The Land Buy Back Program – You may not like it, but you agreed to it

JD 09-24-2012By Jay Daniels

The Department of the Interior (DOI), Bureau of Indian Affairs (BIA), Office of the Special Trustee (OST) and tribes have begun the tribal consultation process for the implementation of the Cobell Settlement’s (Settlement) Land Buy Back Program (LBBP). The first meeting took place January 31, 2013, with tribal representatives from Minnesota, Wisconsin, North Dakota, South Dakota, and Montana. in Prior Lake, MN., with the remaining sessions to be held Feb. 6 in Rapid City, SD, and Feb. 14 in Seattle, WA.  The DOI has posted a press release about the meetings on their website.

The tribal consultations are meant to provide tribal input into the implementation process. The BIA has put together teams during the past year comprised of departmental representatives. DOI plans to establish three processing centers in various locations along with LBBP Land Titles & Records Offices (LTRO) to manage all acquisitions.

DOI’s start-up costs is expending a portion of the 15% administrative costs of the $1.9 billion Settlement award through these and other efforts. Things are moving fast already and the tribes had their first chance to make comments at this meeting.

After an introduction of all of those attending, DOI/BIA/OST representatives on the panel gave a brief overview of the plan and implementation. Items discussed included:

– The LBBP is authorized for a ten-year period beginning with the final approval of the Settlement, on November 23, 2012. Any funds not expended at the end of the ten-year period, would be returned to Treasury. DOI left open the thought that an extension might be authorized, but no guarantee.

– Establish three LBBP centers for coordinating acquisition purchases. These centers will increase BIA administrative costs as new positions will be required to handle the increase needed for timely processing of acquired interests. BIA stated the 15% administrative costs permitted under the Settlement wasn’t enough and that generally BIA’s costs exceed 15%. Folks thought $285 million was too much for administrative costs, but it is clear that it probably won’t be enough the way things are transpiring.

– DOI made a decision to not place liens on fractionated interest acquired as required under the Indian Land Consolidation Act (ILCA). Liens were a non-issue anyway because the funds weren’t appropriated for acquisitions under ILCA, but subject to the Settlement, an Indian Claims award.

– Appraisals at fair market value (FMV) will be an issue. DOI 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. Land values move up and down based on the location and current economy. DOI wants to spend time and money in areas where there is greater interest by individual Indians to sell their interests. Concentration on some locations or areas means that acquisitions may not occur for a few years on other reservations or Indian Country. DOI also discussed redirecting any savings to purchase fractionated interests locally, or to other tribes. Not a good ideal.

– DOI identified title abstracts costs as an administrative cost. Use of the LTRO should make this a non-issue. LTRO can create a certified title ownership throughout each region even with the anticipated volume and increased workload brought on by the LBBP.

– The $60 million Scholarship Program in the Settlement will be funded by additional Interior funds and distributed on a sliding scale which is not a dollar for dollar contribution, but an incentive award. The Scholarships redirects a portion of the Government’s present and past responsibility to provide education to Indian Country already and funding has historically never been sufficient to meet the needs of potential students. Not a good ideal.

– BIA stated that they are hoping for an all or nothing acquisition to include land and minerals, but stated it wasn’t set in stone. BIA stated that they are looking to the tribes to consider this issue. Not a good ideal.

– BIA also discussed a ceiling for purchase costs of fractionated interests. The ceiling price would be established for locations by the total value per allotment based on the amount of fractional interest owned by a seller. One possibility is to combine every location’s nationwide 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. This possibility would increase FMV for some fractionated interest owners and decrease those owners whose land value is considerably higher. No a good ideal.

– DOI stated that contracting through P.L. 93-638 is prohibited under the ILCA but tribes can enter into cooperative agreements with BIA primarily for outreach efforts to inform Indian landowners of the program and identify interests of participants. There are approximately 290,000 different fractionation interests to  be consolidated nationwide.

– A member of the Tribal Council at Fort Belknap Tribe, indicated that the Montana-Wyoming Tribal Leaders recently met and the consensus of their tribes is to administer 100% of the program and 100% of their share of the 15% admin costs. The individual stated that the BIA has already messed up fractionation before and why let them do it again.

The LBBP can be a good program for Indian Country, but the clock started before the formal preliminary planning and implementation began so it’s already a race against the clock. If the BIA creates all of these new employee positions and obtain centrally located offices for these staff, you might as well kiss year number one of the ten-year term goodbye. Not the best plan, but everyone agreed to it in the Settlement. 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 http://roundhousetalk.com/