Every community needs the ability to invest in its future. But for Tribal Nations, the path to accessing capital can involve legal and structural barriers that are not present for other units of government and that can have profound consequences for what is possible on the ground. In late April, the Public Finance Institute (PFI), in collaboration with the Greater Arizona Development Authority (GADA) and the Government Finance Officers Association (GFOA), hosted a workshop, Funding the Future: Infrastructure Planning for Rural and Tribal Communities. The workshop brought together leaders to explore the information, insights, and strategies needed to plan, finance, and advance meaningful investments in their communities.
One issue that we learned about at the workshop from some of the participants who joined us underscored the distinct and complex challenges Tribal communities can face in accessing capital: Tribal sovereign immunity waivers. As background, these voluntary agreements involve a Tribe consenting, in whole or in part, to be subject to suit or legal accountability in a specific circumstance.
We learned that for lenders, investors, and other capital providers, such waivers can become an important consideration in structuring a transaction.
For Tribal Nations, however, they sit at the intersection of sovereignty, self-determination, access to capital, and the ability to invest in community priorities. The conversations we’ve engaged in around this topic have made clear that this is a complex issue deserving greater attention, particularly from stakeholders seeking to expand equitable access to capital. PFI is contributing this post as a starting point for that broader conversation and to share and externalize our learnings as we build our base of understanding on these issues.
A brief history of Tribal Sovereign Immunity Waivers
Before exploring the importance of this concept, it is important to briefly consider its history. Tribal sovereign immunity is a legal doctrine that developed in U.S. law in the early twentieth century, recognizing that Tribal Nations, given their unique sovereign status, enjoy immunity from suit in much the same way that states and the federal government do. This means an aggrieved party cannot either sue the government or governmental entity unless a waiver has been given and even then, typically the scope of such a suit is preemptively outlined in the waiver itself. While decades of subsequent cases have reaffirmed important aspects of Tribal sovereignty and sovereign immunity, the legal landscape continues to evolve, including through recent court decisions and debates over the scope of Tribal sovereign authority.
This doctrine itself is the culmination of a centuries-long historical process of violence, displacement, and discrimination against Tribal Nations and communities that predates even the founding of the United States. Though today the U.S.’s treaty obligations are largely adhered to, this wasn’t always the case. The U.S. government's practice of signing treaties with Tribes ended in 1871. Of the approximately 370 treaties that were ratified between its founding and the end of the practice, many of them were violated in some way, shape, or form by the U.S. This history of broken commitments did more than undermine individual agreements; it eroded trust in the very legal framework through which Nation-to-Nation relations were meant to be established.
Tribal sovereignty and autonomy
Tribal sovereign immunity is widely understood as an important component of Tribal sovereignty and autonomy. It also provides legal protection for Tribal governments, which often operate with limited fiscal resources. The historical experiences of Tribal Nations with non-Tribal governments and entities (including instances of exploitative or adverse business practices) provide important context for understanding the caution that may accompany certain commercial relationships.
Dynamics that surfaced in our research on this topic highlight the tension that can exist between protecting Tribal sovereignty and creating the clarity and predictability that outside parties may seek when entering into business relationships with Tribal Nations. Some experts highlighted how they are structuring waivers to establish clear parameters around the types or amounts of remedies available to outside parties while counterbalancing Tribal Nations’ interests. The process of negotiating and approving such agreements can also introduce additional considerations and challenges, particularly for transactions operating within conventional financing timelines.
The importance of patience, flexibility & openness
There is no one-size-fits-all approach in this complex and important area.
Building durable business relationships with Tribal Nations requires an appreciation for the importance of Tribal decision-making processes and a willingness to engage with them thoughtfully and respectfully.
Private-sector leaders should bring patience, flexibility, and openness to new approaches to financing and partnership with Tribal Nations. Together, practices built with a vision for shared values, openness and clear intentions to all partner’s needs, and attentiveness to history, can help create the conditions for productive, durable relationships that support investment and economic opportunity in Tribal communities, and, in turn, can support greater access to capital for place-based priorities to be realized and sustained.
Acknowledgements & Disclaimer
This resource was created for educational purposes only as part of the Rural & Small Cities Program, with the support of the Robert Wood Johnson Foundation. The views and perspectives presented in this resource are those of the authors and the Public Finance Institute team.
