Tips, Tricks, Pitfalls to Avoid Michael J. McMillin LEASING INDIAN LANDS Tips, Tricks, Pitfalls to Avoid Michael J. McMillin

Contact Information Munson & McMillin, P.C. 247 N. Broadway Edmond, Oklahoma 73034 mmcmillin@munsonmcmillin.com (405) 513-7707

General Overview Restricted Lands v. Trust Lands

General Overview Osage Tribe This discussion does not apply to lands owned by the Osage Tribe

General Overview Restricted Lands Began in the 1890’s with the Dawes Commission Established census, tribal rolls, Curtis Bill established plan for the restricted status of land Several more laws dealing with restrictions May 28, 1908 – Removal of restrictions for several types of Allottees 1934 – Indian Reorganization Act 5 Civilized Tribes Cherokee, Muscogee (Creek), Chickasaw, Choctaw, Seminole

General Overview Restricted Lands Restrictions on sales and leases (any transfer of ownership) Fitzpatrick Indian Title Chart ½ blood quantum or more (today) District courts are vested with jurisdiction Stigler Act

General Overview Trust Lands All other tribes General Allotment Act of 1887 The federal government holds title to the land for the benefit of an individual Indian Keep in mind Generally, Indian status of land is NOT dependent on blood quantum Approval of the Secretary is needed to sell/convey/lease the property

General Overview Trust Lands Goal of Federal Government Oversight Management of land/minerals Guardian/Ward relationship Initial trust patents were set out for 25 years The timeframe has been extended by acts of Congress State courts have NO jurisdiction as long as the lands are in trust

General Overview Ensure all early conveyances were properly completed Estoril Producing Corporation v. Murdock, 1991 OKCIVAPP 122 Conveyance from Kah-Kah-to-the-Quah, who received an allotment of trust land in 1893. He subsequently conveyed an interest to the railroad, which was NOT approved by the Secretary of the Interior. In 1980, the successors to the railroad attempted to lease this interest. The original conveyance did not meet three criteria: Conveyance made on terms prescribed by Secretary of the interior, made under the supervision of the Commissioner of Indian Affairs, and approved by the Secretary of the Interior Therefore, the original conveyance was not fee simple, only an easement. The 1980 lease was set aside.

Leasing Restricted Lands

Leasing Restricted Lands Cherokee, Muscogee (Creek), Chickasaw, Choctaw, Seminole The leases are executed by the individual Indian owner, but approved by the district court in the county where the land is located. Private lease No more than 3 year terms, 3/16 royalty, paid up, no warranty

Leasing Restricted Lands The lessee will negotiate terms with the individual owner If the Indian owner has a blood quantum of ½ or more, then you will need district court approval Always confirm restricted status with the appropriate tribal office The MRTA does NOT apply to Indians of the five civilized tribes

Leasing Restricted Lands Muscogee (Creek) Nation Realty Trust Services Cherokee Nation Real Estate Services Eastern Oklahoma Regional Office Bureau of Indian Affairs Chickasaw and Seminole Choctaw Nation Real Property Division Email: bsullivan@mcn-nsn.gov Email: ginger- reeves@cherokee.org Email: karen.stills@bia.gov Email: dloper@choctawnation.com

Leasing Restricted Lands As you get information, send it to the attorney (even before leases are executed) Be sure to include all information you have Roll Nos. Heirs/last will and testaments Set out all heirship from Allottee Any information you have received from the tribe The attorney will provide the proposed petition and waiver The attorney will file the Petition for approval, publish notice (which recites the consideration) Notice will be given to the Solicitor’s office

Leasing Restricted Lands A hearing will be set Not less than 10 days after notice Set by the BIA depending on tribe Competitive bidding may occur at the hearing Based on fair market value Judge must be satisfied with the consideration (best interest of the Indian owner) Evidence and hearings will be transcribed. There must be a record. Sale will be confirmed to the highest bidder The purchaser/lessee must pay all costs of the case Generally, the lessor is then paid directly

Leasing Restricted Lands This process is in an administrative capacity as delegated by the federal government Therefore, any heirship that is set out is NOT a final determination of heirship Order cannot be used to clear title nor is the lease warranted There must be a separate case filed (probate or quiet title) to determine heirship Operators may take the business risk and rely on affidavits or files of the BIA Minors and incompetents must have guardians appointed (pursuant to state law)

Force Pooling Restricted Lands There is a process to force pool restricted lands What you need to do: Contact the appropriate BIA office Will need to provide proof of attempting to locate the owners through searches of county records, telephone directories, Tribal papers, BIA records Publish in the appropriate Tribal newspaper Forward the above along with the application for pooling and testimony given for market value to the BIA That information is then forwarded to the BLM for review Forward the final order to the BLM for approval Time to complete

Leasing Trust Lands

Very different process from restricted lands Leasing Trust Lands Very different process from restricted lands Leases are approved by the appropriate agency within the BIA State courts do not have jurisdiction All leases will be on the appropriate BIA form Eastern Tribes Western Tribes

Leasing Trust Lands Eastern Tribes Western Tribes Administered by the Eastern Oklahoma Regional Office in Muskogee Periodic sealed bids There are some five civilized tribal lands that are held in Trust It all goes back to the original allotment/patent Western Tribes Tribes are divided by agencies (see contact sheet)

Records Maintained under the Southern Plains Regional Office in Anadarko Anadarko Agency: Apache Tribe Caddo Nation Comanche Nation Delaware Nation Fort Sill Apache Tribe Kiowa Indian Tribe Wichita and Affiliated Tribes Concho Agency: Cheyenne-Arapaho Horton Agency: Iowa Tribe of Kansas & Nebraska Kickapoo Tribe in Kansas Prairie Band of Potawatomi Nation Sac and Fox Nation of Missouri Pawnee Agency: Kaw Nation Otoe-Missouria Tribe of Indians Pawnee Nation Ponca Tribe of Indians Tonkawa Tribe

Leasing Trust Lands Always obtain a Title Status Report (TSR) from the appropriate agency This will be the record title for those trust lands Agencies are charged with record title, not the county clerk’s office All leases and subsequent assignments must be filed with the appropriate agency These must also be on the appropriate BIA form The BIA keeps the official records

Leasing Trust Lands Contact the appropriate agency to begin the leasing process All negotiations are generally handled through the administrative office, NOT with the Indian owner Permission may be given to negotiate with the Indian owner The lease forms may vary slightly based on tribe/office Eastern – lease royalties are gradual based on production Western – generally a 1/5 lease All leases will contain depth clauses For each agency, there are notice requirements, a bidding process, then approval (4-6 weeks after submission for approval)

Leasing Trust Lands All BIA leases will be subject to all federal environmental regulations (Clean Air Act, National Environmental Protection Act, etc.) The expiration date of the lease is from the date of approval Assignments must be on BIA forms and filed with the appropriate BIA office Pooling and spacing language will NOT be included in BIA leases Must obtain a Communitization Agreement

Leasing Trust Lands Communitization Agreement Will be limited to the lands and common sources of supply required for production Timely execution is vital 90 days prior to lease expiration Miles v. Southern Plains Regional Director, BIA, 60 IBIA 257 (2015), vacated and remanded to Board, Cimarex Energy Co. v. Gilbert Miles, No. CIV-15-1163-F (W.D. Okla. 2016), remanded to Concho Agency Superintendent, Miles v. Southern Plains Regional Director, 63 IBIA 55 (2016), appeal dismissed, Cimarex Energy Co., et al. v. Acting Southern Plains Regional Director, 65 IBIA 277 (2018) The issue is whether the Communitization Agreement was properly approved

Leasing Trust Lands Key Points from Miles The Communitization Agreement must be filed with the Superintendent or Regional Director 90 days prior to the first expiration date of any Indian Leases in the proposed drilling unit (See 25 C.F.R. § 212.28(e)) At its discretion, the Agreement may be reviewed within the 90 days if it is in the best interest of the Indian However, a Communitization Agreement must be approved before the lease expiration date (See 25 C.F.R. § 212.28(f)) “An Indian oil and gas lease expires by its own terms when there is no production during the primary term and the lease is not included within a producing unit under a CA approved prior to the expiration of the lease.” Black Hawk Oil Co. v. Acting Anadarko Area Director, 18 IBIA 414, 421 (1990) (citing Continental Oil Co., 2 IBIA 116 (1973))

Key Points Each tribe is different Always contact the agency first Building relationships With heirs – name as many as you can With BIA Payments

Helpful Websites and Resources Dawes Rolls http://www.okhistory.org/research/dawes Fitzpatrick Charts http://thorpe.ou.edu/treatises/fitzpatrick/fitzchart.html Guide to Rarick’s Oklahoma Indian Law Titles http://thorpe.ou.edu/treatises/guideidx.html Southern Plains Region https://www.bia.gov/regional-offices/southern-plains/ Contact Handout