Tribal Energy Resource Agreements Under the Indian Tribal Energy Development and Self-Determination Act, 12808-12836 [E8-4301]

Agencies

• DEPARTMENT OF THE INTERIOR
• Bureau of Indian Affairs
• Indian Affairs Bureau

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



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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

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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

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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

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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,

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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 st