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Bureau of Indian Affairs proposes new regulations for surface leases of Indian trust lands

Hogan Lovells • Andrew L. Spielman and Meg Parish • USA • November 30 2011

On November 29, 2011, the Interior Department's Bureau of Indian Affairs (BIA) proposed a new set of surface leasing regulations for Federal Indian trust lands.   
The proposed regulations represent a dramatic departure from previous surface leasing regulations. Changes include specific leasing programs for wind and solar leases, more discretion for tribes on valuation issues, and, most importantly, the promise of more certainty in timing for surface leasing decisions.
Scope of proposed regulations
BIA's proposed regulations only address residential, business, and wind and solar energy leasing. They do not include mineral or agricultural leases.
Why is BIA changing its regulations?
The existing regulations were adopted in 1961. They lack defined processes or deadlines for BIA approvals. Under these regulations, even simple BIA approvals could take years, and there was general uncertainty about when decisions would be made. These proposed regulations aim to remedy this.
What kind of leasing has BIA proposed for wind and solar development?
The proposed rules establish a two-part process for wind development: a short-term (three- to six-year) wind energy evaluation lease (WEELs) for the purposes of installation and maintenance of wind evaluation equipment, and a long-term (25- to 50-year) wind and solar resource (WSR) development lease. For solar energy, only the second long-term permit would be used. Wind developers would not be required to obtain a short-term WEEL before obtaining a WSR lease.
The proposed regulations aim to approve or deny both kinds of leases quickly. Within 60 days of receiving a WSR application, and 20 days of receiving a short-term WEEL, BIA would approve, disapprove, return the submission for revision, or notify the applicant in writing that BIA needs additional time.
Other changes
The proposed regulations give more discretion to the value that tribes have negotiated for leases. BIA would generally not require an appraisal or determine fair market rental for lands to be leased by a tribe, but instead would defer to the tribe's determination that the negotiated compensation is in its best interest. The Bureau of Land Management would continue to evaluate fair market value or do some kind of economic analysis for most trust lands leased by individuals.
The regulations also set up processes for BIA approval of lease assignments and subleases. They set 30-day deadlines for these decisions and establish the assumption that assignments and subleases will be approved, barring particular circumstances.
What's next?
There will be a 60-day comment period on the proposed regulations. BIA anticipates that the proposed rule will be finalized in spring or summer 2012.
 

 


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