On July 30, 2012, President Obama signed into law the Helping Expedite and Advance Responsible Tribal Homeownership (HEARTH) Act amendments to the Indian Long-Term Leasing Act, 25 U.S.C. § 415. The HEARTH Act provides authority for Indian tribes to lease tribal trust lands directly pursuant to tribal law, without further Secretarial approval, if the requirements of the Act are met. A tribally promulgated leasing ordinance must be “consistent with” the Bureau of Indian Affairs (BIA) leasing regulations and include an environmental review process. Within 120 days the BIA must make an approval determination on submitted tribal leasing regulations. Once the tribal leasing regulation receives BIA approval, the tribe may immediately begin to process and approve leases.
The BIA leasing regulations at 25 C.F.R. Part 162 became effective on January 4, 2013. Assistant Secretary-Indian Affairs, Kevin Washburn, announced that these regulations were meant to work “hand-in-glove” with the recently enacted HEARTH Act. On January 16, 2013, the BIA issued a National Policy Memorandum (Interim Guidance) providing guidance to BIA decision makers on the standards and processes to be followed when reviewing and approving leasing regulations submitted by tribes pursuant to HEARTH Act authority. This guidance will expire on January 16, 2014.
There are a number of significant reasons why tribes should consider submitting tribal leasing regulations for BIA approval before the Interim Guidance expires. First, the Interim Guidance requires the review and approval of tribal leasing regulations to occur in the office of Deputy Bureau Director, Office of Trust Services – meaning at the BIA’s Central Office in Washington, D.C. Currently that office has staff members dedicated to review tribal leasing ordinances. This review and approval occurs in coordination with the Solicitor’s office. Whether this review and approval responsibility will remain with Central Office or be delegated to BIA Regional offices once the Interim Guidance expires is yet to be determined. However, not all BIA Regional Offices or Field Solicitor Offices have the same capacity or technical expertise. Some are staffed better than others, and experience teaches us that some have difficulty uniformly implementing what was intended to be a BIA-wide policy.
Second, the Interim Guidance contains a very succinct and easy-to-follow checklist of items that must be included in a tribal leasing ordinance submitted under HEARTH Act authority. The checklist covers required (and suggested) leasing regulation provisions for agricultural, residential, business, wind and solar resource leases – as well as leases for educational, recreational, public, and religious uses. Once the Interim Guidance expires the checklist may be revised.
The passage of the HEARTH Act was nationally lauded as a tool that would empower tribes to realize their potential for economic growth and job creation on tribal lands, increase community development, streamline business development and housing development, and strengthen tribal self-determination. To date, very few tribes have taken advantage of this opportunity to promulgate tribal leasing ordinances and submit those for BIA approval.
We recommend that tribes immediately examine current leasing practices and identify how the BIA leasing regulations, together with authority under the HEARTH Act, can be utilized as a powerful tool for economic development and as potential leverage during negotiations with states and local governments. The most important feature of the new regulations is the language concerning taxation. The regulations at
25 C.F.R. § 162.017(a)-(c) state that “subject only to applicable Federal law” permanent improvements, activities, and leasehold or possessory interests on leased Indian land “are not subject to any fee, tax, assessment, levy, or other charge imposed by any State or political subdivision of a State.” (Emphasis added). Examples of the types of prohibited taxation, include “severance taxes,” “business use, privilege, public utility, excise, [and] gross revenue taxes.” Under HEARTH Act authority tribes that desire a greater deal of autonomy may choose to promulgate their own tribal leasing ordinance (codifying the taxation provisions into tribal law) to address leasing of tribal trust and restricted land for a wide variety of purposes.
Tribes that choose to adopt their own leasing regulations under HEARTH Act authority will: (1) enjoy a greater measure of self-governance and control over the leasing of tribal lands, (2) create a leasing process tailored specifically to their tribal needs, and (3) implement a leasing process that will move at a tribally determined pace rather than depending on BIA officials to take action in a timely fashion.
Please let us know if we may provide additional information regarding the BIA’s Interim HEARTH Act Guidance.