Having lost hundreds of millions of acres of land to allotment and tax auction, sale, fraud and federal chicanery beginning in the late 1880s, Indian tribes have ever since been on a decades-long mission to acquire and reconsolidate their once-mighty land holdings. Currently, the federal government manages 55 million surface acres and 57 million acres of subsurface minerals in trust for tribal and individual Indian beneficiaries.
Land is by far the most significant economic asset in Indian country, and using land for productive purposes relies on an efficient land leasing process.
Decades ago, tribal communities in general were lacking a foundation of homegrown enterprises, so they turned to land leasing to generate capital for their economies. These leases to third parties and private companies are for agricultural, commercial establishments, energy development, grazing and other forms of economic activity.
The Bureau of Indian Affairs (BIA) recently reported that income from energy and minerals represents “the largest revenue source generated from trust lands.” In the just-issued fiscal year 2016 budget justifications for the BIA, it is noted that royalties to oil and gas tribes alone climbed to $1.1 billion in 2014. To continue and expand these developments, tribal energy producers and their private partners will need a leasing system that is transparent, timely and sensitive to the needs and desires of the tribal beneficiaries.
This need for an efficient leasing system is not limited to business and economic development; individual tribal members interested in establishing business or a home on leased lands also require a modern, efficient system.
These modern needs of tribes and their members are in direct conflict with federal leasing statutes that were enacted long ago, before the era of Indian self-determination when tribal governments and economies were weak and offered few opportunities to tribal members.
Grounded in the belief that Indians were incompetent, these leasing statutes required the review and approval of the Interior Secretary. Delays in winning departmental approval of leases and other business agreements generated frustration for the tribes, caused business opportunities to walk away, and in the end cost the tribes and their members significant economic opportunities, jobs and household incomes.
After the Indian Mineral Leasing Act was enacted in 1935, it took nearly 50 years for Indian tribes and their champions in Congress to push for reforms that authorized a more prominent role for tribes when it comes to leasing of their own land and assets to third parties. The result was the Indian Mineral Development Act of 1982 and, incredibly, the Department of the Interior did not finalize implementing regulations to the 1982 Act until 1993!
Leasing improvements continued in fits and starts in the 1990s and beyond. In 1999, the Navajo Nation proposed, and Congress enacted, the Navajo Surface Leasing Act which puts the Navajo Nation in the driver’s seat by authorizing it to develop and manage its own surface leasing laws without the prior review or approval by the Interior Secretary. This was a major breakthrough and provided the intellectual basis for the Tribal Energy Resource Agreement (TERA) mechanism contained in the Indian Tribal Energy Development and Self-Determination Act of 2005, as well as the Helping Expedite and Advance Responsible Tribal Homeownership Act (HEARTH) of 2012.
While the TERA law continues to undergo fine tuning and amendment, to date, 14 tribes have had their surface leasing ordinance approved by the Interior Secretary – as required by the HEARTH Act --- and another seven have submitted tribal ordinances to the Department. These tribes no longer endure the lengthy and costly delays associated with the federal leasing approval process, and the resulting flexibility will help them attract outside investment and jobs for their members.
All of these structural reforms were proposed by Indian country leaders and enacted by a Congress motivated by a desire to increase tribal self-determination as a means to facilitate investment, job creation and improved household incomes for Indian people.
In a larger sense, these efforts are in a very real way “trust reform,” if we define that term to include a recalibration of the federal – tribal relationship based on a determination of the appropriate federal role in the lives and business of the Indian people themselves.
These and other reforms should encourage Indian tribes across the country to reassert themselves in economic matters and assume primary authority and responsibility for the economic lives and futures of their members.
Paul Moorehead is a Shareholder in the Indian Tribal Governments Group of Powers Pyles Sutter & Verville PC, in Washington, D.C. He was formerly Chief Counsel and Staff Director to the U.S. Senate Committee on Indian Affairs.