New formula prioritizes potential value of the land to tribal economic development rather than simply looking at reducing total fractionation
Five years into the $1.9 billion Cobell Trust Land Buy-Back program and with funds quickly dwindling, the Department of the Interior announced July 31 that it is looking at its priorities in making future purchase offers to individual owners through a different lens: severity of fractionation, appraisal complexity, degree of ownership overlap between locations or geographic proximity, tribal readiness, past response rate, and cost and efficiency, including land value.
Prior to this shift, the objectives of the program were straightforward: to increase the tribe’s title share hold to 50 percent or greater in order to make it easier for the tribe to use its controlling interest to reduce the number of parcels standing vacant and unused.
The new formula puts a premium on the potential value of the land to tribal economic development rather than simply looking at reducing total fractionation so that the tribe can determine what to do with the land.
While the current program has had notable success – the reduction of the number of fractional interests by 23 percent since 2013, “[We’re] really trying to make sure that the remaining acreage is the best that it can be….of the dollars we have left, how can that be used in a way that’s going to get the most interest?…. said John McClanahan, Interior Director of the Land Buy-Back Program for Tribal Nations in an April tribal listening session focused on the program.
Injecting the “best it can be” into the formula will likely make the buy-back program more competitive, both between tribes and between tribal members. Potential winners would logically be tribes – and individuals – with more natural resources on fractionated lands whose consolidation allows the tribe to develop those resources.
Another element that will enter into Interior’s decision-making framework is the addition of more tribes, presumably those with characteristics more attractive to businesses or investors, to the queue, along with the elimination of tribes already identified for land buy-back from the program.
“Hard choices,” McClanahan called them, at the same time he solicited tribal leadership help in making them. Deb DuMontier, the Acting Special Trustee for American Indians, and a major partner in the Buy-Back Program in appraisal work and outreach, acknowledged that indeed, under the new framework, “not everyone will receive a buy-back purchase offer.”
DOI’s refocusing of its priorities – and purchase – of parcels based on the productivity of the land could certainly force the hand of parcels with multiple owners to act on their own. This would reduce the cost of consolidation to the buy-back program and achieve some of the programs goals at no cost. But it could also create resentment amongst tribal members and tribes at a time when inter-tribal solidarity is growing due to external political pressure. Bottom line: there will be winners and losers, and this could drive a wedge between both as these new Interior priorities are put into place.
Bruce Loudermilk, director for the Bureau of Indian Affairs, broke down the four major phases of the Buy-Back Program in an April tribal listening session. Phase 1 is outreach – meeting with tribes and individual landowners to provide them with information on their land holdings, and their options under the program or as non-participants. This is followed by land research in Phase 2 which is largely data gathering on precipitation, elevation, soil types, access, the presence of timber or minerals, so that the land valuation – the fair market value of the land (appraisal) – can be done in Phase 3. This is followed by land acquisition in Phase 4 when BIA sends out offers to select individual landowners, processes their responses, and transfers those that accept the offers into tribal trust.
So far, the program has purchased more than two million acres from more than 700,000 fractional interests on almost 40,000 tracts at 45 locations at a cost of $1.2 billion dollars, or 75 percent of the $1.56 billion available under the program. The program has also expended 25 percent of the $285 million authorized for implementing the program. In other words, the program is spending money faster than planned. Thus, the strategic redirect.
Interior believes that its revised strategy “will more effectively allocate the remaining Program funds to reduce the maximum amount of fraction interests…” while providing “new opportunities for tribal governments to use the Program’s tools and systems to facilitate their own land consolidation initiatives.” In brief, as in its other programs, Interior is essentially transferring the responsibilities of the Buy-Back Program – and ultimately its costs – to the tribes. Though not an unfunded mandate, the effect is the same since the expectation has been solidly embedded in tribal – and governmental – thinking.
For Interior Associate Deputy Secretary James Cason, “The revised strategy…maximizes the remaining dollars left for the implementation of the Buy-Back Program and seeks to achieve the greatest reduction of fractional interests, the largest number possible of landowners able to participate, and the most effective use of the Department’s resources,” he has testified before Congress.
To make the changes more palatable to the tribes and potential landholders, Interior has also implemented some changes demanded by the tribes at a December Senate Committee on Indian Affairs hearing. It is examining how to facilitate tribal and co-owner purchases, lengthening the validity of an appraisal from nine to 12 months, streamlining cooperative agreements with tribes with regard to funding mechanisms for land consolidation, revising the acquisition approach to prioritize acquiring tracts with above or below ground mineral rights – especially where tribes or individuals commit to use their own funds to acquire fractional interests, and extending offer times from 45 to 60 days.
While most of these changes come in direct response to concerns voiced at the hearing, prioritizing parcels with minerals is not, and it will be interesting to see how Indian country reacts to this facet of the new strategy, or whether, as Elouise Cobell was once inclined to do, remind the government that the value of land to Indians is about more than economics.