or part, 
individually-owned Indian land, we will adopt the tribal determination 
in paragraph (a) of this section.

[[Page 7135]]

Sec. 166.310  What must a permittee do to protect livestock from 
exposure to disease?

    In accordance with applicable law, permittees must:
    (a) Vaccinate livestock;
    (b) Treat all livestock exposed to or infected with contagious or 
infectious diseases; and
    (c) Restrict the movement of exposed or infected livestock.

Management Plans and Environmental Compliance


Sec. 166.311  Is an Indian agricultural resource management plan 
required?

    (a) Indian agricultural land under the jurisdiction of a tribe must 
be managed in accordance with the goals and objectives in any 
agricultural resource management plan developed by the tribe, or by us 
in close consultation with the tribe, under the AIARMA.
    (b) The ten-year agricultural resource management and monitoring 
plan must be developed through public meetings and completed within 
three years of the initiation of the planning activity. Such a plan 
must be developed through public meetings, and be based on the public 
meeting records and existing survey documents, reports, and other 
research from federal agencies, tribal community colleges, and land 
grant universities. When completed, the plan must:
    (1) Determine available agricultural resources;
    (2) Identify specific tribal agricultural resource goals and 
objectives;
    (3) Establish management objectives for the resources;
    (4) Define critical values of the tribe and its members and provide 
identified holistic management objectives; and
    (5) Identify actions to be taken to reach established objectives.
    (c) Where the regulations in this subpart are inconsistent with a 
tribe's agricultural resource management plan, we may waive the 
regulations under part 1 of this title, so long as the waiver does not 
violate a federal statute or judicial decision or conflict with our 
general trust responsibility under federal law.


Sec. 166.312  Is a conservation plan required?

    A conservation plan must be developed for each permit with the 
permittee and approved by us prior to the issuance of the permit. The 
conservation plan must be consistent with the tribe's agricultural 
resource management plan and must address the permittee's management 
objectives regarding animal husbandry and resource conservation. The 
conservation plan must cover the entire permit period and reviewed by 
us on an annual basis.


Sec. 166.313  Is environmental compliance required?

    Actions taken by the BIA under the regulations in this part must 
comply with the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.), applicable regulations of the Council on Environmental 
Quality (40 CFR part 1500), and applicable tribal laws and regulations.

Conservation Practices and Improvements


Sec. 166.314  Can a permittee apply a conservation practice on 
permitted Indian land?

    Yes. A permittee can apply a conservation practice on permitted 
Indian land as long as the permittee has approval from the BIA and 
majority interest and the conservation practice is consistent with the 
conservation plan.


Sec. 166.315  Who is responsible for the completion and maintenance of 
a conservation practice if the permit expires or is canceled before the 
completion of the conservation practice?

    Prior to undertaking a conservation practice, the BIA, landowner, 
and permittee will negotiate who will complete and maintain a 
conservation practice if the permit expires or is canceled before the 
conservation practice is completed. That conservation practice 
agreement will be reflected in the conservation plan and permit.


Sec. 166.316  Can a permittee construct improvements on permitted 
Indian land?

    Improvements may be constructed on permitted Indian land if the 
permit contains a provision allowing improvements.


Sec. 166.317  What happens to improvements constructed on Indian lands 
when the permit has been terminated?

    (a) If improvements are to be constructed on Indian land, the 
permit must contain a provision that improvements will either:
    (1) Remain on the land upon termination of the permit, in a 
condition that is in compliance with applicable codes, to become the 
property of the Indian landowner; or
    (2) Be removed and the land restored within a time period specified 
in the permit. The land must be restored as close as possible to the 
original condition prior to construction of such improvements. At the 
request of the permittee we may, at our discretion, grant an extension 
of time for the removal of improvements and restoration of the land for 
circumstances beyond the control of the permittee.
    (b) If the permittee fails to remove improvements within the time 
allowed in the permit, the permittee may forfeit the right to remove 
the improvements and the improvements may become the property of the 
Indian landowner or at the request of the Indian landowner, we will 
apply the bond for the removal of the improvement and restoration of 
the land.

Subpart E--Grazing Rental Rates, Payments, and Late Payment 
Collections

Rental Rate Determination and Adjustment


Sec. 166.400  Who establishes grazing rental rates?

    (a) For tribal lands, a tribe may establish a grazing rental rate 
that is less or more than the grazing rental rate established by us. We 
will assist a tribe to establish a grazing rental rate by providing the 
tribe with available information concerning the value of grazing on 
tribal lands.
    (b) We will establish the grazing rental rate by determining the 
fair annual rental for:
    (1) Individually-owned Indian lands; and
    (2) Tribes that have not established a rate under paragraph (a) of 
this section.
    (c) Indian landowners may give us written authority to grant 
grazing privileges on their individually-owned Indian land at a grazing 
rental rate that is:
    (1) Above the grazing rental rate set by us; or
    (2) Below the grazing rental rate set by us, subject to our 
approval, when the permittee is a member of the Indian landowner's 
immediate family as defined in this part.


Sec. 166.401  How does the BIA establish grazing rental rates?

    An appraisal can be used to determine the rental value of real 
property. The development and reporting of the valuation will be 
completed in accordance with the Uniform Standards of Professional 
Appraisal Practices (USPAP). If an appraisal is not desired, 
competitive bids, negotiations, advertisements, or any other method can 
be used in conjunction with a market study, rent survey, or feasibility 
analysis developed in accordance with the USPAP.


Sec. 166.402  Why must the BIA determine the fair annual rental of 
Indian land?

    The BIA must determine the fair annual rental of Indian land to:
    (a) Assist the Indian landowner in negotiating a permit with 
potential permittees; and

[[Page 7136]]

    (b) Enable us to determine whether a permit is in the best 
interests of the Indian landowner.


Sec. 166.403  Will the BIA ever grant or approve a permit at less than 
fair annual rental?

    (a) We will grant a permit for grazing on individually-owned Indian 
land at less than fair annual rental if, after competitive bidding of 
the permit, we determine that such action would be in the best 
interests of the individual Indian landowners.
    (b) We may approve a permit for grazing on individually-owned 
Indian land at less than fair annual rental if:
    (1) The permit is for the Indian landowner's immediate family or 
co-owner; or
    (2) We determine it is in the best interest of the Indian 
landowners.
    (c) We may approve a permit for grazing on tribal land at less than 
fair annual rental if the tribe sets the rate.


Sec. 166.404  Whose grazing rental rate will be applicable for a permit 
on tribal land?

    The following grazing rental rate schedule will apply for tribal 
land:

------------------------------------------------------------------------
                                                       Then you will pay
        If you are * * *             And if * * *            * * *
------------------------------------------------------------------------
(a) Grazing livestock on tribal   The tribe           The rate set by
 land.                             established the     the tribe.
                                   grazing rental
                                   rate.
(b) Grazing livestock on tribal   No tribal grazing   The rate set by
 land.                             rental rate has     the BIA.
                                   been established.
(c) The successful bidder for                         Your rental rate
 use of any of these specific                          bid, but not less
 parcels of Indian land.                               than the minimum
                                                       bid rate
                                                       advertised.
------------------------------------------------------------------------

Sec. 166.405  Whose grazing rental rate will be applicable for a permit 
on individually-owned Indian land?

    The following grazing rental rate schedule will apply for 
individually-owned Indian land:

------------------------------------------------------------------------
       If you are * * *                 Then you will pay * * *
------------------------------------------------------------------------
(a) Grazing livestock on       The rate set by the BIA or by the
 Individually-owned Indian      individual Indian landowner and approved
 land.                          by us.
(b) The successful bidder for  Your rental rate bid, but not less than
 use of any of these specific   the minimum bid rate advertised, unless
 parcels of Indian land.        the permit is granted at less than fair
                                annual rental under Sec.  166.403.
(c) The recipient of an        The bid rate or the appraised rate,
 allocation from a bid unit.    whichever is higher.
------------------------------------------------------------------------

Sec. 166.406  Whose grazing rental rate will be applicable for a permit 
on government land?

    The following grazing rental rate schedule will apply for 
government land:

------------------------------------------------------------------------
                                                       Then you will pay
        If you are * * *             And if * * *            * * *
------------------------------------------------------------------------
(a) Grazing livestock on          The tribe has       The rate set by
 government land.                  control over the    the tribe.
                                   land or the tribe
                                   has authority to
                                   set the rate.
(b) Grazing livestock on          Government          The rate set by
 government land.                  controls all use    the BIA.
                                   of the land.
------------------------------------------------------------------------

Sec. 166.407  If a range unit consists of tribal and individually-owned 
Indian lands, what is the grazing rental rate?

    The grazing rental rate for tribal land will be the rate set by the 
tribe. The grazing rental rate for individually-owned Indian land will 
be the grazing rental rate set by us.


Sec. 166.408  Is the grazing rental rate established by the BIA 
adjusted periodically?

    Yes. To ensure that Indian landowners are receiving the fair annual 
return, we may adjust the grazing rental rate established by the BIA, 
based upon an appropriate valuation method, taking into account the 
value of improvements made under the permit, unless the permit provides 
otherwise, following the Uniform Standards of Professional Appraisal 
Practice.
    (a) We will:
    (1) Review the grazing rental rate prior to each anniversary date 
or when specified by the permit.
    (2) Provide you with written notice of any adjustment of the 
grazing rental rate 60 days prior to each anniversary date.
    (3) Allow the adjusted grazing rental rate to be less than the fair 
annual rental if we determine that such a rate is in the best interest 
of the Indian landowner.
    (b) If adjusted, the grazing rental rate will become effective on 
the next anniversary date of the permit.
    (c) These adjustments will be retroactive, if they are not made at 
the time specified in the permit.
    (d) For permits granted by tribes, we will consult with the 
granting tribe to determine whether an adjustment of the grazing rental 
payment should be made. The permit must be modified to document the 
granting tribe's waiver of the adjustment. A tribe may grant a permit 
without providing for a rental adjustment, if the tribe establishes 
such a policy under Sec. 166.100(a)(4) of this part and negotiates such 
a permit.

Rental Payments


Sec. 166.409  How is my grazing rental payment determined?

    The grazing rental payment is the total of the grazing rental rate 
multiplied by the number of AUMs or acres covered by the permit.


Sec. 166.410  When are grazing rental payments due?

    The initial grazing rental payment is due and payable as specified 
in the permit or 15 days after the BIA approves the permit, whichever 
is later. Subsequent payments are due as specified in the permit.


Sec. 166.411  Will a permittee be notified when a grazing rental 
payment is due?

    Each permit states the schedule of rental payments agreed to by the 
parties. We will issue an invoice to the permittee 30 to 60 days prior 
to the rental payment due date.


Sec. 166.412  What if the permittee does not receive an invoice that a 
grazing rental payment is due?

    If we fail to send an invoice or if we send an invoice and the 
permittee does not receive it, the permittee is still responsible for 
making timely payment of all amounts due under the permit.


Sec. 166.413  To whom are grazing rental payments made?

    (a) A permit must specify whether grazing rental payments will be 
made

[[Page 7137]]

directly to the Indian landowners or to us on behalf of the Indian 
landowners. If the permit provides for payment to be made directly to 
the Indian landowners, the permit must also require that the permittee 
retain specific documentation evidencing proof of payment, such as 
canceled checks, cash receipt vouchers, or copies of money orders or 
cashier's checks, consistent with the provisions of Secs. 166.1000 and 
166.1001 of this part.
    (b) Grazing rental payments made directly to the Indian landowners 
must be made to the parties specified in the permit, unless the 
permittee receives a notice of a change of ownership. Unless otherwise 
provided in the permit, grazing rental payments may not be made payable 
directly to anyone other than the Indian landowners.
    (c) A permit which provides for grazing rental payments to be made 
directly to the Indian landowners must also provide for such payments 
to be suspended and rent thereafter paid to us, rather than directly 
than 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.


Sec. 166.414  What forms of grazing rental payments are acceptable?

    (a) When grazing 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 
permittee;
    (2) Money orders;
    (3) Cashier's checks;
    (4) Certified checks; or
    (5) Electronic funds transfer payments.


Sec. 166.415  What will the BIA do if the permittee fails to make a 
direct payment to an Indian landowner?

    Within five business days of the Indian landowner's notification to 
us that a payment has not been received, we will contact the permittee 
either in writing or by telephone requesting that the permittee provide 
documentation (e.g., canceled check, cash receipt voucher, copy of a 
money order or cashier's check) showing that payment has been made to 
the Indian landowner. If the permitee fails to provide such 
documentation, we will follow the procedures identified in Sec. 166.419 
of this part to collect the money on behalf of the Indian landowner or 
to cancel the permit.


Sec. 166.416  May a permittee make a grazing rental payment in advance 
of the due date?

    Rent may be paid no more than 30 days in advance, unless otherwise 
specified in the permit.


Sec. 166.417  May an individual Indian landowner modify the terms of 
the permit on a fractionated tract for advance grazing rental payment?

    No. An individual Indian landowner of a fractionated tract may not 
modify a permit to allow a grazing rental payment in advance of the due 
date specified in the initial approved permit.


Sec. 166.418  When is a grazing rental payment late?

    A grazing rental payment is late if it is not received on or before 
the due date.

Late Rental Payment Collections


Sec. 166.419  What will the BIA do if grazing rental payments are not 
made in the time and manner required by the permit?

    (a) A permitee's failure to pay grazing rental payments in the time 
and manner required by a permit will be a violation of the permit, and 
a notice of violation will be issued under Sec. 166.703 of this part. 
If the permit requires that grazing rental payments be made to us, we 
will send the permittee and its sureties a notice of violation within 
five business days of the date on which the grazing rental payment was 
due. If the permit provides for payment directly to the Indian 
landowner(s), we will send the permittee and its sureties a notice of 
violation within five business days of the date on which we receive 
actual notice of non-payment from the Indian landowner(s).
    (b) If a permittee fails to provide adequate proof of payment or 
cure the violation within the requisite time period described in 
Sec. 166.704 of this part, 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 permit under Sec. 166.705 of this part, or invoke any other 
remedies available under the permit 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 cancellation of the 
permit or any further notice to the permittee, nor will such an action 
be precluded by a prior cancellation.
    (c) Partial payments may be accepted, under special circumstances, 
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 permit violations. Unless otherwise provided in the permit, 
overpayments may be credited as an advance against future grazing 
rental payments.
    (d) If a personal or business check is dishonored, and a grazing 
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 permit, 
and a written notice of violation will be issued under Sec. 166.703 of 
this part. Any payment made to cure such a default, and any future 
payments by the same permittee, must be made by one of the alternative 
payment methods listed in Sec. 166.414(b) of this part.


Sec. 166.420  Will any special fees be assessed on delinquent grazing 
rental payments due under a permit?

    The following special fees will be assessed if a grazing rental 
payment is not paid in the time and manner required, in addition to any 
interest or late payment penalties which must be paid to the Indian 
landowners under a permit. The following special fees will be assessed 
to cover administrative costs incurred by the United States in the 
collection of the debt:

------------------------------------------------------------------------
    The permittee will pay * * *                   For * * *
------------------------------------------------------------------------
(a) $50.00..........................  Administrative fee for checks
                                       returned by the bank for
                                       insufficient funds.
(b) $15.00..........................  Administrative fee for the BIA
                                       processing of each demand letter.
(c) 18% of balance due..............  Administrative fee charged by the
                                       Department of Treasury for
                                       collection.
------------------------------------------------------------------------

Sec. 166.421  If a permit is canceled for non-payment, does that 
extinguish the permittee's debt?

    No. The permittee remains liable for any delinquent payment. No 
future permits will be issued until all outstanding debts related to 
Indian agricultural lands are paid.

Compensation to Indian Landowners


Sec. 166.422  What does the BIA do with grazing rental payments 
received from permittees?

    Unless arrangements for direct payment to the Indian landowners has 
been provided, the rent will be deposited to the appropriate account

[[Page 7138]]

maintained by the Office of Trust Funds Management in accordance with 
part 115 of this title.


Sec. 166.423  How do Indian landowners receive grazing rental payments 
that the BIA has received from permittees?

    Funds will be paid to the Indian landowners by the Office of Trust 
Funds Management in accordance with 25 CFR part 115.


Sec. 166.424  How will the BIA determine the grazing rental payment 
amount to be distributed to each Indian landowner?

    Unless otherwise specified in the permit, the grazing rental 
payment will be distributed to each Indian landowner according to the 
forage production that each parcel of Indian land contributes to the 
permit, annual rental rate of each parcel, and the Indian landowner's 
interest in each parcel.

Subpart F--Administrative and Tribal Fees


Sec. 166.500  Are there administrative fees for a permit?

    Yes. We will charge an administrative fee before approving any 
permit, subpermit, assignment, encumbrance, modification, or other 
related document.


Sec. 166.501  How are annual administrative fees determined?

    (a) Except as provided in subsection (b), we will charge a three 
percent (%) administrative fee based on the annual grazing rent.
    (b) The minimum administrative fee is $10.00 and the maximum 
administrative fee is $500.00.
    (c) If a tribe performs all or part of the administrative duties 
for this part, the tribe may establish, collect, and use reasonable 
fees to cover its costs associated with the performance of 
administrative duties.


Sec. 166.502  Are administrative fees refundable?

    No. We will not refund administrative fees.


Sec. 166.503  May the BIA waive administrative fees?

    Yes. We may waive the administrative fee for a justifiable reason.


Sec. 166.504  Are there any other administrative or tribal fees, taxes, 
or assessments that must be paid?

    Yes. The permittee may be required to pay additional fees, taxes, 
and/or assessments associated with the use of the land as determined by 
us or by the tribe. Failure to make such payments will constitute a 
permit violation under subpart H of this part.

Subpart G--Bonding and Insurance Requirements


Sec. 166.600  Must a permittee provide a bond for a permit?

    Yes. A permittee, assignee or subpermittee must provide a bond for 
each permit interest acquired. Upon request by an Indian landowner, we 
may waive the bond requirement.


Sec. 166.601  How is the amount of the bond determined?

    (a) The amount of the bond for each permit is based on the:
    (1) Value of one year's grazing rental payment;
    (2) Value of any improvements to be constructed;
    (3) Cost of performance of any additional obligations; and
    (4) Cost of performance of restoration and reclamation.
    (b) Tribal policy made applicable by Sec. 166.100 of this part may 
establish or waive specific bond requirements for permits.


Sec. 166.602  What form of bonds will the BIA accept?

    (a) We will only accept bonds in the following forms:
    (1) Cash;
    (2) Negotiable Treasury securities that:
    (i) Have a market value equal to the bond amount; and
    (ii) Are accompanied by a statement granting full authority to the 
BIA to sell such securities in case of a violation of the terms of the 
permit.
    (3) Certificates of deposit that indicate on their face that 
Secretarial approval is required prior to redemption by any party;
    (4) Irrevocable letters of credit (LOC) issued by federally-insured 
financial institutions authorized to do business in the United States. 
LOC's must:
    (i) Contain a clause that grants the BIA authority to demand 
immediate payment if the permittee defaults or fails to replace the LOC 
within 30 calendar days prior to its expiration date;
    (ii) Be payable to the ``Department of the Interior, BIA'';
    (iii) Be irrevocable during its term and have an initial expiration 
date of not less than one year following the date we receive it; and
    (iv) Be automatically renewable for a period of not less than one 
year, unless the issuing financial institution provides the BIA with 
written notice at least 90 calendar days before the letter of credit's 
expiration date that it will not be renewed;
    (5) Surety bond; or
    (6) Any other form of highly liquid, non-volatile security 
subsequently approved by us that is easily convertible to cash by us 
and for which our approval is required prior to redemption by any 
party.
    (b) Indian landowners may negotiate a permit term that specifies 
the use of any of the bond forms described in paragraph (a) of this 
section.
    (c) A tribe may accept and hold any form of bond described in 
paragraph (a) of this section, to secure performance under a permit of 
tribal land.


Sec. 166.603  If cash is submitted as a bond, how is it administered?

    If cash is submitted as a bond, we will establish an account in the 
name of the permittee and retain it.


Sec. 166.604  Is interest paid on a cash performance bond?

    No. Interest will not be paid on a cash performance bond.


Sec. 166.605  Are cash performance bonds refunded?

    If the cash performance bond has not been forfeited for cause, the 
amount deposited will be refunded to the depositor at the end of the 
permit period.


Sec. 166.606  What happens to a bond if a violation occurs?

    We may apply the bond to remedy the violation, in which case we 
will require the permittee to submit a replacement bond of an 
appropriate amount.


Sec. 166.607  Is insurance required for a permit?

    When we determine it to be in the best interest of the Indian 
landowners, we will require a permittee to provide insurance. If 
insurance is required, it must:
    (a) Be provided in an amount sufficient to:
    (1) Protect any improvements on the permit premises;
    (2) Cover losses such as personal injury or death; and
    (3) Protect the interest of the Indian landowner.
    (b) Identify the tribe, individual Indian landowners, and United 
States as insured parties.


Sec. 166.608  What types of insurance may be required?

    We may require liability or casualty insurance (such as for fire, 
hazard, or flood), depending upon the activity conducted under the 
permit.

[[Page 7139]]

Subpart H--Permit Violations


Sec. 166.700  What permit violations are addressed by this subpart?

    This subpart addresses violations of permit provisions other than 
trespass. Trespass is addressed under subpart I of this part.


Sec. 166.701  How will the BIA determine whether the activities of a 
permittee under a permit are in compliance with the terms of the 
permit?

    Unless the permit provides otherwise, we may enter the range unit 
at any reasonable time, without prior notice, to protect the interests 
of the Indian landowners and ensure that the permittee is in compliance 
with the operating requirements of the permit.


Sec. 166.702  Can a permit provide for negotiated remedies in the event 
of a permit violation?

    (a) A permit of tribal land may provide the tribe with certain 
negotiated remedies in the event of a permit violation, including the 
power to terminate the permit. A permit of individually-owned Indian 
land may provide the individual Indian landowners with similar 
remedies, so long as the permit also specifies the manner in which 
those remedies may be exercised by or on behalf of the Indian 
landowners. Any notice of violation must be provided by written notice.
    (b) The negotiated remedies described in paragraph (a) of this 
section will apply in addition to the cancellation remedy available to 
us under Sec. 166.705(c) of this subpart. If the permit 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 permit may provide for permit 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 any 
ongoing proceedings, as appropriate, in deciding whether to exercise 
any of the remedies available to us under Sec. 166.705 of this subpart.


Sec. 166.703  What happens if a permit violation occurs?

    (a) If an Indian landowner notifies us that a specific permit 
violation has occurred, we will initiate an appropriate investigation 
within five business days of that notification.
    (b) If we determine that a permit violation has occurred based on 
facts known to us, we will provide written notice to the permittee and 
the sureties of the violation within five business days.


Sec. 166.704  What will a written notice of a permit violation contain?

    The written notice of a permit violation will provide the permittee 
with ten days from the receipt of the written notice to:
    (a) Cure the permit violation and notify us that the violation is 
cured.
    (b) Explain why we should not cancel the permit; or
    (c) Request in writing additional time to complete corrective 
actions. If additional time is granted, we may require that certain 
corrective actions be taken immediately.


Sec. 166.705  What will the BIA do if a permit violation is not cured 
within the required time period?

    (a) If the permittee does not cure a violation within the required 
time period, we will consult with the Indian landowners, as 
appropriate, and determine whether:
    (1) The permit should be canceled by us under paragraph (c) of this 
section and Secs. 166.706 through 166.707 of this subpart;
    (2) We should invoke any other remedies available to us under the 
permit, including collecting on any available bond;
    (3) The Indian landowners wish to invoke any remedies available to 
them under the permit; or
    (4) The permittee should be granted additional time in which to 
cure the violation.
    (b) If we decide to grant a permittee additional time in which to 
cure a violation, the permittee 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 permit, we will send the permittee 
and its sureties a written notice of cancellation within five business 
days of that decision. We will also provide actual or constructive 
notice of a cancellation decision to the Indian landowners, as 
appropriate. The written notice of cancellation will:
    (1) Explain the grounds for cancellation;
    (2) Notify the permittee of the amount of any unpaid rent, interest 
charges, or late payment penalties due under the permit;
    (3) Notify the permittee of its right to appeal under Part 2 of 
this chapter, as modified by Sec. 166.706 of this subpart, including 
the amount of any appeal bond that must be posted with an appeal of the 
cancellation decision; and
    (4) Order the permittee to vacate the property within 30 days of 
the date of receipt of the written notice of cancellation, if an appeal 
is not filed by that time.


Sec. 166.706  Will the BIA's regulations concerning appeal bonds apply 
to cancellation decisions involving permits?

    (a) The appeal bond provisions in Sec. 2.5 of part 2 of this 
chapter will not apply to appeals from permit cancellation decisions 
made under Sec. 166.705 of this subpart. Instead, when we decide to 
cancel a permit, we may require the permittee to 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 
permit cancellation decision.


Sec. 166.707  When will a cancellation of a permit be effective?

    A cancellation decision involving a permit will not be effective 
for 30 days after the permittee receives a written notice of 
cancellation from us. The cancellation decision will remain ineffective 
if the permittee files an appeal under Sec. 166.706 of this subpart and 
part 2 of this chapter, unless the decision is made immediately 
effective under part 2. While a cancellation decision is ineffective, 
the permittee must continue to pay rent and comply with the other terms 
of the permit. If an appeal is not filed in accordance with 
Sec. 166.706 of this subpart and part 2 of this chapter, the 
cancellation decision will be effective on the 31st day after the 
permittee receives the written notice of cancellation from us.


Sec. 166.708  Can the BIA take emergency action if the rangeland is 
threatened with immediate, significant, and irreparable harm?

    Yes. If a permittee or any other party causes or threatens to cause 
immediate, significant and irreparable harm to the Indian land during 
the term of a permit, we will take appropriate emergency action. 
Emergency action may include trespass proceedings under subpart I of 
this part, or 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

[[Page 7140]]

before or after the emergency action is taken.


Sec. 166.709  What will the BIA do if a permittee holds over after the 
expiration or cancellation of a permit?

    If a permittee remains in possession of Indian land after the 
expiration or cancellation of a permit, we will treat the unauthorized 
use as a trespass. Unless we have reason to believe that the permittee 
is engaged in negotiations with the Indian landowners to obtain a new 
permit, we will take action to recover possession of the Indian land on 
behalf of the Indian landowners, and pursue any additional remedies 
available under applicable law, including the assessment of civil 
penalties and costs under subpart I of this part.

Subpart I--Trespass


Sec. 166.800  What is trespass?

    Under this part, trespass is any unauthorized occupancy, use of, or 
action on Indian agricultural lands. These provisions also apply to 
Indian agricultural land managed under an agricultural lease or permit 
under part 162 of this title.


Sec. 166.801  What is the BIA's trespass policy?

    We will:
    (a) Investigate accidental, willful, and/or incidental trespass on 
Indian agricultural land;
    (b) Respond to alleged trespass in a prompt, efficient manner;
    (c) Assess trespass penalties for the value of products used or 
removed, cost of damage to the Indian agricultural land, and 
enforcement costs incurred as a consequence of the trespass.
    (d) Ensure that damage to Indian agricultural lands resulting from 
trespass is rehabilitated and stabilized at the expense of the 
trespasser.


Sec. 166.802  Who can enforce this subpart?

    (a) The BIA enforces the provisions of this subpart. If the tribe 
adopts the provisions of this subpart, the tribe will have concurrent 
jurisdiction to enforce this subpart. Additionally, if the tribe so 
requests, we will defer to tribal prosecution of trespass on Indian 
agricultural lands.
    (b) Nothing in this subpart shall be construed to diminish the 
sovereign authority of Indian tribes with respect to trespass.

Notification


Sec. 166.803  How are trespassers notified of a trespass determination?

    (a) Unless otherwise provided under tribal law, when we have reason 
to believe that a trespass on Indian agricultural land has occurred, 
within five business days, we or the authorized tribal representative 
will provide written notice to the alleged trespasser, the possessor of 
trespass property, any known lien holder, and beneficial Indian 
landowner, as appropriate. The written notice will include the 
following:
    (1) The basis for the trespass determination;
    (2) A legal description of where the trespass occurred;
    (3) A verification of ownership of unauthorized property (e.g., 
brands in the State Brand Book for cases of livestock trespass, if 
applicable);
    (4) Corrective actions that must be taken;
    (5) Time frames for taking the corrective actions;
    (6) Potential consequences and penalties for failure to take 
corrective action; and
    (7) A statement that unauthorized livestock or other property may 
not be removed or disposed of unless authorized by us.
    (b) If we determine that the alleged trespasser or possessor of 
trespass property is unknown or refuses delivery of the written notice, 
a public trespass notice will be posted at the tribal community 
building, U.S. Post Office, and published in the local newspaper 
nearest to the Indian agricultural lands where the trespass is 
occurring.
    (c) Trespass notices under this subpart are not subject to appeal 
under 25 CFR part 2.


Sec. 166.804  What can I do if I receive a trespass notice?

    If you receive a trespass notice, you will within the time frame 
specified in the notice:
    (a) Comply with the ordered corrective actions; or
    (b) Contact us in writing to explain why the trespass notice is in 
error. You may contact us by telephone but any explanation of trespass 
you wish to provide must be in writing. If we determine that we issued 
the trespass notice in error, we will withdraw the notice.


Sec. 166.805  How long will a written trespass notice remain in effect?

    A written trespass notice will remain in effect for the same 
conduct identified in that written notice for a period of one year from 
the date of receipt of the written notice by the trespasser.

Actions


Sec. 166.806  What actions does the BIA take against trespassers?

    If the trespasser fails to take the corrective action specified by 
us, we may take one or more of the following actions, as appropriate:
    (a) Seize, impound, sell or dispose of unauthorized livestock or 
other property involved in the trespass. We may keep such property we 
seize for use as evidence.
    (b) Assess penalties, damages, and costs, under Sec. 166.812 of 
this subpart.


Sec. 166.807  When will we impound unauthorized livestock or other 
property?

    We will impound unauthorized livestock or other property under the 
following conditions:
    (a) Where there is imminent danger of severe injury to growing or 
harvestable crop or destruction of the range forage.
    (b) When the known owner or the owner's representative of the 
unauthorized livestock or other property refuses to accept delivery of 
a written notice of trespass and the unauthorized livestock or other 
property are not removed within the period prescribed in the written 
notice.
    (c) Any time after five days of providing notice of impoundment if 
you failed to correct the trespass.


Sec. 166.808  How are trespassers notified if their unauthorized 
livestock or other property are to be impounded?

    (a) If the trespass is not corrected in the time specified in the 
initial trespass notice, we will send written notice of our intent to 
impound unauthorized livestock or other property to the unauthorized 
livestock or property owner or representative, and any known lien 
holder of the unauthorized livestock or other property.
    (b) If we determine that the owner of the unauthorized livestock or 
other property or the owner's representative is unknown or refuses 
delivery of the written notice, we will post a public notice of intent 
to impound at the tribal community building, U.S. Post Office, and 
published in the local newspaper nearest to the Indian agricultural 
lands where the trespass is occurring.
    (c) After we have given notice as described above, we will impound 
unauthorized livestock or other property without any further notice.


Sec. 166.809  What happens after my unauthorized livestock or other 
property are impounded?

    Following the impoundment of unauthorized livestock or other 
property, we will provide notice that we will sell the impounded 
property as follows:

[[Page 7141]]

    (a) We will provide written notice of the sale to the owner, the 
owner's representative, and any known lien holder. The written notice 
must include the procedure by which the impounded property may be 
redeemed prior to the sale.
    (b) We will provide public notice of sale of impounded property by 
posting at the tribal community building, U.S. Post Office, and 
publishing in the local newspaper nearest to the Indian agricultural 
lands where the trespass is occurring. The public notice will include a 
description of the impounded property, and the date, time, and place of 
the public sale. The sale date must be at least five days after the 
publication and posting of notice.


Sec. 166.810  How do I redeem my impounded livestock or other property?

    You may redeem impounded livestock or other property by submitting 
proof of ownership and paying all penalties, damages, and costs under 
Sec. 166.812 of this subpart and completing all corrective actions 
identified by us under Sec. 166.804 of this subpart.


Sec. 166.811  How will the sale of impounded livestock or other 
property be conducted?

    (a) Unless the owner or known lien holder of the impounded 
livestock or other property redeems the property prior to the time set 
by the sale, by submitting proof of ownership and settling all 
obligations under Sec. 166.804 and Sec. 166.812 of this subpart, the 
property will be sold by public sale to the highest bidder.
    (b) If a satisfactory bid is not received, the livestock or 
property may be re-offered for sale, returned to the owner, condemned 
and destroyed, or otherwise disposed of.
    (c) We will give the purchaser a bill of sale or other written 
receipt evidencing the sale.

Penalties, Damages, and Costs


Sec. 166.812  What are the penalties, damages, and costs payable by 
trespassers on Indian agricultural land?

    Trespassers on Indian agricultural land must pay the following 
penalties and costs:
    (a) Collection of the value of the products illegally used or 
removed plus a penalty of double their values;
    (b) Costs associated with any damage to Indian agricultural land 
and/or property;
    (c) The costs associated with enforcement of the regulations, 
including field examination and survey, damage appraisal, investigation 
assistance and reports, witness expenses, demand letters, court costs, 
and attorney fees;
    (d) Expenses incurred in gathering, impounding, caring for, and 
disposal of livestock in cases which necessitate impoundment under 
Sec. 166.807 of this subpart; and
    (e) All other penalties authorized by law.


Sec. 166.813  How will the BIA determine the value of forage or crops 
consumed or destroyed?

    We will determine the value of forage or crops consumed or 
destroyed based upon the average rate received per month for comparable 
property or grazing privileges, or the estimated commercial value or 
replacement costs of such products or property.


Sec. 166.814  How will the BIA determine the value of the products or 
property illegally used or removed?

    We will determine the value of the products or property illegally 
used or removed based upon a valuation of similar products or property.


Sec. 166.815  How will the BIA determine the amount of damages to 
Indian agricultural land?

    We will determine the damages by considering the costs of 
rehabilitation and revegetation, loss of future revenue, loss of 
profits, loss of productivity, loss of market value, damage to other 
resources, and other factors.


Sec. 166.816  How will the BIA determine the costs associated with 
enforcement of the trespass?

    Costs of enforcement may include detection and all actions taken by 
us through prosecution and collection of damages. This includes field 
examination and survey, damage appraisal, investigation assistance and 
report preparation, witness expenses, demand letters, court costs, 
attorney fees, and other costs.


Sec. 166.817  What happens if I do not pay the assessed penalties, 
damages and costs?

    Unless otherwise provided by applicable tribal law:
    (a) We will refuse to issue you a permit for use, development, or 
occupancy of Indian agricultural lands; and
    (b) We will forward your case for appropriate legal action.


Sec. 166.818  How are the proceeds from trespass distributed?

    Unless otherwise provided by tribal law:
    (a) We will treat any amounts recovered under Sec. 166.812 of this 
subpart as proceeds from the sale of agricultural property from the 
Indian agricultural land upon which the trespass occurred.
    (b) Proceeds recovered under Sec. 166.812 of this subpart may be 
distributed to:
    (1) Repair damages of the Indian agricultural land and property;
    (2) Reimburse the affected parties, including the permittee for 
loss due to the trespass, as negotiated and provided in the permit; and
    (3) Reimburse for costs associated with the enforcement of this 
subpart.
    (c) If any money is left over after the distribution of the 
proceeds described in paragraph (b) of this section, we will return it 
to the trespasser or, where we cannot identify the owner of the 
impounded property within 180 days, we will deposit the net proceeds of 
the sale into the accounts of the landowners where the trespass 
occurred.


Sec. 166.819  What happens if the BIA does not collect enough money to 
satisfy the penalty?

    We will send written notice to the trespasser demanding immediate 
settlement and advising the trespasser that unless settlement is 
received within five business days from the date of receipt, we will 
forward the case for appropriate legal action. We may send a copy of 
the notice to the Indian landowner, permittee, and any known lien 
holders.

Subpart J--Agriculture Education, Education Assistance, 
Recruitment, and Training


Sec. 166.900  How are the Indian agriculture education programs 
operated?

    (a) The purpose of the Indian agriculture education programs is to 
recruit and develop promising Indian and Alaska Natives who are 
enrolled in secondary schools, tribal or Alaska Native community 
colleges, and other post-secondary schools for employment as 
professional resource managers and other agriculture-related 
professionals by approved organizations.
    (b) We will operate the student educational employment program as 
part of our Indian agriculture education programs in accordance with 
the provisions of 5 CFR 213.3202(a) and (b).
    (c) We will establish an education committee to coordinate and 
carry out the agriculture education assistance programs and to select 
participants for all agriculture education assistance programs. The 
committee will include at least one Indian professional educator in the 
field of natural resources or agriculture, a personnel specialist, a 
representative of the Intertribal Agriculture Council, and a natural 
resources or agriculture professional

[[Page 7142]]

from the BIA and a representative from American Indian Higher Education 
Consortium. The committee's duties will include the writing of a manual 
for the Indian and Alaska Native Agriculture Education and Assistance 
Programs.
    (d) We will monitor and evaluate the agriculture education 
assistance programs to ensure that there are adequate Indian and Alaska 
Native natural resources and agriculture-related professionals to 
manage Indian natural resources and agriculture programs by or for 
tribes and Alaska Native Corporations. We will identify the number of 
participants in the intern, student educational employment program, 
scholarship, and outreach programs; the number of participants who 
completed the requirements to become a natural resources or 
agriculture-related professional; and the number of participants 
completing advanced degree requirements.


Sec. 166.901  How will the BIA select an agriculture intern?

    (a) The purpose of the agriculture intern program is to ensure the 
future participation of trained, professional Indians and Alaska 
Natives in the management of Indian and Alaska Native agricultural 
land. In keeping with this purpose, we will work with tribes and Alaska 
Natives:
    (1) To obtain the maximum degree of participation from Indians and 
Alaska Natives in the agriculture intern program;
    (2) To encourage agriculture interns to complete an undergraduate 
degree program in natural resources or agriculture-related field; and
    (3) To create an opportunity for the advancement of natural 
resources and agriculture-related technicians to professional resource 
management positions with the BIA, other federal agencies providing an 
agriculture service to their respective tribe, a tribe, or tribal 
agriculture enterprise.
    (b) Subject to restrictions imposed by agency budgets, we will 
establish and maintain in the BIA at least 20 positions for the 
agriculture intern program. All Indians and Alaska Natives who satisfy 
the qualification criteria may compete for positions.
    (c) Applicants for intern positions must meet the following 
criteria:
    (1) Be eligible for Indian preference as defined in 25 CFR part 5;
    (2) Possess a high school diploma or its recognized equivalent;
    (3) Be able to successfully complete the intern program within a 
three-year period; and
    (4) Possess a letter of acceptance to an accredited post-secondary 
school or demonstrate that one will be sent within 90 days.
    (d) We will advertise vacancies for agriculture intern positions 
semi-annually, no later than the first day of April and October, to 
accommodate entry into school.
    (e) In selecting agriculture interns, we will seek to identify 
candidates who:
    (1) Have the greatest potential for success in the program;
    (2) Will take the shortest time period to complete the intern 
program; and
    (3) Provide the letter of acceptance required by paragraph (c)(4) 
of this section.
    (f) Agriculture interns must:
    (1) Maintain full-time status in an agriculture-related curriculum 
at an accredited post-secondary school;
    (2) Maintain good academic standing;
    (3) Enter into an obligated service agreement to serve as a 
professional resource manager or agriculture-related professional with 
an approved organization for one year in exchange for each year in the 
program; and
    (4) Report for service with the approved organization during any 
break in attendance at school of more than three weeks.
    (g) The education committee will evaluate annually the performance 
of the agriculture intern program participants against requirements to 
ensure that they are satisfactorily progressing toward completion of 
program requirements.
    (h) We will pay all costs for tuition, books, fees, and living 
expenses incurred by an agriculture intern while attending an 
accredited post-secondary school.


Sec. 166.902  How can I become an agriculture educational employment 
student?

    (a) To be considered for selection, applicants for the student 
educational employment program must:
    (1) Meet the eligibility requirements in 5 CFR part 308; and
    (2) Be accepted into or enrolled in a course of study at an 
accredited post-secondary institution which grants degrees in natural 
resources or agriculture-related curricula.
    (b) Student educational employment steering committees established 
at the field level will select program participants based on 
eligibility requirements without regard to applicants' financial needs.
    (c) A recipient of assistance under the student educational 
employment program will be required to enter into an obligated service 
agreement to serve as a natural resources or agriculture-related 
professional with an approved organization for one year in exchange for 
each year in the program.
    (d) We will pay all costs of tuition, books, fees, and 
transportation to and from the job site to school, for an Indian or 
Alaska Native student who is selected for the cooperative education 
program.


Sec. 166.903  How can I get an agriculture scholarship?

    (a) We may grant agriculture scholarships to Indians and Alaska 
Natives enrolled as full-time students in accredited post-secondary and 
graduate programs of study in natural resources and agriculture-related 
curricula.
    (b) The education committee established in Sec. 166.900(c) of this 
subpart will select program participants based on eligibility 
requirements stipulated in paragraphs (e) through (g) of this section 
without regard to applicants' financial needs or past scholastic 
achievements.
    (c) Recipients of scholarships must reapply annually to continue to 
receive funding beyond the initial award period. Students who have 
received scholarships in past years, are in good academic standing, and 
have been recommended for continuation by their academic institution 
will be given priority over new applicants for scholarship assistance.
    (d) The amount of scholarship funds an individual is awarded each 
year will be contingent upon the availability of funds appropriated 
each fiscal year and is subject to yearly change.
    (e) Preparatory scholarships may be available for a maximum of 
three academic years of general, undergraduate course work leading to a 
degree in natural resources or agriculture-related curricula and may be 
awarded to individuals who:
    (1) Possess a high school diploma or its recognized equivalent; and
    (2) Are enrolled and in good academic standing at an acceptable 
post-secondary school.
    (f) Undergraduate scholarships are available for a maximum of three 
academic years and may be awarded to individuals who:
    (1) Have completed a minimum of 55 semester hours toward a 
bachelor's degree in a natural resources or agriculture-related 
curriculum; and
    (2) Have been accepted into a natural resource or agriculture-
related degree-granting program at an accredited college or university.
    (g) Graduate scholarships are available for a maximum of five 
academic years for individuals selected into the graduate program of an 
accredited college or university that

[[Page 7143]]

grants advanced degrees in natural resources or agriculture-related 
fields.
    (h) A recipient of assistance under the scholarship program must 
enter into an obligated service agreement to serve as a natural 
resources or agriculture-related professional with the BIA, other 
federal agency providing assistance to their respective tribe, a tribe, 
tribal agriculture enterprise, or an ANCSA Corporation for one year for 
each year in the program.
    (i) We will pay all scholarships approved by the education 
committee established in Sec. 166.900 of this subpart for which funding 
is available.


Sec. 166.904  What is agriculture education outreach?

    (a) We will establish and maintain an agriculture education 
outreach program for Indian and Alaska Native youth that will:
    (1) Encourage students to acquire academic skills needed to succeed 
in post-secondary mathematics and science courses;
    (2) Promote agriculture career awareness;
    (3) Involve students in projects and activities oriented to 
agriculture related professions early so students realize the need to 
complete required pre-college courses; and
    (4) Integrate Indian and Alaska Native agriculture program 
activities into the education of Indian and Alaska Native students.
    (b) We will develop and carry out the program in consultation with 
appropriate community education organizations, tribes, ANCSA 
Corporations, Alaska Native organizations, and other federal agencies 
providing agriculture services to Indians.
    (c) The education committee established under Sec. 166.900(c) of 
this subpart will coordinate and implement the program nationally.


Sec. 166.905  Who can get assistance for postgraduate studies?

    (a) The purpose of the postgraduate studies program is to enhance 
the professional and technical knowledge of Indian and Alaska Native 
natural resource and agriculture-related professionals working for an 
approved organization so that the best possible service is provided to 
Indian and Alaska Natives.
    (b) We may pay the cost of tuition, fees, books, and salary of 
Alaska Natives and Indians who are employed by an approved organization 
and who wish to pursue advanced levels of education in natural resource 
or agriculture-related fields.
    (c) The goal of the advanced study program is to encourage 
participants to obtain additional academic credentials such as a degree 
or diploma in a natural resources or agriculture-related field. 
Requirements of the postgraduate study program are:
    (1) The duration of course work cannot be less than one semester or 
more than three years; and
    (2) Students in the postgraduate studies program must meet 
performance standards as required by the graduate school offering the 
study program.
    (d) Program applicants must submit application packages to the 
education committee. At a minimum, such packages must contain a resume 
and an endorsement signed by the applicant's supervisor clearly stating 
the need for and benefits of the desired training.
    (e) The education committee must use the following criteria to 
select participants:
    (1) Need for the expertise sought at both the local and national 
levels;
    (2) Expected benefits, both locally and nationally; and
    (3) Years of experience and the service record of the employee.
    (f) Program participants will enter into an obligated service 
agreement to serve as a natural resources or agriculture-related 
professional with an approved organization for one year for each year 
in the program. We may reduce the obligated service requirement if the 
employee receives supplemental funding such as research grants, 
scholarships, or graduate stipends and, as a result, reduces the need 
for financial assistance under this part. If the obligated service 
agreement is breached, we will collect the amount owed us in accordance 
with Sec. 166.910 of this subpart.


Sec. 166.906  What can happen if we recruit you after graduation?

    (a) The purpose of the post graduation recruitment program is to 
recruit Indian and Alaska Native natural resource and trained 
agriculture technicians into the agriculture programs of approved 
organizations.
    (b) We may assume outstanding student loans from established 
lending institutions of Indian and Alaska Native natural resources and 
agriculture technicians who have successfully completed a post-
secondary natural resources or agriculture-related curriculum at an 
accredited institution.
    (c) Indian and Alaska Natives receiving benefits under this program 
will enter into an obligated service agreement in accordance with 
Sec. 166.901 of this subpart. Obligated service required under this 
program will be one year for every $5,000 of student loan debt repaid.
    (d) If the obligated service agreement is breached, we will collect 
student loan(s) in accordance with Sec. 166.910 of this subpart.


Sec. 166.907  Who can be an intern?

    (a) Natural resources or agriculture personnel working for an 
approved organization may apply for an internship within agriculture-
related programs of agencies of the Department of the Interior or other 
federal agencies providing an agriculture service to their respective 
reservations.
    (b) Natural resources or agriculture-related personnel from other 
Department of the Interior agencies may apply through proper channels 
for ``internships'' within the BIA's agriculture programs. With the 
consent of a tribe or Alaska Native organization, the BIA can arrange 
for an Intergovernmental Personnel Act assignment in tribal or Alaska 
Native agriculture programs.
    (c) Natural resources and agriculture personnel from agencies not 
within the Department of the Interior may apply, through proper agency 
channels and pursuant to an interagency agreement, for an 
``internship'' within the BIA and, with the consent of a tribe or 
Alaska Native organization, we can facilitate an Intergovernmental 
Personnel Act assignment in a tribe, tribal agriculture enterprise, or 
Alaska Native Corporation.
    (d) Natural resources or agriculture personnel from a tribe, tribal 
agriculture enterprise, or Alaska Native Corporation may apply, through 
proper channels and pursuant to a cooperative agreement, for an 
internship within another tribe, tribal forest enterprise, or ANCSA 
Corporation agriculture program.
    (e) The employing agency of participating federal employees will 
provide for the continuation of salary and benefits.
    (f) The host agency for participating tribal, tribal agriculture 
enterprise, or Alaska Native Corporation agriculture employees will 
provide for salaries and benefits.
    (g) A bonus pay incentive, up to 25 percent (%) of the intern's 
base salary, may be provided to intergovernmental interns at the 
conclusion of the internship period. Bonus pay incentives will be at 
the discretion of and funded by the host organization and must be 
conditioned upon the host agency's documentation of the intern's 
superior performance, in accordance with the agency's performance 
standards, during the internship period.

[[Page 7144]]

Sec. 166.908  Who can participate in continuing education and training?

    (a) The purpose of continuing education and training is to 
establish a program to provide for the ongoing education and training 
of natural resources and agriculture personnel employed by approved 
organizations. This program will emphasize continuing education and 
training in three areas:
    (1) Orientation training including tribal-federal relations and 
responsibilities;
    (2) Technical agriculture education; and
    (3) Developmental training in agriculture-based enterprises and 
marketing.
    (b) We will maintain an orientation program to increase awareness 
and understanding of Indian culture and its effect on natural resources 
management and agriculture practices and on federal laws that effect 
natural resources management and agriculture operations and 
administration in the Indian agriculture program.
    (c) We will maintain a continuing technical natural resources and 
agriculture education program to assist natural resources managers and 
agriculture-related professionals to perform natural resources and 
agriculture management on Indian land.
    (d) We will maintain an agriculture land-based enterprise and 
marketing training program to assist with the development and use of 
Indian and Alaska Native agriculture resources.


Sec. 166.909  What are my obligations to the BIA after I participate in 
an agriculture education program?

    (a) Individuals completing agriculture education programs with an 
obligated service requirement may be offered full time permanent 
employment with an approved organization to fulfill their obligated 
service within 90 days of the date all program education requirements 
have been completed. If employment is not offered within the 90-day 
period, the student will be relieved of obligated service requirements. 
Not less than 30 days before the start of employment, the employer must 
notify the participant of the work assignment, its location and the 
date work must begin. If the employer is other than the BIA, the 
employer must also notify us.
    (b) Employment time that can be credited toward obligated service 
requirement will begin the day after all program education requirements 
have been completed, with the exception of the agriculture intern 
program which includes the special provisions outlined in 
Sec. 166.901(f)(4) of this subpart. The minimum service obligation 
period will be one year of full time employment.
    (c) The employer has the right to designate the location of 
employment for fulfilling the service obligation.
    (d) A participant in any of the agriculture education programs with 
an obligated service requirement may, within 30 days of completing all 
program education requirements, request a deferment of obligated 
service to pursue postgraduate or post-doctoral studies. In such cases, 
we will issue a decision within 30 days of receipt of the request for 
deferral. We may grant such a request; however, deferments granted in 
no way waive or otherwise affect obligated service requirements.
    (e) A participant in any of the agriculture education programs with 
an obligated service requirement may, within 30 days of completing all 
program education requirements, request a waiver of obligated service 
based on personal or family hardship. We may grant a full or partial 
waiver or deny the request for wavier. In such cases, we will issue a 
decision within 30 days of receiving the request for waiver.


Sec. 166.910  What happens if I do not fulfill my obligation to the 
BIA?

    (a) Any individual who accepts financial support under agriculture 
education programs with an obligated service requirement, and who does 
not accept employment or unreasonably terminates employment must repay 
us in accordance with the following table:

------------------------------------------------------------------------
                               Then the costs that   And then the costs
        If you are...            you must repay     that you do not need
                                     are...            to repay are...
------------------------------------------------------------------------
(1) Agriculture intern......  Living allowance,     Salary paid during
                               tuition, books, and   school breaks or
                               fees received while   when recipient was
                               occupying position    employed by an
                               plus interest.        approved
                                                     organization.
(2) Cooperative education...  Tuition, books, and
                               fees plus interest.
(3) Scholarship.............  Costs of scholarship
                               plus interest.
(4)Post graduation            All student loans
 recruitment.                  assumed by us under
                               the program plus
                               interest.
(5) Postgraduate studies....  Living allowance,     Salary paid during
                               tuition, books, and   school breaks or
                               fees received while   when recipient was
                               in the program plus   employed by an
                               interest.             approved
                                                     organization.
------------------------------------------------------------------------

    (b) For agriculture education programs with an obligated service 
requirement, we will adjust the amount required for repayment by 
crediting toward the final amount of debt any obligated service 
performed before breach of contract.

Subpart K--Records


Sec. 166.1000  Who owns the records associated with this part?

    (a) Records are the property of the United States if they:
    (1) Are made or received by a tribe or tribal organization in the 
conduct of a federal trust function under 25 U.S.C. Sec. 450f et seq., 
including the operation of a trust program; and
    (2) Evidence the organization, functions, policies, decisions, 
procedures, operations, or other activities undertaken in the 
performance of a federal trust function under this part.
    (b) Records not covered by paragraph (a) of this section that are 
made or received by a tribe or tribal organization in the conduct of 
business with the Department of the Interior under this part are the 
property of the tribe.


Sec. 166.1001  How must a records associated with this part be 
preserved?

    (a) Any organization, including tribes and tribal organizations, 
that have records identified in Sec. 166.1000(a) of this part must 
preserve the records in accordance with approved Departmental records 
retention procedures under the Federal Records Act, 44 U.S.C. Chapters 
29, 31 and 33. These records and related records management practices 
and safeguards required under the Federal Records Act are subject to 
inspection by the Secretary and the Archivist of the United States.
    (b) A tribe or tribal organization should preserve the records 
identified in Sec. 166.1000(b) of this part for the period of time 
authorized by the Archivist of the United States for similar Department 
of the Interior records in accordance with 44 U.S.C. Chapter 33. If a 
tribe or tribal organization does not preserve records associated with 
its conduct of business with the Department of the Interior under this 
part, it may prevent the tribe or tribal

[[Page 7145]]

organization from being able to adequately document essential 
transactions or furnish information necessary to protect its legal and 
financial rights or those of persons directly affected by its 
activities.

    Dated: December 21, 2000.
Kevin Gover,
Assistant Secretary--Indian Affairs.
[FR Doc. 01-1419 Filed 1-19-01; 8:45 am]
BILLING CODE 4310-02-P