Indian Self-Determination and Education Assistance Act (ISDEAA) Section 105(l) leases have grown substantially in scale and use: total annual 105(l) lease revenue grew from $800,000 in 2016 to an estimated $612.7 million in 2024 (adjusted to 2024 dollars)—with roughly $1.81 billion paid to over that period according to the Center for Indian Country Development at the Federal Reserve Bank of Minneapolis. For Tribes and Tribal Organizations carrying out programs, functions, services, or activities (or portions thereof) under ISDEAA, Section 105(l) lease funding presents a critical and ongoing opportunity.

The Office of the Assistant Secretary – Indian Affairs, in collaboration with the Office of Facilities, Property and Safety Management and the Office of Tribal Leases, has proposed updates to the Section 105(l) facility lease process and invited Tribal representatives to consult on the proposed changes. Specifically, the Office of Tribal Leases held two virtual Tribal consultation sessions on the proposed updates in early September. However, written comments may be submitted to consultation@bia.gov by Monday, October 12, 2026.  Questions may be directed to Cody Seaton, Office of Tribal Leases, by email at cody.seaton@bia.gov.

Consultation Topics

The Office of Tribal Leases identified the following topics for the proposed updates to the 105(l) Facility Lease Guide:

1. Federally Funded Facilities: For any facility or portion of a facility whose acquisition or improvements were financed with federal funds, the guidelines would seek to clarify that compensation would be limited to allowable operations and maintenance costs necessary to support program, function, service, or activity (PFSA) delivery, with depreciation allowed only on acquisition costs not financed with federal funds.
2. New Construction Pre-Approval: An optional, “highly-recommended,” process under which conceptual designs and costs for new construction would be reviewed for reasonableness by the Division of Facilities Management and Construction (for new schools), the Office of Justice Services (for correctional facilities), or the Office of Tribal Leases (for all other new construction). Tribe/Tribal organization submissions would involve a conceptual design, PFSA(s) specification, cost estimate, estimated completion date, and written justification for the facility.
3. Reserve Funds: Updating the calculation for “simplicity”—a reserve fund is a set of savings to cover unexpected future costs not part of the regular operating budget: contributions would equal 20% of construction or current replacement cost (based on provided proof of cost); reserve payment will be made for 10 years from the lease start date, with a 4% annual inflation factor applied to the replacement cost calculation.
4. Cost Approach Appraisals: The cost approach appraisals would be permitted only if at least one of the following conditions applies: fewer than three reliable comparable rentals can be identified (after documented and reasonable search efforts have been completed) within a 200 mile radius; the facility is a unique property type with no active rental market; the available comparables are unreliable due to volatility or atypical property characteristics; or the cost approach is otherwise shown to be more reliable. The Office of Tribal Leases would review each appraisal for reasonableness, and a Tribe or Tribal Organization could request a waiver (from the Assistant Secretary of Indian Affairs) if an appraisal is deemed unreasonable.
5. Backdating: The initial lease would be backdated to the date a “complete 105(l) application” is received and “approved”, with all required documents due within the application year (or the Tribe/Tribal Organization would need to re-apply the following year); renewals would follow the policies in effect at renewal.

Why This Matters

The proposed updates describe program guidance for new or renewed BIA 105(l) leases and the October 12, 2026 comment deadline presents a key opportunity to weigh in and provide feedback on the facility lease process.

This article summarizes aspects of the law and does not constitute legal advice. For legal advice with regard to your situation, you should contact an attorney.