[Federal Register Volume 73, Number 47 (Monday, March 10, 2008)]
[Rules and Regulations]
[Pages 12808-12836]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-4301]



[[Page 12807]]

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Part II





Department of the Interior





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Bureau of Indian Affairs



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25 CFR Part 224



Tribal Energy Resource Agreements Under the Indian Tribal Energy 
Development and Self-Determination Act; Final Rule

  Federal Register / Vol. 73, No. 47 / Monday, March 10, 2008 / Rules 
and Regulations  

[[Page 12808]]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Part 224

RIN 1076-AE80


Tribal Energy Resource Agreements Under the Indian Tribal Energy 
Development and Self-Determination Act

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Final rule.

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SUMMARY: The Secretary of the Interior (Secretary) is promulgating 
final regulations providing that Indian tribes, at their discretion, 
may enter into business agreements and leases for energy resource 
development and grant rights-of-way for pipelines or electric 
transmission or distribution lines on tribal land without the 
Secretary's review and approval. Indian tribes entering into such 
business agreements, leases, and grants of rights-of-way must execute 
them under an approved tribal energy resource agreement (TERA) between 
the Secretary and the tribe. These final regulations provide the 
process under which a tribe may apply for, and the Secretary may grant, 
authority for an Indian tribe to review and approve leases and business 
agreements and grant rights-of-way for specific energy development 
activities on tribal lands through an approved TERA. The regulations 
also cover processes for implementation of TERAs, including periodic 
review and evaluation of a tribe's activities under a TERA, enforcement 
of TERA provisions, and administrative appeals. The regulations also 
include a process for a tribe's voluntarily rescinding a TERA.

DATES: This rule is effective April 9, 2008.

ADDRESSES: Further information or questions regarding this final rule 
should be addressed in writing to Robert Middleton, Director, Office of 
Indian Energy and Economic Development, Room 20--South Interior 
Building, 1951 Constitution Avenue, NW., Washington, DC 20245. Please 
include your name and return address.

FOR FURTHER INFORMATION CONTACT: Darryl Francois, Program Analyst, 
Office of Indian Energy and Economic Development, Room 20--South 
Interior Building, 1951 Constitution Avenue, NW., Washington, DC 20245, 
Telephone (202) 219-0740 or Fax (202) 208-4564.

SUPPLEMENTARY INFORMATION: 

I. Background
II. Discussion of Final Rule
III. Discussion of Comments on Proposed Regulations and Responses
IV. Procedural Matters

I. Background

    The Secretary is issuing this part under authority of the Indian 
Tribal Energy Development and Self-Determination Act of 2005, Pub. L. 
109-58, 119 Stat. 763, 25 U.S.C. 3501-3504, and 25 U.S.C. 2 and 9.
    Title V, Section 503, of the Energy Policy Act of 2005 (Pub. L. 
109-58) amended Title XXVI (Indian Energy) of the Energy Policy Act of 
1992 to require the Secretary of the Interior (Secretary) to promulgate 
regulations that implement provisions concerning tribal energy resource 
development on tribal lands. Specifically, the Indian Tribal Energy 
Development and Self-Determination Act of 2005, Title XXVI, Section 
2604 of the Energy Policy Act, as amended, authorizes tribes, at their 
discretion, to apply for and enter into TERAs with the Secretary. Upon 
Secretarial approval of TERAs, tribes may enter into energy-related 
business agreements and leases, and grant rights-of-way for pipelines 
and electric transmission and distribution lines, on tribal lands 
without the Secretary's review and approval. Implementation of the 
final regulations providing for TERAs will further the Federal 
Government's policy of providing enhanced self-determination and 
economic development opportunities for Indian tribes by promoting 
tribal oversight and management of energy resource development on 
tribal lands. The Act and the regulations provide another process, in 
addition to the Indian Minerals Development Act and the Indian Mineral 
Leasing Act, under which tribes may develop their mineral resources. 
Implementation of these regulations will also support the national 
energy policy of increasing utilization of domestic energy resources. 
As stated in the final regulations, the Secretary will interpret and 
implement these regulations and the Act in keeping with the self-
determination and energy development provisions and policies of the 
Act. In drafting the proposed regulations and finalizing regulations, 
the Secretary has diligently attempted to conform to the requirements 
of the Act and to address concerns that arose during the tribal 
consultation and discussion of the proposed regulations during the 
public comment process.
    The Secretary held a series of public meetings and tribal 
consultations in January 2006 to solicit stakeholder and tribal 
comments on the implementation of the Act. In addition, in two letters 
to tribal leaders, the Secretary solicited the direct involvement of 
tribes in drafting a framework for the development of proposed 
regulations. The Secretary identified three primary issues based on the 
written and oral comments: Whether the definition of tribal land on 
which tribes may conduct TERA-authorized activities should include 
tribal fee land; what criteria the Secretary will use to determine that 
a tribe has sufficient capacity to regulate its energy resource 
development; and what will constitute adequate environmental review of 
leases, business agreements, and rights-of-way a tribe may include or 
enter into under an approved TERA.
    Definition of Tribal Lands--In the preamble to the proposed 
regulations, the Secretary specifically sought public comment on the 
alternate definition of tribal land some tribes proposed: ``Those lands 
for which the Secretary has determined that interests in real property 
held in fee by a tribe and located outside of Indian Country, as 
defined in 18 U.S.C. 1151, are not subject to a restriction on 
alienation, unless otherwise specifically imposed by Congress.'' In 
addition, the alternate definition of tribal land included the 
statement that ``should a final, non-appealable decision of a court of 
competent jurisdiction invalidate the Secretary's determination that 
such land is not subject to a restriction on alienation and conclude 
such land is subject to a restriction on alienation, this definition of 
Tribal land will include real property held in fee by a tribe, 
regardless of location, except in those instances in which Congress has 
removed the restriction on alienation.''
    In comments on the proposed regulations, some tribes suggested that 
this more expansive definition of tribal lands had the potential to 
create more economically robust energy resource development projects by 
allowing TERA projects on tribal fee land. The Act, at 25 U.S.C. 
3501(12), defines tribal land as ``any land or interests in land owned 
by any Indian tribe, title to which is held in trust by the United 
States, or is subject to a restriction against alienation under the 
laws of the United States.'' Following publication of the proposed 
regulations, at Sec.  224.30 Definitions, in which the Secretary used 
the statutory definition, the Secretary considered public comments 
received in support of the definition in the proposed regulations and 
the alternate definition of tribal land offered in the preamble. The 
Secretary determined that public comments for the alternate definition 
of tribal land did not provide a convincing or compelling legal 
argument, nor statutory or other legal support, for changing the 
statutory definition of

[[Page 12809]]

tribal land to include tribal fee land in the regulatory definition. In 
response to comments, the Secretary added ``or mineral interests'' 
after ``interests in land'' and added ``or tribes'' after ``any Indian 
tribe'' to clarify that tribal mineral interests severed from the 
surface estate and tribal jointly held interests are included in the 
definition of tribal land.
    Criteria for Determining Tribal Capacity--The Act requires that the 
implementing regulations include criteria the Secretary will use to 
determine that a tribe has sufficient capacity to manage. In the 
preamble to the proposed regulations, the Secretary specifically sought 
public comment concerning sufficient criteria to enable the Secretary 
to determine a tribe's capacity to manage the full scope of 
administrative, regulatory, and energy resource development a tribe 
proposes to assume under an approved TERA. The proposed regulations 
require that a tribe considering entering into a TERA participate in a 
pre-application process designed to provide a preliminary analysis of 
the type of expertise necessary to manage the particular type of energy 
resource development that the tribe contemplates. Under the proposed 
regulations, as part of the TERA application process, a tribe must 
describe the level of expertise it possesses to manage the energy 
resource development within the scope of the proposed TERA or how the 
tribe will acquire the needed expertise. As the Act requires, criteria 
the Secretary developed for the proposed regulations include the 
tribe's experience managing natural resources and the administrative 
and financial resources that will be available to it when implementing 
an approved TERA.
    Environmental Review Processes--The Secretary specifically 
requested comments during the consultation process and in the preamble 
to the proposed regulations on additional environmental review 
requirements a tribe must meet beyond the minimum included in the Act. 
The regulations require that a TERA include provisions that establish a 
tribal environmental review and compliance process for any potential 
environmental impacts that may occur from a lease, business agreement, 
or right-of-way that a tribe plans to enter into.
    A main component of the regulations regarding a tribe's approval 
authority for leases, business agreement, and rights-of-way is ensuring 
compliance with environmental laws. Under the regulations a tribe must 
include in its TERA: all required provisions for the tribe's and any 
third party's compliance with Federal environmental laws in regard to 
leases, business agreements, and rights-of-way entered into or granted 
under an approved TERA; provisions that the tribe include public notice 
and opportunity for public comment on the potential environmental 
effects of leases, business agreements, and rights-of-way a tribe 
proposes to enter into or grant under an approved TERA; provisions that 
the tribe notify the Secretary of any violation or breach; provisions 
that acknowledge that the Secretary may take various actions, including 
reassumption of the authority granted in a TERA, when the Secretary 
finds that there is imminent jeopardy to a physical trust asset; and 
the Secretary's remedies for an interested party who shows that an 
interest of the party has sustained or will sustain an adverse 
environmental impact as a result of a tribe's non-compliance with the 
terms of an approved TERA.
    The Secretary will also develop with a tribe in the application 
process, include in an approved TERA, and conduct throughout the period 
an approved TERA is in effect, periodic reviews and evaluations of the 
tribe's performance of the energy resource development activities a 
tribe undertakes.
    In addition, in conducting review of a tribe's TERA application, 
the Secretary will perform a National Environmental Policy Act (NEPA) 
review consistent with the scope of the tribe's proposed energy 
resource development in the TERA. The Secretary will also publish in 
the Federal Register a notice that the Secretary is considering a final 
proposed TERA and is requesting public comment.
    In addition to the three issues identified in the consultation 
process discussed above, the Secretary identified several other main 
issues during the public comment period discussing: what is included as 
a physical trust asset and the exception of inherently Federal 
functions from responsibilities a tribe may assume under a TERA.
    Physical Trust Asset--The regulatory definition of physical trust 
asset includes physical trust assets the United States owns in trust 
for a tribe or individual Indian or that a tribe or individual Indian 
owns subject to a restriction against alienation under the laws of the 
United States. The regulatory definition excludes improvements to the 
physical trust assets and monetary assets. A few commenters requested 
that the Secretary also exclude ``water'' from the definition of 
physical trust asset. The commenters suggested that water and water 
rights issues have a different legal basis under federal and tribal 
laws than do other natural resources and that it is not appropriate to 
include water as a physical trust asset. The Secretary relied on 
Section 3504(e)(6)(A)(i) of the Act that provides that the Secretary 
must ``act in accordance with the trust responsibility of the United 
States relating to mineral and other trust resources.''
    In addition, the Secretary included the definition of physical 
trust asset because of the imminent jeopardy to a physical trust asset 
regulatory provisions the Act mandates. The Secretary asserts that the 
inclusion of water as a physical trust asset is necessary to ensure 
that any water supply to or body of water that exists on tribal land is 
protected from imminent jeopardy because of a tribe's non-compliance 
with a TERA or a third party's breach or violation of a lease, business 
agreement, or right-of-way under a TERA or violation of applicable 
tribal or Federal environmental laws. Imminent jeopardy means ``an 
immediate threat of devaluation, degradation, damage, or loss of a 
physical trust asset, as determined by the Secretary'' (Sec.  224.30, 
Definitions). A tribe's energy resource development on tribal land may 
affect physical trust assets, including water resources on its land, 
adjacent Indian allotted land, or on another tribe's land. Devaluation, 
degradation, or damage to, or loss of, any natural resource, including 
water, because of a breach or violation of a term of a lease, business 
agreement, or right-of-way under a TERA, or violation of applicable 
environmental laws, are equally potentially environmentally or 
financially devastating. The Secretary is required under the Act to 
provide for taking actions necessary to protect the asset if the 
Secretary determines that a non-compliance with a TERA or applicable 
Federal or tribal environmental laws causes imminent jeopardy to a 
physical trust asset or if the interest of an interested party, as 
defined in the regulations, has sustained or will sustain an adverse 
environmental impact due to a tribe's non-compliance with an approved 
TERA. The Secretary must therefore include water, as a natural resource 
and a trust resource, as a trust asset in the definition of physical 
trust asset.
    Inherently Federal Functions--In keeping with the intention of the 
Act and the Secretary's intention to further tribes' opportunities to 
manage their own energy resource development on tribal lands, the 
regulations provide that tribes, at their discretion, may review

[[Page 12810]]

and approve leases, business agreements, and rights-of-way associated 
with energy resource development on tribal lands to tribes under 
approved TERAs. In addition to the review and approval authority the 
Secretary would ordinarily perform, the Act and the regulations require 
that tribes provide for carrying out specific activities the Secretary 
would ordinarily perform. The regulations include required provisions 
for a tribe's establishing and carrying out an environmental review 
process, ensuring environmental compliance in tribal approval of 
leases, business agreements, and rights-of-way, and public 
participation in environmental review of the effects that tribal 
approval of leases, business agreements, and rights-of-way will have.
    However, Congress also provided in the Act, and the regulations 
state, that the United States is not absolved of any responsibility to 
Indians or Indian tribes, including those derived from the trust 
relationship or from any treaties, statutes, and other laws of the 
United States, Executive Orders, or agreements between the United 
States and any Indian tribe. In addition, under the Act and the 
regulations, the Secretary must act in accordance with the trust 
responsibility of the United States relating to mineral and other trust 
resources and act in good faith and in the best interest of Indian 
tribes. In addition, the Act and the regulations provide that the 
Secretary must continue to fulfill the trust obligation of the United 
States to ensure that the rights and interests of an Indian tribe are 
protected ``if any other party to a lease, business agreement, or 
right-of-way violates any applicable Federal law or the terms of any 
lease, business agreement, or right-of-way a tribe enters into under an 
approved TERA or any provision in a lease, business agreement, or 
right-of-way violates the TERA under which the lease, business 
agreement, or right-of-way was executed.'' Tribes with approved TERAs 
must report any violation or breach of terms of a lease, business 
agreement, or right-of-way or a Federal or tribal environmental law to 
the Secretary. The Secretary must determine that a tribe has the 
capacity to carry out the authority and the activities it proposes to 
assume under a TERA before approving a TERA. Under an approved TERA, 
the Secretary must conduct periodic review and evaluations of a tribe's 
activities. In addition, the regulations, following the requirements of 
the Act, provide that in a TERA a tribe must authorize the Secretary to 
take any actions the Secretary determines are necessary to enable the 
Secretary to carry out the trust responsibility upon the Secretary's 
finding of imminent jeopardy to a physical trust asset.
    The final regulations provide that tribes may assume activities 
beyond those specified in the Act. Wherever possible within the 
requirements of the Act and wherever tribal assumption of activities 
would not conflict with inherently Federal functions, the Secretary 
provided for as much flexibility as possible for participating tribes 
in providing for tribal procedures and assumption of activities for 
energy resource development under the regulations. Congress did not 
expressly prohibit the use of the term ``Inherently Federal 
Functions,'' and left this issue open to the Secretary when it outlined 
the Secretary's trust responsibility in the Act (25 U.S.C. 3504(e)(6)). 
Therefore, the regulations at Sec.  224.52(c) state that a tribe may 
include in a TERA the ``assumption by the tribe of certain activities 
normally carried out by the Secretary, except for inherently Federal 
functions.'' The regulations further provide, at Sec.  224.53(e)(3), 
that ``the tribe's intended scope of administrative activities [in a 
TERA] may not include the responsibilities of the Federal government 
under the Endangered Species Act or any other inherently Federal 
functions.'' Under regulations for Indian self-determination, self-
governance, surface leasing and grazing, and Indian Reservation Roads, 
for example, the Secretary has also reserved responsibility for 
inherently Federal functions, which a tribe may not assume. While a few 
commenters requested that, the Secretary define ``inherently Federal 
functions,'' the Secretary declined to do so. Under the Indian Self-
Determination and Education Assistance Act (ISDEAA), as amended, the 
Secretary determines inherently Federal functions on a case-by-case 
basis.
    In the final regulations at Sec.  224.58, the regulations provide 
that in an application consultation meeting with the tribe the Director 
will identify specific services, consistent with the Secretary's 
ongoing trust responsibility and available resources, that the 
Department will provide to the tribe upon approval of a TERA. The 
Director will also discuss with the tribe the activities the tribe 
proposes to assume under a TERA. It is the Secretary's policy to make 
available to a tribe under an approved TERA all administrative 
functions that may be lawfully contracted under the ISDEAA, as amended, 
and the Federal Oil and Gas Royalty Management Act. It is the 
Secretary's intention to interpret and implement this part as stated in 
Sec.  224.20.
    In the final regulations, the Secretary substituted the term 
``activities'' for ``authority'' and ``responsibility'' where 
``authority'' and ``responsibility'' were used interchangeably in the 
proposed regulations for activities a tribe requests to assume in a 
TERA. In the proposed regulations, the terms ``authority'' and 
``responsibility'' were also used in a manner in which they 
conceptually overlapped. In order to clarify meanings and distinguish 
what authority a tribe obtains and what other activities a tribe may 
assume under an approved TERA, the Secretary determined that the term 
``responsibility'' relates to an inherently Federal function for which 
the Secretary must retain final decision-making. The term ``authority'' 
is properly used in connection with a tribe's review and approval of 
leases, business agreements, and rights-of-way to denote the effect of 
an approved TERA. Under an approved TERA, the Secretary is granting 
authority to a tribe to review and approve these instruments without 
Secretarial approval. Therefore, the Secretary has maintained use of 
the term ``authority'' when it applies to the Secretary's grant to a 
tribe under an approved TERA. The Secretary has replaced the term 
``authority'' or ``responsibility'' with ``activity'' or ``activities'' 
when referencing what a tribe may assume from the Secretary, in 
addition to review and approval authority for leases, business 
agreements, and rights-of-way, under an approved TERA.
    In addition to the issues discussed above, in several instances the 
Secretary found that clarification under the requirements of the Act 
were necessary, as discussed below.
    Miscellaneous Provisions--In order to meet the Secretary's 
commitment to develop implementing regulations that conform to the 
requirements of the Act, where the Secretary found provisions in the 
regulations that incompletely reflected specific provisions of the Act, 
the Secretary revised them to accurately reflect the requirements of 
the Act. In addition, the Secretary included the following items in the 
final regulations after review and consideration.
    Recordkeeping Requirements--Based on the Act's requirements, the 
Secretary carefully reviewed provisions for items required for 
inclusion in a TERA under Sec.  224.63. The Secretary added Sec. Sec.  
224.63(k) and 224.56(l) to subpart B, requiring that tribes include 
provisions for recordkeeping in TERAs. Under these sections, tribes 
must create,

[[Page 12811]]

maintain and preserve records concerning the activities and leases, 
business agreements, and rights-of-way it enters into under a TERA. The 
Secretary must have available at periodic reviews and evaluations 
sufficient documentation to allow for meaningful review and evaluation 
of a tribe's energy development activities under a TERA. In addition, 
in the event a tribe voluntarily rescinds a TERA or the Secretary 
reassumes a TERA, the Secretary must ensure that the tribe has 
appropriate records to provide to the Secretary to allow the Secretary 
to carry out the activities the tribe assumed; ensure compliance with 
the leases, business agreements, or rights-of-way the tribe has entered 
into with third parties; protect physical trust assets; and discharge 
the United States' trust responsibility. Addition of this recordkeeping 
provision is not a substantive change since the Act and Sec.  224.32(e) 
provide that under a TERA the tribe must provide the Director with 
``records and documents relevant to the provisions of an agreement.'' 
In addition, the Act and the final regulations provide that upon a 
tribe's notifying the Secretary of a violation or breach, the Secretary 
may ``review relevant transactions and reports.''
    Definition of Violation or Breach--Upon the review of the 
regulations, the Secretary determined that the definition of 
``violation or breach'' in Sec.  224.30 should follow the definition in 
the Act. Therefore, in order to complete the definition of ``violation 
or breach'' in Sec.  224.30, the Secretary added ``other'' before 
``violation'' and added ``by another party'' after ``violation.'' The 
Secretary also added ``any provision in'' before ``lease'' and added, 
``under a TERA or any activity or occurrence under a lease, business 
agreement or right-of-way that constitutes a violation of'' before 
``Federal or tribal environmental law.''
    Provision for Hearing on Determination of Non-Compliance With 
TERA--The proposed regulations did not include a provision for a 
hearing for a tribe upon the Director's determination that the tribe is 
not in compliance with the terms of its approved TERA. The Secretary 
added a provision for a hearing for a tribe to Sec.  224.121 at (a), 
along with a provision granting a tribe a reasonable opportunity to 
comply with the TERA. The provision was inadvertently left out of the 
proposed regulations. The Secretary wanted to acknowledge that a tribe 
has due process rights in this section.

II. Discussion of Final Rule

    The final regulations include the specific regulatory provisions 
the Act required for TERAs: (1) Criteria for determining that a tribe 
has sufficient capacity to regulate the development of its energy 
resources; (2) a scope of, and procedures for, Secretarial review and 
evaluation of tribal action under a TERA, including provisions for 
review of transactions, reports and site inspections, and any other 
review processes the Secretary deems appropriate; (3) provisions for 
final agency actions after exhaustion of administrative appeals of 
Secretarial decisions regarding interested party petitions; and (4) a 
process and requirements for a tribe's voluntarily rescinding a TERA 
and returning to the Secretary the review and approval authority for 
future leases, business agreements and rights-of-way for energy 
resource development. The regulations also provide for a tribal 
application process for a TERA, tribal consultation throughout the pre-
application and application processes, and a process for Secretarial 
review and approval of TERAs. The regulations require that the 
Secretary provide notice of, and an opportunity for public comment on, 
a final proposed TERA. In addition, the regulations require that a TERA 
include provisions that cover tribal environmental compliance measures 
and a process for review of any potential environmental impacts to 
areas affected by activities that the tribe could approve under the 
TERA. Further, the final regulations provide processes for tribes and 
the Secretary to take any action necessary to protect physical trust 
assets if activities undertaken under an approved TERA cause imminent 
jeopardy to a physical trust asset. The regulations also require that 
the Secretary take any action necessary upon a third-party lessee's 
non-compliance with a lease or agreement or right-of-way or a violation 
of a Federal or tribal environmental law results in imminent jeopardy 
to a physical trust asset.
    Because an approved TERA is the decisional and operational document 
governing tribal authority to approve leases and business agreements 
on, and to grant rights-of-way, over tribal land, the Act requires that 
specific provisions be included in a TERA. In addition to requiring 
that a tribe provide information regarding its capacity to assume 
certain duties, a TERA, pursuant to the Act, also sets forth detailed 
provisions a tribe must include in a lease, business agreement, or 
grant of right-of-way to ensure environmental compliance, including 
reporting violations and breaches of leases, business agreements, and 
rights-of-way and violations of Federal and tribal environmental laws 
to the Secretary. TERAs must also specify that the Secretary will 
conduct periodic reviews and evaluations of a tribe's performance under 
a TERA. During the application consultation, the Director and the tribe 
will develop a periodic review and evaluation process that addresses 
the tribe's specific circumstances and the tribe will include the 
process in its final TERA. The regulations also provide that a tribe 
may voluntarily rescind its authority to the Secretary. Under the 
regulations, the Secretary may reassume all of a tribe's activities 
under a TERA under very specific circumstances. Consequently, the 
Secretary carefully reviewed provisions requiring items to be included 
in a TERA. The Secretary added Sec. Sec.  224.63(k) and 224.63(l) to 
subpart B, to provide that tribes include a provision for recordkeeping 
in each TERA. Under this section, tribes must create, maintain and 
preserve records concerning the leases, business agreements, and 
rights-of-way it enters into under a TERA. The Secretary must have 
available at periodic reviews and evaluations sufficient documentation 
to allow for meaningful review and evaluation of a tribe's energy 
development activities under a TERA. In addition, in the event a tribe 
voluntarily rescinds a TERA or the Secretary reassumes a TERA, the 
Secretary must ensure that the tribe has appropriate records to allow 
the Secretary to carry out the activities; protect physical trust 
assets; and discharge the United States' trust responsibility. The 
Secretary does not consider the addition of this section to be a 
substantive change, since Sec.  224.32(e) already requires that the 
tribe provide the Director with ``records and documents relevant to the 
provisions of an agreement.''

III. Discussion of Comments on Proposed Regulations and Responses

    The Secretary received input from 20 commenters on the proposed 
regulations published in the Federal Register on August 21, 2006 (71 FR 
48626). Tribes, private companies, tribal organizations, non-
governmental associations, a Federal government agency, and individuals 
provided written comments. A number of comments indicated that 
commenters were not familiar with provisions of the Act from which we 
developed the regulations. In responses to comments, the Secretary 
indicated where the Act required specific provisions in the

[[Page 12812]]

regulations. Public comments and the Secretary's responses are arranged 
first by general comments and then by comments to subpart and/or 
section. We have included responses only to substantive comments. Where 
commenters suggested minor editorial revisions such as changes in 
grammar or minor word changes that we accepted, we have made such 
changes to the regulations, but have not included these comments in the 
responses that follow. In addition, in final review of these 
regulations, we identified minor editorial revisions and provisions 
that required edits, either to clarify a section or to provide for 
agreement between the regulations and the Act. We made those changes. 
In a few instances, we identified items that we wanted to add to 
sections either to clarify the section or to provide for agreement 
between the regulations and the Act. We also made those changes. We did 
not make substantive changes in any of these instances, and have 
provided a discussion of them in this document.

Subpart A--General Provisions

Section 224.20 How will the Secretary interpret and implement this Part 
and the Act?
    Several commenters requested that the Department impose specific 
timeline requirements on tribes for energy development activities that 
they manage under a TERA or mandate that tribes develop processes that 
parallel state and federal practices. In fulfilling the requirement to 
write implementing regulations for Title V--Indian Energy of the Act, 
we have imposed specific requirements where appropriate or mandated by 
the Act. In other places, we have allowed as much flexibility as 
possible to participating tribes in accordance with the mission of the 
Department to advance the objectives of the Indian Self-Determination 
and Education Assistance Act, as amended, and in recognition of tribal 
sovereignty. The regulations in Sec.  224.20 incorporate the 
Department's attempt to balance requirements of the Act and the 
flexibility tribes need to facilitate economic development.
Section 224.30 What definitions apply to this Part?
    There were several comments concerning definitions. Several 
commenters said that the use of the term ``agreement'' throughout the 
regulations, when referring to a Tribal Energy Resource Agreement 
(TERA), was confusing and could lead to misinterpretation of the 
regulations. We agree with these commenters, and throughout the final 
rule, we replaced the term ``agreement'' with ``TERA,'' where 
appropriate, and added a definition of TERA to Sec.  224.30. In the 
Preamble of the proposed rule, the Secretary published an alternate 
definition of the term ``tribal land'' and sought comment on how the 
term ``tribal land'' should be defined. The Secretary received comments 
on both the proposed definition and the alternate definition of tribal 
land. The Secretary determined that the definition of tribal land at 
Sec.  224.30, which follows the definition in the Act at 25 U.S.C. 
3501(12), is the appropriate definition.
    Some commenters suggested that the definition of ``Interested 
Party'' unfairly limits the interests of parties that could appeal 
actions taken under a TERA. The Secretary recognizes the limitation of 
the definition, but it follows the definition in the Act. In addition, 
there are other avenues for appeal of TERA approved actions in Subpart 
I Appeals. A few commenters suggested that the Secretary constrain the 
definition of Violation or Breach by inserting the word ``significant'' 
to indicate that only a violation or breach of a certain degree of 
seriousness would require Secretarial action. The definition the 
Secretary uses follows the definition in the Act. In addition, under 
the definition the Secretary has discretion to determine the 
seriousness of the violation or breach within the context of the 
approved TERA. Some commenters suggested excluding water from the 
definition of a ``Physical Trust Asset.'' The Secretary determined that 
the regulations must include a definition of ``Physical Trust Asset'' 
because the Secretary has a trust responsibility for natural resources 
and the Act mandates provisions dealing with a breach or violation that 
has caused or will cause ``imminent jeopardy to a physical trust 
asset.'' The Secretary determined that the inclusion of water as a 
physical trust asset is necessary to ensure that any water supply or 
body of water that exists on tribal land has protection from imminent 
jeopardy because of the action or inaction of a tribe or a third party 
under a TERA.
Section 224.40 How does the Act or a TERA affect the Secretary's trust 
responsibility?
    One commenter asked that the regulations reflect the Secretary's 
ongoing accountability for stewardship of energy and other subsurface 
resources. Another commenter requested that the Secretary state the 
specific requirements of the trust responsibility. We note that the 
proposed regulations in Sec.  224.40 states that the Secretary 
continues to maintain trust responsibilities (as defined by statutes 
and regulations under U.S. v. Mitchell, 463 U.S. 206 (1983) and its 
progeny) and that the regulatory language is consistent with the Act at 
25 U.S.C. Section 3504(e)(6)(B). One commenter objected to Sec.  
224.40(d), which relieves the Secretary of liability for any losses 
resulting from a business agreement, lease, or right-of-way granted 
under a TERA, and claims that this provision is inconsistent with the 
Secretary's obligation to intervene where imminent jeopardy to a 
physical trust asset occurs under a business agreement, lease, or grant 
of right-of-way. However, this provision is entirely consistent with 
the language of the Act which states that the Secretary `` shall not be 
liable to any party (including any Indian tribe) for any negotiated 
term of, or loss resulting from the negotiated terms for, a lease, 
business agreement, or right-of-way executed pursuant to and in 
accordance with a tribal energy resource agreement approved by the 
Secretary.'' The Secretary believes that the regulations outlined in 
Subpart E are sufficient to protect physical trust assets from imminent 
jeopardy conditions. Another commenter asked what form a TERA would 
take. The language of the Act and the regulations provide that an 
approved TERA is the Secretary's grant of authority to a tribe to 
approve leases, business agreements, or rights-of-way for specific 
energy development activities on tribal lands. The Secretary conditions 
this grant of authority on the Secretary's periodic review and 
evaluation of the tribe's compliance with the terms of the TERA and 
these regulations as mandated by Title V, Section 503 of the Energy 
Policy Act of 2005. The final regulations contain provisions under 
which the Secretary may reassume the authority granted to the tribe 
under a TERA. One commenter expressed concern that in the case of 
jointly held tribal land that Sec.  224.41 should specifically refer to 
``tribal minerals.'' However, the definition of tribal land in Sec.  
224.30 includes ``land or interests'' owned by a ``tribe or tribes'' 
and therefore jointly held mineral interests are covered in the final 
regulations.

Subpart B--Procedures for Obtaining Tribal Energy Resource Agreements

    A commenter expressed concern that the Secretary would not fully 
consult with tribes on the range of opportunities available to 
determine the scope of energy development and regulatory authority that 
they may want to assume under a TERA. The commenter suggested that the 
Secretary apprise

[[Page 12813]]

tribes of financial resources available to help them develop the 
expertise and capacity to develop their energy resources. In response, 
the Secretary notes that the regulations under Subparts B and C require 
the Secretary to conduct a thorough consultation process with a tribe 
applying for a TERA that will lead to a comprehensive review of the 
capacity of a tribe to conduct the activities that are the subject of a 
TERA. In addition, under Subpart F, the Secretary will conduct periodic 
review and evaluation of the tribe's compliance with a TERA to identify 
any inadequacy in the tribe's capacity to perform under the 
requirements of its approved TERA. If the Secretary identifies any 
inadequacies in the tribe's capacity to implement the provisions of the 
TERA, the Secretary will communicate those concerns and incorporate 
those findings in a decision to allow the tribe's activities to 
continue or to reassume the authority granted to the tribe in the TERA. 
Finally, in Sec.  224.63(h), the regulations require that the TERA 
identify the financial assistance, if any, that the Secretary has 
agreed to provide to the tribe to assist in the implementation of the 
TERA, including the tribe's environmental review of individual energy 
development activities. In addition, Sec.  224.89 of the regulations 
requires that the Secretary and the tribe consult regarding the extent 
of Secretarial assistance, if any, to enforce leases, business 
agreements or rights-of-way entered into under a TERA.
    Some commenters noted that the regulations should retain the 
greatest flexibility possible to allow tribes to acquire the 
appropriate level of involvement with a TERA.
    The Secretary recognizes the need for ongoing consultation with 
tribes during the process of approval and implementation of a TERA. The 
regulations include a pre-application consultation process at Subpart 
B, Sec. Sec.  224.51-53. In addition, Sec. Sec.  224.58-62 outline the 
consultation process that begins with receipt of a tribe's formal 
application for a TERA. Finally, at many points throughout the TERA 
review, approval, and monitoring process the Secretary will consult 
with the tribe when making decisions about the tribe's TERA. Throughout 
the consultation processes and implementation of TERAs, the Secretary 
will strive to include officials at the local level as well as 
officials that deal with Indian affairs in other bureaus within the 
Department, relevant Federal agencies outside the Department, and the 
Department's advisory committee in discussions with the tribe.
Section 224.52 What may a tribe include in a TERA?
    In Sec.  224.52(c), the Secretary states that a tribe may assume 
under a TERA ``* * * certain activities normally carried out by the 
Secretary, except for inherently Federal functions.'' Several 
commenters objected to the exclusion of inherently Federal functions 
from a TERA. These commenters either wanted the exclusion deleted or 
expanded into a definition. In response, the Secretary notes that 
Congress did not expressly prohibit the use of the term ``Inherently 
Federal Function,'' and left this issue up to the Secretary's 
discretion when it outlined the Secretary's trust responsibility in the 
Act (25 U.S.C. Section 33504(e)(6)(A) and (B)). The Secretary therefore 
determined that exclusion of inherently Federal functions from a TERA 
is consistent with the Act and other legislation, specifically the 
Indian Self Determination and Education Assistance Act, as amended. 
Furthermore, the pre- and post-application consultation process between 
tribes and the Department outlined in the regulations should enable the 
tribes and the Department to reach an agreement as to what activities a 
tribe can assume under a TERA.
Section 224.53 What must an application for a TERA contain?
    This section describes the various elements that a TERA application 
must contain. One commenter said that the provision in Sec.  224.53 
went beyond the provisions of the Act. However, the Secretary 
determined that the regulations are fully consistent with the Act's 
stated purpose of assisting Indian tribes in the development of their 
energy resources and furthering the goal of Indian self-determination. 
Furthermore, the specific provisions of the Act that are codified at 25 
U.S.C. 3504(e)(2)(B)(i) provide that the Secretary shall approve a TERA 
if the Secretary determines that the Indian tribe has demonstrated 
sufficient capacity to regulate the development of its energy 
resources. At the tribe's discretion, the tribe may include the full 
range of development activities in its TERA application which the 
Secretary must approve or disapprove.
    Several commenters requested that the regulations provide an ``opt 
out'' clause for tribes so that tribes may choose to pursue agreements 
outside the TERA process. The Secretary notes that a tribe is not 
required to enter into a TERA to pursue energy development activity. In 
fact, the Act and the regulations provide that it is a tribe's 
discretion whether to enter into a TERA. When applying for a TERA, a 
tribe may preserve the option to use the provisions of the Indian 
Mineral Development Act, or other existing authorities, to pursue 
energy development on tribal land by complying with the requirements in 
Sec.  224.53(c)(1) and (2).
    Some commenters seek to insert language to clarify that after a 
TERA goes into effect, tribes may amend existing leases, business 
agreements, and rights-of-way and exercise TERA regulatory authority 
under a TERA with respect to the existing agreements to promote 
efficient administration of energy resource development projects on 
tribal land. The Secretary agrees with the commenters and has added 
clauses (c)(3) and (e)(3) to Sec.  224.53 to allow a tribe to state its 
intent to amend or modify (with the agreement of relevant third 
parties) leases, business agreements, and rights-of-way that exist when 
a TERA is approved, if those activities are directly related to the 
activities authorized by the TERA.
Section 224.55 Is information a tribe submits throughout the TERA 
process under this Part subject to disclosure to third parties?
    Although this section states that a tribe may identify information 
it determines is confidential and proprietary, one commenter requested 
that the regulations outline the process the Secretary will use if it 
receives a Freedom of Information Act (FOIA) request concerning a TERA. 
The Secretary does not think it is necessary to outline the procedures 
in these regulations, because we will follow the procedures found at 43 
CFR Part 2. This commenter also requested the addition of language to 
the regulations that would require that the Secretary consult with the 
tribe before responding to a FOIA request. The Department will comply 
with applicable sections of both FOIA (5 U.S.C. 552) and the 
Departmental regulations (43 CFR Part 2) in responding to FOIA requests 
for tribal information submitted in pre-application and application 
processes.
Section 224.59 How will the Director use the results of the application 
consultation meeting?
    One commenter noted that this section does not sufficiently 
describe the factors the Secretary will consider based on the 
information from the application consultation meeting. In response, the 
Secretary revised the section so that it refers to the specific

[[Page 12814]]

sections in which the regulations describe the evaluation process.
Section 224.62 May a final proposed TERA differ from the original 
proposed TERA?
    A commenter requested that time limits on the review process for a 
TERA change only with the consent of the affected tribe when changes 
are made between the original proposed TERA proposal and the final 
proposed TERA. We agree with this request and modified the language in 
Sec.  224.62(b) to indicate that tribal consent is required.
Section 224.63 What provisions must a TERA contain?
    Several commenters questioned the environmental review provisions 
in Sec.  224.63(c). One commenter said that the regulations did not set 
a ``real standard'' for what would constitute an ``appropriate'' 
environmental evaluation for activities proposed under a TERA. Other 
commenters noted that the provisions are more stringent than what is 
required under the National Environmental Policy Act (NEPA). In 
response, the Secretary agrees that the provisions in Sec.  224.63(c) 
go beyond the requirements of NEPA. However, this language is 
consistent with the requirements of the Act at 25 U.S.C. 
3504(e)(2)(C)(i)-(ii). With respect to environmental review, we agree 
that it is the Secretary's responsibility to ensure that the 
environmental review process that the tribe proposes as part of the 
TERA is sufficient to ensure that the tribe identifies, evaluates, and 
mitigates foreseeable impacts during energy resource development. The 
Secretary will address the process and procedures to use in this 
evaluation, guided by the specifics of each tribe's TERA proposal as we 
implement these regulations.
    Another commenter requested that the Secretary require that all 
tribes use the same royalty accounting methodology. However, in 
fulfilling the requirement to write implementing regulations for Title 
V--Indian Energy of the Act, also called the Indian Tribal Energy and 
Self-Determination Act of 2005, the Secretary has imposed specific 
requirements where appropriate or mandated by the Act. In other 
sections, the Secretary has allowed as much flexibility as possible to 
participating tribes in accordance with the mission of the Department 
to advance the objectives of the Indian Self-Determination and 
Education Assistance Act, as amended, and in recognition of tribal 
sovereignty.
    One commenter noted that it is important to provide that the option 
for a lease, business agreement, or right-of-way may have retroactive 
application from the date it becomes effective because parties in 
commercial transactions often fix the operative date of a transaction 
as the date upon which an agreement was reached. The Act provides that 
a lease, business agreement, or right-of-way becomes effective when a 
tribe executes it and mails it to the Secretary. Therefore, in these 
regulations the Secretary agrees that commercial considerations may 
necessitate a retroactive applicability date for a lease, business 
agreement or right-of-way. We modified Sec.  224.63(c)(14) to allow for 
a lease, business agreement, or right-of-way to become applicable 
retroactively by agreement of the tribe and other parties, under 
certain conditions.
    Another commenter noted that in the proposed regulations we used 
the word ``reassume'' in Sec.  224.63(c)(13), but the Act uses the word 
``suspend.'' We have made the word change to make the regulations 
consistent with the Act. The same commenter also suggested re-
designation for clauses (c)(15) to (c)(21). We agree with the 
suggestions, in part, and have changed Sec.  224.63(c)(15) to Sec.  
224.63(d) and have similarly re-designated the clauses that follow from 
Sec.  224.63(c)(16) to (21) to Sec.  224.63(e) to (j).
Section 224.67 What must the Secretary do upon the Director's receipt 
of a final proposed TERA?
    One commenter said that it was not clear if the public notification 
of a TERA application would also provide access to the proposed TERA, 
and suggested that the public should have sufficient time to review any 
proposed TERA. We note that the regulations clearly state at Sec.  
224.67(a) that the Federal Register notice shall advise the public on 
how to request and receive copies of the final proposed TERA from the 
Secretary. Since this is a NEPA process (40 CFR 1502.25(a)), the 
Department will follow the longstanding procedures of the Federal 
government outlined in its NEPA public notice procedures to allow the 
public sufficient time to review the proposed TERAs.

Subpart C--Approval of Tribal Energy Resource Agreements

Section 224.70 Will the Secretary conduct a review of a final proposed 
TERA under the National Environmental Policy Act (NEPA)?
    Several commenters asked that we insert clarifying language in 
Sec.  224.70 that the Secretary's NEPA review is triggered by a tribe's 
submittal of a TERA for review and approval, but that such review does 
not extend to subsequent leases, business agreements, or grants or 
rights-of-way that a tribe may enter into with third parties pursuant 
to an approved TERA. The Secretary agrees that this is the intent of 
the Act and we have added language to Sec.  224.70 of the regulations 
to make this clear.
    One commenter stated that the relationship between these 
regulations, NEPA, and other Federal laws was unclear. The Secretary 
believes that the language in the proposed regulations at Sec.  224.70 
is consistent with the NEPA public notice and public comment 
requirements at 40 CFR 1503 and 1506. Furthermore, the Secretary will 
comply with all applicable Federal laws in the TERA review and approval 
process. In addition, one commenter noted that some projects might not 
be viable unless a tribe can opt out of the environmental review 
process required to be included in the TERA. We note that the proposed 
regulations already addressed this issue at Sec.  224.53(c)(1), which 
we have retained in the final regulations. This provision of the 
regulations provides a tribe an opportunity to identify resources on 
tribal land or parts of tribal land that the tribe does not want to 
include in the proposed TERA.
Section 224.72 How will the Secretary determine whether a tribe has 
demonstrated sufficient capacity?
    One commenter objects to the Secretary approving a TERA because 
other provisions in the Act that would build tribal capacity have not 
been put in place. Until these provisions have been implemented for a 
considerable time, according to the commenter, all tribes should be 
prevented from taking advantage of the TERA program. In response, the 
Secretary states that, in fulfilling the Act's requirement to develop 
implementing regulations for Title V--Indian Energy of the Act, also 
called the Indian Tribal Energy and Self-Determination Act of 2005, we 
have imposed specific requirements where appropriate or mandated by the 
Act. In other places, we have allowed participating tribes as much 
flexibility as possible in accordance with the mission of the 
Department to advance the objectives of the Indian Self-Determination 
and Education Assistance Act, as amended, and in recognition of tribal 
sovereignty.
    In addition, given the varying experiences of tribes with managing 
their energy resources, the Secretary cannot ignore the intent and will 
of Congress in the Act, which is to provide tribes with an additional 
tool to enhance their financial sovereignty while

[[Page 12815]]

requiring a thorough evaluation of the tribe's capacity to develop its 
own resources. The Secretary will diligently carry out the regulations' 
requirement that the Secretary evaluate a tribe's technical, financial, 
and administrative capacity in full consultation with the tribe and in 
response to individual proposed TERAs. A couple of commenters indicated 
that the language in this section should make it clear that the 
Secretary's determination of tribal capacity to manage energy 
development under a TERA is limited to the administrative and 
regulatory activities the tribe seeks to assume from the Secretary, and 
not specific projects that a tribe may seek to develop under a TERA. In 
response, we have made changes consistent with these comments. Finally, 
one commenter objected to a provision in Sec.  224.72(i) that allows 
the Secretary, in evaluating tribal capacity to assume energy 
development regulatory authority, to determine ``any other relevant 
factors'' for consideration. In response to this comment, the Secretary 
notes that the Act specifically provides this discretion to the 
Secretary.
Section 224.73 How will the scope of energy resource development 
proposed in a tribe's TERA affect the Secretary's determination of the 
tribe's capacity?
    One commenter stated that the language in this section again 
suggests that a TERA will include a description of each energy resource 
development subject to a TERA and that tribes will have to go through 
multiple capacity determinations as each proposed development project 
arises under a TERA. We agree that this is not the intent of the Act. 
We have revised the language in this section to indicate that the 
Secretary's capacity determination will include a determination as to 
each type of energy resource development subject to the TERA which the 
tribe seeks to regulate and each type of administrative or regulatory 
activity the tribe proposes to assume. Furthermore, the section now 
makes it clear that the Secretary's review of a TERA is limited to 
activities specified by its provisions. Another commenter requested 
that we change the word ``manage'' in Sec.  224.73 to ``monitor,'' 
stating that this would be consistent with language in Sec.  224.71(b). 
The Secretary believes that the word ``manage'' is consistent with 
intent of the Act, and, in response, has made a change in Sec. Sec.  
224.71(b) and 224.72 to refer to tribe's intent to ``manage'' 
regulatory activities under a TERA.
Section 224.75 What must the Secretary do upon approval or disapproval 
of a final proposed TERA?
    In this section, a commenter objected to the inclusion of the terms 
``if any'' in reference to revisions in Sec.  224.75(b)(2). The 
commenter stated that addition of ``if any'' contradicts the language 
and one of the purposes of the Act, which is to ``provide the Indian 
Tribe with an opportunity to revise and resubmit the tribal energy 
resource agreement.'' Under the Act, if the Secretary disapproves of 
the submitted TERA, the Secretary is required to state the ``changes or 
other actions'' a tribe is required to submit to address the 
Secretary's concerns. Therefore, the commenter recommends that we 
delete the phrase ``if any.'' The Secretary agrees with this comment, 
and we have made the suggested change. Another commenter suggested that 
in Sec.  224.75(c), where there is a reference to complying with FOIA, 
that the regulations refer to the disclosure procedures in Sec.  
224.55. The Secretary agrees that this proposed change would clarify 
the regulations and has eliminated the references to FOIA in Sec.  
224.75(c).

Subpart D--Implementation of Tribal Energy Resource Agreements

Section 224.82 What activities will the Department continue to perform 
after approval of a TERA?
    A commenter said that Sec.  224.82(e) is ambiguous and needs 
clarification. The commenter specifically requested that the reference 
to Department ``activities'' should be changed to ``services.'' The 
commenter also stated that the phrase ``does not affect'' is unclear. 
We agree with the comments about the ``does not affect'' language and 
have revised this section. For the purposes of consistency with other 
provisions of the regulations, we are not changing ``activities'' to 
``services.'' Another commenter sought the addition of a subsection 
that would state that the Department would provide ``access to leases, 
agreements, rights-of-way, and other contracts entered into between the 
tribe and any third party.'' The Secretary believes the existing 
language in Sec.  224.82(a) and (e) has the same effect as proposed by 
this commenter. In addition, we note that when a tribe enters into a 
TERA, the Department's existing responsibilities to provide information 
or services to the tribe remains unchanged.
Section 224.84 When may a tribe grant a right-of-way?
    One commenter said that this section contained too many limitations 
on a tribe's ability to grant a right-of-way. The Secretary notes that 
the limitations in the regulations regarding rights-of-way are fully 
consistent with the Act. Another commenter suggested that the authority 
for ``* * * renewals of leases and rights of ways and other rights 
under the current TERA regulations should be included and be clear and 
flexible enough to allow a project to retain its lease or other rights 
as long as a project is being depreciated.'' The Secretary agrees with 
this comment. In response, we added a Sec.  224.86(d) that states that 
when a tribe enters into a lease or business agreement or grants a 
right-of-way, at its discretion, this tribe may renew the lease, 
business agreement, or right-of-way as long as the TERA remains in 
effect and as long as the tribe still has the authority to approve 
leases and business agreements, and grant rights-of-way under the TERA.
Section 224.85 When may a tribe enter into a lease or business 
agreement?
    A couple of commenters said that Sec.  224.85 is too narrow in its 
limitation of energy resource development activities and it could be 
interpreted to preclude tribes from entering into agreements for 
processing minerals or other activities which include non-tribal 
sources of production. These commenters suggested that the Secretary 
delete this section of the regulations or modify it to indicate that a 
tribe may enter into a lease or business agreement for the purpose of 
energy resource development on ``or affecting'' tribal land. In 
response, the Secretary notes that the Act limits energy resource 
development projects to those that develop resources on tribal land as 
defined in Sec.  224.30 and so has not made the requested change.
Section 224.86 Are there limits on the duration of leases, business 
agreements, and rights-of-way?
    One commenter noted that no mention was made of how to deal with 
renewals of leases, business agreements, and rights-of-way under a 
TERA. As noted before, the Secretary agrees with this comment and in 
response has added a Sec.  224.86(d) that states that when a tribe 
enters into a lease or business agreement or grants a right-of-way, it 
may be renewed at the discretion of the tribe as long as the TERA 
remains in effect and as long as the tribe still has the authority to 
approve leases, business agreements, or rights-of-way under the TERA.
    Another commenter requested that we change the phrase ``in terms'' 
to ``on the duration'' to clearly indicate that this section deals with 
the temporal existence of leases, business agreements,

[[Page 12816]]

and rights-of-way under a TERA and not the legal ``terms'' and 
conditions. The Secretary agrees with this comment and has made the 
requested change.
Section 224.87 What are the obligations of a tribe if it discovers a 
violation or breach?
    A commenter suggested we clarify this section to state that 
Secretarial responsibilities also apply to third-party violators and 
that Sec.  224.89 should be cross-referenced in these other sections to 
better clarify the delineation of actions by the Secretary. In response 
to this comment we have made specific reference to third party actions 
in Sec.  224.87 and in the Sec.  224.30 definition of imminent 
jeopardy.

Subpart E--Interested Party Petitions

Section 224.100 May a person or entity ask the Secretary to review a 
tribe's compliance with a TERA?
    One commenter suggested that we delete this section because it 
creates a conflict of interest for the Secretary in its requirement 
that the Secretary act as an arbiter of a dispute between a tribe and a 
third party petitioner. The commenter stated that this would be a clear 
violation of the Secretary's trust responsibilities. Another commenter 
suggested that this Subpart implies that a tribe waives its sovereign 
immunity when it enters into a TERA. The Secretary notes that the 
language in Subpart E regarding the rights of a third party petitioner 
is identical to language in the Act codified at 25 U.S.C. 3504(e)(7)(A) 
and (B). The Act expressly provides that any person or entity, who is 
an interested party, as defined in the Act, may file a petition 
alleging that a tribe is not complying with a TERA. The Act also 
provides that an interested party must first exhaust tribal remedies if 
the tribe has enacted laws, regulations, or procedures providing tribal 
remedies. There is no waiver of sovereign immunity implied or intended 
in the Act or these regulations.
Section 224.101 Who is an interested party?
    Several commenters objected to this regulatory provision as too 
broad, and permitting ``anyone who claims a hypothetical or other form 
of inadequate `interest' to participate as an `interested party' '' or 
that ``* * * such a loose standard may create a cause of action where 
no actual standing exists.'' One commenter requested that we define 
``Interested Party'' in Sec.  224.101 as a person or entity ``that has 
demonstrated that a legally cognizable interest of the person or entity 
in property or a resource has sustained, or will sustain, an adverse 
environmental impact because of a tribe's failure to comply with an 
agreement.'' The commenter notes that this suggested definition is 
consistent with the Department's existing administrative appeal 
practice at 43 CFR 4.410(d) (requiring a legally cognizable interest). 
In response, the Secretary notes that Congress defined this term in the 
Act as codified at 25 U.S.C. 3504(e)(7)(A). In developing the 
regulations, the Secretary cannot limit the definition when the Act 
does not do so.
Section 224.106 If a tribe has enacted tribal laws, regulations, or 
procedures for challenging tribal action, how must the tribe respond to 
a petitioner's challenge?
    One commenter noted that while under Sec.  224.106(a) a tribe must 
respond within a ``reasonable'' time, the regulation should include a 
specified time period no longer than 30 days. In fulfilling the 
requirement to write implementing regulations for the Act, the 
Secretary has imposed specific requirements where appropriate or 
mandated by the Act. In other places, such as this section, the 
Secretary has allowed as much flexibility as possible to participating 
tribes in accordance with the mission of the Department to advance the 
objectives of the Indian Self Determination and Education Assistance 
Act, as amended, and in recognition of tribal sovereignty.
Section 224.107 What must a petitioner do before filing a petition with 
the Secretary?
    One commenter stated that Sec.  224.107(a) should explicitly 
require a petitioner to use ``any appeals or appellate court review'' 
allowed under the tribe's laws. The inclusion of such language would 
ensure that a petitioner must proceed through all available tribal 
remedies prior to filing a petition with the Secretary. We have added 
``including any tribal appeal process'' to Sec.  224.107. In addition, 
we note that Sec.  224.109(c) requires a petitioner to include specific 
facts demonstrating that the petitioner has exhausted tribal remedies 
in the petition. Also, in Sec.  224.113, a tribe may state whether the 
petitioner has exhausted tribal remedies in its response to a petition.
    Another commenter said that this section lists as a prerequisite to 
filing a petition that a petitioner has participated in a tribal 
hearing or comment process regarding allegations of tribal non-
compliance with its TERA. The commenter suggests that a petitioner 
should have participated in a tribal hearing or comment process 
regarding the tribe's proposed activity, if such a process was 
provided, in addition to exhaustion of tribal remedies, if any, for 
alleging non-compliance with a TERA. The Secretary believes that this 
would place an unfair burden on a petitioner to have known with 
foresight the full range of potential impacts and their magnitude prior 
to their implementation. The Secretary believes that the provision, as 
written, reflects the intent of Congress.
Section 224.110 When may a petitioner file a petition with the 
Secretary?
    One commenter recommended that we shorten to 30 days the 45-day 
period for filing a petition that Sec.  224.110(a) allows after receipt 
of the tribe's written decision on a petition, noting that Act did not 
specify a period for filing a petition for review and 30 days should be 
adequate for doing so. The Secretary agrees with the commenter and has 
made the change.
Section 224.115 When must the Director make a threshold determination 
about a petition?
    A commenter objected to Sec.  224.115(c), which allows the Director 
to reject the resolution mutually agreed upon by the tribe and the 
petitioning party. The commenter expressed the opinion that resolution 
of such disputes should be encouraged. The Act provides that ``[t]he 
Secretary [shall take certain steps to ensure compliance with a TERA] 
only if the Indian tribe fails, refuses, is unable to cure or otherwise 
resolve each claim made in the petition within a reasonable period, as 
determined by the Secretary, after the expiration of the [consultation] 
period.'' 25 U.S.C. 3504(e)(7)(C)(iii)(II). The commenter understands 
the language ``as determined by the Secretary'' gives the Secretary the 
right to determine what is a reasonable period, not to reject a 
settlement that the tribe and petitioning party have reached. The 
commenter suggests changing ``may'' to ``will'' in line 7 of Sec.  
224.114 and deleting Sec.  224.115(c). However, the Secretary believes 
that the existing language in this section is consistent with the 
intent of the Act, and fulfills the Department's residual trust 
responsibility as noted in the Act (25 U.S.C. 3504(e)(6)(A)(I) and 
(ii)) and Section 3504(e)(6)(B)) to consider the best interests of the 
tribe and the protection of trust resources in the Secretary's 
decision-making. Therefore, the Secretary declines to make the 
suggested change.

[[Page 12817]]

Section 224.117 When must the Director dismiss a petition after making 
a threshold determination about a petition?
    A commenter suggested that Sec.  224.117(b) include as a basis for 
dismissal that a petitioner's lack of participation in a tribal hearing 
or comment process regarding the tribe's proposed activity, as well as 
failing to exhaust tribal remedies, if any, for alleging non-compliance 
with a TERA. The Secretary determined in response to a comment for 
Sec.  224.107 that participation in a tribal hearing or comment process 
regarding a tribe's proposed activity under a TERA as a prerequisite 
for filing a petition would place an unfair burden on a petitioner and 
declined to make the suggested change. The Secretary also declines to 
make the suggested changes to Sec.  224.117(b) because such a change 
would be inconsistent with the requirements in Sec.  224.107 and would 
impose more requirements on a petitioner than Congress intended.
Section 224.119 How must the Director proceed if the Director does not 
dismiss the petition based on a threshold determination?
    A commenter suggested that, if a petition is not dismissed based on 
threshold determinations, the Secretary's action on a petition should 
be limited to that necessary to cure or otherwise resolve each claim of 
adverse environmental impact to the petitioner's interest. The 
Secretary disagrees with the comment by noting that the Act expressly 
provides that the basis for an interested party's petition is a claim 
of a tribe's noncompliance with a TERA (5 U.S.C. 3504(e)(7)(B)). In 
addition, the Secretary's required consultation with a tribe after 
receipt of an interested party's petition is about ``any noncompliance 
alleged in the petition'' (25 U.S.C. 3504(e)(7)(C)(i)(II)). Also, if a 
tribe ``denies, or fails to respond to, each claim made in the petition 
* * * or fails, refuses, or is unable to cure or otherwise resolve each 
claim made in the petition, * * * the Secretary shall determine whether 
the Indian tribe is not in compliance with the TERA.'' (25 U.S.C. 
3504(e)(7)(C)(iii)(I) and (II) and (e)(7)(D)(I)).
    While we have maintained the general petition process included in 
Subpart E of the proposed regulations, after further review we have 
modified sections of Subpart E that did not accurately reflect the 
provisions of the Act or that required clarification, as follows:
    Under the statutory scheme, Congress is providing third parties who 
may be interested parties, as defined in the Act, the opportunity to 
request that the Secretary review a claim that a tribe is not complying 
with a TERA. However, before a person or entity that may be an 
interested party may file a petition with the Secretary, the person or 
entity must exhaust tribal remedies. Under Sec.  224.105(a) we 
clarified that tribal laws, regulations, or procedures establish 
``tribal remedies'' rather than ``a process for hearing and comments'' 
because under Sec.  224.105(b) tribal remedies provide a person or 
entity the opportunity to file a petition with the tribe. We have added 
a new provision at Sec.  224.107 to clarify that during the tribal 
remedy process a tribe may resolve the claims in a petition with the 
petitioner. The new provision does not provide for how a tribe may 
resolve the claims or require that the Director make any determination 
on the tribe's resolution during the tribal remedy process. Under the 
final regulations at Sec.  224.106(c) a person or entity that files a 
petition becomes a petitioner. In Sec.  224.111 we added as a provision 
under which a petitioner may file a petition with the Secretary that 
the tribe failed to provide a person or entity that may be an 
interested party with copies of applicable tribal laws within a 
reasonable time of a request.
    In review of the proposed regulations, the Secretary finds that 
proposed Sec.  224.112 inaccurately states that after a petition 
consultation with the Director, a tribe ``may'' respond to the 
petition. Consequently, Sec.  224.112 is re-numbered to Sec.  224.113 
and we have changed ``may'' to ``must'' to reflect the Act's 
requirement in 25 U.S.C. 3504(e)(7)(C)(ii). The Secretary also finds 
that Sec.  224.113 states that a tribe ``may or may not'' dispute the 
petitioner's allegations. Consequently, Sec.  224.113 is re-numbered to 
Sec.  224.114 and we have changed this provision to state that a tribe 
``must respond to any claims made in the petition * * *'' to reflect 
the Act's requirement in 25 U.S.C. 3504(e)(7)(C)(ii). We have also 
added subsection (b) to state that a tribe ``must cure or otherwise 
resolve each claim of noncompliance made in the petition'' as required 
under 25 U.S.C. 3504(e)(7)(C)(iii).
    In review of comments on proposed Sec.  224.119 on threshold 
determinations, the Secretary finds that proposed Sec.  224.119 does 
not accurately reflect when the Director makes a threshold 
determination or what the threshold determination should be. The Act 
requires the Secretary, upon receipt of a petition, to notify the tribe 
of the petition within 20 days of receipt and initiate consultation 
with the tribe. The Act requires the tribe, within 45 days of 
completion of the consultation, to respond to the claims in the 
petition. Following consultation, the tribe has the opportunity to deny 
or respond to the claims in the petition and then has the opportunity 
to resolve or otherwise cure the claims. The Act requires the Director 
to make certain threshold determinations on a petition following 
consultation with the tribe before proceeding to review a tribe's 
compliance with a TERA, not upon receipt of the petition (25 U.S.C. 
3504(e)(7)(C)(iii) and (e)(7)(D)(I). The Act at (e)(7) (D)(I) requires 
that the Director investigate a tribe's compliance with a TERA within 
120 days of receipt of a petition, only upon making a threshold 
determination under 25 U.S.C. 3504(e)(7)(c)(iii). The threshold 
determinations the Director must make are whether the tribe has denied 
or failed to respond to each claim made in the petition or whether the 
tribe has failed or refused or is unable to cure or otherwise resolve 
each claim made in the petition (25 U.S.C. 3504(e)(7)(C)(iii)(I) and 
(II)). The Director may not proceed with a review of the tribe's 
compliance with a TERA unless the Director determines that one of the 
threshold determinations is met (25 U.S.C. 3504(e)(7)(C)(iii)). It is 
only upon the Director's determination that one of the threshold 
determinations is met that the Director reviews the petition and the 
tribe's response, if any, makes a written determination on the tribe's 
compliance with a TERA, and offers the tribe an opportunity for a 
hearing and a reasonable opportunity to attain compliance (25 U.S.C. 
3504(e)(7)(E)). The Director may not take action to ensure compliance 
with the TERA under 25 U.S.C. 3504(e)(7)(D)(iii) before complying with 
25 U.S.C. 3504(e)(7)(E)(i)-(iii). Therefore, the Secretary has modified 
proposed Sec.  224.112 through Sec.  224.122 in final Sec.  224.113 
through Sec.  224.120 to accurately reflect the provisions of the Act.
    The Secretary has added a new provision in Sec.  224.117 that the 
Director provide the tribe an opportunity for a hearing, as required by 
25 U.S.C. 3504(e)(7)(C)(iii)). New provision Sec.  224.118 requires 
that a tribe must respond in writing to the Director's opportunity for 
a hearing within 20 days and, if the tribe does not respond, the 
Director will proceed to a determination of whether the tribe is in 
compliance with the TERA. Requiring the tribe to respond to the 
opportunity for a hearing allows for a timely hearing if the tribe 
requests it and allows the Director to

[[Page 12818]]

make a determination on compliance under the petition without undue 
delay.

Subpart F--Periodic Reviews

Section 224.132 How does the Director conduct a periodic review and 
evaluation?
    One commenter raised concern that a tribe's provision of records 
and documents in the TERA review and evaluation process raises 
confidentiality issues similar to those involved in the initial 
application process. They recommend that the Secretary add a provision 
concerning record and document confidentiality. The Secretary agrees 
with the concern expressed in the comment. Our change is to insert in 
Sec.  224.132(e) that the tribe should identify any information in 
these submitted records and documents that is confidential and 
proprietary. Specific exemptions to disclosure under the Freedom of 
Information Act, or other statutory protections against disclosure, may 
apply and preclude disclosure of this information to third parties.
Section 224.140 What must the Secretary do if the tribe fails to 
respond to or does not comply with the Director's order?
    Two commenters raised a concern that under this section the 
Secretary could make a decision to reassume all activities the tribe 
assumed under the agreement if the tribe does not comply or respond to 
the Director's order to cease conduct or take a specific action to 
correct a condition that caused imminent jeopardy to a physical trust 
asset. These commenters requested that flexibility be added to this 
requirement so that the Secretary could reassume either all or a part 
of the activities the tribe assumed under the TERA. The Secretary 
recognizes this concern, but notes that the Act at 25 U.S.C. 
3504(e)(2)(D)(ii) does not provide the desired flexibility. The Act 
requires total reassumption where the Secretary determines there is 
imminent jeopardy to a physical trust asset and the tribe does not 
comply or respond to the Director's order to cease conduct or take a 
specific action to correct a condition that caused imminent jeopardy to 
a physical trust asset.

Subpart G--Reassumption

Section 224.151 When may the Secretary reassume activities?
    One commenter in this section suggested that when the Secretary 
invokes reassumption procedures because of a tribe's actions or 
inaction, such reassumption should be limited to the specific activity 
(or inactivity) giving rise to the reassumption, and not to the TERA in 
its entirety. The commenter further suggests that, at the very least, 
the regulations should give the Secretary discretion to reassume only a 
specific activity. In the case of reassumption in this section, the 
Secretary notes that the intent of the existing language of the 
regulations is consistent with the Act at 25 U.S.C. 3504(e)(2)(D)(ii) 
where there is imminent jeopardy to a physical trust asset. The 
language of the Act at 25 U.S.C. 3504(e)(7)(D)(iii)(II) refers to a 
condition of non-compliance with the conditions of the TERA that do not 
rise to the level of imminent jeopardy and gives the Secretary 
discretion to rescind all or part of a TERA. However, if the Secretary 
makes a decision to rescind all provisions of the TERA based on a 
finding of imminent jeopardy to a physical trust asset, then the 
Secretary must reassume all of the activities and authority under the 
TERA.
    Another commenter requests the insertion of language in this 
section that states reassumption is ``based on a tribal violation of an 
agreement or applicable Federal law.'' The purpose of this change would 
be to clarify the underlying legal basis required for the Secretary's 
reassumption. However, the Secretary believes that the regulations 
already adequately deal with this issue and declines to make this 
addition.
Section 224.152 Must the Secretary always reassume the activities upon 
a finding of imminent jeopardy to a physical trust asset?
    A commenter recommends that the text of this section should 
correspond to the question and should address situations involving 
imminent jeopardy to a physical trust asset. The Secretary believes 
that the section adequately responds to the question and refers to the 
flexibility that the Secretary has to take action when there is 
imminent jeopardy to a physical trust asset. The commenter also 
suggests that the regulations note that under the Act, (25 U.S.C. 
3504(e)(2)(D)(ii), the time period for reassumption appears to expire 
once the violation and any condition that caused the jeopardy is 
corrected. The Secretary agrees with this assertion and notes that 
Sec. Sec.  224.154 and 224.157 deal with setting conditions and a 
timeline for a reassumption or termination of the reassumption process.
Section 224.160 How will reassumption affect a TERA?
    One commenter noted a conflict in the regulations in which Sec.  
224.160 states that reassumption of a TERA applies to all activities 
undertaken under a TERA and Sec.  224.150 of Subpart G titled ``What is 
the purpose of this subpart?'' states that the subpart explains when 
and how the Secretary may reassume all or certain activities included 
within an agreement. The Secretary agrees that these sections of the 
regulation conflict with each other and notes that the question of 
reassumption as stated in the Act applies to all activities and 
resources transferred under a TERA. The Secretary has made changes to 
both sections to make them consistent and clarify their meaning. In 
addition, the Secretary made a change to Sec.  224.137(d) to make clear 
that in case of a finding of non-compliance with a TERA or other 
applicable Federal law, where said non-compliance does not cause 
imminent jeopardy to a physical trust asset, the Secretary has the 
discretion to suspend or rescind a part or all activities approved 
under a TERA.

Subpart H--Rescission

Section 224.170 What is the purpose of this subpart?
    A commenter states that the reassumption and rescission processes 
should allow for reassumption of specific activities and should not 
automatically require a tribe to relinquish all activities assumed 
under a TERA. The Secretary does not agree with this contention. We 
believe that the language in the regulations is consistent with the 
Act. When a rescission of a TERA takes place because of a voluntary 
action by the tribe, it must be done in its entirety. It is only when 
the rescission is a result of Secretarial action to remedy a finding of 
non-compliance with the TERA or other applicable Federal laws that the 
rescission action can be taken in part or whole.
Section 224.172 May a tribe rescind only some of the activities subject 
to a TERA while retaining a portion of those activities?
    One commenter suggests the addition of a new sentence to the end of 
this section that states, ``Nothing in this section shall prohibit the 
Secretary and a tribe from amending an agreement to change its scope.'' 
Another commenter agrees and states that the Secretary's authority 
could, through an amendment to a TERA, permit a tribe to rescind a 
portion of a TERA voluntarily. The commenter notes that this would 
appear to be precluded by Sec.  224.172 in which the Secretary appears 
to have limited rescission of a TERA to an all or nothing proposition. 
If the Secretary feels that that is the only statutorily permitted form 
of unilateral tribal rescission, the

[[Page 12819]]

commenter suggests, the Secretary should nonetheless make provision for 
a mutually agreed upon amendment of a TERA so that the scope of a TERA 
can be reduced without negating the entire TERA. The commenter argues 
that it is foreseeable that, in many instances, the precise scope of 
the optimal TERA will be developed over time and urges the Secretary to 
retain and apply a flexible approach to TERA amendments. The Secretary 
believes that the language in this section is consistent with the 
intent of Congress. However, the Department has added a Sec.  224.66 to 
allow for a reduction in the scope of a TERA. The Secretary believes 
that, the addition of this section preserves the flexibility of the 
tribe and the Secretary while meeting the intent of Congress.

IV. Procedural Matters

Regulatory Planning and Review (Executive Order 12866)

    This rule is a significant rule and the Office of Management and 
Budget has reviewed this rule under Executive Order 12866. We have made 
the assessments required by E.O. 12866 and the results are summarized 
below and can be obtained by writing to the address in the addressees 
section.
    (1) This rule will not have an effect of $100 million or more on 
the economy. It will not adversely affect in a material way the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities. These regulations create a process that will allow tribes 
to enter into an agreement with the Department whose intent is to 
promote tribal oversight and management of energy and mineral resource 
development on tribal lands. Approval of a Tribal Energy Resource 
Agreement (TERA) under the requirements of the regulations and will 
not, by itself, result in energy development related leases, business 
agreements, or rights-of-way.
    It is important to note that there is a great amount of flexibility 
in the construction of a TERA with the Department. A TERA can cover 
energy development on all or part of the tribal land controlled by the 
tribe for development of energy resources (renewable and/or 
nonrenewable); including, but not limited to, natural gas, oil, 
uranium, coal, nuclear, wind, solar, geothermal, biomass, and 
hydrologic. Energy resource development may include the following types 
of arrangements between a tribe and private industry or a tribal energy 
resource development organization (in which the tribe is a partner):
    Lease defined as a written agreement, or modification of a written 
agreement, between a tribe and a tenant or lessee, whereby the tenant 
or lessee grants a right to possession of tribal land or energy mineral 
resources for purposes of energy resource development.
    Business agreement which includes (1) Any permit, contract, joint 
venture, option, or other agreement that furthers any activity related 
to locating, producing, transporting, or marketing energy resources on 
tribal land; (2) Any amendment, supplement, or other modification to 
such an agreement; or (3) Any other business agreement entered into or 
subject to administration under a TERA.
    Right-of-Way which means an easement, right, or other authorization 
over tribal lands, granted or subject to administration under a TERA, 
for a pipeline or electric transmission or distribution line that 
serves a facility located on tribal land related to energy resource 
development.
    The ability to derive a quantitative estimate for the overall 
impact on the economy of these regulations is highly speculative 
because of the varying size of Indian Tribes, their level of 
infrastructure and economic development, tribal development expertise, 
and the type of energy resource that they possess. In addition, it is 
not known how many tribes will choose a TERA as a development vehicle, 
since the decision to enter into a TERA is voluntary. In addition the 
large degree of flexibility with regard to the range of regulatory 
activities, type of business arrangements, and type and scale of energy 
development that a tribe may wish to a engage in makes any quantitative 
analysis of the costs or benefits to a tribe highly uncertain.
    The business climate for companies that seek to negotiate for 
leases, business agreements or rights-of-way for energy development 
projects on tribal land (as defined in Sec.  224.30) would not change 
substantially because of these regulations. National or regional 
economic costs of energy development (i.e. coal vs. natural gas; wind 
vs. coal) and other market forces (e.g., location, access to 
transmission networks, cost of technology, etc.) would be the most 
likely principal drivers for companies that want to enter into energy 
development-related business arrangements than whether a tribe is 
negotiating under Indian Mineral Leasing Act, Indian Mineral 
Development Act or TERA regulations.
    One benefit, to both industry and tribes that may occur, could be a 
reduction in the time needed to complete negotiations and enter into 
contracts for proposed projects. Presumably once a TERA is final a 
tribe's capacity to conduct negotiations, complete contractual 
arrangements, and conduct any needed technical analyses leading to the 
commencement of operations, would increase with time and could lead to 
an increased ability of tribes and third parties to more readily take 
advantage of and adjust to current market conditions without waiting 
for Departmental approval.
    The requirement for submittal of commercial and financial 
information by businesses contracting with tribes should not change 
markedly because the regulations require tribes to adhere to 
administrative practices similar to what the Department already 
requires. Therefore, compliance costs for businesses should largely 
remain the same as in the pre-TERA climate.
    For tribes, one factor that could increase their administrative 
costs would be, in some cases, an increased need for creating, 
maintaining and preserving records of their technical and financial 
arrangements with industry. These record keeping requirements now 
largely are the responsibility of the Department.
    These recordkeeping requirements are necessary because of the 
Department's residual trust responsibility under the Act. In the case 
of a reassumption by the Department or a voluntary rescission by a 
tribe of authority that is granted through a TERA the Department must 
be able to regain effective regulatory and management control over any 
energy development projects on tribal trust land. However, these costs 
should be largely related to the initial creation of records management 
systems, acquisition of physical space, and training of staff for 
implementation.
    Another factor that could increase tribal costs would be the 
assumption by the tribe of costs for assessing potential environmental 
impacts and creating an ongoing environmental review process for 
activities covered by a TERA. The regulations as authorized by the Act 
require a tribe to develop these internal capacities and programs or to 
identify how they will acquire these capacities externally.
    Although a tribe is permitted to identify in a proposed TERA, any 
Departmental resources that they could use to fund administrative and 
technical programs that they want to assume activities there is no 
guarantee that an affirmative decision by the Department would provide 
enough financial resources to allow the tribe to not incur increased 
cost. However, the magnitude of these costs is highly uncertain, again 
because of the large variation in the

[[Page 12820]]

range of activities and scale of energy development that a tribe may 
seek to assume.
    The Department believes that the benefits derived from 
implementation of these regulations are in keeping with Congressional 
and Departmental goals for advancing tribal self-governance and far 
outweigh the potential costs as described. Furthermore, these 
regulations are not unduly burdensome to Indian Tribes, private 
industry, or consumers and will actually serve to decrease the workload 
currently in place.
    (2) The regulations do not preclude tribes from using other 
existing regulations to pursue economic development opportunities and 
so will not create serious inconsistency or otherwise interfere with 
any action taken or planned by another agency. The main benefit of this 
rulemaking is an enhanced self-governance opportunity for tribes. By 
implementing the provisions of the Act, these regulations will further 
the goal of Indian self-determination, that is a longstanding goal of 
the Federal Government and the Department.
    (3) The creation of a TERA between a tribe and the Department does 
not affect other entitlement, grant, or loan programs with the 
Department or any other Federal agency. Furthermore, this rule does not 
establish new user fees, or restrict in any way any other existing user 
fees. Therefore, these regulations will not affect any such programs or 
the rights or obligations of their recipients.
    (4) These regulations will not create serious inconsistency with 
existing laws or executive orders or raise novel legal or policy 
issues. As stated before the main benefit from these regulations is an 
enhanced self-governance opportunity for tribes. Implementation of the 
provisions of the Act is consistent with the Indian Self Determination 
and Education Assistance Act, as amended. These regulations further the 
development of Indian self-determination, which is a longstanding goal 
of the Federal Government and the Department.

Regulatory Flexibility Act (RFA)

    The Department certifies that this rule will not have a significant 
economic effect on a substantial number of small entities as defined 
under the RFA (5 U.S.C. 601 et seq.). Most of the costs for complying 
with this rule would be information collection costs. The total 
estimated annual burden hours for responding to the information 
collection requirements in this rule are 10,752. Respondents to the 
information collection required by these regulations would need to 
acquire the services of individuals in the project management and 
energy, environmental, financial and legal analyses fields as well as 
administrative service staff. The annual non-hour burden associated 
with the regulations is $48,200 for office and maintenance expenses 
associated with preparation of reports and a variety of correspondence. 
When added to the salary and benefits for personnel, the annual 
industry-wide cost for the information collection burden in this rule 
would be about $375,795. Therefore, complying with ``Part 224--Tribal 
Energy Resource Agreements under The Indian Tribal Energy Development 
and Self-Determination Act'' should not be a significant financial 
burden. For a rule with these relatively low projected costs, a 
Regulatory Flexibility Analysis is not required. Accordingly, a Small 
Entity Compliance Guide is not required.

Small Business Regulatory Enforcement Fairness Act (SBREFA)

    This rule is not a major rule under SBREFA (5 U.S.C. 804(2)) 
because:
    (a) Most of the costs for complying with this rule would be 
information collection costs. The total estimated industry-wide cost 
for the information collection burden in this rule would be about 
$375,000. Therefore, the rule will not have an annual effect on the 
economy of $100 million or more.
    (b) The approval of a Tribal Energy Resource Agreement will not, by 
itself, result in energy development related leases, business 
agreements, or rights-of-way. Therefore, the regulations will not cause 
a major increase in costs or prices for consumers, individual 
industries, federal, state, or local government agencies, or geographic 
areas.
    (c) Because the regulations do not directly result in energy 
resource development projects, they will not have significant adverse 
effects on competition, employment, investment, productivity, 
innovation, or the ability of U.S.-based enterprises to compete with 
foreign-based enterprises.

Unfunded Mandates Reform Act (UMRA)

    Participation in the development of Tribal Energy Resource 
Agreements as outlined in these regulations is voluntary. In addition, 
there are regulatory alternatives for tribes that want to develop 
energy resources on tribal lands, but they may not want to develop a 
TERA. Furthermore, the regulations will not result in the expenditure 
by the state, local or tribal governments or private sector of $100 
million or more in any one year. Therefore, these regulations do not 
impose an unfunded mandate on state, local, or tribal governments, or 
the private sector, of more than $100 million per year, and the 
regulations do not have a significant or unique effect on state, local, 
or tribal governments, or the private sector. A statement containing 
the information required by the UMRA (2 U.S.C. 1531 et seq.) is not 
required.

Federalism (Executive Order 13132)

    According to Executive Order 13132, these regulations do not have 
Federalism implications. While these regulations are of interest to 
tribes, 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, the 
regulations do not substantially and directly affect the relationship 
between the Federal and State governments, and would not impose costs 
on states or localities and so do not require a federalism assessment.

Civil Justice Reform (Executive Order 12988)

    With respect to Executive Order 12988, the Office of the Solicitor 
has determined that this rule would not unduly burden the judicial 
system, and meets the requirements of sections 3(a) and 3(b)(2) of the 
Executive Order.

Paperwork Reduction Act (PRA)

    Under the proposed rule (71 FR 48626, August 21, 2006), we asked 
for comments regarding any information collection burdens that would 
arise under these regulations at 25 CFR part 224 that govern the review 
of Tribal Energy Resource Agreements and activities undertaken pursuant 
to a TERA.
    We specifically solicited comments on the following questions:
    (a) Is the proposed collection of information necessary for the 
Department to properly perform its functions, and will it be useful?
    (b) Are the estimates of the burden hours of the proposed 
collection reasonable?
    (c) Do you have any suggestions that would enhance the quality, 
clarify, or usefulness of the information to be collected?
    (d) Is there a way to minimize the information collection burden on 
those who are to respond, including the use of appropriate automated 
electronic, mechanical, or other forms of information technology?
    The Department issued a Federal Register notice for the information

[[Page 12821]]

collection authorization for the proposed rule. After the comment 
period, the Office of Management and Budget (OMB) subsequently approved 
the information collection associated with this rule on March 12, 2007 
under OMB control number 1076-0167 (OMB approval expires March 31, 
2010). The total hour burden currently approved under 1076-0167 is 
9,290 hours.
    Respondents to the information collections in these regulations 
derive economic benefit from an enhanced ability to manage energy 
resources that exist on tribal lands. Therefore, the frequency of 
response will vary and depends on the respondents' needs. The 
information collection (IC) does not include questions of a sensitive 
nature. The Department will protect proprietary information according 
to the Freedom of Information Act (5 U.S.C. 522) and its implementing 
regulations (43 CFR part 2) or other applicable laws. You may obtain a 
copy of the supporting statement for the new collection of information 
by contacting the Bureau of Indian Affairs' Information Collection 
Clearance Officer at (703) 735-4414.

National Environmental Policy Act (NEPA)

    This final rule is categorically excluded from the preparation of 
an environmental assessment or an environmental impact statement under 
the National Environmental Policy Act of 1969, 42 U.S.C. 4321, et seq., 
because its environmental effects are too broad, speculative, or 
conjectural to lend themselves to meaningful analysis and the federal 
actions under the final rule (i.e., approval or disapproval of TERAs) 
will be subject at the time of the action itself to the NEPA process, 
either collectively or case-by-case. (Because they are not Federal 
actions, approval or disapproval by a tribe of leases, business 
agreements, and rights-of-way under a TERA will not be subject to NEPA 
review.) Further, no extraordinary circumstances exist to require 
preparation of an environmental assessment or environmental impact 
statement.

Data Quality Act

    In developing these regulations, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554).

Energy Supply, Distribution, or Use (Executive Order 13211)

    This rule is not a significant rule and is not subject to review by 
the Office of Management and Budget under Executive Order 13211. The 
regulations are administrative in nature and will not directly lead to 
energy development projects. Therefore, they will not have a 
significant effect on energy supply, or distribution. Thus, a Statement 
of Energy Effects is not required.

Consultation and Coordination With Indian Tribal Governments (Executive 
Order 13175)

    Pursuant to Executive Order 13175 of November 6, 2000, Consultation 
and Coordination with Indian Tribal Governments, the Department 
determined that because the rulemaking will uniquely affect tribal 
governments it would follow Department and Administrative protocols in 
consulting with tribal governments on the rulemaking. Consequently, the 
Department notified tribal governments through a Federal Register 
notice of the proposed rulemaking and through the BIA regional offices. 
The notices enabled tribal officials and the affected tribal 
constituency throughout Indian country to have meaningful and timely 
input in the development of the proposed rule. We believe that these 
actions reinforce good intergovernmental relations with tribal 
governments and better inform, educate, and advise such tribal 
governments on compliance requirements of the rulemaking.
    The Department sent letters to tribal leaders on October 31, 2005 
with information about the TERA provisions of Title V, Section 503 and 
solicited participation in a process to develop a framework for the 
implementing regulations. On December 9, 2005, the Department published 
a Federal Register notice (70 FR 73257) announcing public meetings and 
tribal consultations in 10 cities between January 9 and 20, 2006. The 
Federal Register notice also solicited written comments and the BIA 
regional offices distributed the notice to all tribes. We held the 
meetings in the following cities: Tulsa, OK; Denver, CO; Houston, TX; 
Albuquerque, NM; Las Vegas, NV; Sacramento, CA; Minneapolis, MN; 
Billings, MT; Portland, OR; and Washington, DC. The comments received 
from these public meetings and consultations and the written comments 
submitted were taken into consideration in the formulation of the 
proposed regulations. In response to the proposed rule, the Department 
received comments from several tribes and organizations that represent 
tribal interests. We have committed to consulting with tribal 
representatives in developing processes and procedures for the 
implementation of these Tribal Energy Resource Agreement regulations 
following publication of the final rule. In addition, the Department 
has incorporated a Pre- and Post-Application consultation process 
designed to enable tribes that pursue a TERA with the Department to 
have the widest available knowledge base with which to operate during 
the application review and evaluation phase.

List of Subjects in 25 CFR Part 224

    Agreement, Appeals, Application, Business Agreements, Energy 
Development, Interested Party, Lease, Record keeping requirements, 
Reporting requirements, Right-of-Way, Tribal Energy Resource 
Agreements, Tribal capacity, Tribal lands, Trust, Trust asset.

    Dated: October 1, 2007.
Carl J. Artman,
Assistant Secretary--Indian Affairs.

0
For the reasons stated in the preamble, the Department amends Chapter I 
of Title 25 of the Code of Federal Regulations to add a new part 224, 
to read as follows:

PART 224--TRIBAL ENERGY RESOURCE AGREEMENTS UNDER THE INDIAN TRIBAL 
ENERGY DEVELOPMENT AND SELF DETERMINATION ACT

Subpart A--General Provisions
Sec.
224.10 What is the purpose of this part?
224.20 How will the Secretary interpret and implement this Part and 
the Act?
224.30 What definitions apply to this Part?
224.40 How does the Act or a TERA affect the Secretary's trust 
responsibility?
224.41 When does the Secretary require agreement of more than one 
tribe to approve a TERA?
224.42 How does the Paperwork Reduction Act affect these 
regulations?
Subpart B--Procedures for Obtaining Tribal Energy Resource Agreements
224.50 What is the purpose of this subpart?
Pre-application Consultation and the Form of Application
224.51 What is a pre-application consultation between a tribe and 
the Director?
224.52 What may a tribe include in a TERA?
224.53 What must an application for a TERA contain?
Processing Applications

224.54 How must a tribe submit an application?
224.55 Is information a tribe submits throughout the TERA process 
under this Part subject to disclosure to third parties?
224.56 What is the effect of the Director's receipt of a tribe's 
complete application?
224.57 What must the Director do upon receipt of an application?
Application Consultation Meeting


[[Page 12822]]


224.58 What is an application consultation meeting?
224.59 How will the Director use the results of the application 
consultation meeting?
224.60 What will the Director provide to the tribe after the 
application consultation meeting?
224.61 What will the tribe provide to the Director after receipt of 
the Director's report on the application consultation meeting?
224.62 May a final proposed TERA differ from the original proposed 
TERA?
TERA Requirements

224.63 What provisions must a TERA contain?
224.64 How may a tribe assume management of development of different 
types of energy resources?
224.65 How may a tribe assume additional activities under a TERA?
224.66 How may a tribe reduce the scope of a TERA?
Public Notification and Comment

224.67 What must the Secretary do upon the Director's receipt of a 
final proposed TERA?
224.68 How will the Secretary use public comments?
Subpart C--Approval of Tribal Energy Resource Agreements
224.70 Will the Secretary review a proposed TERA under the National 
Environmental Policy Act?
224.71 What standards will the Secretary use to decide to approve a 
final proposed TERA?
224.72 How will the Secretary determine whether a tribe has 
demonstrated sufficient capacity?
224.73 How will the scope of energy resource development affect the 
Secretary's determination of the tribe's capacity?
224.74 When must the Secretary approve or disapprove a final 
proposed TERA?
224.75 What must the Secretary do upon approval or disapproval of a 
final proposed TERA?
224.76 Upon notification of disapproval, may a tribe re-submit a 
revised final proposed TERA?
224.77 Who may appeal the Secretary's decision on a final proposed 
TERA or a revised final proposed TERA?
Subpart D--Implementation of Tribal Energy Resource Agreements
Applicable Authorities and Responsibilities

224.80 Under what authority will a tribe perform activities for 
energy resource development?
224.81 What laws are applicable to activities?
224.82 What activities will the Department continue to perform after 
approval of a TERA?
Leases, Business Agreements, and Rights-of-Way under a TERA

224.83 What must a tribe do after executing a lease or business 
agreement, or granting a right-of-way?
224.84 When may a tribe grant a right-of-way?
224.85 When may a tribe enter into a lease or business agreement?
224.86 Are there limits on the duration of leases, business 
agreements, and rights-of-way?
Violation or Breach

224.87 What are the obligations of a tribe if it discovers a 
violation or breach?
224.88 What must the Director do after receiving notice of a 
violation or breach from the tribe?
224.89 What procedures will the Secretary use to enforce leases, 
business agreements, or rights-of-way?
Subpart E--Interested Party Petitions
224.100 May a person or entity ask the Secretary to review a tribe's 
compliance with a TERA?
224.101 Who is an interested party?
224.102 Must a tribe establish a comment or hearing process for 
addressing environmental concerns?
224.103 Must a tribe establish other public participation processes?
224.104 Must a tribe enact tribal laws, regulations, or procedures 
permitting persons or entities to allege a tribe is not complying 
with a TERA?
224.105 How may a person or entity obtain copies of tribal laws, 
regulations, or procedures that permit an allegation of 
noncompliance with a TERA?
224.106 If a tribe has enacted tribal laws, regulations, or 
procedures for challenging tribal action, how must the tribe respond 
to a petition?
224.107 What must a petitioner do before filing a petition with the 
Secretary?
224.108 May tribes offer a resolution of a petitioner's claim?
224.109 What must a petitioner claim or request in a petition filed 
with the Secretary?
224.110 What must a petition to the Secretary contain?
224.111 When may a petitioner file a petition with the Secretary?
224.112 What must the Director do upon receipt of a petition?
224.113 What must the tribe do after it completes petition 
consultation with the Director?
224.114 How may the tribe address a petition in its written 
response?
224.115 When in the petition process must the Director investigate a 
tribe's compliance with a TERA?
224.116 What is the time period in which the Director must 
investigate a tribe's compliance with a TERA?
224.117 Must the Director make a determination of the tribe's 
compliance with a TERA?
224.118 How must the tribe respond to the Director's notice of the 
opportunity for a hearing?
224.119 What must the Director do when making a decision on a 
petition?
224.120 What action may the Director take to ensure compliance with 
a TERA?
224.121 How may a tribe or a petitioner appeal the Director's 
decision about the tribe's compliance with the TERA?
Subpart F--Periodic Reviews
224.130 What is the purpose of this subpart?
224.131 What is a periodic review and evaluation?
224.132 How does the Director conduct a periodic review and 
evaluation?
224.133 What must the Director do after a periodic review and 
evaluation?
224.134 How often must the Director conduct a periodic review and 
evaluation?
224.135 Under what circumstances may the Director conduct additional 
reviews and evaluations?
Noncompliance

224.136 How will the Director's report address a tribe's 
noncompliance?
224.137 What must the Director do if a tribe's noncompliance has 
resulted in harm or the potential for harm to a physical trust 
asset?
224.138 What must the Director do if a tribe's noncompliance has 
caused imminent jeopardy to a physical trust asset?
224.139 What must a tribe do after receiving a notice of imminent 
jeopardy to a physical trust asset?
224.140 What must the Secretary do if the tribe fails to respond to 
or does not comply with the Director's order?
224.141 What must the Secretary do if the tribe responds to the 
Director's order?
Subpart G--Reassumption
224.150 What is the purpose of this subpart?
224.151 When may the Secretary reassume activities?
224.152 Must the Secretary always reassume the activities upon a 
finding of imminent jeopardy to a physical trust asset?
Notice of Intent to Reassume

224.153 Must the Secretary notify the tribe of an intent to reassume 
the authority granted under a TERA?
224.154 What must a notice of intent to reassume include?
224.155 When must a tribe respond to a notice of intent to reassume?
224.156 What information must the tribe's response to the notice of 
intent to reassume include?
224.157 How must the Secretary proceed after receiving the tribe's 
response?
224.158 What must the Secretary include in a written notice of 
reassumption?
224.159 How will reassumption affect valid existing rights or lawful 
actions taken before the effective date of the reassumption?
224.160 How will reassumption affect a TERA?
224.161 How may reassumption affect the tribe's ability to enter 
into a new TERA or to modify another TERA to administer additional 
activities or assume administration of activities that the Secretary 
previously reassumed?
Subpart H--Rescission
224.170 What is the purpose of this subpart?
224.171 Who may rescind a TERA?

[[Page 12823]]

224.172 May a tribe rescind only some of the activities subject to a 
TERA while retaining a portion of those activities?
224.173 How does a tribe rescind a TERA?
224.174 When does a voluntary rescission become effective?
224.175 How will rescission affect valid existing rights or lawful 
actions taken before the rescission?
Subpart I--General Appeal Procedures
224.180 What is the purpose of this subpart?
224.181 Who may appeal Departmental decisions or inaction under this 
part?
224.182 What is the Initial Appeal Process?
224.183 What other administrative appeals processes also apply?
224.184 How do other administrative appeals processes apply?
224.185 When are decisions under this part effective?

    Authority: 25 U.S.C. 2 and 9; 25 U.S.C. 3501-3504; Pub. L. 109-
58

Subpart A--General Provisions


Sec.  224.10  What is the purpose of this part?

    This part:
    (a) Establishes procedures by which a tribe, at its discretion, may 
enter into and manage leases, business agreements, and rights-of-way 
for purposes of energy resource development on tribal land; and
    (b) Describes the process for obtaining, implementing, and 
enforcing a tribal energy resource agreement (TERA) that will allow a 
tribe to enter into individual leases, business agreements, and rights-
of-way without obtaining Secretarial approval.


Sec.  224.20  How will the Secretary interpret and implement this part 
and the Act?

    (a) The Secretary will interpret and implement this part and the 
Indian Tribal Energy Development and Self-Determination Act (the Act) 
in accordance with the self-determination and energy development 
provisions and policies in the Act.
    (b) The Secretary will liberally construe this part and the Act for 
the benefit of tribes to implement the Federal policy of self-
determination. The Secretary will construe any ambiguities in this part 
or the Act in favor of the tribe to implement a TERA as authorized by 
this part and the Act.


Sec.  224.30  What definitions apply to this part?

    Act means the Indian Tribal Energy Development and Self-
Determination Act of 2005, as promulgated in Title V of the Energy 
Policy Act of 2005, Public Law 109-58, 25 U.S.C. 3501-3504.
    Application means the application submitted for a TERA under 
subpart B.
    Business agreement means:
    (1) Any permit, contract, joint venture, option, or other agreement 
that furthers any activity related to locating, producing, 
transporting, or marketing energy resources on tribal land;
    (2) Any amendment, supplement, or other modification to such an 
agreement; or
    (3) Any other business agreement entered into or subject to 
administration under a TERA.
    Days mean calendar days in computing any period prescribed or 
allowed by the Act and this part:
    (1) Do not include the day of the event from which the period 
begins to run;
    (2) Include the last day of the period, unless it is a Saturday, 
Sunday, or Federal holiday, in which event the period runs until the 
end of the next day which is not a Saturday, Sunday, or Federal 
holiday; and
    (3) When the period prescribed or allowed is less than 11 days, 
exclude intermediate Saturdays, Sundays, and Federal holidays from the 
computation.
    Decision Deadline means the 120-day period within which the 
Director will make a decision about a petition submitted by an 
interested party under subpart E. The Director may extend this period 
for up to 120 days.
    Department means the Department of the Interior.
    Designated Tribal Official means the official designated in a 
tribe's pre-application consultation request, application, or agreement 
to assist in scheduling consultations or to receive communications from 
the Secretary or the Director to the tribe regarding the status of a 
TERA or activities under a TERA.
    Director means the Director of the Office of Indian Energy and 
Economic Development or the Secretary's designee, authorized to act on 
behalf of the Secretary.
    Energy Resources means both renewable and nonrenewable energy 
sources, including, but not limited to, natural gas, oil, uranium, 
coal, nuclear, wind, solar, geothermal, biomass, and hydrologic 
resources.
    Imminent jeopardy to a physical trust asset means an immediate 
threat of devaluation, degradation, damage, or loss of a physical trust 
asset, as determined by the Secretary, caused by the noncompliance of a 
tribe or third party with a TERA or applicable Federal laws.
    Interested party means a person or entity who has filed a petition 
with the Secretary under subpart E seeking review of a tribe's 
compliance with a TERA and who meets the criteria in Sec.  224.101.
    Lease means a written agreement, or modification of a written 
agreement, between a tribe and a tenant or lessee, whereby the tenant 
or lessee is granted a right to possession of tribal land or energy 
mineral resources for purposes of energy resource development.
    Petitioner means a person or entity who has filed a petition under 
subpart E with a tribe or the Secretary seeking review of a tribe's 
compliance under a TERA. A petitioner is not considered to be an 
interested party unless the petitioner meets the criteria in Sec.  
224.101.
    Physical trust asset means a physical asset held in trust by the 
United States for a tribe or individual Indian or by a tribe or 
individual Indian subject to a restriction against alienation under the 
laws of the United States. ``Physical trust asset'' does not include:
    (1) Any improvements (for example, wells or structures) to the 
assets held in trust or restricted status; or
    (2) Monetary assets.
    Public means one or more natural or legal persons, and their 
associations, organizations, or groups; or Federal, State, tribal and 
local government agencies; or private industry and their associations, 
organizations, or groups.
    Right-of-way means an easement, right, or other authorization over 
tribal lands, granted or subject to administration under a TERA, for a 
pipeline or electric transmission or distribution line that serves a 
facility located on tribal land that is related to energy resource 
development.
    Secretary means the Secretary of the Interior or the Secretary's 
designee.
    TERA means tribal energy resource agreement.
    Tribal governing body means a tribe's governing entity, such as 
tribal council or tribal business committee, as established under 
tribal or Federal law and recognized by the Secretary.
    Tribal land means any land or interests in land owned by a tribe or 
tribes, title to which is held in trust by the United States, or is 
subject to a restriction against alienation under the laws of the 
United States. For the purposes of this part, tribal land includes land 
taken into trust or subject to restrictions on alienation under the 
laws of the United States after the effective date of the agreement.
    Tribe means any Indian tribe, band, nation, or other organized 
group or community that is recognized as eligible for the special 
programs and services provided by the United States to Indians because 
of their status as Indians, except a Native Corporation as defined in 
the Alaska Native Claims Settlement Act, 43 U.S.C. 1602.

[[Page 12824]]

    Violation or breach means any breach or other violation by another 
party of any provision in a lease, business agreement, or right-of-way 
under a TERA or any activity or occurrence under a lease business 
agreement or right-of-way that constitutes a violation of Federal or 
tribal environmental law.


Sec.  224.40  How does the Act or a TERA affect the Secretary's trust 
responsibility?

    (a) The Act (25 U.S.C. 3504(e)(6)) preserves the Secretary's trust 
responsibilities relating to mineral and other trust resources and 
requires the Secretary to act in good faith and in the best interest of 
Indian tribes.
    (b) Neither the Act nor this part absolves the Secretary of 
responsibilities to Indian tribes under the trust relationship, 
treaties, statutes, regulations, Executive Orders, agreements or other 
Federal law.
    (c) The Act and this part preserve the Secretary's trust 
responsibility to ensure that the rights and interests of an Indian 
tribe are protected if:
    (1) Another party to a lease, business agreement, or right-of-way 
executed under an approved TERA violates any term of the lease, 
business agreement, or right-of-way, or any applicable Federal law; or
    (2) Any provision of a lease, business agreement, or right-of-way 
violates the TERA under which it was executed.
    (d) The United States is not liable for losses to any party 
(including any tribe) for any negotiated term of, or any loss resulting 
from, the negotiated terms of a lease, business agreement, or right-of-
way the tribe executes under a TERA.


Sec.  224.41  When does the Secretary require agreement of more than 
one tribe to approve a TERA?

    When tribal land held for the benefit of more than one tribe is 
contemplated for inclusion in a TERA, each appropriate tribal governing 
body must request a pre-application consultation meeting, and submit a 
resolution or formal act of the tribal governing body approving the 
submission of any application. Each appropriate tribal governing body 
must also sign the TERA, if it is approved.


Sec.  224.42  How does the Paperwork Reduction Act affect these 
regulations?

    The information collected from the public is cleared and covered by 
OMB Control Number 1076-0167. The sections of this rule which have 
information collections are Sec. Sec.  224.53, 224.57(d), 224.61, 
224.63, 224.64, 224.65, 224.68(d), 224.76, 224.83, 224.87, 224.109, 
224.112, 224.120(a), 224.139(b), 224.156, and 224.173. Please note that 
a Federal Agency may not conduct or sponsor, and you are not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number.

Subpart B--Procedures for Obtaining Tribal Energy Resource 
Agreements


Sec.  224.50  What is the purpose of this subpart?

    This subpart establishes procedures for:
    (a) Pre-application and application consultations and process;
    (b) Requirements for the content of applications;
    (c) Submittal of completed applications; and
    (d) Secretarial review and processing of applications.

Pre-application Consultation and the Form of Application


Sec.  224.51  What is a pre-application consultation between a tribe 
and the Director?

    (a) A tribe interested in entering into a TERA should request a 
pre-application consultation by writing to the Director, Office of 
Indian Energy and Economic Development. The request should include the 
name and contact information for the Designated Tribal Official who 
will coordinate scheduling with the Director.
    (b) Upon receiving a pre-application consultation request, the 
Director will contact the Designated Tribal Official to schedule a pre-
application consultation meeting. The Director may also initiate pre-
application discussions with the tribal governing body.
    (c) At the pre-application consultation meeting, the tribe and the 
Director may discuss any of the matters related to a future application 
including, but not limited to:
    (1) The application process;
    (2) The potential scope of the tribe's future application, 
including any regulatory or administrative activities that the tribe 
anticipates exercising;
    (3) The required content of an application for a TERA;
    (4) The energy resource the tribe anticipates developing;
    (5) The tribe's capacity to manage and regulate the energy resource 
development the tribe identifies;
    (6) Potential opportunities for funding capacity-building and other 
activities related to the energy resource the tribe anticipates 
developing under a TERA; and
    (7) Any other matters applicable to this part, the Act, and the 
tribe.


Sec.  224.52  What may a tribe include in a TERA?

    A TERA under this part:
    (a) May include development of all or part of a tribe's energy 
resources;
    (b) Must specify the type of energy resource included;
    (c) May include assumption by the tribe of certain activities 
normally carried out by the Department, except for inherently Federal 
functions; and
    (d) Must specify the services or resources related to the specific 
activity related to energy resource development that the tribe proposes 
to assume from the Department.


Sec.  224.53  What must an application for a TERA contain?

    (a) An application for a TERA must contain all of the following:
    (1) A proposed TERA between the tribe and the Secretary, signed by 
the authorized representative of the tribe, that contains the 
provisions required by Sec.  224.63;
    (2) A statement that the Secretary recognizes the tribe as an 
Indian tribe and that the tribe has tribal land;
    (3) A brief description of the tribe's form of government;
    (4) Copies of relevant portions of tribal documents (see paragraph 
(b) of this section);
    (5) A map, legal description, and general description of the tribal 
land that the tribe intends to include in the TERA;
    (6) A statement that meets the requirements in paragraph (c) of 
this section;
    (7) A statement describing the tribe's experience in negotiating 
and administering energy-related leases, business agreements, and 
rights-of-way issued under other Federal laws that includes 
descriptions of significant leases, business agreements, and rights-of-
way the tribe has entered into with third parties or to which it has 
consented;
    (8) A description of the expertise that the tribe will use to 
administer the TERA and an explanation of how that expertise meets the 
requirements of paragraph (d) of this section;
    (9) A statement of the scope of administrative activities that the 
tribe intends to conduct and an explanation of how that meets the 
requirements of paragraph (e) of this section;
    (10) A statement that meets the requirements of paragraph (f) of 
this section describing the capability of the tribe to assume all of 
the activities the tribe has identified in the application;
    (11) A copy of the resolution or formal action of the tribal 
governing body or bodies under Sec.  224.41 that approves submission of 
an application for a TERA; and
    (12) A designation of, and contact information for, the Designated 
Tribal

[[Page 12825]]

Official who will receive notifications from the Secretary or the 
Director regarding the status of the TERA application.
    (b) The documents required by paragraph (a)(4) of this section 
include documents such as a constitution, code, ordinance, or 
resolution, that designate the tribal governing body or tribal 
officials that have authority to enter into leases, business 
agreements, or rights-of-way on behalf of the tribe.
    (c) The statement required by paragraph (a)(6) of this section 
must:
    (1) If applicable, state that the tribe retains the option of 
entering into energy-related leases or agreements under laws other than 
the Act for any tribal land that the TERA includes; and
    (2) State one of the following:
    (i) The tribe intends the TERA to include all tribal land, energy 
resources, and categories of energy-related leases, business 
agreements, and rights-of-way; or
    (ii) The tribe intends the TERA to include only certain tribal 
land, energy resources, or categories of energy-related leases, 
business agreements, or rights-of-way in the TERA. In this case, the 
statement must specify and describe the tribal land, energy resources, 
or categories of energy-related leases, business agreements, or rights-
of-way that the tribe intends to include in the TERA.
    (3) State the tribe's intent to amend or modify leases, business 
agreements, or rights-of-way that exist when a TERA is approved if 
those activities are directly related to the activities authorized by 
the TERA. The tribe's ability to amend or modify such leases, business 
agreements or rights-of-way requires the agreement of the other parties 
to the lease, business agreement or rights-of-way, which must be stated 
in the TERA.
    (d) The statement required by paragraph (a)(8) of this section must 
describe the expertise that the tribe will use in the four areas 
specified in paragraph (d)(1) of this section. It must also address, at 
a minimum, the administrative and personnel resources specified in 
paragraph (d)(2) of this section.
    (1) The statement must describe the expertise that the tribe will 
use to:
    (i) Negotiate or review leases, business agreements, or rights-of-
way under the TERA;
    (ii) Evaluate the environmental effects, including those related to 
cultural resources, of leases, business agreements, or rights-of-way 
entered into under a TERA;
    (iii) Review proposals for leases, business agreements and rights-
of-way under the TERA; and
    (iv) Monitor the compliance of a third party with the terms and 
conditions of any leases, business agreements and rights-of-way covered 
by the TERA.
    (2) The statement must describe the following:
    (i) Existing energy resource development related departments or 
administrative divisions within the tribe;
    (ii) Proposed energy resource development related departments or 
administrative divisions within the tribe;
    (iii) Existing energy resource development related expertise 
possessed by the tribe, including a description of the relevant 
expertise of designated tribal employees, consultants and/or advisors; 
and
    (iv) Proposed energy resource development related expertise that 
the tribe may acquire, including a description of the relevant 
expertise of designated tribal employees, consultants and/or advisors 
that the tribe intends to hire or retain.
    (e) The statement required by paragraph (a)(9) of this section must 
describe the amount of administrative activities related to the 
permitting, approval, and monitoring of activities, as applicable, that 
the tribe proposes to undertake under any lease, business agreement, or 
right-of-way the tribe executes under an approved TERA.
    (1) If the tribe proposes to regulate activities, the tribe must 
state its intent and describe the scope of the tribe's plan for such 
administration and management in sufficient detail for the Secretary to 
determine the tribe's capacity to administer and manage the regulatory 
activity(ies).
    (2) The tribe's intended scope of administrative responsibilities 
may not include the responsibilities of the Federal Government under 
the Endangered Species Act or other inherently Federal functions.
    (3) If the tribe intends to regulate activities, it should also 
describe the regulatory activities it desires to assume in the 
geographical area identified in Sec.  224.53(c)(2) with respect to 
leases, business agreements, and rights-of-way that exist when a TERA 
is approved.
    (f) The statement required by paragraph (a)(10) of this section 
must:
    (1) Describe the tribe's ability to negotiate and enter into 
leases, business agreements, and rights-of-way;
    (2) Include a discussion of the estimated annual costs to the tribe 
to assume those activities the tribe has identified in the application 
and the proposed source of tribal funds to carry out those activities; 
and
    (3) Describe the estimated annual amounts needed to conduct those 
activities the tribe has identified in the application and identify the 
Federal program that may provide those funds, if one of the sources of 
tribal funds includes grants or contract awards from the Department, 
the Department of Energy, or other Federal agencies.
    (4) Include a description of any:
    (i) Compacts and contracts between the tribe and the Secretary 
under the Indian Self-Determination and Education Assistance Act, as 
amended;
    (ii) Environmental programs a tribe has assumed under the Clean 
Water Act (33 U.S.C. 1251 et seq.) or the Clean Air Act (42 U.S.C.A. 
7401); or
    (iii) Cooperative agreements under the Federal Oil and Gas Royalty 
Management Act (30 U.S.C. 1701 et seq.).

Processing Applications


Sec.  224.54  How must a tribe submit an application?

    A tribe must submit an application and all supporting documents in 
written and electronic form to the Director.


Sec.  224.55  Is information a tribe submits throughout the TERA 
process under this Part subject to disclosure to third parties?

    The requirements of this section implement the requirements of the 
Freedom of Information Act (5 U.S.C. 552) (FOIA) and 43 CFR Part 2:
    (a) Information a tribe submits to the Department throughout the 
TERA process under this Part may be subject to disclosure to third 
parties under FOIA unless a FOIA exemption or exception applies or 
other provisions of law protect the information.
    (b) A tribe may, but is not required to, designate information it 
submits as confidential commercially or financially sensitive 
information, as applicable, in any submissions it makes throughout the 
TERA process, including, but not limited to:
    (1) Pre-application information;
    (2) Application information
    (3) A final proposed TERA;
    (4) Any amendments to a TERA; and
    (5) Leases, business agreements, and grants of right-of-way 
executed under an approved TERA.
    (c) Upon receipt of a FOIA request for records that contain 
commercial or financial information a tribe has submitted under the 
TERA process, as required by 43 CFR Part 2 the Department will provide 
the tribe, as submitter, with written notice of the FOIA request if:
    (1) The tribe has designated the information as confidential 
commercial or financial information; or

[[Page 12826]]

    (2) The Department has reason to believe that the information 
requested may be protected under FOIA Exemption 4 (trade secrets and 
commercial or financial information which is obtained from a person and 
is privileged or confidential).
    (d) The notice to the tribe will:
    (1) Include a copy of the FOIA request;
    (2) Describe the information requested or include copies of the 
pertinent records;
    (3) Advise the tribe of procedures for objecting to the release of 
the requested information and specify the time limit for the tribe's 
response;
    (4) Give the tribe no less than ten (10) working days from the 
Department's notice to object to the release and explain the basis for 
objection, if any;
    (5) Advise the tribe that:
    (i) Information contained in the tribe's objections may be subject 
to disclosure under FOIA if the Department receives a FOIA request for 
it; and
    (ii) If the tribe's objections contain commercial or financial 
information and a requestor asks for the objections under FOIA, the 
same notification procedures as above will apply;
    (6) Advise the tribe that it is the Department, rather than the 
tribe, that is responsible for deciding whether the information will be 
released or withheld;
    (7) If the tribe designated the information as commercial or 
financial information 10 or more years before the FOIA request, the 
Department will request the tribe's views on whether the tribe still 
considers the information to be confidential;
    (e) If the tribe has any objection to disclosure of the 
information, the tribe must submit a detailed written statement to the 
Department including the following:
    (1) The justification for withholding any portion of the 
information under any exemption of FOIA, and if the applicable 
exemption is Exemption 4, the tribe must submit a specific and detailed 
discussion of:
    (i) Whether the Federal government required the information to be 
submitted, and, if so, how substantial competitive harm or other 
business harm would likely result from release of the information; or
    (ii) Whether the tribe provided the information voluntarily and, if 
so, how the information fits into a category of information that the 
tribe customarily does not release to the public;
    (2) A certification that the information is confidential, has not 
been disclosed to the public by the tribe, and is essentially non-
public because it is not routinely available to the public from other 
sources;
    (3) If not already provided, a tribal contact telephone and fax 
number so that the Department can communicate with the tribe about the 
FOIA request;
    (f) The Department will review and consider all objections to 
release that are received within the time limits specified in the 
notice to the tribe, and if the tribe does not respond within the time 
limits specified in the notice, the Department will presume that the 
tribe has no objection to release of the information;
    (g) If the Department decides to release the information over the 
objection of the tribe, it will notify the tribe in writing by 
certified mail, return receipt requested, and will include copies of 
the records the Department intends to release and the reasons for 
deciding to release them. The notice will also inform the tribe that it 
intends to release the records within 10 working days after the tribe's 
receipt of the notice.


Sec.  224.56  What is the effect of the Director's receipt of a tribe's 
complete application?

    The Director's receipt of a tribe's complete application begins a 
270-day statutorily mandated period during which the Secretary must 
approve or disapprove a proposed TERA. With the consent of the tribe, 
the Secretary may extend the 270-day period for making a decision.


Sec.  224.57  What must the Director do upon receipt of an application?

    (a) Upon receiving an application for a TERA, the Director must:
    (1) Promptly notify the Designated Tribal Official in writing that 
the Director has received the application and the date it was received;
    (2) Within 30 days from the date of receiving the application, 
determine whether the application is complete; and
    (3) Take the following actions:

------------------------------------------------------------------------
  If the Director determines
          that . . .                  Then the Director must . . .
------------------------------------------------------------------------
(i) The application is         (A) Issue a written notice and a request
 complete.                      for an application consultation meeting
                                to the Designated Tribal Official; and
                               (B) If appropriate, notify other
                                Departmental bureaus and offices of
                                receiving the application and provide
                                copies.
(ii) The application is not    (A) Issue a written notice to the
 complete.                      Designated Tribal Official that the
                                application is not complete;
                               (B) Specify the additional information
                                the tribe is required to submit to make
                                the application complete; and
                               (C) Start the 270-day review period only
                                when the Director receives a complete
                                application.
------------------------------------------------------------------------

    (b) Unless the Director notifies the Designated Tribal Official 
during the 30-day review period that the application is not complete, 
the application is presumed to be complete and the 270-day review 
period under 25 U.S.C. 3504(e)(2)(A) of the Act will begin as of the 
date that the application was received.

Application Consultation Meeting


Sec.  224.58  What is an application consultation meeting?

    An application consultation meeting is a meeting held at the 
tribe's headquarters between the Director and the tribal governing body 
and any other representatives that the tribe may designate to discuss 
the TERA application. The Secretary will designate representatives of 
appropriate Departmental offices or bureaus to attend the application 
consultation meeting, as necessary. The tribe may record the meeting. 
The meeting will:
    (a) Be held at the earliest practicable time after the Director 
receives a tribe's complete application;
    (b) Include a thorough discussion of the tribe's application;
    (c) Identify the specific services consistent with the Secretary's 
ongoing trust responsibility and available resources that the 
Department would provide to the tribe upon the approval of a TERA;
    (d) Include a discussion of the relationship of the tribe to other 
Federal agencies with responsibilities for implementing or ensuring 
compliance with the terms and conditions of leases, business 
agreements, or rights-of-way and applicable Federal laws;
    (e) Include a discussion of the relationship of the tribe to its 
members, to State and local governments, and to non-Indians who may be 
affected by approval of a TERA or by leases, business agreements, or 
rights-of-way that the tribe may enter into or grant under an approved 
TERA;

[[Page 12827]]

    (f) Include a discussion of the tribal administrative, financial, 
technical, and managerial capacities needed to carry out the tribe's 
obligations under a TERA; and
    (g) Include a discussion of the form of the TERA and the timing and 
relative responsibilities of the parties for its preparation.


Sec.  224.59  How will the Director use the results of the application 
consultation meeting?

    The Director will use the information gathered during the 
application consultation meeting in conjunction with information 
provided through Sec.  224.53 and Sec.  224.63 to determine the energy 
resource development capacity of the tribe as detailed in Sec.  224.72.


Sec.  224.60  What will the Director provide to the tribe after the 
application consultation meeting?

    Within 30 days following the meeting with the tribe, the Director 
will provide to the Designated Tribal Official a written report on the 
application consultation meeting. The report must include the 
Director's recommendations, if any, for revising the proposed TERA that 
was submitted as part of the tribe's application.


Sec.  224.61  What will the tribe provide to the Director after receipt 
of the Director's report on the application consultation meeting?

    If the tribe wishes to proceed with the application, the tribe must 
submit a final proposed TERA to the Director within 45 days following 
the date of the Tribe's receipt of the Director's report on the 
application consultation meeting.


Sec.  224.62  May a final proposed TERA differ from the original 
proposed TERA?

    The final proposed TERA may or may not contain provisions that 
differ from the original proposed TERA submitted with the application.
    (a) If a final proposed TERA does not differ significantly or 
materially from the original TERA contained in the complete 
application, the 270-day review period will begin to run on the date 
the original complete application was received (under Sec.  224.57(c)) 
or on the date established by operation of Sec.  224.57(d)).
    (b) If a final proposed TERA differs significantly or materially 
from the original TERA contained in the complete application, the 
Secretary, with the tribe's consent, may extend the 270-day period for 
a reasonable time. The Secretary will notify the tribe in writing if an 
extension of time is necessary.

TERA Requirements


Sec.  224.63  What provisions must a TERA contain?

    A TERA must contain all the elements required by this section.
    (a) A provision for the Secretary's periodic review and evaluation 
of the tribe's performance under a TERA.
    (b) A provision that recognizes the authority of the Secretary, 
upon a finding of imminent jeopardy to a physical trust asset, to take 
actions the Secretary determines to be necessary to protect the asset, 
including reassumption under subparts F and G of this part.
    (c) A provision under which the tribe establishes and ensures 
compliance with an environmental review process for leases, business 
agreements, and rights-of-way which, at a minimum:
    (1) Identifies and evaluates all significant environmental effects 
(as compared to a no-action alternative), including effects on cultural 
resources, arising from a lease, business agreement, or right-of-way;
    (2) Identifies proposed mitigation measures, if any, and 
incorporates appropriate mitigation measures into the lease, business 
agreement, or right-of-way;
    (3) Informs the public and provides opportunity for public comment 
on the environmental impacts of the approval of the lease, business 
agreement or right-of-way;
    (4) Provides for tribal responses to relevant and substantive 
public comments before tribal approval of the lease, business agreement 
or right-of-way;
    (5) Provides for sufficient tribal administrative support and 
technical capability to carry out the environmental review process; and
    (6) Develops adequate tribal oversight of energy resource 
development activities under any lease, business agreement or right-of-
way under a TERA that any other party conducts to determine whether the 
activities comply with the TERA and applicable Federal and tribal 
environmental laws.
    (d) Provisions that require, with respect to any lease, business 
agreement, or right-of-way approved under a TERA, all of the following:
    (1) Mechanisms for obtaining corporate, technical, and financial 
qualifications of a third party that has applied to enter into a lease, 
business agreement, or right-of-way;
    (2) Express limitations on duration that meet the restrictions of 
the Act and this Part under Sec.  224.86;
    (3) Mechanisms for amendment, transfer, and renewal;
    (4) Mechanisms for obtaining, reporting and evaluating the economic 
return to the tribe;
    (5) Mechanisms for securing technical information about activities 
and ensuring that technical activities are performed in compliance with 
terms and conditions;
    (6) Assurances of the tribe's compliance with all applicable 
environmental laws;
    (7) Requirements that the lessee, operator, or right-of-way grantee 
will comply with all applicable environmental laws;
    (8) Identification of tribal representatives with the authority to 
approve a lease, business agreement, or right-of-way and the related 
energy development activities that would occur under a lease, business 
agreement, or right-of-way;
    (9) Public notification that a lease, business agreement, or right-
of-way has received final tribal approval;
    (10) A process for consultation with affected States regarding off-
reservation impacts, if any, identified under paragraph (c) of this 
section;
    (11) A description of remedies for breach;
    (12) A statement that any provision that violates an express term 
or requirement of the TERA is null and void;
    (13) A statement that if the Secretary determines that any 
provision that violates an express term or requirement of the TERA is 
material, the Secretary may suspend or rescind the lease, business 
agreement, or right-of-way, or take any action the Secretary determines 
to be in the best interest of the tribe, including, with the consent of 
the parties, revising the nonconforming provisions so that they conform 
to the intent of the applicable portion of the TERA; and
    (14) A statement that the lease, business agreement, or right-of-
way subject to a TERA, unless otherwise provided, goes into effect when 
the tribe delivers executed copies of the lease, business agreement, or 
right-of-way to the Director by first class mail return receipt 
requested or express delivery. The parties to a lease, business 
agreement, or right-of-way may agree in writing that any provision of 
their contract may have retroactive application.
    (e) Citations to any applicable tribal laws, regulations, or 
procedures that:
    (1) Provide opportunity for the public to comment on and to 
participate in public hearings, if any, under paragraph (c)(2) of this 
section; and
    (2) Provide remedies that petitioning parties must exhaust before 
filing a

[[Page 12828]]

petition with the Secretary under subpart E of this part.
    (f) Provisions that require a tribe to provide the Secretary with 
citations to any tribal laws, regulations, or procedures the tribe 
adopts after the effective date of a TERA that establish, amend, or 
supplement tribal remedies that petitioning parties must exhaust before 
filing a petition with the Secretary under subpart E of this part.
    (g) Provisions that designate a person or entity, together with 
contact information, authorized by the tribe to maintain and 
disseminate to requesting members of the public current copies of 
tribal laws, regulations, or procedures that establish or describe 
tribal remedies that petitioning parties must exhaust before 
instituting appeals under subpart E of this part.
    (h) Identification of financial assistance, if any, that the 
Secretary has agreed to provide to the tribe to assist in 
implementation of the TERA, including the tribe's environmental review 
of individual energy development activities.
    (i) Provisions that require a tribe to notify the Secretary and the 
Director in writing, as soon as practicable after the tribe receives 
notice, of a violation or breach as defined in this Part.
    (j) Provisions that require the tribe and the tribe's financial 
experts to adhere to Government auditing standards and to applicable 
continuing professional education requirements.
    (k) Provisions that require the tribe to submit to the Director 
information and documentation of payments made directly to the tribe, 
if any. These provisions enable the Secretary to discharge the trust 
responsibility of the United States to enforce the terms of, and 
protect the rights of the tribe under, a lease, business agreement, or 
right-of-way. Required documentation must include documents evidencing 
proof of payment such as cancelled checks; cash receipt vouchers; 
copies of money orders or cashiers checks; or verification of 
electronic payments.
    (l) Provisions that ensure the creation, maintenance and 
preservation of records related to leases, business agreements, or 
rights-of-way and performance of activities a tribe assumed under a 
TERA sufficient to facilitate the Secretary's periodic review of the 
TERA. The Secretary will use these records as part of the periodic 
review and evaluation process under Sec.  224.132. Approved 
Departmental records retention procedures under the Federal Records Act 
(44 U.S.C. Chapters 29, 31, and 33) provide a framework the tribe may 
use to ensure that its records under a TERA adequately document 
essential transactions, furnish information necessary to protect its 
legal and financial rights, and enable the Secretary to discharge the 
trust responsibility if:
    (1) Any other party violates the terms of any lease, business 
agreement, or right-of-way; or
    (2) Any provision of a lease, business agreement or right-of-way 
violates the TERA.


Sec.  224.64  How may a tribe assume management of development of 
different types of energy resources?

    In order for a tribe to assume authority for approving leases, 
business agreements, and rights-of-way for development of another 
energy resource that is not included in the TERA, a tribe must apply 
for a new TERA covering the authority for the development of another 
energy resource it wishes to assume. The Secretary's consideration of a 
new TERA will include a determination of the tribe's capacity to 
develop that type of energy resource and will trigger the public notice 
and opportunity for comment consistent with Sec.  224.67.


Sec.  224.65  How may a tribe assume additional activities under a 
TERA?

    A tribe may assume additional activities related to the development 
of the same type of energy resource included in a TERA by negotiating 
with the Secretary an amendment to the existing TERA to include the 
additional activities. The Secretary will determine in each case 
whether the tribe has sufficient capacity to carry out additional 
activities the tribe may wish to assume under an approved TERA.


Sec.  224.66  How may a tribe reduce the scope of the TERA?

    A tribe may reduce the scope of the TERA by negotiating with the 
Secretary an amendment to the existing TERA to eliminate an activity 
assumed under the TERA or a type of energy resource development managed 
under the TERA. Any such reduction in scope must include the return of 
all relevant Departmental resources transferred under the TERA and any 
relevant records and documents.

Public Notification and Comment


Sec.  224.67  What must the Secretary do upon the Director's receipt of 
a final proposed TERA?

    (a) Within 10 days of the Director's receipt of a final proposed 
TERA, the Secretary must submit a notice for publication in the Federal 
Register advising the public:
    (1) That the Secretary is considering a final proposed TERA for 
approval or disapproval: and
    (2) Of any National Environmental Policy Act (NEPA) review the 
Secretary is conducting.
    (b) The Federal Register notice will:
    (1) Contain information advising the public how to request and 
receive copies of or participate in any NEPA reviews, as prescribed in 
subpart C of this part, related to approval of the final proposed TERA; 
and
    (2) Contain information advising the public how to comment on a 
final proposed TERA.


Sec.  224.68  How will the Secretary use public comments?

    (a) The Secretary will review and consider public comments in 
deciding to approve or disapprove the final proposed TERA; and
    (b) The Secretary will provide copies of the comments to the 
Designated Tribal Official;
    (c) Upon mutual agreement between the tribe and the Secretary, the 
tribe may make changes in the final proposed TERA based on the comments 
received; and
    (d) If the tribe revises the final proposed TERA based on public 
comments, the tribal governing body must approve the changes, the 
authorized representative of the tribe must sign the final proposed 
TERA as revised, and the tribe must send the revised final proposed 
TERA to the Director. The Secretary and the tribe will consult on 
whether an extension of the review period is necessary under Sec.  
224.62(b).

Subpart C--Approval of Tribal Energy Resource Agreements


Sec.  224.70  Will the Secretary review a proposed TERA under the 
National Environmental Policy Act?

    Yes, the Secretary will conduct a review under the National 
Environmental Policy Act (NEPA) of the potential impacts on the quality 
of the human environment that might arise from approving a final 
proposed TERA. The scope of the Secretary's evaluation will be limited 
to the scope of the TERA. The public comment period, when required, 
under the NEPA review will occur concurrently with the public comment 
period for a TERA under Sec.  224.67.


Sec.  224.71  What standards will the Secretary use to decide to 
approve a final proposed TERA?

    The Secretary will consider the best interests of the tribe and the 
Federal policy of promoting tribal self-

[[Page 12829]]

determination in deciding whether to approve a final proposed TERA. The 
Secretary must approve a final proposed TERA if it contains the 
provisions required by the Act and this part and the Secretary 
determines that the tribe has demonstrated sufficient capacity to 
manage the development of energy resources it proposes to develop.


Sec.  224.72  How will the Secretary determine whether a tribe has 
demonstrated sufficient capacity?

    The Secretary will determine whether a tribe has demonstrated 
sufficient capacity under Sec.  224.71 based on the information 
obtained through the application process. The Secretary will consider:
    (a) The specific energy resource development the tribe proposes to 
regulate;
    (b) The scope of the administrative or regulatory activities the 
tribe seeks to assume;
    (c) Materials and information submitted with the application for a 
TERA, the result of meetings between the tribe and a representative of 
the Department and the Director's written report;
    (d) The history of the tribe's role in energy resource development, 
including negotiating and approval or disapproval of pre-existing 
energy-related leases, business agreements, and rights-of-way;
    (e) The administrative expertise of the tribe available to regulate 
energy resource development within the scope of the final proposed TERA 
or the tribe's plans for establishing that expertise;
    (f) The financial capacity of the tribe to maintain or procure the 
technical expertise needed to evaluate proposals and to monitor 
anticipated activities in a prudent manner;
    (g) The tribe's past performance administering contracts and grants 
associated with self-determination programs, cooperative agreements 
with Federal and State agencies, and environmental programs 
administered by the Environmental Protection Agency;
    (h) The tribe's past performance monitoring activities undertaken 
by third parties under approved leases, business agreements, or rights-
of-way; and
    (i) Any other factors the Secretary finds to be relevant in light 
of the scope of the proposed TERA.


Sec.  224.73  How will the scope of energy resource development affect 
the Secretary's determination of the tribe's capacity?

    The Secretary's review under Sec.  224.72 of the tribe's capacity 
to manage and regulate energy resource development under the TERA will 
include a determination as to each type of energy resource development 
subject to the TERA for which the tribe seeks to regulate, and each 
type of regulatory activity the tribe proposes to assume. The 
Secretary's review of a TERA must be limited to activities specified by 
its provisions.


Sec.  224.74  When must the Secretary approve or disapprove a final 
proposed TERA?

    The Secretary must approve or disapprove a final proposed TERA or a 
revised final proposed TERA within 270 days of the Director's receipt 
of a complete application for a TERA. With the consent of the tribe, or 
as provided in Sec.  224.62(b), the Secretary may extend the period for 
a decision.


Sec.  224.75  What must the Secretary do upon approval or disapproval 
of a final proposed TERA?

    Within 10 days of the Secretary's approval or disapproval of a 
final proposed TERA, the Secretary must notify the tribal governing 
body in writing and take the following actions:

------------------------------------------------------------------------
 If the Secretary's decision
           is . . .                  Then the Secretary will . . .
------------------------------------------------------------------------
(a) To approve the final       (1) Sign the TERA making it effective on
 proposed TERA.                 the date of signature, and return the
                                signed TERA to the tribal governing
                                body; and
                               (2) Maintain a copy of the TERA and any
                                subsequent amendments or supplements to
                                the TERA.
(b) To disapprove the final    Send the tribe a notice of disapproval
 proposed TERA.                 that must include:
                               (1) The basis of the disapproval;
                               (2) The changes or other actions required
                                to address the Secretary's basis for
                                disapproval; and
                               (3) A statement that the decision is a
                                final agency action and is subject to
                                judicial review.
------------------------------------------------------------------------

Sec.  224.76  Upon notification of disapproval, may a tribe re-submit a 
revised final proposed TERA?

    Yes, within 45 days of receiving the notice of disapproval, or a 
later date as the Secretary and the tribe agree to in writing, the 
tribe may re-submit a revised final proposed TERA, approved by the 
tribal governing body and signed by the tribe's authorized 
representative, to the Director that addresses the Secretary's 
concerns. Unless the Secretary and the tribe otherwise agree, the 
Secretary must approve or disapprove the revised final proposed TERA 
within 60 days of the Director's receipt of the revised final proposed 
TERA. Within 10 days of the Secretary's approval or disapproval of a 
revised final proposed TERA, the Secretary must notify the tribal 
governing body in writing and take the following actions:

------------------------------------------------------------------------
 If the Secretary's decision
           is . . .                  Then the Secretary will . . .
------------------------------------------------------------------------
(a) To approve the revised     (1) Sign the TERA making it effective on
 final proposed TERA.           the date of signature, and return the
                                signed TERA to the tribal governing
                                body; and
                               (2) Maintain a copy of the TERA and any
                                subsequent amendments or supplements to
                                the TERA.
(b) To disapprove the revised  Send the tribe a notice of disapproval
 final proposed TERA.           that must include:
                               (1) The reasons for the disapproval; and
                               (2) A statement that the decision is a
                                final agency action and is subject to
                                judicial review.
------------------------------------------------------------------------


[[Page 12830]]

Sec.  224.77  Who may appeal the Secretary's decision on a final 
proposed TERA or a revised final proposed TERA?

    Only a tribe applying for a TERA may appeal the Secretary's 
decision to disapprove a final proposed TERA or a revised final 
proposed TERA in accordance with the appeal procedures contained in 
subpart I of this part. No other person or entity may appeal the 
Secretary's decision. The Secretary's decision to approve a final 
proposed TERA or a revised final proposed TERA is a final agency 
action.

Subpart D--Implementation of Tribal Energy Resource Agreements

Applicable Authorities and Responsibilities


Sec.  224.80  Under what authority will a tribe perform activities for 
energy resource development?

    A tribe will perform activities for energy resource development 
activities undertaken under a TERA under the authorities provided in 
the approved TERA. Notwithstanding anything in this part or an approved 
TERA to the contrary, a tribe will retain all sovereign and other 
powers it otherwise possesses.


Sec.  224.81  What laws are applicable to activities?

    Federal and tribal laws apply to activities under a TERA, unless 
otherwise specified in the TERA.


Sec.  224.82  What activities will the Department continue to perform 
after approval of a TERA?

    After approval of a TERA, the Department will provide a tribe:
    (a) All activities that the Department performs unless the tribe 
has assumed such activities under the TERA;
    (b) Access to title status information and support services needed 
by a tribe in the course of evaluating proposals for leases, business 
agreements, or rights-of-way;
    (c) Coordination between the tribe and the Department for ongoing 
maintenance of accurate real property records;
    (d) Access to technical support services within the Department to 
assist the tribe in evaluating the physical, economic, financial, 
cultural, social, environmental, and legal consequences of approving 
proposals for leases, business agreements, or rights-of-way under a 
TERA; and
    (e) Assistance to ensure that third-party violations or breaches of 
the terms of leases, business agreements, or rights-of-way or 
applicable provisions of Federal law by third parties are handled 
appropriately.

Leases, Business Agreements, and Rights-of-way Under a TERA


Sec.  224.83  What must a tribe do after executing a lease or business 
agreement, or granting a right-of-way?

    Following the execution of a lease, business agreement, or grant of 
right-of-way under a TERA, a tribe must:
    (a) Inform the public of approval of the lease, business agreement, 
or right-of-way under the authority granted in the TERA; and
    (b) Send a copy of the executed lease, business agreement, or 
right-of-way, or amendments, to the Director within one business day of 
execution. The copy must be sent by certified mail return receipt 
requested or by overnight delivery.


Sec.  224.84  When may a tribe grant a right-of-way?

    A tribe may grant a right-of-way under a TERA if the grant of 
right-of-way is over tribal land for a pipeline or an electric 
transmission or distribution line if the pipeline or electric 
transmission or distribution line serves:
    (a) An electric generation, transmission, or distribution facility 
located on tribal land; or
    (b) A facility located on tribal land that processes or refines 
energy resources developed on tribal land.


Sec.  224.85  When may a tribe enter into a lease or business 
agreement?

    A tribe may enter into a lease or business agreement for the 
purpose of energy resource development for:
    (a) Exploration for, extraction of, or other development of the 
tribe's energy mineral resources on tribal land including, but not 
limited to, marketing or distribution;
    (b) Construction or operation of an electric generation, 
transmission, or distribution facility located on tribal land; or
    (c) A facility to process or refine energy resources developed on 
tribal land.


Sec.  224.86  Are there limits on the duration of leases, business 
agreements, and rights-of-way?

    (a) The duration of leases, business agreements, and rights-of-way 
entered into under a TERA are limited as follows:
    (1) For leases and business agreements, except as provided in 
paragraph (b) of this section, 30 years;
    (2) For leases for production of oil resources and gas resources, 
or both, 10 years and as long after as oil or gas production continues 
in paying quantities; and
    (3) For rights-of-way, 30 years.
    (b) A lease or business agreement a tribe enters into, or a right-
of-way a tribe grants may be renewed at the discretion of the tribe as 
long as the TERA remains in effect and the approved activities have not 
been rescinded by the tribe or suspended or reassumed by the 
Department.

Violation or Breach


Sec.  224.87  What are the obligations of a tribe if it discovers a 
violation or breach?

    As soon as practicable after discovering or receiving notice of a 
violation or breach of a lease, business agreement, or right-of-way of 
a Federal or tribal environmental law resulting from an activity 
undertaken by a third party under a lease, business agreement, or 
right-of-way, the tribe must provide written notice to the Director 
describing:
    (a) The nature of the violation or breach in reasonable detail;
    (b) The corrective action taken or planned by the tribe; and
    (c) The proposed period for the corrective action to be completed.


Sec.  224.88  What must the Director do after receiving notice of a 
violation or breach from the tribe?

    After receiving notice of a violation or breach from the tribe, the 
Director will:
    (a) Review the notice and conduct an investigation under Sec.  
224.135(b) including, as necessary:
    (1) An on-site inspection; and
    (2) A review of relevant records, including transactions and 
reports.
    (b) If the Director determines, after the investigation, that a 
violation or breach is not causing or will not cause imminent jeopardy 
to a physical trust asset, the Director will review, for concurrence or 
disapproval, the corrective action to be taken or imposed by the tribe 
and the proposed period for completion of the corrective action;
    (c) If the Director determines, after the investigation, that a 
violation or breach is causing or will cause imminent jeopardy to a 
physical trust asset, the Director will proceed under the imminent 
jeopardy provisions of subpart F of this part.


Sec.  224.89  What procedures will the Secretary use to enforce leases, 
business agreements, or rights-of-way?

    (a) The Secretary and a tribe will consult with each other 
regarding enforcement of and Secretarial assistance needed to enforce 
leases, business agreements, or rights-of-way entered into under a 
TERA. When appropriate, the Secretary will:
    (1) Use the notification and enforcement procedures established in 
25 CFR parts 162, 211 and 225 to ensure

[[Page 12831]]

compliance with leases and business agreements; and
    (2) Use the notification and enforcement procedures of 25 CFR part 
169 to ensure compliance with rights-of-way.
    (b) All enforcement remedies established in 25 CFR parts 162, 211, 
225, and 169 are available to the Secretary.

Subpart E--Interested Party Petitions


Sec.  224.100  May a person or entity ask the Secretary to review a 
tribe's compliance with a TERA?

    In accordance with this subpart, a person or entity that may be an 
interested party may submit to the Secretary a petition to review a 
tribe's compliance with a TERA. However, before filing a petition with 
the Secretary, a person or entity that may be an interested party must 
first exhaust tribal remedies, if a tribe has provided for such 
remedies. If a tribe has not provided for tribal remedies, a person or 
entity that may be an interested party may file a petition directly 
with the Secretary.


Sec.  224.101  Who is an interested party?

    For the purposes of this Part, an interested party is a person or 
entity that has demonstrated that an interest of the person or entity 
has sustained, or will sustain, an adverse environmental impact as a 
result of a tribe's failure to comply with a TERA.


Sec.  224.102  Must a tribe establish a comment or hearing process for 
addressing environmental concerns?

    Yes. The Act (25 U.S.C. 3504(e)(2)(C)(iii)(I), (II) and 25 U.S.C. 
3504(e)(2)(B)(iii)(X)) and subpart B of this part require a tribe to 
establish an environmental review process under a TERA that:
    (a) Ensures that the public is notified about and has an 
opportunity to comment on the environmental impacts of proposed tribal 
action to be taken under a TERA;
    (b) Requires that the tribe respond to relevant and substantive 
comments about the environmental impacts of a proposed tribal action 
before the tribe approves a lease, business agreement, or right-of-way; 
and
    (c) Provides for a process for consultation with any affected 
States regarding off-reservation environmental impacts, if any, 
resulting from approval of a lease, business agreement, or right-of-
way.


Sec.  224.103  Must a tribe establish other public participation 
processes?

    No. Except for the environmental review process required by the Act 
and Sec.  224.63(b)(1), a tribe is not required to establish a process 
for public participation concerning non-environmental issues in a TERA 
or leases, business agreements or rights-of-way undertaken under a 
TERA. However, a tribe may elect to establish procedures that permit 
the public to participate in public hearings or that expand the scope 
of matters about which the public may comment.


Sec.  224.104  Must a tribe enact tribal laws, regulations, or 
procedures permitting a person or entity to allege that a tribe is not 
complying with a TERA?

    No. A tribe is not required, but may elect, to enact tribal laws, 
regulations, or procedures permitting a person or entity that may be an 
interested party to allege that a tribe is not complying with its TERA.


Sec.  224.105  How may a person or entity obtain copies of tribal laws, 
regulations, or procedures that would permit an allegation of 
noncompliance with a TERA?

    (a) A person or entity that may be an interested party may obtain 
copies of tribal laws, regulations, or procedures that establish tribal 
remedies that permit a person or entity to allege that the tribe is not 
complying with its TERA by making a request to the tribe in accordance 
with the TERA and Sec.  224.63(g).
    (b) Upon obtaining copies of tribal laws, regulations, or 
procedures under subsection (a), a person or entity that may be an 
interested party may file a petition with the tribe under those tribal 
laws, regulations, or procedures.
    (c) If the person or entity that may be an interested party files a 
petition alleging noncompliance with a TERA, the person or entity 
becomes a petitioner, and the tribe must respond according to Sec.  
224.106.


Sec.  224.106  If a tribe has enacted tribal laws, regulations, or 
procedures for challenging tribal action, how must the tribe respond to 
a petition?

    If a tribe has enacted tribal laws, regulations, or procedures 
under which a petitioner may file a petition alleging noncompliance 
with a TERA, the tribe must:
    (a) Within a reasonable time issue a final written decision under 
the tribal laws, regulations, or procedures that addresses the claim. 
The decision may include a determination of whether the petitioner is 
an interested party;
    (b) Provide a copy of its final written decision to the petitioner; 
and
    (c) If the tribe fails, within a reasonable period, to issue a 
written decision to a petition that a petitioner brings under 
applicable tribal laws, regulations, or procedures the petitioner may 
file a petition with the Secretary.


Sec.  224.107  What must a petitioner do before filing a petition with 
the Secretary?

    Before a petitioner may file a petition with the Secretary under 
this subpart, the petitioner must have exhausted tribal remedies by 
participating in any tribal process under Sec.  224.106, including any 
tribal appeal process.


Sec.  224.108  May tribes offer a resolution of a petitioner's claim?

    Yes. In responding to a petition filed under tribal laws, 
regulations or procedures, a tribe may, with the petitioner's written 
consent, resolve the petitioner's claims.


Sec.  224.109  What must a petitioner claim or request in a petition 
filed with the Secretary?

    In a petition filed with the Secretary, a petitioner must:
    (a) Claim that the tribe, through its action or inaction has failed 
to comply with terms or provisions of a TERA, and, as a result, the 
petitioner's interest has sustained or will sustain an adverse 
environmental impact.
    (b) Request that the Secretary review the claims raised in the 
petition; and
    (c) Request that the Secretary take whatever action is necessary to 
bring a tribe into compliance with the TERA.


Sec.  224.110  What must a petition to the Secretary contain?

    A petition must contain:
    (a) The petitioner's name and contact information;
    (b) Specific facts demonstrating that the interested party under 
Sec.  224.101, including identification of the affected interest;
    (c) Specific facts demonstrating that the petitioner exhausted 
tribal remedies, if tribal laws, regulations, or procedures permitted 
the petitioner to allege tribal noncompliance with a TERA;
    (d) A description of facts supporting the petitioner's allegation 
of the tribe's noncompliance with a TERA;
    (e) A description of the adverse environmental impact that the 
petitioner's interest has sustained or will sustain because of the 
tribe's alleged noncompliance with the TERA;
    (f) A copy of any written decision the tribe issued responding to 
the petitioner's claims;
    (g) If applicable, a statement that the tribe has issued no written 
decision within a reasonable time related to a claim a petitioner has 
filed with the tribe under applicable tribal laws, regulations, or 
procedures;
    (h) If applicable, a statement and supporting documentation that 
the tribe

[[Page 12832]]

did not respond to the petitioner's request under Sec.  224.105(a) for 
copies of any tribal laws, regulations, or procedures allowing the 
petitioner to allege that the tribe is not complying with a TERA; and
    (i) Any other information relevant to the petition.


Sec.  224.111  When may a petitioner file a petition with the 
Secretary?

    (a) A petitioner may file a petition with the Secretary:
    (1) By delivering the petition to the Director within 30 days of 
receiving the tribe's final written decision addressing the allegation 
of noncompliance under applicable tribal laws, regulations, or 
procedures;
    (2) Within a reasonable period following the tribe's constructive 
denial of the petition under Sec.  224.106(c), and the Secretary will 
determine if the petition is timely in light of the applicable facts 
and circumstances; or
    (3) The tribe did not respond to the petitioner's request for 
copies of any tribal laws, regulations, or procedures under Sec.  
224.105(a).
    (b) A petitioner may file a petition directly with the Secretary if 
the tribe has no tribal laws, regulations or procedures that provide 
the petitioner an opportunity to allege tribal noncompliance with a 
TERA.


Sec.  224.112  What must the Director do upon receipt of a petition?

    Within 20 days after receiving a petition, the Director must:
    (a) Notify the tribe in writing that the Director has received a 
petition;
    (b) Provide a copy of the complete petition to the tribe;
    (c) Initiate a petition consultation with the tribe that will 
address the petitioner's allegation of a tribe's noncompliance with a 
TERA and alternatives to resolve any noncompliance; and
    (d) Notify the tribe in writing by certified mail, return receipt 
requested, when the petition consultation is complete.


Sec.  224.113  What must the tribe do after it completes petition 
consultation with the Director?

    (a) Within 45 days of receiving the Director's notice that the 
petition consultation is complete, the tribe must respond to any claim 
made in the petition by submitting a written response to the Director; 
and
    (b) Within a reasonable time after 45 days following the completion 
of the petition consultation process, the tribe must cure or otherwise 
resolve each claim of noncompliance made in the petition.


Sec.  224.114  How may the tribe address a petition in its written 
response?

    In addition to responding to the petitioner's claims, the tribe may 
also:
    (a) Include its interpretation of relevant provisions of the TERA 
and other legal requirements;
    (b) Discuss whether the petitioner is an interested party;
    (c) State whether the petitioner has exhausted tribal remedies, and 
if so, how; and
    (d) Propose to cure or otherwise resolve the claims within the time 
frame in Sec.  224.113(b).


Sec.  224.115  When in the petition process must the Director 
investigate a tribe's compliance with a TERA?

    The Director must investigate the petitioner's claims of the 
tribe's noncompliance with a TERA only after making a threshold 
determination that:
    (a) The tribe has denied or failed to respond to each claim made in 
the petition within the period under Sec.  224.113(a); or
    (b) The tribe has failed, refused, or was unable to cure or 
otherwise resolve each claim made in the petition within a reasonable 
period, as determined by the Director, after the expiration of the 
period in Sec.  224.113(b).


Sec.  224.116  What is the time period in which the Director must 
investigate a tribe's compliance with a TERA?

    (a) If the Director determines under Sec.  224.115 that one of the 
threshold determinations in Sec.  224.114 has been met, then within 120 
days of the Director's receipt of a petition, the Director must 
determine whether or not a tribe is in compliance with the TERA;
    (b) The Director may extend the time for determining a tribe's 
compliance with a TERA up to 120 days in any case in which the Director 
determines that additional time is necessary to evaluate the claims in 
the petition and the tribe's written response, if any. If the Director 
decides to extend the time, the Director must notify the petitioner and 
the tribe in writing of the extension.


Sec.  224.117  Must the Director make a determination of the tribe's 
compliance with a TERA?

    (a) Yes. Upon a finding that one of the threshold determinations in 
Sec.  224.115 has been met, the Director must make a determination of 
the tribe's compliance with a TERA within the time period in Sec.  
224.116.
    (b) If the Director determines that the tribe is in compliance with 
the TERA, the Director will notify the tribe and the petitioner in 
writing;
    (c) If the Director determines that the tribe is not in compliance 
with the TERA, the Director will notify the tribe and the petitioner in 
writing and, in addition, must provide the tribe:
    (1) A written determination that describes the manner in which the 
TERA has been violated together with a written notice of the 
violations;
    (2) Notice of a reasonable opportunity to comply with the TERA; and
    (3) Notice of the tribe's opportunity for a hearing.


Sec.  224.118  How must the tribe respond to the Director's notice of 
the opportunity for a hearing?

    The tribe must respond in writing to the Director's notice of the 
opportunity for a hearing within 20 days of receipt of the notice by 
requesting a hearing or declining to request a hearing. If the tribe 
does not respond within the time period, the Director will proceed with 
making a decision without further input from the tribe.


Sec.  224.119  What must the Director do when making a decision on a 
petition?

    (a) The Director must issue a written decision to the tribe and the 
petitioner stating the basis for the decision about the tribe's 
compliance or noncompliance with the TERA within 30 days following:
    (1) A hearing, if the tribe requested a hearing;
    (2) The tribe's declining the opportunity for a hearing; or
    (3) The tribe's failure to respond to the opportunity for a hearing 
within 20 days of the Director's written notice of the opportunity for 
a hearing.
    (b) If the Director decides that the tribe is not in compliance 
with the TERA, the Director must:
    (1) Include findings of fact and conclusions of law with the 
written decision to the tribe; and
    (2) Take action to ensure compliance with the TERA.


Sec.  224.120  What action may the Director take to ensure compliance 
with a TERA?

    If the Director decides that a tribe is not in compliance with a 
TERA, the Director may take action to ensure compliance with the TERA 
including:
    (a) Temporarily suspending any activity under a lease, business 
agreement, or right-of-way until the tribe complies with the TERA; or
    (b) Rescinding approval of part of the TERA, or
    (c) Rescinding all of the TERA and recommending that the Secretary 
reassume activities under subpart G of this part.

[[Page 12833]]

Sec.  224.121  How may a tribe or a petitioner appeal the Director's 
decision about the tribe's compliance with the TERA?

    A tribe or a petitioner, or both, may appeal the Director's 
decision on the petition under Sec.  224.119 to the Principal Deputy 
Assistant Secretary--Indian Affairs under subpart I of this part.

Subpart F--Periodic Reviews


Sec.  224.130  What is the purpose of this subpart?

    This subpart describes how the Secretary and a tribe will develop 
and perform the periodic review and evaluation required by the Act and 
by a TERA.


Sec.  224.131  What is a periodic review and evaluation?

    A periodic review and evaluation is an examination the Director 
performs to monitor a tribe's performance of activities associated with 
the development of energy resources and to review compliance with a 
TERA. During the TERA consultation, a tribe and the Director will 
develop a periodic review and evaluation process that addresses the 
tribe's specific circumstances and the terms and conditions of the 
tribe's TERA. The tribe will include the agreed-upon periodic review 
and evaluation process in its final proposed TERA.


Sec.  224.132  How does the Director conduct a periodic review and 
evaluation?

    (a) The Director will conduct a periodic review and evaluation 
under the TERA, in consultation with the tribe, and in cooperation with 
other Departmental bureaus and offices whose activities the tribe 
assumed or that perform activities for the tribe.
    (b) The Director will communicate with the Designated Tribal 
Official throughout the process established by this section.
    (c) During the periodic review and evaluation, the Director will:
    (1) Review relevant records and documents, including transactions 
and reports the tribe prepares under the TERA;
    (2) Conduct on-site inspections as appropriate; and
    (3) Review compliance with statutes and regulations applicable to 
activities undertaken under the TERA.
    (d) Review the effect on physical trust assets resulting from 
activities undertaken under a TERA.
    (e) Upon written request, the tribe should provide the Director 
with records and documents relevant to the provisions of the TERA. In 
addition, the tribe should identify any information in these submitted 
records and documents that is confidential, commercial and financial. 
Specific exceptions to disclosure under the Freedom of Information Act, 
or other statutory protections against disclosure, may apply and 
preclude disclosure of this information to third parties as provided 
for in Sec.  224.55.


Sec.  224.133  What must the Director do after a periodic review and 
evaluation?

    After a periodic review and evaluation, the Director must prepare a 
written report of the results and send the report to the Designated 
Tribal Official.


Sec.  224.134  How often must the Director conduct a periodic review 
and evaluation?

    The Director must conduct a periodic review and evaluation annually 
during the first 3 years of a TERA. After the third annual review and 
evaluation, the Secretary and the tribe may mutually agree to amend the 
TERA to conduct periodic reviews and evaluations once every 2 years.


Sec.  224.135  Under what circumstances may the Director conduct 
additional reviews and evaluations?

    The Director may conduct additional reviews and evaluations:
    (a) At a tribe's request;
    (b) As part of an investigation undertaken when the tribe notifies 
the Director of a violation or breach;
    (c) As part of an investigation undertaken because of a petition 
submitted under subpart E of this part;
    (d) As follow-up to a determination that harm or the potential for 
harm to a physical trust asset, previously identified in a periodic 
review and evaluation, exists; or
    (e) As the Secretary determines appropriate to carry out the 
Secretary's trust responsibilities.

Noncompliance


Sec.  224.136  How will the Director's report address a tribe's 
noncompliance?

    This section applies if the Director conducts a review and 
evaluation or investigation of a notice of violation of Federal law or 
the terms of a TERA.
    (a) If the Director determines that the tribe has not complied with 
Federal law or the terms of a TERA, the Director's written report must 
include a determination of whether the tribe's noncompliance has 
resulted in harm or the potential for harm to a physical trust asset.
    (b) If the Director determines that the tribe's noncompliance may 
cause harm or has caused harm to a physical trust asset, the Director 
must also determine whether the noncompliance cause imminent jeopardy 
to a physical trust asset.


Sec.  224.137  What must the Director do if a tribe's noncompliance has 
resulted in harm or the potential for harm to a physical trust asset?

    If, because of the tribe's noncompliance with Federal law or the 
terms of a TERA, the Director determines that there is harm or the 
potential for harm to a physical trust asset that does not rise to the 
level of imminent jeopardy to a physical trust asset, the Director 
must:
    (a) Document the issue in the written report of the review and 
evaluation;
    (b) Report the issue in writing to the tribal governing body;
    (c) Report the issue in writing to the Assistant Secretary--Indian 
Affairs; and
    (d) Determine what action, if any, the Secretary must take to 
protect the physical trust asset, which could include temporary 
suspension of the activity that resulted in non-compliance with the 
TERA or other applicable Federal laws or rescinding approval of all or 
part of the TERA.


Sec.  224.138  What must the Director do if a tribe's noncompliance has 
caused imminent jeopardy to a physical trust asset?

    If the Director finds that a tribe's noncompliance with a Federal 
law or the terms of a TERA has caused imminent jeopardy to a physical 
trust asset, the Director must:
    (a) Immediately notify the tribe by a telephone call to the 
Designated Tribal Official followed by a written notice by facsimile to 
the Designated Tribal Official and the tribal governing body of the 
imminent jeopardy to a physical trust asset. The notice must contain:
    (1) A description of the tribe's noncompliance with Federal law or 
the terms of the TERA;
    (2) A description of the physical trust asset and the nature of the 
imminent jeopardy to a physical trust asset resulting from the tribe's 
noncompliance; and
    (3) An order to the tribe to cease specific conduct or take 
specific action deemed necessary by the Director to correct any 
condition that caused the imminent jeopardy to a physical trust asset.
    (b) Issue a finding that the tribe's noncompliance with the TERA or 
a Federal law has caused imminent jeopardy to a physical trust asset.


Sec.  224.139  What must a tribe do after receiving a notice of 
imminent jeopardy to a physical trust asset?

    (a) Upon receipt of a notice of imminent jeopardy to a physical 
trust asset, the tribe must cease specific conduct outlined in the 
notice or take specific action the Director orders that

[[Page 12834]]

is necessary to correct any condition causing the imminent jeopardy; 
and
    (b) Within 5 days of receiving a notice of imminent jeopardy to a 
physical trust asset, the tribe must submit a written response to the 
Director that:
    (1) Responds to the Director's finding that the tribe has failed to 
comply with a Federal law or the terms of the TERA;
    (2) Responds to the Director's finding of imminent jeopardy to a 
physical trust asset;
    (3) Describes the status of the tribe's cessation of specific 
conduct or specific action the tribe has taken to correct any condition 
causing imminent jeopardy to a physical trust asset; and
    (4) Describes what further actions, if any, the tribe proposes to 
take to correct any condition, cited in the notice, causing imminent 
jeopardy to a physical trust asset.


Sec.  224.140  What must the Secretary do if the tribe fails to respond 
to or does not comply with the Director's order?

    If the tribe does not respond to or does not comply with the 
Director's order under Sec.  224.138(a)(3), the Secretary may take any 
actions the Secretary deems appropriate to protect the physical trust 
asset, which may include the immediate reassumption of all activities 
the tribe assumed under the TERA. The procedures in subpart G of this 
part do not apply to reassumption under this section.


Sec.  224.141  What must the Secretary do if the tribe responds to the 
Director's order?

    (a) If the tribe responds in a timely manner to the Director's 
order under Sec.  224.138, the Secretary must:
    (1) Evaluate the tribe's response;
    (2) Determine whether or not the tribe has complied with the TERA 
and the Federal law cited in the notice; and
    (3) If the Secretary determines, after reviewing the tribe's 
response, that the tribe has not complied with the TERA or with a 
Federal law, the Secretary will determine whether the noncompliance 
caused imminent jeopardy to a physical trust asset.
    (b) If the Secretary determines that the tribe's noncompliance has 
caused imminent jeopardy to a physical trust asset, the Secretary may:
    (1) Order the tribe to take any action the Secretary deems 
necessary to comply with the TERA or Federal law and to protect the 
physical trust asset; or
    (2) Take any action the Secretary deems necessary to protect the 
physical trust asset, including reassumption under subpart G of this 
part.
    (c) If the Secretary determines, after reviewing the tribe's 
response, that the tribe has complied with the TERA and with Federal 
law, the Secretary will withdraw the Director's order.
    (d) The Secretary must base a finding of imminent jeopardy to a 
physical trust asset on the tribe's non-compliance with a TERA or 
violation of a Federal law.

Subpart G--Reassumption


Sec.  224.150  What is the purpose of this subpart?

    This subpart explains when and how the Secretary may reassume all 
activities included within a TERA without the consent of the tribe.


Sec.  224.151  When may the Secretary reassume activities?

    Upon issuing a written finding of imminent jeopardy to a physical 
trust asset, the Secretary may reassume activities under a TERA in 
accordance with this subpart. The Secretary may also reassume 
activities approved under a TERA in response to a petition from an 
interested party under subpart E of this part. Only the Secretary or 
the Assistant Secretary--Indian Affairs may reassume activities under a 
TERA.


Sec.  224.152  Must the Secretary always reassume the activities upon a 
finding of imminent jeopardy to a physical trust asset?

    (a) The Secretary may take whatever actions the Secretary deems 
necessary to protect the physical trust asset. At the discretion of the 
Secretary, these actions may include reassumption of the activities a 
tribe assumed under a TERA.
    (b) If the tribe does not respond to or does not comply with the 
Director's order under Sec.  224.138(a)(3), the Secretary must 
immediately reassume all activities the tribe assumed under the TERA. 
The notice procedures in this subpart will not apply to such immediate 
reassumption.

Notice of Intent To Reassume


Sec.  224.153  Must the Secretary notify the tribe of an intent to 
reassume the authority granted?

    If the Secretary determines under Sec.  224.152 that reassumption 
is necessary to protect the physical trust asset, the Secretary will 
issue a written notice to the tribal governing body of the Secretary's 
intent to reassume.


Sec.  224.154  What must a notice of intent to reassume include?

    A notice of intent to reassume must include:
    (a) A statement of the reasons for the intended reassumption, 
including, as applicable, a copy of the Secretary's written finding of 
imminent jeopardy to a physical trust asset;
    (b) A description of specific measures that the tribe must take to 
correct the violation and any condition that caused the imminent 
jeopardy to a physical trust asset;
    (c) The time period within which the tribe must take the measures 
to correct the violation of the TERA and any condition that caused the 
imminent jeopardy to a physical trust asset; and
    (d) The effective date of the reassumption, if the tribe does not 
meet the requirements in paragraphs (b) and (c) of this section.


Sec.  224.155  When must a tribe respond to a notice of intent to 
reassume?

    The tribe must respond to the Director in writing by mail, 
facsimile, or overnight express within 5 days of receiving the 
Secretary's notice of intent to reassume. If sent by mail, the tribe 
must send the response by certified mail, with return receipt 
requested. The Director will consider the date of the written response 
as the date it is postmarked.


Sec.  224.156  What information must the tribe's response to the notice 
of intent to reassume include?

    The tribe's response to the notice of intent to reassume must state 
that:
    (a) The tribe has complied with the Secretary's requirements in the 
notice of intent to reassume;
    (b) The tribe is taking specified measures to comply with the 
Secretary's requirements, and when the tribe will complete such 
measures, if the tribe needs more than 5 days to do so; or
    (c) The tribe will not comply with the Secretary's requirements.


Sec.  224.157  How must the Secretary proceed after receiving the 
tribe's response?

    (a) If the Secretary determines that the tribe's proposed or 
completed actions to comply with the Secretary's requirements are 
adequate to correct the violation of the TERA or Federal law and any 
condition that caused the imminent jeopardy, the Secretary will:
    (1) Notify the tribe of the adequacy of its response in writing; 
and
    (2) Terminate the reassumption proceedings in writing.
    (b) If the Secretary determines that the tribe's proposed or 
completed actions to comply with the Secretary's requirements are not 
adequate, then the Secretary will issue a written notice of 
reassumption.


Sec.  224.158  What must the Secretary include in a written notice of 
reassumption?

    The written notice of reassumption must include:
    (a) A description of the authorities the Secretary is reassuming;

[[Page 12835]]

    (b) The reasons for the determination under Sec.  224.157(b);
    (c) The effective date of the reassumption; and
    (d) A statement that the decision is a final agency action and is 
subject to judicial review.


Sec.  224.159  How will reassumption affect valid existing rights or 
lawful actions taken before the effective date of the reassumption?

    Reassumption will not affect valid existing rights that vested 
before the effective date of the reassumption or lawful actions the 
tribe and the Secretary took before the effective date of the 
reassumption.


Sec.  224.160  How will reassumption affect a TERA?

    Reassumption of a TERA applies to all of the authority and 
activities assumed under a TERA. Upon reassumption, the tribe must also 
return all Departmental resources transferred under the TERA and any 
relevant records and documents to the Secretary.


Sec.  224.161  How may reassumption affect the tribe's ability to enter 
into a new TERA or to modify another TERA to administer additional 
activities or to assume administration of activities that the Secretary 
previously reassumed?

    Following reassumption, a tribe may submit a request to enter into 
a new TERA or modify another TERA to administer additional activities, 
or assume administration of activities that the Secretary previously 
reassumed. In reviewing a subsequent tribal request, however, the 
Secretary may consider the fact that activities were reassumed and any 
change in circumstances supporting the tribe's request.

Subpart H--Rescission


Sec.  224.170  What is the purpose of this subpart?

    This subpart explains the process and requirements under which a 
tribe may rescind a TERA and therefore return to the Secretary all 
authority and activities assumed under that TERA.


Sec.  224.171  Who may rescind a TERA?

    Only a tribe may rescind a TERA.


Sec.  224.172  May a tribe rescind only some of the activities subject 
to a TERA while retaining a portion of those activities?

    No. A tribe may only rescind a TERA in its entirety, including the 
authority to approve leases, business agreements and grant rights-of-
way for specific energy resource development, not some of the authority 
or activities subject to the TERA.


Sec.  224.173  How does a tribe rescind a TERA?

    To rescind a TERA, a tribe must submit to the Secretary a written 
tribal resolution or other official action of the tribe's governing 
body approving the voluntary rescission of the TERA. Upon rescission, 
the tribe must also return all Departmental resources transferred under 
the TERA and any relevant records and documents.


Sec.  224.174  When does a voluntary rescission become effective?

    A voluntary rescission becomes effective on the date specified by 
the Secretary, provided that the date is no more than 90 days after the 
Secretary receives the tribal resolution or other official action the 
tribe submits under Sec.  224.173.


Sec.  224.175  How will rescission affect valid existing rights or 
lawful actions taken before the rescission?

    Rescission does not affect valid existing rights that vested before 
the effective date of the rescission or lawful actions the tribe and 
the Secretary took before the effective date of the rescission.

Subpart I--General Appeal Procedures


Sec.  224.180  What is the purpose of this subpart?

    The purpose of this subpart is to explain who may appeal 
Departmental decisions or inaction under this part and the initial 
administrative appeal processes, and general administrative appeal 
processes, including how 25 CFR Part 2 and 43 CFR Part 4 apply, and the 
effective dates for appeal decisions.


Sec.  224.181  Who may appeal Departmental decisions or inaction under 
this part?

    The following persons or entities may appeal Department decisions 
or inaction under this part:
    (a) A tribe that is adversely affected by a decision of or inaction 
by an official of the Department of the Interior under this part;
    (b) A third party who has entered into a lease, right-of-way, or 
business agreement with a tribe under an approved TERA and is adversely 
affected by a decision of, or inaction by a Department official under 
this part; or
    (c) An interested party who is adversely affected by a decision of 
or inaction by the Director under subpart E of this part, provided that 
the interested party may appeal only those issues raised in its prior 
participation under subpart E of this part and may not appeal any other 
decision rendered or inaction under this part.


Sec.  224.182  What is the Initial Appeal Process?

    The initial appeal process is as follows:
    (a) Within 30 days of receiving an adverse decision by the Director 
or within 30 days after the time period within which the Director is 
required to act under subpart E, a party that may appeal under this 
subpart may file an appeal to the Principal Deputy Assistant Secretary-
Indian Affairs;
    (b) Within 60 days of receiving an appeal, the Principal Deputy 
Assistant Secretary--Indian Affairs will review the record and issue a 
written decision on the appeal; and
    (c) Within 7 days of a decision by the Principal Deputy Assistant 
Secretary--Indian Affairs, the Secretary will provide a written copy of 
the decision to the tribe and other participating parties.


Sec.  224.183  What other administrative appeals processes also apply?

    The administrative appeal processes in 25 CFR Part 2 and 43 CFR 
Part 4, subject to the limitations in Sec.  224.184, apply to:
    (a) An interested party's appeal from an adverse decision or 
inaction by the Principal Deputy Assistant Secretary--Indian Affairs 
under Sec.  224.182; and
    (b) An appeal by a tribe or a person or entity that has entered 
into a lease, business agreement, or right-of-way from an adverse 
decision by or the inaction of a Departmental official taken under this 
part.


Sec.  224.184  How do other administrative appeals processes apply?

    The administrative appeals process in 25 CFR Part 2 and 43 CFR Part 
4 are modified, only as they apply to appeals under this part, as set 
forth in this section.
    (a) The definition of interested party in 25 CFR Part 2 and as 
incorporated in 43 CFR Part 4 does not apply to this part.
    (b) The right of persons or entities other than an appealing party 
to participate in appeals under 25 CFR Part 2 and 43 CFR Part 4 does 
not apply to this part, except as permitted under paragraph (c) of this 
section.
    (c) The only persons or entities, other than appealing parties, 
under Sec.  224.181(a) to (c), who may participate in an appeal under 
this part are:
    (1) The Secretary, if an appeal is taken from a decision of the 
Director or Principal Deputy Assistant Secretary--Indian Affairs;
    (2) A tribe, which may intervene, appear as an amicus curiae, or 
otherwise appear in any appeal taken under this

[[Page 12836]]

part by a person or entity who has entered into a lease, business 
agreement, or right-of-way with the tribe or by an interested party 
under this part; or
    (3) A person or entity that has entered into a lease, business 
agreement, or right-of-way with a tribe, may intervene, appear as an 
amicus curiae, or otherwise appear in any appeal taken under this part 
by the tribe or by an interested party under this part.
    (d) The Secretary does not have an obligation to provide notice and 
service upon non-appealing persons as provided in 25 CFR Part 2 and 43 
CFR Part 4. The only exception to this principle is that notice and 
service of all documents must be served consistent with the 
requirements of 25 CFR Part 2 and 43 CFR Part 4 on those persons or 
entities identified in paragraph (c) of this section.


Sec.  224.185  When are decisions under this part effective?

    Decisions under subpart I are effective as follows:
    (a) Decisions of the Secretary disapproving a final proposed TERA 
or a revised final proposed TERA under subpart C of this part, a 
finding of imminent jeopardy to a physical trust asset under subpart F 
of this part, and decisions by the Secretary or the Assistant 
Secretary--Indian Affairs to reassume activities under subpart G of 
this part are final for the Department. These decisions and findings 
are effective upon issuance.
    (b) Decisions under this part, other than those in paragraph (a) of 
this section, that adversely affect a tribe and for which an appeal is 
pending are not final for the Department and are not effective while 
the appeal is pending, unless:
    (1) The tribe had an opportunity for a hearing before the decision 
was issued;
    (2) The tribe had a reasonable amount of time to comply with the 
TERA after the decision was issued; and
    (3) The Interior Board of Indian Appeals (Board), the Secretary, or 
Assistant Secretary--Indian Affairs issued a written decision that, 
notwithstanding a reasonable period given the tribe to comply with the 
TERA, the tribe has failed to take the actions necessary to comply with 
the TERA.
    (c) All other decisions rendered by the Board or the Assistant 
Secretary--Indian Affairs in an appeal from a Director's decision under 
subparts E, F, or G of this part are effective when issued.

 [FR Doc. E8-4301 Filed 3-7-08; 8:45 am]
BILLING CODE 4310-4M-P