By  Janice Schneider, Sean Krispinsky, and Stacey VanBelleghem

Navigating the regulatory requirements for leasing Tribal lands for renewable energy projects can be complex and time consuming, but it might become easier thanks to a new law, that was signed on July 30, 2012.  The Helping Expedite and Advance Responsible Tribal Home Ownership (or “HEARTH”) Act of 2011, will likely create new opportunities for tribal self-governance, economic development, and renewable resource development.[1]  The HEARTH Act permits tribes to develop leasing regulations, subject to approval by the Secretary of the Interior, allowing tribes to approve leases of tribal trust lands for non-mineral development purposes.  This represents a significant departure from the lease approval process currently mandated under the Indian Long-Term Leasing Act,[2] which requires that most leases of tribal trust lands be reviewed and approved by the Secretary of the Interior prior to becoming effective.  If tribes capitalize on this new opportunity, tribal management of leasing approvals could substantially expedite and simplify the leasing process.

Congress previously granted similar leasing authority to the Navajo Nation through the Navajo Nation Trust Land Leasing Act of 2000.[3]  The HEARTH Act is modeled on the Navajo Nation leasing amendment and extends the law to all federally recognized Indian tribes.  The HEARTH Act requires tribal leasing regulations to be approved by the Secretary of the Interior before the tribes may approve individual leases without Secretary approval.  The Secretary is directed to approve any tribal leasing regulations that:

  • are “consistent” with the Department of the Interior’s existing regulations governing the lease of tribal lands;  and
  • include an environmental review process that:
    • identifies and evaluates any “significant effects of the proposed action on the environment;”
    • provides for public notice and opportunity to comment on environmental impacts of the proposed action; and
    • requires the tribe to provide responses to “relevant and substantive” public comments before the tribe may approve the lease.[4] 

The law also specifies that tribes may rely upon a Federal environmental review if an Indian tribe carries out a project or activity funded by a Federal agency, rather than on any tribal environmental review process, if they chose to do so.  The law requires that the Secretary either approve or disapprove any submission of proposed tribal regulations no later than 120 days after they are submitted (subject to the possibility of extensions upon consultation with the tribe), and provides that the Secretary supply written documentation describing the basis for any disapproval.  Once the tribal leasing regulations are in force, the law provides that the United States will no longer be liable for any losses sustained by a party to a lease approved under the tribal regulations.  The law also provides a mechanism for an interested party to petition the Secretary to review tribal compliance with the tribal leasing regulations.    

Importantly, the law does not allow for tribal approval of “a lease for the exploration, development, or extraction of any mineral resources,” and does not apply to individually owned Indian allotted land.  For business and agricultural leases entered into pursuant to approved tribal regulations, lease terms may be for up to 25 years (with up to 2 additional renewal terms).  If the lease is for public, religious, educational, recreational, or residential purposes, the term may be for up to 75 years.[5]

The HEARTH Act has the potential to significantly expedite and simplify the process for leasing tribal land.  The current leasing approval process, administered through the Bureau of Indian Affairs (BIA), can take years to complete.  This can considerably complicate project financing and other approvals and is believed to adversely impact the potential for economic development of lands held in trust. 

The HEARTH Act is an important development in the area of leasing tribal lands for renewable resource projects, and compliments the trend toward streamlining the process for these leases.  In November 2011, the Bureau of Indian Affairs proposed significant reforms to surface leasing regulations that included new provisions expressly governing wind and solar resource development.[6]  The comment period for those proposed regulations ended January 30, 2012, and the proposal remains pending.  The HEARTH Act also follows the Tribal Energy Resource provisions of the Energy Policy Act of 2005, which similarly promote tribal autonomy over (and reduced Secretarial approval of) energy development on tribal land.[7] 

Despite the HEARTH Act’s tremendous streamlining potential, it will likely take time to see a real-world impact on the leasing process given that tribes will first need to draft and receive Secretarial approval of their leasing regulations.  Prior leasing and energy initiatives have similarly taken time to implement.  For instance, to our knowledge, no tribe has entered into a TERA to date.   In the case of the Navajo Nation leasing regulations, it took nearly 5 years for the tribe to promulgate the regulations.  Tribes may be able to implement the HEART Act on a faster timeline since tribes could potentially use the Navajo leasing regulations as a model.  However, some tribes may be reluctant to assume the leasing authority since doing so could limit United States trust liability for those leases.

The HEARTH Act represents a big step toward streamlining the process of trust land leasing and providing tribes with more control over and a greater say in leasing approvals.  The law has the potential, once in full swing, to greatly increase the opportunities for economic development of tribal trust lands, including those related to renewable energy development, and could be a tremendous benefit to both tribes and entities interested in doing business in Indian country.

[1] Pub. L. No. 112-151, 126 Stat. 1150.

[2] 25 U.S.C. § 415(a).

[3] Pub. L. No. 106-568, §§ 1201-1203, 114 Stat. 2868, 2933 (codified at 25 U.S.C. § 415(e)).

[4] Pub. L. No. 112-151, §2, 126 Stat. 1150.

[5] Id.

[6] 76 Fed. Reg. 73784 (Nov. 29, 2011).

[7] Pub. L. No. 109-58, § 503, 119 Stat. 594, 769 (to be codified at 25 U.S.C. §3504); 25 C.F.R. part 224 (Bureau of Indian Affairs regulations implementing the Tribal Energy Resource provisions).