Hoeven: Tribes Can Share in State's Opportunities

BISMARCK, N.D. – Senator John Hoeven today told a gathering of the Three Affiliated Tribes that the best way to help create jobs on reservations is to make sure that they share in opportunities created by North Dakota’s growing economy. The senator spoke before the Tribal Employment Rights Office staff and tribal leaders.

To illustrate his point, Hoeven cited a historic oil and gas agreement he helped forge with the Three Affiliated Tribes and how that approach might work on a national level.

North Dakota had been working very hard to attract and retain energy companies to western North Dakota, and that work was beginning to pay off in 2007. Wells were being permitted and sunk, and people were finally making a good living in that part of the state – including many families that owned the mineral rights under their land and the many service companies that mushroomed to serve the burgeoning oil industry.

The case was different on the Fort Berthold Reservations for the Three Affiliated Tribes, which was blessed with mineral resources. There was duplicated regulation and the tribe was not receiving taxes for production on non-tribal land within the reservation boundaries. Further, the tax rate on tribal land within the reservation was double because both the tribe and state taxed it. Therefore there was just one rig on the reservation, and that one was on fee land - non-tribal land. No rigs were drilling on the Indian land.

To remedy that, working with the Three Affiliated Tribes, the Hoeven administration, working with the state Legislature, crafted a first-in-the-nation oil and gas bill that comprehensively reformed taxation and regulations of oil production on the reservation. The agreement, which was signed in 2008, created a competitive environment that respected tribal sovereignty and also made the playing field equal on and off the reservation for companies looking to explore. Prior to the 2008 agreement, there had not been a well drilled on Fort Berthold trust lands in 27 years because of the unstable and unpredictable tax and regulatory structure.

Under the agreement, the state and tribes agreed to have one tax structure, with oil companies paying a 6.5 percent extraction tax and a 5 percent production tax on trust land, the same taxes that companies pay in the rest of the state. For wells drilled on trust lands, that revenue was divided equally between the state and the tribe. To date, the agreement has yielded about half a billion dollars for Fort Berthold in tax revenue and royalties.

“TERO was a big part of the original agreement because it also provided for workforce training,” Hoeven said. “It recognized and funded the Tribal Employment Rights Office, which has been training and helping Native Americans find employment in the oil industry.”

The senator said the agreement is opening up entrepreneurial opportunities for tribe members on the reservation, as well. For example, a member of the tribe started driving a truck for an oil company doing business on the reservation. He quickly discovered that he could operate his own truck and work for himself. In a few short years, he owned several trucks and employed dozens of his own employees.

“The point is this,” Hoeven said. “If we improve the economic situation on reservations, if we encourage the building of business enterprises, industry, retail stores, and other economic ventures, we build jobs and opportunities. And that makes families stronger, schools better, and tribal communities a better place to live and work.”