Federal Legal Issues

This page describes some legal issues at the federal level concerning tribal energy development.

Environmental Protection

The Environmental Protection Agency (EPA) includes an American Indian Environmental Office that has primary jurisdiction to enforce environmental protection laws on Indian reservations. If the project involves the discharge of any pollutants into the environment, federal permitting may be required. Under the Clean Water Act and the Clean Air Act, tribes can assume responsibility to adopt their own water or air quality standards for their reservations. However, this can be a lengthy and burdensome process, and project development should not be contingent on the tribe securing that authority.

Cultural Resource Protection

The National Historic Preservation Act (NHPA), the Archeological Resource Protection Act (ARPA), and the Native American Graves Protection and Repatriation Act (NAGPRA) apply on reservation lands. Tribes can assume the federal enforcement functions under the NHPA and appoint a Tribal Historic Preservation Officer. Any project requiring a federal permit or approval must have cultural resource clearance.

Rights of Way or Leases

If the project requires any rights of way or leasing of Indian lands, federal law requires that the Bureau of Indian Affairs (BIA) must approve those arrangements. Failure to follow the strict requirements of these laws will result in a finding that the facilities are in trespass. Security arrangements for financing that encumber trust or restricted lands for seven years or more will also require BIA approval.


Income derived from Section 17 chartered corporations is tax exempt. However, recent policy of the Internal Revenue Service (IRS) calls for closer scrutiny of corporations chartered under tribal law (in order for the income of the corporation to remain tax exempt). Tribes should never use state laws to form their business enterprise. The IRS treats income from those businesses as taxable. For a good summary of these rules, see the IRS Web site for Indian tribal governments.