[Federal Register Volume 83, Number 130 (Friday, July 6, 2018)]
[Notices]
[Pages 31562-31563]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-14520]
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DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
[189A2100DD/AAKC001030/A0A501010.999900]
HEARTH Act Approval of San Manuel Band of Mission Indians,
California Business Site Leasing Code
AGENCY: Bureau of Indian Affairs, Interior.
ACTION: Notice.
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SUMMARY: On June 11, 2018, the Bureau of Indian Affairs (BIA) approved
the San Manuel Band of Mission Indians, California, leasing regulations
under the HEARTH Act. With this approval, the Band is authorized to
enter into business leases without BIA approval.
FOR FURTHER INFORMATION CONTACT: Sharlene Round Face, Bureau of Indian
Affairs, Division of Real Estate Services, 1849 C Street, NW, MS-4642-
MIB, 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's leasing regulations at
25 CFR part 162 and provide for an
[[Page 31563]]
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
San Manuel Band of Mission Indians, California.
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 72,440, 72,447-48 (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. 5108,
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 5108 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 72,447-48, 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).
Similar to BIA's surface leasing regulations, Tribal regulations
under the HEARTH Act pervasively cover all aspects of leasing. See 25
U.S.C. 415(h)(3)(B)(i) (requiring Tribal regulations be consistent with
BIA surface leasing regulations). 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
San Manuel Band of Mission Indians, California.
Dated: June 11, 2018.
John Tahsuda,
Principal Deputy Assistant Secretary--Indian Affairs, Exercising the
Authority of the Assistant Secretary--Indian Affairs.
[FR Doc. 2018-14520 Filed 7-5-18; 8:45 am]
BILLING CODE 4337-15-P