A Cobell Land Buy-Back Check-Up
Four years after the $1.9 billion Indian land buy-back program that comprised part of the $3.4 billion Cobell settlement, federal legislators are checking up on how the program is working – or perhaps not working.
The Senate Committee on Indian Affairs (SCIA) focused on the program on December 7. With years of experience, Mike Connor, Deputy Secretary of the Department of the Interior (DOI), Floyd Azure, Chairman of the Assiniboine and Sioux Tribes of the Fort Peck Reservation, Terry Tatsey, Vice Chairman of the Blackfeet Nation, Turk Cobell, Treasurer of the Cobell Board of Trustees, and Melvin Monette, President and Executive Director of Indigenous Education, Inc., which administers the Cobell Scholarship Program, testified and responded to questions from the members of the committee regarding the program.
Land buy-back program objectives are fairly straightforward: to significantly reduce the amount of fractionated landholdings across Indian country in order to strengthen and support tribal sovereignty and self-determination as well as foster the growth of business on tribal land. With the program implemented in 2012 and set to expire in 2022, testimony focused on whether it has been achieving its goals.
According to Connor, the most critical issue facing the program is that it is only a temporary fix for fractionation, the division of the title of a parcel of reservation land held by a tribal member – but not the land itself – amongst his/her heirs upon the death of the title holder, rather than by the tribes themselves.
Fractionation of Indian lands has its roots in the General Allotment Act (Dawes Act) of 1887, when reservation land was divided up amongst individual tribal members. As heirs died off, the title continued to split in each generation. This resulted in some single tracts of land having thousands of partial title holders, making it impossible for anyone to use the land profitably.
The resulting undivided common ownership interest in a single tract of land has brought the use of the land for leasing and other uses for the tribes to a standstill in many instances.
The general objective of the buy-back program is to increase the tribal title shares to 50 percent or greater in order to make it easier for tribes to use their controlling interests to reduce the number of parcels that stand vacant and unused. Fractionation also “…can make it hard to protect or obtain access to sacred or cultural sites, and the checkerboard ownership pattern creates jurisdictional challenges and ties up land within the reservation boundaries,…” Connor testified.
In large part, DOI considers the buy-back program a success story so far with regard to resolving the current level of fractionation, according to Connor, although he agrees that improvements can and must be made.
Success here is measurable. “The program thus far has made more than $2.5 billion in offers to nearly 123,000 unique individuals – half of all eligible landowners – for interests at 34 locations….since it began making those offers in December 2013,” Connor testified. To date, it has paid out more than $925 million to individual landowners, restoring almost 1.7 million acres of land to tribal governments. This has resulted in 1.8 million acres in which tribal ownership is more than 50 percent. Payments to participating landowners have added an estimated $911 million to the general economy, according to DOI, and has resulted in $1.7 billion in economic output from investment.
In spite of that, critical issues remain. Azure testified that although the program “created a rare opportunity to restore tribal land bases…from the outset, tribes challenged the purchase ceilings as they did not appear based on the value or number of the interests, but instead on an allocation of the total available funding for each reservation,” a determination made by DOI. He expressed disappointment that although DOI’s implementation plan called for collaboration on research, data collection, land valuation, and outreach to potential sellers, the department instead used its own data and a “mass appraisal process that relied largely on comparable land sales in areas surrounding each reservation” to make valuations of parcels. Together, all seriously diminished “opportunities for meaningful tribal involvement.”
Azure proposed that the buy-back program be extended because some qualified title holders did not receive their paperwork. Others had their applications rejected due to their filling out the paperwork incorrectly. He also thought the nine-month appraisal validity was too short, and that it should reflect real world land valuation programs.
Azure mentioned that tribes were initially “…encumbered by needing DOI approval on all movements they made on the buy-back.” He expressed frustration that making mineral rich tracts unavailable for purchase required a separate and richer discussion with the department. Connor agreed, saying that mineral tracts were not prioritized in the program because it made the appraisal process highly complex. Connor added that the growing discovery of minerals on potentially salable tracts makes this a critical issue since mineral tracts would have great value to tribes if they sought to exploit them.
Tatsey strongly seconded Azure’s testimony, adding that distrust of the federal government had been a huge obstacle for potential sellers. Azure also said that outreach programs to educate potential sellers work well now, but that they were late in coming. Both challenged how buy-backs are prioritized, and they agreed that a longer window to respond to offers – 60 days instead of 45 days – would allow for better decision making for sellers. Connor commented that the 45-day offer window was meant to move the program along more efficiently, but said that it could be renegotiated.
Another concern for tribal officials was that little to nothing is being done to avoid continued fractionation through the use of trusts and wills. Connor agreed that the need for estate planning was essential to avoiding continued fractionation. Education is also required to avoid problems associated with “sudden money,” which has resulted in tribal member misspending or being defrauded, and had negative impacts on entitlement program benefits (SNAP, TANF, Medicaid) that many fractional landowners relied on since the increase in income at least temporarily disqualified them.
In contrast, the impacts of the Cobell Scholarship Program, also part of the Cobell settlement, were largely a good news story. In spite of a rough start administratively – two administrative companies having been fired prior to the launch of the program – the program has been functioning well, according to testifiers.
Cobell and Monette testified, …in the 16 months since [the program] first began authorizing scholarship awards, nearly 1,800 individual Cobell scholarships have been awarded to almost 1,000 Native American students. The scholarship awards are $5,000 per semester for three undergraduates and $10,000 per semester for graduate and doctoral students. This translates into more than $5.25 million in awards in the past 16 months to American Indian / Alaskan Native tribal members, a number they hope to expand as the fund grows.
Their biggest uncertainty derives from how the program is funded. It is not yet a fully-funded program. Unlike a foundation, it doesn’t have equity that capitalizes at a known investment rate to draw from. Rather, it receives quarterly cash infusions, of varying amounts against the government’s $1.9 million promissory note that will be paid to it, minus fees, from the Cobell settlement. This makes it difficult to project funding available for scholarships each quarter. Their biggest problem is that they have more highly qualified applicants than they can fund.
There continues to be strong bipartisan support for the program, current SCIA Chairman Sen. John Barrasso (R-WY) and Sen. Tom Udall (D-NM) agreed. Even with a new incoming administration, all expect increased consultation with the tribes on buy-back issues.
Ultimately, though, “This is not just an acquisition process, we need policy,” Connor maintained. Without policy in place to correct issues raised, the problems will recur, and fractionation could return to its original level by 2022.