 Beginning in 1953 , the tribe entered into agreements with oil companies , including the plaintiffs Merrion and Bayless , to provide oil and gas leases . The leases were approved by the Commissioner of Indian Affairs ( now the Bureau of Indian Affairs , or BIA ) in accordance with 25 U.S.C. § § 396a – 396g . As was the usual practice at the time , the oil companies negotiated directly with BIA , who then presented the contracts to the tribal council . While the oil and gas was from reservation land , Merrion paid severance taxes to the state of New Mexico under the provisions of 25 U.S.C. § 398c , where Congress had authorized such taxation in 1927 . The leases provided for royalties to be paid to the tribe , but the BIA was lax in collecting them . In 1973 , tribal attorneys wrote to the BIA to demand the collection of royalties , and after a year delay , the BIA would only state that they were " looking into it . " In 1976 , the BIA approved a tribal ordinance that also provided for a severance tax . This tax was set at 29 cents ( U.S. ) per barrel of oil and at 5 cents per million British thermal units ( BTU ) for natural gas . 
