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Tribal Wind and Solar Resource Leasing (3-FD-i)

25 U.S.C. 415(a) governs solar leases on tribal lands, unless the tribe has incorporated under 25 U.S.C. 477, has entered into a Tribal Energy Resource Agreement (TERA), or has promulgated its own regulations under the HEARTH Act. If 25 U.S.C. 415(a) controls, the developer must obtain a Wind and Solar Resource (WSR) lease in accordance with 25 U.S.C. 415(a) and Subpart E of part 25 CFR 162. 25 U.S.C. 81 requires approval from the Bureau of Indian Affairs (BIA) for any contract with an Indian tribe that encumbers Indian land for 7 or more years. 25 U.S.C. 415(a) allows Indian tribes to lease Indian lands, with BIA approval, for up to 25 years. Subpart E of part 25 CFR 162 contains the regulations governing Wind and Solar Resource (WSR) leases. Tribes must comply with Subpart E in order to obtain approval for a utility-scale solar lease.

Tribal Wind and Solar Resource Leasing Process

3-FD-i.1 to 3-FD-i.2 – Contact Tribal Representatives; Negotiate Land Lease

The developer initiates the WSR leasing process by contacting the tribal representative. The developer and the Tribe will then negotiate the lease in accordance with Subpart E of 25 CFR 162. 25 CFR 162.010 requires the developer to negotiate directly with Indian landowners, prepare and submit to the BIA required information and analyses, and comply with Subpart E. There is no model WSR lease, although the BIA may provide guidance or assist Indian landowners in developing lease provisions.

25 CFR 162.542 contains a list of mandatory provisions that each WSR must contain. Terms not required by the regulations should be negotiated between the parties. The requirements that trigger an action during the leasing process on the part of the developer or the tribe are discussed below.

3-FD-i.3 – 3-FD-i.4 – Identify and Contact Individual Indian Landowners; Obtain Consent from Fractional Interests

If the proposed lease tract is fractioned, 25 CFR 162.010 requires the developer to identify and contact all of the fractional owners. 25 CFR 162.011 allows the developer to obtain contact information and information regarding land ownership form the BIA for purposes of negotiating the lease.

In addition, the developer must obtain consent from a specific percentage of the landowners. 25 CFR 162.012 explains what percentages are required based on the number of owners involved. If consent is obtained from the appropriate percentage of owners, non-consenting owners will be bound to the lease. A non-consenting tribe is only bound with respect to the tribally owned fractional interest, although tribal land subject to a tribal land assignment may only be leased with the consent of the tribe. The BIA will determine the number of owners and their fractional interests for purposes of obtaining consent.

3-FD-i.5 – Conduct Valuation, If Required

A Tribe may waive valuation by the BIA and negotiate payment for a WSR lease directly with the developer if it submits a tribal authorization stating that:

  • The negotiated compensation is satisfactory to the tribe;
  • The tribe waives valuation; and
  • Waiving valuation and accepting the negotiated compensation is in the best interests of the tribe.

The BIA will conduct a valuation based on the fair market value analysis, described in 25 CFR 162.551, at the request of the tribe. The tribe may then use the valuation to negotiate compensation.

If the tribe does not submit a tribal authorization or request a valuation, the BIA requires the lease to provide compensation based on the fair market value determined by 25 CFR 162.551.

3-FD-i.6 to 3-FD-i.7 – Proposed Solar Land Use Lease; Submit Lease and Required Documentation to BIA

25 CFR 162.563 requires the tribe to submit the following documentation before the BIA will approve the WSR lease:

  • A lease executed by the Indian landowners and the lessee that meets the requirements of 25 CFR 162 et seq.;
  • For tribal land, a tribal authorization for the lease and, if applicable, meeting the requirements of §§162.549(a), 162.555(b), and 162.557(a), or a separate signed certification meeting the requirements of §§162.555(b) and 162.557(a);
  • A valuation, if required under §162.549 or §162.550;
  • Proof of insurance, if required under §162.562;
  • A performance bond or other security, if required under §162.559;
  • Statement from the appropriate tribal authority that the proposed use is in conformance with applicable tribal law, if required by the tribe;
  • Environmental and archeological reports, surveys, and site assessments as needed to facilitate compliance with applicable federal and tribal environmental and land use requirements, including any documentation prepared under §162.027(b);
  • A resource development plan that describes the type and location of any permanent improvements the lessee plans to install and a schedule showing the tentative commencement and completion dates for those improvements;
  • A restoration and reclamation plan (and any subsequent modifications to the plan);
  • Where the lessee is not an entity owned and operated by the tribe, documents that demonstrate the technical capability of the lessee or lessee's agent to construct, operate, maintain, and terminate the proposed project and the lessee's ability to successfully design, construct, or obtain the funding for a project similar to the proposed project, if appropriate;
  • A legal description of the land under §162.547;
  • If the lease is being approved under 25 U.S.C. 415, information to assist us in our evaluation of the factors in 25 U.S.C. 415(a); and
  • If the lessee is a corporation, limited liability company, partnership, joint venture, or other legal entity, except a tribal entity, information such as organizational documents, certificates, filing records, and resolutions, that demonstrates that:
    • The representative has authority to execute a lease;
    • The lease will be enforceable against the lessee; and
    • The legal entity is in good standing and authorized to conduct business in the jurisdiction where the land is located.

The BIA begins reviewing the proposed lease once it has all of the required documents.

3-FD-i.8 to 3-FD-i.9 – Review Lease Package for Completeness; Is the Lease Package Complete?

The BIA notifies the parties by letter upon receipt of the WSR lease package. If the package is complete, the letter informs the parties of the date of receipt and the BIA begins the review process. If the package is not complete, the letter identifies what information or documentation is still required. The parties should then supplement the WSR lease package with the required information. See 25 CFR 162.565(b).

3-FD-i.10 – Complete BIA NEPA Process

The BIA must perform a National Environmental Policy Act (NEPA) review in conjunction with the lease approval process. NEPA requires federal agencies to consider the potential environmental consequences of their proposed actions and any reasonable alternatives before undertaking a major federal action. Approval of leases on Indian lands are considered to be major federal actions. An Environmental Impact Statement (EIS) is required when a major federal action significantly affects the quality of the human environment. See 40 CFR 1502.3. If the effects of the action are not significant an Environmental Assessment (EA) and Finding of No Significant Impact (FONSI) may be sufficient.

A tribe may request that the BIA review the proposed WSR lease before or during the NEPA process. The BIA then provides an acknowledgement of the terms of the lease and identifies any provisions that would justify disapproval of the lease pending the completion of the NEPA review. See 25 CFR 162.654. In some cases, the BIA may require NEPA review documentation from the parties. See 25 CFR 162.565(b).

3-FD-i.11 to 2-FD-i.12 – Review Lease; Has the Lease Been Approved?

The BIA must determine whether the proposed WSR lease is in the best interest of the tribe. In making that determination, the BIA will:

  • Review the lease and supporting documents;
  • Identify potential environmental impacts and ensure compliance with environmental laws and regulations;
  • Make sure adequate consideration has been given to 25 U.S.C. 415(a) factors; and
  • Require any lease modifications or mitigation measures necessary to satisfy any requirements, including federal and tribal land use requirements.

See 25 CFR 162.565(a).

The BIA must approve the lease unless the required consents have not been obtained, the requirements of Subpart E have not been met, or there is a compelling reason to withhold approval in order to protect the interests of the Indian landowners. The BIA defers, to the maximum extent possible, to the tribe’s determination that the lease is in their best interests. The BIA may not unreasonably withhold approval of the lease. See 25 CFR 162.566.

The BIA must approve the lease, return the lease package for revision, or inform the parties that additional time is required within 60 days. If the BIA needs additional time, it must send a letter to the parties explaining its concerns and inviting the parties to respond within 15 days. The BIA has 30 days after sending the letter to approve or disapprove the lease. If the BIA does not comply with the deadlines in 25 CFR 162.565 the parties may take action in accordance with 25 CFR 162.588. Once the BIA has made its decision, it must provide the parties with a determination of approval or disapproval and provide the basis for that decision.

3-FD-i.13 to 3-FD-i.15 – Inform Parties That Lease Has Been Disapproved; Can the Lease be Approved if Revised?; Appeal BIA Decision

As stated above, the BIA must inform the parties whether they approve or disapprove the lease and state the basis for their decision. If the lease is disapproved, the BIA will return it to the parties for revision. If revision is not possible, the parties may appeal the BIA’s decision in accordance with the procedures found in part 2 of title 25.

3-FD-i.16 to 3-FD-i.18 – Record Lease with Land Title and Records Office; Provide Lease to Lessee and Copies of the Lease to the Tribe and Indian Landowners; Solar Land-Use Lease

25 CFR 162.568 requires all WSR lease documents to be recorded with the Land Titles and Records Office. The BIA immediately records all leases upon approval. 25 CFR 162.565(e) requires the BIA to provide the approved WSR lease to the lessee and a copy of the lease to the tribe. Copies of the lease will also be made available to Indian landowners upon request.

Once the lease has been recorded and the approved lease is returned to the lessee, operations may commence in accordance with the negotiated terms.

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