Here is yesterday’s order list.
Cert petition here.
Lower court materials here.
An excerpt from the court’s summary:
The panel affirmed the district court’s dismissal for lack of standing and ripeness of a complaint brought by the Desert Water Agency (“DWA”), a political subdivision of the State of California, against the United States Department of the Interior and its Bureau of Indian Affairs, challenging a federal regulation that DWA believed might preempt certain taxes and fees DWA assessed against non-Indians who leased lands within an Indian reservation.
New federal regulation 25 C.F.R. § 162.017 concerns taxes applied to leases approved on Indian lands to third parties. DWA provides water supplies and water services to businesses and residences in Riverside County, California, and charges fees and taxes to non-Indians who lease land from the Agua Caliente Band of Cahuilla Indians within the Agua Caliente Indian Reservation.
The panel held that § 162.017 did not purport to change existing law, and therefore, did not itself operate to preempt DWA’s charges, and did not command DWA to modify its behavior by doing or refraining from doing anything. The panel concluded that DWA lacked standing because it had not suffered a cognizable injury at the hands of the Department of the Interior.
Lower court materials here.
|This webinar explore the effect of the new Interior regulations excluding state taxes on business leases in Indian Country. The panel will describe recent changes to the regulations and chart the course of the litigation ongoing in several states over the new regulations. The panel will also discuss strategies being considered to resolve this longstanding state-tribal conflict outside of the ongoing litigation.
Wendy S. Pearson, Pearson Law Offices PS, Seattle, WA
Bruce Zimmerman, Confederated Tribes of the Umatilla Indian Reservation, Pendleton, OR
Joseph C. Lennihan, Attorney At Law, Santa Fe, NM
Shana Barehand, Tribal Liaison, Washington Department of Revenue, Olympia, WA
For more information and to register click here.
PLEASE NOTE: To receive CLE credit you must be logged into the webinar interface for the ENTIRE program (including the Q&A). Partial credit is not available for this program. Please see the CLE Informaton page for more details
By: Del Laverdure and Bryan Newland
Last week’s decision out of the U.S. District Court in Southern Florida in Seminole Tribe of Florida v. Florida could signal a potential shift in Indian tax law.
For many tribal leaders and Indian law practitioners, tax law in Indian country is an intimidating jurisdictional maze – often times allowing state and local taxes to apply in Indian country in spite of tribal territorial sovereignty. The outcome of an Indian tax case depends upon a combination of the type of tax or government fee imposed, the government doing the taxing, the individual or entity being taxed, and the location of the activity, individual, or property being taxed.
Many states have levied taxes on non-Indians and non-Indian businesses working in Indian country; and, in recent years, these efforts have been upheld under the Supreme Court’s decision in White Mountain Apache Tribe v. Bracker. Under that case, a reviewing court must balance the interest of the tribe, the state, and the federal government when deciding whether state taxes in Indian country are preempted by federal law. In many losing cases, tribal litigants have tried to invalidate state taxation without a clear statement of the federal government’s interest.
In the Seminole case, the State of Florida was attempting to impose two different taxes on tribal lands: a “rental tax” on businesses leasing property from the Tribe; and, a “utility tax” on electricity delivered to the Tribe’s lands. The Court held that Florida’s rental tax was preempted by federal laws governing leasing on Indian lands (it also invalidated the utility tax because the legal incidence of the tax fell on the Tribe).
Here are the new materials:
Prior post here.
Update: Here is the complaint:
The Desert Water Agency, based in southern California, has sued the Department of the Interior over the tax provisions in its new Indian leasing regulations.
The Department of the Interior published revised surface leasing regulations in November 2012, after a year-long public notice and comment rulemaking process. Those regulations govern surface leasing of Indian lands, and include a new provision clarifying the tax status of property and activities under a lease:
§ 162.017 What taxes apply to leases approved under this part?
(a) Subject only to applicable Federal law, permanent improvements on the leased land, without regard to ownership of those improvements, are not subject to any fee, tax, assessment, levy, or other charge imposed by any State or political subdivision of a State. Improvements may be subject to taxation by the Indian tribe with jurisdiction.
(b) Subject only to applicable Federal law, activities under a lease conducted on the leased premises are not subject to any fee, tax, assessment, levy, or other charge (e.g., business use, privilege, public utility, excise, gross revenue taxes) imposed by any State or political subdivision of a State. Activities may be subject to taxation by the Indian tribe with jurisdiction.
(c) Subject only to applicable Federal law, the leasehold or possessory interest is not subject to any fee, tax, assessment, levy, or other charge imposed by any State or political subdivision of a State. Leasehold or possessory interests may be subject to taxation by the Indian tribe with jurisdiction.
In its complaint, the Desert Water Agency is challenging the application of this provision to the fees it assesses to water users/lessees on tribal lands (particularly the Agua Caliente Reservation) in southern California. It asserts that its taxes are not preempted by federal law, and that the new regulation either does not apply or is arbitrary and capricious.
As part of its claim, the Desert Water Agency asserts that Congress has expressly permitted state and local government to levy such taxes on Executive Order reservations (like Agua Caliente’s) through 25 U.S.C. Section 398c. (It also asserts that its taxes are permitted under the traditional Bracker balancing test).
The Desert Water Agency’s reliance on 398c is curious, because that provision was included in 1927 legislation that Congress enacted to address Indian mineral leasing.
As most Indian law practitioners know, the federal Indian surface estate and the Indian mineral estate are governed under separate legal regimes. The Department of the Interior’s leasing regulations expressly apply to surface leasing under 25 U.S.C. Section 415 and related statutes. They are inapplicable to mineral leases on Indian lands (in fact, 398c is not even listed as authority for the regulations).
Either the Desert Water Agency’s attorneys are unaware of this key distinction in Indian law, or they are deliberately misrepresenting 25 U.S.C. 398c. Given the history of Indian law, either is possible – though I’m not sure that either is a good position to be in.
The Desert Water Agency has also claimed that it was unaware of the rule change until it had already gone into effect on January 2013. I find these types of claims particularly weak, given the fact that Indian leasing reform was a signature initiative of the Department of the Interior in President Obama’s first term. The President himself announced the proposed change at the 2011 Tribal Nations Conference, and it was published in the Federal Register through the traditional public notice and comment rulemaking process with a version of the tax provision included. The BIA even hosted a tribal consultation session in January 2012 at the publicly-owned Palm Springs Convention Center in the Desert Water Agency’s backyard.
Challenges to the tax provisions of the new leasing regulations were inevitable, especially considering the stakes involved. The fact that it has only taken several months for this type of suit to arise speaks to those stakes. It will be interesting to watch this case unfold.
Two weeks ago, we took a look back at some of the significant federal Indian policy developments during President Obama’s first term. President Obama’s historic inauguration last week marked the beginning of his second term, which will bring a new set of challenges and opportunities for the Administration’s Indian policy agenda.
The ongoing stalemate in Congress regarding the federal budget, a Republican House of Representatives, and the fact that the 2016 Presidential campaign will kick off immediately after the 2014 mid-term elections, will make it difficult to push significant Indian policy reforms through Congress. Nevertheless, Indian country leaders will continue to press for reforms in a number of important areas.
Look for the following issues to receive attention in the next four years:
The Department of the Interior has been criticized by tribal leaders for not taking adequate steps to protect sacred sites in its push to permit renewable energy projects on public lands during the first term. But, at the 2012 White House Tribal Nations Conference, the Administration announced an interagency Memorandum of Understanding intended to help agencies – including the Department of the Interior – work with tribes to protect sacred sites. The U.S. Department of Agriculture prepared a report to Secretary Vilsack on tribal sacred sites in December 2012.
The #IdleNoMore movement in the United States is coalescing around environmental and sacred sites issues, and will put significant pressure on the Administration to respond to Indian Country on these issues.
With respect to conventional energy, the oil & gas boom in places like the Fort Berthold Reservation and the U&O Reservation have posed significant challenges on the BIA to keep pace with development. Shrinking budgets, due to the stalemate in Congress, will make it even more difficult for the BIA to work with tribes to ensure that they can capitalize on their energy resources.
There are a number of other issues that we can expect to arise during the next four years as well, including the selection of a new Secretary of the Interior to replace Ken Salazar, appointing an Indian judge to the federal bench, protecting tribes from the PACT Act, implementing the Cobell settlement, and putting meat on the bones of the President’s decision to endorse the United Nations Declaration on the Rights of Indigenous People.
There is also a likelihood that other events will transpire that could affect Indian Country’s and the President’s agenda (such as a Supreme Court decision in its upcoming ICWA case or other unforeseen events). No matter what, the next four years will present enough policy and legal issues to keep Indian Country leaders and advocates burning the midnight oil.
This document describes where tribes can submit leasing regulations adopted under the recently enacted HEARTH Act, and how the BIA will review those regulations to ensure that they comply with the new law.