[Federal Register Volume 80, Number 217 (Tuesday, November 10, 2015)]
[Notices]
[Pages 69692-69693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-28476]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

[156A2100DD/AAKC001030/A0A501010.999900 253G]


Navajo Nation Trust Leasing Act of 2000 Approval of Navajo Nation 
Regulations

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Notice.

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SUMMARY: On May 16, 2014, the Bureau of Indian Affairs (BIA) approved 
the Navajo Nation General Leasing Regulations under the Navajo Nation 
Trust Leasing Act of 2000. With this approval, the Tribe is authorized 
to enter into leases without BIA approval.

FOR FURTHER INFORMATION CONTACT: Ms. Cynthia Morales, Office of Trust 
Services--Division of Realty, Bureau of Indian Affairs; Telephone (202) 
768-4166; Email [email protected].

SUPPLEMENTARY INFORMATION: 

I. Summary of the Navajo Nation Trust Leasing Act of 2000

    The Navajo Nation Trust Leasing Act authorizes the Nation to issue 
leases for purposes authorized under 25 U.S.C. 415(a) without the 
approval of the Secretary, provided the lease is executed under tribal 
regulations approved by the Secretary. Congress enacted the Leasing Act 
in 2000, to ``establish a streamlined process for the Navajo Nation to 
lease trust lands without having the approval of the Secretary of the 
Interior for individual leases,'' and ``[t]o maintain, strengthen, and 
protect the Navajo Nation's leasing power over Navajo trust lands.'' 
Public Law 106-568 Sec.  1202, 114 Stat. 2933 (Dec. 27, 2000). See also 
S. Rpt. 106-511 (Oct. 31, 2000). The Navajo Nation Trust Leasing Act 
requires the Secretary to approve tribal regulations if the tribal 
regulations are consistent with the Department's leasing regulations at 
25 CFR part 162 and provide for an environmental review process that 
meets requirements set forth in the Act. This notice announces that the 
Secretary, through the Assistant Secretary--Indian Affairs, has 
approved the tribal regulations for the Navajo Nation.

II. Federal Preemption of State and Local Taxes

    The Department's regulations governing the surface leasing of trust 
and restricted Indian lands specify that, subject to applicable Federal 
law, permanent improvements on leased land, leasehold or possessory 
interests, and activities under the lease are not subject to State and 
local taxation and may be subject to taxation by the Indian tribe with 
jurisdiction. See 25 CFR 162.017. As explained further in the preamble 
to the final regulations, the Federal government has a strong interest 
in promoting economic development, self-determination, and tribal 
sovereignty. 77 FR 72,440, 72,447-48 (December 5, 2012). The principles 
supporting the Federal preemption of State law in the field of Indian 
leasing and the taxation of lease-related interests and activities 
applies with equal force to leases entered into under tribal leasing 
regulations approved by the Federal government pursuant to the Navajo 
Nation Trust Leasing Act.
    Section 5 of the Indian Reorganization Act, 25 U.S.C. 465, preempts 
State and local taxation of permanent improvements on trust land. 
Confederated Tribes of the Chehalis Reservation v. Thurston County, 724 
F.3d 1153, 1157 (9th Cir. 2013) (citing Mescalero Apache Tribe v. 
Jones, 411 U.S. 145 (1973)). In addition, as explained in the preamble 
to the revised leasing regulations at 25 CFR part 162, Federal courts 
have applied a balancing test to determine whether State and local 
taxation of non-Indians on the reservation is preempted. White Mountain 
Apache Tribe v. Bracker, 448 U.S. 136, 143 (1980). The Bracker 
balancing test, which is conducted against a backdrop of ``traditional 
notions of Indian self-government,'' requires a particularized 
examination of the relevant State, Federal, and tribal interests. We 
hereby adopt the Bracker analysis from the preamble to the surface 
leasing regulations, 77 FR at 72,447-48, as supplemented by the 
analysis below.
    The strong Federal and tribal interests against State and local 
taxation of improvements, leaseholds, and activities on land leased 
under the Department's leasing regulations apply equally to 
improvements, leaseholds, and activities on land leased pursuant to 
tribal leasing regulations approved under the Navajo Nation Trust 
Leasing Act. The Navajo Nation Trust Leasing Act was intended to 
``revitalize the distressed Navajo Reservation by promoting political 
self-determination, and encouraging economic self-sufficiency, 
including economic development that increases productivity and the 
standard of living for members of the Navajo Nation.'' Public Law 106-
568 Sec.  1202, 114 Stat. 2933 (Dec. 27, 2000). Moreover, the Navajo 
Nation Trust Leasing Act was the model for the HEARTH (Helping Expedite 
and Advance Responsible Tribal Homeownership) Act of 2012, for which 
Congress's overarching intent was to ``allow tribes to exercise greater 
control over their own land, support self-determination, and eliminate 
bureaucratic delays that stand in the way of homeownership and economic 
development in tribal communities.'' 158 Cong. Rec. H. 2682 (May 15, 
2012).
    Assessment of State and local taxes would obstruct these express 
Federal policies supporting tribal economic development and self-
determination, and also threaten substantial tribal interests in 
effective tribal government, economic self-sufficiency, and territorial 
autonomy. See Michigan v. Bay Mills Indian Community, 134 S. Ct. 2024, 
2043 (2014) (Sotomayor, J., concurring) (determining that ``[a] key 
goal of the Federal Government is to render Tribes more self-
sufficient, and better positioned to fund their own sovereign 
functions, rather than relying on Federal funding''). The additional 
costs of State and local taxation have a chilling effect on potential 
lessees, as well as on a tribe that, as a result, might refrain from 
exercising its own sovereign right to impose a tribal tax to support 
its infrastructure needs. See id. at 2043-44 (finding that State and 
local taxes greatly discourage tribes from raising tax revenue from the 
same sources because the imposition of double taxation would impede 
tribal economic growth).
    Just like BIA's surface leasing regulations, tribal regulations 
under the Navajo Nation Trust Leasing Act pervasively cover all aspects 
of leasing. Furthermore, the Federal government remains involved in the 
tribal land leasing process by approving the tribal leasing regulations 
in the first instance. The Secretary also retains authority to take 
``all appropriate actions . . . in furtherance of the trust obligation 
of the United States to the Navajo Nation'' and necessary actions 
remedy violations of tribal regulations, including cancelling the lease 
or rescinding approval of the tribal regulations and reassuming lease 
approval responsibilities. 25 U.S.C. 415(e). Moreover, the Secretary 
continues to review, approve, and

[[Page 69693]]

monitor individual Indian land leases and other types of leases not 
covered under the tribal regulations according to the Part 162 
regulations.
    Accordingly, the Federal and tribal interests weigh heavily in 
favor of preemption of State and local taxes on lease-related 
activities and interests, regardless of whether the lease is governed 
by tribal leasing regulations or Part 162. Improvements, activities, 
and leasehold or possessory interests may be subject to taxation by the 
Navajo Nation.

    Dated: November 2, 2015.
Kevin K. Washburn,
Assistant Secretary, Indian Affairs.
[FR Doc. 2015-28476 Filed 11-9-15; 8:45 am]
BILLING CODE 4337-15-P