[Federal Register Volume 81, Number 50 (Tuesday, March 15, 2016)]
[Notices]
[Pages 13817-13818]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-05807]
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DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
[167 A2100DD/AAKC001030/A0A501010.999900]
HEARTH Act Approval of Shakopee Mdewakanton Sioux Community
Regulations
AGENCY: Bureau of Indian Affairs, Interior.
ACTION: Notice.
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SUMMARY: On March 3, 2016, the Bureau of Indian Affairs (BIA) approved
the Shakopee Mdewakanton Sioux Community leasing regulations under the
HEARTH Act. With this approval, the Tribe is authorized to enter into
the following type of leases without BIA approval: Business site
leases.
FOR FURTHER INFORMATION CONTACT: Sharlene Round Face, Bureau of Indian
Affairs, Division of Real Estate Services, MS-4642-MIB, 1849 C Street
NW., Washington, DC 20240, at (202) 208-3615.
SUPPLEMENTARY INFORMATION:
I. Summary of the HEARTH Act
The HEARTH (Helping Expedite and Advance Responsible Tribal
Homeownership) Act of 2012 (the Act) makes a voluntary, alternative
land leasing process available to Tribes, by amending the Indian Long-
Term Leasing Act of 1955, 25 U.S.C. 415. The Act authorizes Tribes to
negotiate and enter into agricultural and business leases of Tribal
trust lands with a primary term of 25 years, and up to two renewal
terms of 25 years each, without the approval of the Secretary of the
Interior. The Act also authorizes Tribes to enter into leases for
residential, recreational, religious, or educational purposes for a
primary term of up to 75 years without the approval of the Secretary.
Participating Tribes develop Tribal leasing regulations, including an
environmental review process, and then must obtain the Secretary's
approval of those regulations prior to entering into leases. The Act
requires the Secretary to approve Tribal regulations if the Tribal
regulations are consistent with the Department of the Interior's (the
Department) leasing regulations at 25 CFR part 162 and provide for an
environmental review process that meets requirements set forth in the
Act. This notice announces that the Secretary, through the Assistant
Secretary--Indian Affairs, has approved the Tribal regulations for the
Shakopee Mdewakanton Sioux Community.
II. Federal Preemption of State and Local Taxes
The Department's regulations governing the surface leasing of trust
and restricted Indian lands specify that, subject to applicable Federal
law, permanent improvements on leased land, leasehold or possessory
interests, and activities under the lease are not subject to State and
local taxation and may be subject to taxation by the Indian Tribe with
jurisdiction. See 25 CFR 162.017. As explained further in the preamble
to the final regulations, the Federal government has a strong interest
in promoting economic development, self-determination, and Tribal
sovereignty. 77 FR 72440 at 72447-48 (December 5, 2012). The principles
supporting the Federal preemption of State law in the field of Indian
leasing and the taxation of lease-related interests and activities
applies with equal force to leases entered into under Tribal leasing
regulations approved by the Federal government pursuant to the HEARTH
Act.
Section 5 of the Indian Reorganization Act, 25 U.S.C. 465, preempts
State and local taxation of permanent improvements on trust land.
Confederated Tribes of the Chehalis Reservation v. Thurston County, 724
F.3d 1153, 1157 (9th Cir. 2013) (citing Mescalero Apache Tribe v.
Jones, 411 U.S. 145 (1973)). Similarly, section 465 preempts State
taxation of rent payments by a lessee for leased trust lands, because
``tax on the payment of rent is indistinguishable from an impermissible
tax on the land.'' See Seminole Tribe of Florida v. Stranburg, No. 14-
14524, *13-*17, n.8 (11th Cir. 2015). In addition, as explained in the
preamble to the revised leasing regulations at 25 CFR part 162, Federal
courts have applied a balancing test to determine whether State and
local taxation of non-Indians on the reservation is preempted. White
Mountain Apache Tribe v. Bracker, 448 U.S. 136, 143 (1980). The Bracker
balancing test, which is conducted against a backdrop of ``traditional
notions of Indian self-government,'' requires a particularized
examination of the relevant State, Federal, and Tribal interests. We
hereby adopt the Bracker analysis from the preamble to the surface
leasing regulations, 77 FR at 72447-48, as supplemented by the analysis
below.
The strong Federal and Tribal interests against State and local
taxation of improvements, leaseholds, and activities on land leased
under the Department's leasing regulations apply equally to
improvements, leaseholds, and activities on land leased pursuant to
Tribal leasing regulations approved under the HEARTH Act. Congress's
overarching intent was to ``allow Tribes to exercise greater control
over their own land, support self-determination, and eliminate
bureaucratic delays that stand in the way of homeownership and economic
development in Tribal communities.'' 158 Cong. Rec. H. 2682 (May 15,
2012). The HEARTH Act was intended to afford Tribes ``flexibility to
adapt lease terms to suit [their] business and cultural needs'' and to
``enable [Tribes] to approve leases quickly and efficiently.'' Id. at
5-6.
Assessment of State and local taxes would obstruct these express
Federal policies supporting Tribal economic development and self-
determination, and also threaten substantial Tribal interests in
effective Tribal government, economic self-sufficiency, and territorial
autonomy. See Michigan v. Bay Mills Indian Community, 134 S. Ct. 2024,
2043 (2014) (Sotomayor, J., concurring) (determining that ``[a] key
goal of the Federal Government is to render Tribes more self-
sufficient, and better positioned to fund their own sovereign
functions, rather than relying on Federal funding''). The additional
costs of State and local taxation have a chilling effect on potential
lessees, as well as on a Tribe that, as a result, might refrain from
exercising its own sovereign right to impose a Tribal tax to support
its infrastructure needs. See id. at 2043-44 (finding that State and
local taxes greatly discourage Tribes from raising tax revenue from the
same sources because the imposition of double taxation would impede
Tribal economic growth).
Just like BIA's surface leasing regulations, Tribal regulations
under the HEARTH Act pervasively cover all aspects of leasing. See
Guidance for the Approval of Tribal Leasing Regulations under the
HEARTH Act, NPM-TRUS-29 (effective Jan. 16, 2013) (providing guidance
on Federal review process to ensure consistency of proposed Tribal
regulations with part 162 regulations and listing required Tribal
regulatory
[[Page 13818]]
provisions). Furthermore, the Federal government remains involved in
the Tribal land leasing process by approving the Tribal leasing
regulations in the first instance and providing technical assistance,
upon request by a Tribe, for the development of an environmental review
process. The Secretary also retains authority to take any necessary
actions to remedy violations of a lease or of the Tribal regulations,
including terminating the lease or rescinding approval of the Tribal
regulations and reassuming lease approval responsibilities. Moreover,
the Secretary continues to review, approve, and monitor individual
Indian land leases and other types of leases not covered under the
Tribal regulations according to the part 162 regulations.
Accordingly, the Federal and Tribal interests weigh heavily in
favor of preemption of State and local taxes on lease-related
activities and interests, regardless of whether the lease is governed
by Tribal leasing regulations or part 162. Improvements, activities,
and leasehold or possessory interests may be subject to taxation by the
Shakopee Mdewakanton Sioux Community.
Dated: March 3, 2016.
Lawrence S. Roberts,
Assistant Secretary--Indian Affairs.
[FR Doc. 2016-05807 Filed 3-14-16; 8:45 am]
BILLING CODE 4337-15-P