New BIA Regulations for Encumbrance of Tribal Land

Stephen L. Simpson
Division of Indian Affairs
Office of the Solicitor
U.S. Department of the Interior

Under the Nonintercourse Act of 1790, 25 U.S.C. § 177, an interest in land held by the United States in trust for an Indian Tribe cannot be conveyed by the Tribe without the approval of the United States. Several times over the 211 years since then, Congress has granted authority to Tribes to convey leasehold and other interests in their trust lands with the approval of the Secretary of the Interior, e.g., 25 U.S.C. §§ 323 (rights-of-way), 396a (mineral leases), 415 (leases for specific purposes). On July 26, 2001, the Bureau of Indian Affairs (BIA) published final regulations implementing the latest of these statutes, the Indian Tribal Economic Development and Contract Encouragement Act of 2000 (the Act), Pub. L. 106-179, 114 Stat. 46.

The Act, codified at 25 U.S.C. § 81, requires the approval of the Secretary of the Interior for certain contracts or agreements pertaining to land held in trust by the United States for Indian Tribes. BIA published the proposed regulations implementing the Act on July 14, 2000 (65 Fed. Reg. 43952). After consideration of comments from Tribes, Tribal leaders, Tribal attorneys, the National Congress of American Indians, and individual Indians (both in writing and at seven formal consultation sessions), the BIA published the final regulations at 66 Fed. Reg. 38919 (July 26, 2001). The regulations will be codified at 25 C.F.R. Part 84.

The Act replaced Section 2103 of the Revised Statutes, enacted in 1871. The preamble to the proposed regulations contains a history of Section 2103 and some of the reasons for the replacement. This article will focus on the provisions of the Act and the way BIA is implementing them in the new Part 84 regulations.

Congress passed the Act in March 2000. Section 2 of the Act replaces the text of Section 2103 with six subsections, the most important of which for this purpose is subsection (b). This subsection provides that agreements or contracts with Indian Tribes that "encumber Indian lands for a period of seven or more years are not valid unless they bear the approval of the Secretary of the Interior or a designee of the Secretary." Congress has therefore carved out certain types of agreements concerning Indian land for Secretarial approval. In order to require Secretarial approval under the Act, a contract or agreement must:

• Be with an Indian Tribe. The Act does not apply to allotted land.
• Concern "Indian lands." These are defined in the Act as Tribal trust or restricted land. The Part 84 regulations use the same definition as the Act, but use the term "Tribal lands."
• Be for a period of seven or more years.
• "Encumber" the Indian land. Congress did not define this term, but it is defined in the Part 84 regulations: a contract or agreement "encumbers" Indian land if it "by [its] terms could give to a third party exclusive or nearly exclusive proprietary control over Tribal land."

Congress also gave the Secretary significant authority in implementing the Act. First, under subsection (e), the Secretary is required to promulgate regulations "for identifying types of agreements or contracts that are not covered under subsection (b)." A large portion of the Part 84 regulations is devoted to a list of the types of contracts or agreements that do not require Secretarial approval under the Act. Generally, if the Secretary is required under another statute or regulation to approve a particular contract or agreement (such as the leasing and right-of-way statutes mentioned above or Federal Energy Regulatory Commission hydropower licensing documents, under certain conditions), that contract or agreement is not subject to approval under the Act. Similarly, if another statute or regulation states that the Secretary does not have to approve a particular contract or agreement, that contract or agreement is not subject to approval under the Act.

The list in Part 84 of exempted contracts and agreements is exclusive. If a type of contract or agreement is not on that list, it requires the Secretary’s approval as a matter of law. One of the types on that list, however, is a catchall: "contracts or agreements that do not convey exclusive or nearly exclusive proprietary control over tribal lands for a period of seven years or more." Several commenters on the regulations asked for a list in the regulations of such contracts and agreements. BIA refused to do so, since the determination must be made on a case-by-case basis. There are some examples in the preamble to the final regulations, however, based on the legislative history and on experience in applying the Act, using the proposed regulations as guidance.

Second, under subsection (c), a particular contract or agreement is not subject to approval under the Act if the Secretary or a designee of the Secretary determines that it is not covered by the Act. This provision is directed at the old practice of "accommodation approvals." The application of Section 2103 was fraught with uncertainty. To gain a measure of insurance, Tribes would often ask the BIA to approve a particular contract whether BIA’s approval was required or not. BIA would accommodate the Tribe’s request by issuing a statement (an "accommodation approval") that, to the extent approval was necessary, it was given. Under the Act and the Part 84 regulations, BIA will no longer issue "accommodation approvals." As noted in the legislative history, "it would contradict the law’s intent if parties made a practice of submitting agreements where Section 81 is patently inapplicable, simply to obtain an official endorsement of this conclusion." S. Rep. No. 106-150 at 10 (1999). Under the regulations, if the Secretary determines that a contract or agreement does not require approval, the Secretary will return such contracts and agreements within thirty days after receipt of final, executed documents. The return package will include a statement explaining why approval is not required.

If the Secretary decides that a particular contract or agreement must be approved, the Act and the regulations state that only two criteria need to be fulfilled. First, the contract or agreement cannot violate Federal law. This includes review under the National Environmental Policy Act, other applicable Federal statutes (such as the Endangered Species Act or the National Historic Preservation Act), and the United States’ trust responsibility to the Tribe. Second, the contract or agreement must contain one of the following three provisions:

• remedies in the event the contract or agreement is breached;
• reference to a Tribal code, ordinance or ruling of a court of competent jurisdiction that discloses the right of the Tribe to assert sovereign immunity as a defense in an action brought against the Tribe; or
• an express waiver of the right of the Tribe to assert sovereign immunity as a defense in any action brought against the Tribe, including a waiver that limits the nature of relief that may be provided or the jurisdiction of a court with respect to such an action.

The Secretary will consult with the Tribe before any potential disapproval under Part 84 to allow the Tribe an opportunity to cure.

Finally, the Act explicitly repealed two provisions of existing law that may be of special importance to the readers of this Newsletter. Under both Section 2103 and the Indian Reorganization Act, 25 U.S.C. § 476, the Secretary was required to approve contracts between a Tribe and an attorney for legal services. The Act repealed those provisions and, on the same day that the final Part 84 regulations were published, the BIA removed its regulations for approval of most attorney contracts (25 C.F.R. §§ 89.1-89.26). The Act did not repeal the separate requirement under 25 U.S.C. § 82a for Secretarial approval of Tribal attorney contracts involving the Five Civilized Tribes in Oklahoma. BIA will, however, issue a separate proposed rule, in consultation with the Five Civilized Tribes, to revise those regulations, especially 25 C.F.R. § 89.30, in light of the Act. Also, the Act specifically does not alter the provisions of Tribal constitutions. Therefore, the Secretary will still approve or disapprove attorney contracts if the Tribal constitution so requires, based on any criteria in the Tribal constitution and any relevant Federal law. The BIA will defer to the Tribe’s interpretation of its own constitution.

Stephen L. Simpson is an attorney-advisor in the Division of Indian Affairs in the U.S. Department of the Interior’s Office of the Solicitor. The views expressed in this article are the views of the author and do not necessarily represent those of the Office of the Solicitor, the Department of the Interior, or the United States.