How Tribal facilities could benefit from ISDEAA section 105(l) leases

Section 105(l) Leases of the Indian Self-Determination and Education Assistance Act (ISDEAA) allows Tribes and Tribal organizations (Tribes) to be compensated for costs incurred while carrying out their ISDEAA self-determination or self-governance at Tribal facilities.

Tribes can enter into such facility cost agreements with the Bureau of Indian Affairs (BIA), Bureau of Indian Education (BIE), and Indian Health Services (IHS), when those facilities are used to carry out programs, services, functions, and activities (PFSAs contracts).

If your Tribe uses its own facility, regardless of whether you hold the title, have a leasehold interest, or have a trust interest in the facility to operate BIA, IHS, and BIE programs, you have substantial incentive to negotiate a 105(l) lease agreement.

What does the 105(l) lease pay for?

The lease may compensate the Tribe for the following costs, excluding duplicate costs.

• Rent
• Depreciation and use allowance
• Contributions to a reserve for replacement of facilities
• Principal and interest
• Operation and maintenance expenses, including but not limited to water, sewage, utilities, fuel, insurance, fire protection, and so forth
• Scheduled and unscheduled maintenance like replacing floor coverings, lighting fixtures, or repainting
• Security services and management fees
• Building and equipment repairs
• Alterations needed to meet contract requirements
• Fair market rental for buildings or portions of buildings and land, excluding federal share of building construction or acquisition costs or fair market rental for buildings constructed with federal funds, excluding fee or profit, and for land
• Other reasonable expenses

Considerations before negotiations

Before you begin your lease negotiations with the BIA, IHS, or BIE, you’ll want to prepare a detailed list of your true costs to operate the PFSAs in the facility, including other costs you want to include in the lease, such as depreciation and reserve for replacement costs. You’ll need to identify the actual prior year costs recorded in your general ledger.