Bill Lomax: Supreme Court decision hurts tribal economies

Thursday, December 15, 2011  

"In the Carcieri v. Salazar decision, the Supreme Court stood 75 years of policy and practice on its head. The Indian Reorganization Act (IRA) of 1934 authorized the secretary of the Interior to take lands into trust for federally recognized tribes. But the court has placed all tribes into a web of uncertainty by ruling that the secretary did not have the authority to take land into trust for tribes that were not considered “under federal jurisdiction” when the IRA was enacted. Not only did the Supreme Court effectively create two unequal classes of tribes—those which can have land in trust and those which cannot, but it also failed to address the question of precisely what “under federal jurisdiction” means, as no one single common definition has been agreed upon and accepted by the courts.

The uncertainty created by the Carcieri decision paralyzes economic development because banks and other financing sources are hesitant to back tribal businesses; it is impossible to tell whether a tribe will be affected by the Carcieri ruling. Land is vital to tribal economic growth, and if the rights to tribal land are no longer protected, lenders will not invest, and tribal businesses will be unable to grow.

Uncertainty and risk are two formidable roadblocks to raising capital. Banks and other investors are hesitant to lend money where they perceive risk. The more risk associated with a loan, the higher the cost of borrowing. If the risk gets too high, banks simply stop lending and tribal development becomes untenable. The uncertainty created by the Carcieri decision has greatly hampered potential business owners from opening their doors or expanding to create new jobs."

Get the Story:
Bill Lomax: Job Creators Paralyzed by Supreme Court’s Carcieri Decision (Indian Country Today 12/14)

Supreme Court Decision:
Syllabus | Opinion [Thomas] | Concurrence [Breyer] | Dissent [Stevens] | Concurrence/Dissent [Souter]

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