Why Tribes Need the HEARTH Act and BIA Leasing Regulations

John T. Plata

In 2012 Congress enacted the Helping Expedite and Advance Responsible Tribal Homeownership (HEARTH) Act amendments to the Indian Long-Term Leasing Act. This Act provides authority for Indian tribes to lease tribal trust lands directly pursuant to tribal law, without further Secretarial approval. The passage of the HEARTH Act amendments was nationally lauded by the White House, members of congress, tribal leaders, and tribal organizations as a valuable tool that would: (1) empower tribes to realize their potential for economic growth and job creation on tribal lands, (2) increase community development, and (3) strengthen tribal self-determination. Despite these substantial benefits, to date, very few tribes have taken advantage of the opportunity to use this tool by promulgating tribal leasing ordinances that take advantage of HEARTH Act authority.  

In order to implement the new law, on January 16, 2013, the BIA issued a National Policy Memorandum, known as the Interim Guidance, providing guidance to BIA decision makers on the standards and processes to be followed when reviewing and approving leasing ordinances submitted by tribes pursuant to the Act. This Interim Guidance will expire on January 16, 2014 and it is unknown at this time, what procedures will be adopted to replace it.

There are a number of significant reasons why tribes should consider submitting tribal leasing regulations in the near future 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 at the BIA's Central Office in Washington, D.C., and in coordination with the Solicitor's office. Currently the BIA has staff members dedicated to review tribal leasing ordinances, and the review and approval process has been implemented very smoothly. Whether this review and approval responsibility will remain with the BIA 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 workload 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 all lease purposes authorized under the HEARTH Act. Once the Interim Guidance expires it is possible that: (1) the checklist may be revised, and (2) what is required to be included in a tribal leasing ordinance may be subject to differing interpretations if the review and approval responsibility is delegated to the BIA Regional and Field Solicitor offices.

In order to avoid this uncertainty, there is a need for tribes to immediately examine internal leasing practices and identify how the BIA leasing regulations, together with HEARTH Act authority, can be utilized as a tool for economic development. This authority may also provide tribes some leverage during negotiations with states and local governments on a variety of matters. This leverage may be provided by the most important feature of the new leasing regulations - the language concerning preemption of certain state and local taxation. The leasing regulations 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." 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 and codify these taxation provisions into tribal law.

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.

The HEARTH Act coupled with the BIA leasing regulations cannot be the valuable tool it was meant to be, if it not utilized. While securing lease approval authority under the HEARTH Act does not provide a cure-all for tribal leasing concerns - it is an excellent start. There are strong reasons for tribes to act on this now, under the Interim Guidance in order to avoid uncertainty after that guidance expires on January 16, 2014.

Do not wait; the time will never be ‘just right.’ Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along” -- George Herbert

John Tabinaca Plata is member of the Comanche Nation of Oklahoma, and a partner at the Washington D.C. office of Hobbs, Straus, Dean and Walker, LLP.