[Federal Register Volume 88, Number 63 (Monday, April 3, 2023)]
[Notices]
[Pages 19665-19666]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-06875]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

[234A2100DD/AAKC001030/A0A501010.999900]


HEARTH Act Approval of Southern Ute Indian Tribe of the Southern 
Ute Reservation, Colorado Leasing Ordinance

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Notice.

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SUMMARY: The Bureau of Indian Affairs (BIA) approved the Southern Ute 
Indian Tribe of the Southern Ute Reservation, Colorado Leasing 
Ordinance under the Helping Expedite and Advance Responsible Tribal 
Homeownership Act of 2012 (HEARTH Act). With this approval, the Tribe 
is authorized to enter into agriculture, business, residential, and 
wind and solar leases without further BIA approval.

DATES: BIA issued the approval on March 28, 2023.

FOR FURTHER INFORMATION CONTACT: Ms. Carla Clark, Bureau of Indian 
Affairs, Division of Real Estate Services, 1001 Indian School Road NW, 
Albuquerque, NM 87104, [email protected], (702) 484-3233.

SUPPLEMENTARY INFORMATION: 

I. Summary of the HEARTH Act

    The HEARTH Act makes a voluntary, alternative land leasing process 
available to Tribes, by amending the Indian Long-Term Leasing Act of 
1955, 25 U.S.C. 415. The HEARTH Act authorizes Tribes to negotiate and 
enter into business leases of Tribal trust lands with a primary term of 
25 years, and up to two renewal terms of 25 years each, without the 
approval of the Secretary of the Interior (Secretary). The HEARTH Act 
also authorizes Tribes to enter into leases for residential, 
recreational, religious or educational purposes for a primary term of 
up to 75 years without the approval of the Secretary. Participating 
Tribes develop Tribal Leasing regulations, including an environmental 
review process, and then must obtain the Secretary's approval of those 
regulations prior to entering into leases. The HEARTH Act requires the 
Secretary to approve Tribal regulations if the Tribal regulations are 
consistent with the Department of the Interior's (Department) leasing 
regulations at 25 CFR part 162 and provide for an environmental review 
process that meets requirements set forth in the HEARTH Act. This 
notice announces that the Secretary, through the Assistant Secretary--
Indian Affairs, has approved the Tribal regulations for the Southern 
Ute Indian Tribe of the Southern Ute Reservation, Colorado.

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 72440, 72447-48 (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 HEARTH 
Act.
    Section 5 of the Indian Reorganization Act, 25 U.S.C. 5108, 
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)). Similarly, section 5108 preempts 
State taxation of rent payments by a lessee for leased trust lands, 
because ``tax on the payment of rent is indistinguishable from an 
impermissible tax on the land.'' See Seminole Tribe of Florida v. 
Stranburg, 799 F.3d 1324, 1331, n.8 (11th Cir. 2015). In addition, as 
explained in the preamble to the revised leasing

[[Page 19666]]

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 
72447-48, 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 HEARTH Act. 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). The HEARTH Act was intended to afford Tribes ``flexibility to 
adapt lease terms to suit [their] business and cultural needs'' and to 
``enable [Tribes] to approve leases quickly and efficiently.'' H. Rep. 
112-427 at 6 (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, 572 U.S. 782, 810 
(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 810-11 (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).
    Similar to BIA's surface leasing regulations, Tribal regulations 
under the HEARTH Act pervasively cover all aspects of leasing. See 25 
U.S.C. 415(h)(3)(B)(i) (requiring Tribal regulations be consistent with 
BIA surface leasing regulations). Furthermore, the Federal government 
remains involved in the Tribal land leasing process by approving the 
Tribal leasing regulations in the first instance and providing 
technical assistance, upon request by a Tribe, for the development of 
an environmental review process. The Secretary also retains authority 
to take any necessary actions to remedy violations of a lease or of the 
Tribal regulations, including terminating the lease or rescinding 
approval of the Tribal regulations and reassuming lease approval 
responsibilities. Moreover, the Secretary continues to review, approve, 
and 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 
Southern Ute Indian Tribe of the Southern Ute Reservation, Colorado.

Bryan Newland,
Assistant Secretary--Indian Affairs.
[FR Doc. 2023-06875 Filed 3-31-23; 8:45 am]
BILLING CODE 4337-15-P