Office of the Secretary, Interior.
Final rule.
In 2016, Congress passed the Indian Trust Asset Reform Act (ITARA), which requires the Secretary of the Interior to establish and publish in the
This rule is effective on July 26, 2017.
Ms. Elizabeth Appel, Office of Regulatory Affairs and Collaborative Action—Indian Affairs at
On June 22, 2016, the Indian Trust Asset Reform Act, Public Law 114–178, was signed into law. Title III of the Act requires the Department of the Interior (Interior) to establish minimum qualifications for individuals to prepare appraisals and valuations of Indian trust property and allow an appraisal or valuation by a qualified person to be considered final without being reviewed or approved by Interior.
On September 22, 2016, Interior published a proposed rule (81 FR 65319) to implement ITARA and requested public comments for 60 days. This final rule implements ITARA and responds to the comments received on the proposed rule. This rule establishes the minimum qualifications for individuals to prepare appraisals and valuations of Indian trust property and allows an appraisal or valuation by a qualified appraiser to be considered final without being reviewed or approved by Interior.
The Act also requires appraisals and valuations of Indian trust property to be administered by a single administrative entity within Interior. This rule is finalized under the Office of the Secretary within the Department of the Interior to allow for flexibility if another entity or agency within Interior is designated the single entity to administer appraisals and valuations of Indian trust property.
This rule establishes a new Code of Federal Regulations (CFR) part to establish the minimum qualifications for appraisers, employed by or under contract with an Indian tribe or individual Indian, to become qualified appraisers who may prepare an appraisal or valuation of Indian property that will, in certain circumstances, be accepted by the Department without further review or approval. The final rule clarifies that, because the Department is not reviewing and approving the appraisal or valuation, it is not liable for any deficiency or inaccuracy in the appraisal or valuation.
Subpart A, General Provisions, defines terms used in the regulation, describes the purpose of the regulation, and provides the standard Paperwork Reduction Act compliance statement. The terms are defined to include, in the context of this regulation, any property that the U.S. Government holds in trust or restricted status for an Indian tribe or individual Indian, to include not just land, but also natural resources or other assets. Other important terms include “appraisal,” “valuation,” and “qualified appraiser.” Consistent with the statutory direction, the purpose of the regulations is written broadly, to include appraisals or valuations of any Indian trust property, including:
• Appraisals and valuations of real property;
• Appraisals and valuations of timber, minerals, or other property to the extent they contribute to the value of the whole property (for use in appraisals and valuations of real property); and
• Appraisals and valuations of timber, minerals, or other property separate from appraisals and valuations of real property.
Subpart B, Appraiser Qualifications, establishes the minimum qualifications an appraiser must meet to be considered a “qualified appraiser” and establishes that the Secretary must verify that the appraiser meets those minimum qualifications.
This subpart requires that the verification information be submitted contemporaneously with the appraisal or valuation so that the Secretary can verify that the appraiser is a qualified appraiser at that point in time.
Subpart C, Appraisals and Valuations, notes that some transactions requiring Secretarial approval under titles 25 and 43 of the Code of Federal Regulations (
The rule requires the Department to forego review and approval of the appraisal or valuation and consider the appraisal or valuation final if three conditions are met: (1) The appraisal or valuation was completed by a qualified appraiser; (2) the Indian tribe or individual Indian expressed their intent to waive Departmental review and approval; and (3) no owner of any interest in the Indian property objects to the use of the appraisal or valuation without Departmental review and approval. The first condition is clearly required by ITARA. The second condition is implied by ITARA. The number of individual Indian owners of fractionated tracts that must express their intent to waive Departmental review and approval, under the second condition, would depend upon the underlying title 43 or title 25 requirements. For example, if the underlying transaction is a right-of-way, then the owners of a majority of the interests in the tract must express their intent to waive Departmental review and approval, consistent with the general consent requirements in 25 CFR part 169. The third condition, that no Indian property owner objects, is necessary to address situations where one or more owners of the tract still want Departmental review and approval of the appraisal or valuation, consistent with our trust responsibility to all owners of the Indian trust property.
This subpart exempts certain transactions, thereby requiring Departmental review of the appraisal or valuation. The exempted transactions include transactions under any legislation expressly requiring the Department to review and approve an appraisal or valuation, such as the Land Buy Back Program under the Claims Resolution Act of 2010 (Pub. L. 111–291), and purchase at probate under 43 CFR part 30, because the judge will not be in a position to verify an appraiser's qualifications. The Department will also review any appraisal for an acquisition by the United States.
Several tribes stated their support of the ITARA provision to eliminate the current requirement for Office of Appraisal Services review to reduce delays. One tribe noted the importance of the Department accepting and approving, without further review or delay, any appraisal or valuation that complies with the appraiser's qualification standards and is satisfactory to the Indian property owner. Another tribe stated its support for the minimum qualifications for appraisal services.
One tribe stated that the qualifications for individuals to prepare appraisals and valuations of Indian property should be the same that apply to professional appraisers in the private sector.
One tribe stated the procedures should require: (1) Departmental approval of appraisers who satisfy minimum qualifications; (2) Departmental review within a specified period with a default of automatic approval; (3) minimum requirements for qualifications of review appraisers.
One commenter stated that the rule's minimum qualifications for appraisers should be more stringent and the rule should require appraisals to be performed by a multidisciplinary group of experts who: (1) Meet all the criteria in the rule; (2) have completed a mandatory valuation ethics training course; and (3) have collaborated with Native American groups to better understand the cultural value of the lands in question. This commenter stated that the appraisal must account for cultural values of those with sacred ties to the ecosystems and lands. The commenter reasoned that the process of assigning value to an area is subjective, and using the knowledge and methodologies of a diverse group of experts and stakeholders would prevent a single individual from the power to assign a monetary value to sacred land.
The Appraisal Institute stated that requiring generally accepted standards in the appraiser qualification criteria would enhance credibility and reliability of the appraisals being performed.
Several tribes strongly objected to relying on State licensing for appraisers and a determination of good standing by State regulatory agencies, and asserted that the rule should instead rely on tribal licensing and require compliance with tribal laws and regulations.
The DOI Self-Governance Advisory Committee and several tribes stated that tribes should be permitted to adopt their own standards consistent with USPAP and Federal law to meet the unique needs tribal Nations have in assuming appraisal responsibilities.
A tribal member suggested that tribes should have their own appraisal process so they don't have to pay $2,500 for an appraisal that reveals a property value of much less.
One tribe stated that not all appraisers have the General Appraiser certification (
A tribe stated that the appraiser should have expertise in valuation of resources involved in the appraisal. Likewise, the Indian Land Tenure Foundation noted that the appraiser performing specialty appraisals (timber and minerals) must have demonstrated the specialized skills.
A tribal commenter stated that the rule should require appraisers to have an understanding of general Federal Indian law and special obligations under tribe-specific relationships.
A tribal member suggested requiring appraisers to be certified under the Certified Federal Surveyor Program from the Bureau of Land Management.
The Appraisal Institute urged the Department to include in the minimum qualifications for appraisers recognition of professional designations from nationally recognized appraisal organizations that confer competency-based designations. The commenter suggested that a professional designation is necessary to ensure appraisers have experience with appraisal review because the Department will not be reviewing the appraiser's appraisals. The Appraisal Institute stated that eliminating Departmental review of the appraisal dramatically increases risks and likened the practice to performing accounting functions without any audit processes.
A tribe suggested having appraisers register online for searchability by those who would like to hire them to do appraisals and valuations.
One tribe stated that periodic review of qualifications should be required as standards and experience with individual appraisers change over time.
A tribal member stated that there is a fundamental misunderstanding as to what an appraisal is: Specifically, that an appraisal is not equivalent to value; rather, it is an expert opinion to inform the owners (the beneficiary) and trustee as to what somebody's opinion of fair market value is.
A tribal member asked whether an appraisal and a valuation are different, and whether either evaluates tribal rights such as water rights or gathering rights for medicine.
Another tribal member stated that allotted land makes up most of the workload for appraisals, but under ILCA, only an “estimate of value” rather than an appraisal, is needed for a gift, sale, or exchange. He suggested instead defining what an “estimate of value” is.
Several tribes recommended that any appraisal or valuation of Indian property be in accordance with authority in title 25 of the CFR, appraisal standards in the current edition of USPAP, and use of appraisal industry-recognized valuation methods and techniques.
Several tribes suggested requiring adherence to the Uniform Appraisal Standards for Federal Land Acquisitions (UASFLA) if the transaction is to the United States.
The Appraisal Institute stated that the proposed regulations should include a requirement that the appraisal or valuation reflect market value (as opposed to another value, such as “use value”) because market value is most appropriate to determine “just
One commenter stated that there is no rule that could guarantee a credible appraisal because the client may dictate conditions and instructions to an appraiser that affects the result, so the appraisal review serves as a check and ensures the client's instructions adequately support approval for the conveyance.
One tribe stated requirements for formal appraisals for transactions for negotiated sales involving informed consent of owners should be clarified.
The Indian Land Tenure Foundation stated that a waiver of Departmental review should come after the appraisal is complete and not in the submission of the appraisal request.
The Foundation also stated that the practice of requiring the appraiser to attach a certificate of qualifications to each appraisal is not a burden and should be required.
The American Gas Association, Interstate Gas Association of American, and the Utilities Group stated that ITARA was limited to those transactions where statutes expressly require an appraisal or valuation (such as the Indian Land Consolidation Act) and should not apply to all potential transactions under titles 25 and 43 (
Several utilities and utility associations expressed concerns about the effect of the rule on projects and rights-of-way that serve the public's energy needs. Some stated that the rule should not apply to rights-of-way transactions because those transactions have their own statutory scheme. Some also stated that the rule conflicts with existing statutes governing rights-of-way across Indian land, and specifically the statutory requirement for “the payment of such compensation as the Secretary of the Interior shall determine to be just,” because the rule would allow an appraisal to be deemed final without the Secretary assuring just compensation.
Several of these utility group commenters stated that, if the rule does apply to rights-of-way transactions, then the rule should require a fair market value as just compensation for rights-of-way and renewals to public entities and utilities that benefit the public interest. Commenters stated that allowing above-market valuations would allow tribes, without monitoring by the Secretary, to attempt to take advantage of the public interest by exploiting the public entities' and utilities' presence on Federal trust land. One commenter likewise stated its concern that the rule will permit tribes to demand in excess of fair market value for renewals of rights-of-way for public entities and public utilities that benefit the public interest. The commenter stated that it made investments in infrastructure in reliance on use of fair market value as the standard for the rights-of-way and renewals under the right-of-way statutory framework requiring just compensation to be fair market value.
One tribe opposed the provision in the preamble and discussed at tribal consultation sessions that would have
A tribal member suggested having an online training program for appraisers.
A utilities group and gas associations stated their belief that the rule is a major rule under 5 U.S.C. 804(2) and a significant regulatory action under E.O. 12866. These commenters stated that a cost-benefit analysis is required because the rule: (1) Will result in a major increase in the costs of rights-of-way for state and local governments and public utilities, which will adversely affect industry and millions of consumers and taxpayers nationwide; and (2) will have an aggregate effect of over $100 million on the economy because of staggering renewal rates and the thousands of miles of rights-of-way across the nation. One gas company commenter also noted the escalating costs of rights-of-way through Indian lands and that the rule exacerbates the issue by failing to make clear that fair market value is the appropriate standard for appraising and valuing rights-of-way for public entities and utilities.
One commenter stated that if the proposed rule violates a treaty, then it should not go into effect.
A few commenters noted there has been, and will be, an increase in the demand for appraisals due to the Land Buy-Back Program and the purchase at probate provision.
One tribe stated that development and use of mass appraisal systems and use of qualified third-party appraisers should be encouraged because there is a delay in Departmental review and approval of appraisals that has resulted in lost opportunities and repetitive appraisals because their longevity is limited.
A tribal attorney stated that the rule should add a requirement to allow beneficiaries to view the work papers in appraisal reports.
A tribal attorney stated that the rule should include language that appraisals will not expire.
A tribal member suggested a central Web site for value of the land.
Executive Order (E.O.) 12866 provides that the Office of Information and Regulatory Affairs (OIRA) at the Office of Management and Budget (OMB) will review all significant rules. OIRA has determined that this rule is not significant.
E.O. 13563 reaffirms the principles of E.O. 12866 while calling for improvements in the Nation's regulatory system to promote predictability, to reduce uncertainty, and to use the best, most innovative, and least burdensome tools for achieving regulatory ends. The E.O. directs agencies to consider regulatory approaches that reduce burdens and maintain flexibility and freedom of choice for the public where these approaches are relevant, feasible, and consistent with regulatory objectives. E.O. 13563 emphasizes further that regulations must be based on the best available science and that the rulemaking process must allow for public participation and an open exchange of ideas. We have developed this rule in a manner consistent with these requirements.
The Department of the Interior certifies that this document will not have a significant economic effect on a substantial number of small entities under the Regulatory Flexibility Act (5 U.S.C. 601
This rule is not a major rule under 5 U.S.C. 804(2), the Small Business Regulatory Enforcement Fairness Act. This rule:
(a) Will not have an annual effect on the economy of $100 million or more.
(b) Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions.
(c) Will not have significant adverse effects on competition, employment, investment, productivity, innovation, or
This rule does not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule does 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 Unfunded Mandates Reform Act (2 U.S.C. 1531
This rule does not effect a taking of private property or otherwise have taking implications under E.O. 12630. A takings implication assessment is not required.
Under the criteria in section 1 of E.O. 13132, this rule does not have sufficient federalism implications to warrant the preparation of a federalism summary impact statement. A federalism summary impact statement is not required.
This rule complies with the requirements of E.O. 12988. Specifically, this rule: (a) Meets the criteria of section 3(a) requiring that all regulations be reviewed to eliminate errors and ambiguity and be written to minimize litigation; and
(b) Meets the criteria of section 3(b)(2) requiring that all regulations be written in clear language and contain clear legal standards.
The Department of the Interior strives to strengthen its government-to-government relationship with Indian tribes through a commitment to consultation with Indian tribes and recognition of their right to self-governance and tribal sovereignty. We have evaluated this rule under the Department's consultation policy and under the criteria in E.O. 13175 and have identified substantial direct effects on federally recognized Indian tribes that will result from this rulemaking. Tribes may be substantially and directly affected by this rulemaking because it allows for the submission of appraisals for transactions involving Indian property without Departmental review and approval. As such, the Department consulted with tribes on this rule as part of the consultation sessions addressing ITARA and hosted listening sessions with Indian tribes and trust beneficiaries at:
This rule contains an information collection that requires approval by OMB. The Department is seeking approval of a new information collection and a revision to an existing regulation, as follows.
A Federal agency may not conduct or sponsor, and you are not required to respond to, a collection of information unless the form or regulation requesting the information displays a currently valid OMB Control Number.
This rule does not constitute a major Federal action significantly affecting the quality of the human environment. A detailed statement under the National Environmental Policy Act of 1969 (NEPA) is not required because this is an administrative and procedural regulation. (For further information see 43 CFR 46.210(i)). We have also determined that the rule does not involve any of the extraordinary circumstances listed in 43 CFR 46.215 that would require further analysis under NEPA.
This rule is not a significant energy action under the definition in E.O. 13211. A Statement of Energy Effects is not required.
This action is not an E.O. 13771 regulatory action because it imposes no more than
Indians, Indians—claims, Indians—lands, Mineral resources.
For the reasons given in the preamble, the Department of the Interior amends 43 CFR subtitle A, by adding part 100 to read as follows:
5 U.S.C. 301; Pub. L. 114–178.
(1) Any person who is a member of any Indian tribe, is eligible to become a member of any Indian tribe, or is an owner as of October 27, 2004, of a trust or restricted interest in land;
(2) Any person meeting the definition of Indian under the Indian Reorganization Act (25 U.S.C. 479) and the regulations promulgated thereunder; or
(3) With respect to the inheritance and ownership of trust or restricted land in the State of California under 25 U.S.C. 2206, any person described in paragraph (1) or (2) of this definition or any person who owns a trust or restricted interest in a parcel of such land in that State.
This part describes the minimum qualifications for appraisers, employed by or under contract with an Indian tribe or individual Indian, to become qualified appraisers who may prepare an appraisal or valuation of Indian property that will be accepted by the Department without further review or approval when the Indian tribe or individual Indian waives Departmental review and approval.
This part applies to anyone preparing or relying upon an appraisal or valuation of Indian property.
The collections of information contained in this part have been approved by the Office of Management and Budget under 44 U.S.C. 3501
(a) An appraiser must meet the following minimum qualifications to be a qualified appraiser under this part:
(1) The appraiser must hold a current Certified General Appraiser license in the State in which the property appraised or valued is located;
(2) The appraiser must be in good standing with the appraiser regulatory agency of the State in which the property appraised or valued is located; and
(3) The appraiser must comply with the Uniform Standards of Professional Appraisal Practice (USPAP) rules and provisions applicable to appraisers (including but not limited to Competency requirements applicable to the type of property being appraised or valued and Ethics requirements). This includes competency in timber and mineral valuations if applicable to the subject property.
All qualified appraisers of Indian property must meet the Competency requirements of USPAP for the type of property being appraised or valued. Competency can be demonstrated by previous completed assignments on the type of properties being appraised, additional education or training in specific property types, or membership and/or professional designation by a related professional appraisal association or group.
The Secretary will verify the appraiser's qualifications to determine
The tribe or individual Indian must submit the following with the appraisal or valuation:
(a) A copy of the appraiser's current Certified General Appraiser license;
(b) A copy of the appraiser's qualifications statement;
(c) The appraiser's self-certification that the appraiser meets the criteria in § 100.200; and
(d) If the property contains natural resource elements that contribute to the value of the property, such as timber or minerals, a list of the appraiser's additional qualifications for the specific type of property being valued in the appraisal report.
The tribe or individual Indian must submit the package of appraiser qualifications to the Secretary with the appraisal or valuation.
Appraisals and valuations of Indian property must be submitted to us if relied upon or required for transactions requiring Secretarial approval under titles 25 and 43 of the CFR (other than those under the Federal Land Policy and Management Act).
(a) The Department will not review the appraisal or valuation of Indian property and the appraisal or valuation will be considered final as long as:
(1) The submission acknowledges the intent of the Indian tribe or individual Indian to waive Departmental review and approval;
(2) The appraisal or valuation was completed by a qualified appraiser meeting the requirements of this part; and
(3) No owner of any interest in the Indian property objects to use of the appraisal or valuation without Departmental review and approval.
(b) The Department must review and approve the appraisal or valuation if:
(1) Any of the criteria in paragraph (a) of this section are not met; or
(2) The appraisal or valuation was submitted for:
(i) Purchase at probate under 43 CFR part 30;
(ii) The Land Buy-Back Program for Tribal Nations;
(iii) An acquisition by the United States to which the Uniform Appraisal Standards for Federal Land Acquisitions applies; or
(iv) Specific legislation requiring the Department to review and approve an appraisal or valuation.
If you do not specifically request waiver of Departmental review and approval under § 100.300(a)(1), the Department will review the appraisal or valuation.
If the Indian tribe or individual Indian does not agree with the appraisal or valuation prepared by their qualified appraiser, the Indian tribe or individual Indian should not submit the appraisal or valuation under this part.
The Department is not liable for any deficient or inaccurate appraisal or valuation provided by the tribe or individual Indian that it did not review or approve, even if the Department approved a transaction for Indian property (including but not limited to a lease, grant, sale, or purchase) based on the appraisal or valuation.