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A Review of Land-Buy Consultation Meeting, Minneapolis

Jay Daniels
2/6/13

The first of the second round of tribal consultations between the Department of the Interior (DOI), Bureau of Indian Affairs (BIA), Office of the Special Trustee (OST) and various tribes took place at the Mystic Lake Resort & Casino, hosted by the Mdewakatan Sioux Indian Community in Shakopee, Minnesota, on January 31, 2013.  The consultation was attended by tribal representatives from the state of Minnesota, Wisconsin, North Dakota, South Dakota, and Montana. The DOI has already posted a press release about the meeting at their website. I attended the meeting as an observer and to see what the DOI's plan for implementation would entail.

The meeting is part of the Cobell Settlement's (Settlement) LBBP implementation and is scheduled to also occur in Seattle, WA and Rapid City, South Dakota in the upcoming weeks. The Minneapolis meeting was attended by tribes from the Midwest, Aberdeen, and the Rocky Mountain Regions.

Although the tribal consultations are meant to include tribal input into the implementation process, the BIA has been busy during the past year putting together teams comprised of departmental representatives. Actually, a joint implementation team has been established and it appears that a plan to create three processing centers in various locations along with a LBBP Land Titles & Records Office (LTRO) to manage all acquisitions under the program is under way.

Likewise, BIA has established a position in Central Office too and has placed an employee on the payroll to coordinate efforts between Central Office and the regions in implementing the plan. DOI's start-up costs are already expending a portion of the 15 percent administrative costs of the $1.9 billion Cobell Settlement award through these and other efforts. Things are moving fast already and the tribes had their first chance to make comments on January 31, 2013. One BIA representative stated that 15 percent administrative costs that are allocated is not sufficient and that generally BIA's costs are more than that. Most folks (natives affected by Cobell) thought $285 million was too much to use for administrative costs, but it is clear that it probably won't be enough the way things are moving.

After an introduction of all of those attending, Anthony Walters, Counsel to the Assistant Secretary, DOI, and other representatives on the panel gave a brief overview of the plan and implementation. Items discussed included:

-The LBBP is authorized for a 100year period beginning with the final approval of the Cobell Settement, being November 23, 2012. Any funds not expended at the end of the 10 year period, would be returned to Treasury. DOI left open the thought that an extension may be possible, but the settlement did provide only a 10 year period or shelf life.

-Establish 3 LBBP centers for coordinating acquisition purchases. These three centers will definitely increase BIA administrative costs as new positions will be required to handle the increase and need for timely processing of the acquired interests of individual Indian land owners.

Discussion then went on to the DOI's decision to not place liens on fractionated interest acquired as required in the Indian Land Consolidation Act (ILCA). That really was a non-issue I thought because the funds weren't appropriated for the ILCA, but rather were authorized under the ILCA statutes as provided under the Cobell Settlement. These are Indian land claims funds which are not subject to payback. The same fact should extend to the 10 year period to spend the funds should not have been time imposed as well, except for the fact that the Settlement parties agreed to the 10-year term.

There was discussion about how appraisals, and obtaining fair market value (FMV) would be determined. Determining land values for the targeted allotments will be an enormous task. Interior is proposing to split up the acquisitions into phases by concentrating on an area, region, state or tribes for 18-24 months and then move on to another location. Their concern about the shelf life of appraisals is correct as some location's values move up and down based on the area or location and economy. Otherwise, appraisals could expire or need to be performed again. DOI wants to spend time and money where there is greater interest by individual Indians to sell their interests as well. The problem, concentration on some locations or areas means that acquisitions may not occur for several years on other reservations or Indian country.

You can begin to see how administrative costs probably won't be sufficient even though their intent is that any savings in these costs could be used to purchase fractionated interests either on the tribe's reservation, or as left open in the discussion. Administrative costs savings on one reservation could be redirected to other tribes. This thought was not discussed but somewhat alluded to.

DOI identified Title abstracts costs as a necessary administrative cost, but it shouldn't because the BIA's LTRO maintains the certified title ownership throughout each region and they have the training and authority to certify title on behalf of landowners. LTRO has a policy that they must review and certify title within 72 hours for any conveyance documents relating to leasehold mortgages so this would seem to not be too big an issue except for the anticipated volume and increased workload brought on by the Land Buy Back Program.

The $60 million Scholarship Program in the Settlement will be funded by additional Interior funds and will be distributed on a pro rata basis, as detailed in the Settlement, on a sliding scale which is not a dollar for dollar contribution, but rather an incentive award. It definitely is not that good and redirects a portion of the Government's responsibility to provide education to Indian country already and funding has historically not been sufficient to meet the needs of potential students.

BIA stated that they are planning on an all or none acquisition to include land and minerals, but also expressed that it wasn't set in stone. BIA stated that they are looking to the tribe's position as how to address this issue.

BIA also discussed a ceiling for purchase costs of fractionated interests. It is hard to understand this concept as it was somewhat glossed over as a casual comment. It would seem that a ceiling price per interest would be established in various locations or a total value per allotment distributed based on the amount of fractional interest owned by a seller. One ideal discussed is to combine every location’s proportional share in total interests that is eligible for buy back and multiply it by  $1.5 billion to determine each tribe's total award share. Again, discussion was vague and not set in stone but it is another thought in implementing the LBBP nationwide. The problem is that this idea would increase FMV for some fractionated interest owners and decrease those owners whose land value is considerably higher. For example, an individual with interest in agricultural land would sell their interests at the same rate of compensation as a landowner of pasture land. This would be one of many scenarios establishing FMV.

DOI informed the tribes that P.L. 93-638 is prohibited under the ILCA Authority but tribes can enter into cooperative agreements with BIA primarily for outreach efforts in informing Indian landowners of the program and identifying interests to be acquired. There are approximately 290,000 different fractionation interests to be consolidated nationwide.

Donovan Archambeault, Fort Belknap Tribe, indicated that the Montana-Wyoming Tribal Leaders recently met and their consensus of their tribes is to administer 100 percent of the program including 100 percent of their share of the 15 percent admin costs. Mr. Archambeault stated that the BIA has already messed up fractionation before and why let them do it again.

DOI stated that the primary purpose was to keep administrative costs down so that more funds could be used for purchasing interests. In conclusion, it can be a good program for Indian country, but the clock started ticking before the formal preliminary planning and implementation began so it's already a race against time. If the BIA creates all of these proposed new employee positions and obtain centrally located offices for these staff, you might as well kiss year number one of the 10-year shelf life away. We will see what happens.

Jay Daniels has 30 years of experience working in Indian country, managing trust lands and is a member of the Cherokee Nation of Oklahoma. You can find resources and information at RoundhouseTalk.com.

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Anonymous's picture
Did anyone at the meeting ask whether Interior is applying Indian preference in hiring the administrative positions, and if not, why?
Anonymous
Anonymous's picture
Instead of concentrating on one area at a time, why not let all landowners interested in selling their fractional interest be first in line? It would be much more efficient and they wouldn't have to wait for years again to see some money. Do it again and again and again until the end of the period.
Anonymous
Anonymous's picture
Re: Buy-Back Program: Questions and Comments I am a Native American Indian enrolled on the Fort Totten Indian Reservation in North Dakota, and I have some tiny fractionated land parcels of Allotted Land. I have the following questions for you: 1. Since there is only so much money to purchase the fractionated Land parcels, what will be the order of purchasing (i.e. which parcels get purchased first), by which Tribe? Here is it first come first served, or will there be a formula used to make sure more of the “Buy-Back” money is not spent all on one Reservation, than other Reservations? 2. Next who or what formula will be used to determine, which fractionated land gets purchased first? 3. According to slide #14 from the PowerPoint presentation in Rapid City, SD, on February 6, 2013 titled “Land Valuation Phase” the second bullet point states “The Office of Minerals Evaluation will be responsible for the evaluation of mineral interests” of the Fractionated land. As a Land owner, will this information be provided to me, to help me make my decision on whether to sell or continue to hold onto my fractionated land? 4. According to slide #14 from the PowerPoint presentation in Rapid City, SD, on February 6, 2013 titled “Land Valuation Phase” the fourth bullet point states “mass appraisal valuation techniques will be used to reduce administrative costs…” If the administrative costs are already set in stone at 15% or $285 million, why are these “mass appraisal valuations” used/ Also, if some fractionated land is more valuable than others? This is not done in the White mans’ cities real estate processes, so why is it done on the Indian Reservations? 5. On the subject of Administrative costs, will the top administrators (i.e. John McClanahan and all people working in the “Buy-Back” program, have their salaries and yearly costs, open to the Native American public? After all since this “Buy-Back program is not under the BIA, it is not subject to the Indian preference hiring practices regulations, and how can Native Americans know, that the Administrative costs are not being paid out to non-Native Americans with highly inflated salaries? 6. According to slide #22 from the PowerPoint presentation in Rapid City, SD, on February 6, 2013 titled “Tribal Involvement” this slide states “Tribes interested in entering into cooperative agreements with Interior must submit detailed proposals to the Buy-Back program”. Will a template be provided to the Tribes to assist them in submitting the required detail proposals? 7. Also from slide #22, what criteria will be used, and who will decide on which Tribes can provide Tribal Involvement, and who decides whether the Tribes administrative costs are appropriate, or will the Native American be subject to “below poverty” wages? Please answer all my questions, and I await your reply. Thank you Ida Stiffarm Billings, MT, 59101
Anonymous