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HomeMy WebLinkAbout01 16 2018 Fee to Trust PresentationFee to Trust Ownership of Land Tribal land ownership is very complicated, but generally tribes can own land as follows: ➢Fee title –a tribe can purchase property just as any other individual or organization can purchase property. Fee land does not generally have any special protections and, with some limitations, the City has jurisdiction over fee land owned by the Tribe. ➢Reservation land –is land that was historically reserved to a tribe by treaty. These lands are held in trust by the federal government for the benefit of the tribe. Trust lands cannot be sold or leased without federal authority. They are also not subject to local government jurisdiction such as condemnation, assessment and taxation. ➢“Allotted” land -a number of times throughout history the government has “allotted” land from a tribe to individual Indians. Allotted lands could be removed from trust status and sold, losing the protections of reservation land. These “allotted” lands not exist as a checkerboard of tribal vs individual ownership and fee vs trust lands. ➢Trust –in addition to reservation land and allotted land still held in trust, a tribe can transfer fee land it owns into trust under certain conditions. This allows a tribe to protect fee land that it has purchased from sale as well as from local government regulation. Trust land can be declared to be part of a tribe’s reservation. ➢Whether the City has authority over tribe owned land depends on whether the land is “Indian Land”/“Indian Country” or not. ➢Generally, case law has identified Indian Land to include reservation land, land held in trust, and land that has been “set aside” or “allotted” by the federal government. Indian Land ➢The City does not have the authority to assess, condemn, tax, etc. “Indian Land” Non-Indian Land ➢The City does have the authority to assess, condemn, tax, etc. land that is owned by the tribe but is not “Indian Land” ➢However, as the land is owned by the tribe and the tribe has sovereign immunity, the City may not be able serve or sue the tribe or to collect on a claim. If the tribe does not waive its sovereign immunity, the County may not be able to foreclose on the property. ➢The Supreme Court has not addressed the issue of foreclosure on fee lands. ➢The 2nd Circuit has found that tax foreclosure is prohibited on tribe owned land. ➢The WI Federal district has found that if land can be taxed a tax foreclosure is permitted City Authority Fee to Trust Process ➢Tribe files application with the local Bureau of Indian Affairs office (“Bureau”). ➢Bureau provides notice to the “state and local governments having regulatory jurisdiction over the land to be acquired”. No timeline for when the notice must be sent. ➢No definition of “state and local governments having regulatory jurisdiction”. ➢State, City and County -Yes ➢School Districts –No –no jurisdiction over the “land”. ➢Met Council –Maybe -political subdivision of the State and has regulatory authority over matters such as comprehensive plans and sewer/water. Historically the Met Council has not received notice. ➢Affected jurisdictions have 30 days to comment on the acquisition from the date they receive the notice. ➢The 30 day deadline can be extended an additional 30 days on the request of the affected jurisdiction. ➢Bureau has also historically accepted comments from other interested parties including citizen groups and legislators. ➢Comments are provided to the applicant and the applicant is given a reasonable time in which to respond. ➢Often made by a Regional or Area Director of the Bureau. (The current administration has issued a directive that all off reservation decisions are to be made by Central Office not the Regional Office.) ➢Decision can be made by the Secretary or Assistant Secretary of the Bureau at the discretion of the Bureau (usually when the transfer is highly contentious or political). ➢No timeline on how quickly a decision must be made. ➢If approved, the Bureau publishes notice of the intended acquisition and notifies all interested parties who have made themselves known. Decision Appeal ➢Decision made by an Area or Regional Director can be appealed to the Interior Board of Indian Appeals (“IBIA”). ➢Decision by an Area or Reginal Director is not final until the time for appeal has expired and no appeal has been filed. This suggests that a decision to transfer property into trust is stayed until a final decision is made by the Secretary, Assistant Secretary or IBIA. ➢Decision by the Secretary, Assistant Secretary or IBIA can be appealed to the Federal District Court. The appeal is by the city/county/state and the opposing party is the federal government, not the tribe. ➢No automatic stay during an appeal to the District Court. Both the Bureau and the Court have discretionary authority to issue a stay pending appeal. ➢Once the case has been appealed to Court the case may be appealed to the Federal Court of Appeals and potentially to the US Supreme Court. Timeline ➢No specific timeline for the fee to trust process. ➢Based on the history of SMSC decisions, transfers can take anywhere from several months to several years depending on the issues and opposition. ➢In addition, there is no prohibition against resubmitting an application that has been withdrawn or denied. For example, with regards to the MWCC property the SMSC submitted an application in 1995 which it withdrew; in 1998 which was denied; in 2000 which was deemed incomplete; and an updated application in 2005 which was approved in 2007. Criteria When land is on or contiguous to a reservation the following criteria are considered: ➢(a) The existence of statutory authority; ➢(b) The need for additional land; ➢(c) The purposes for which the land will be used; ➢(d) (only applies if the land is to be acquired for an individual Indian); ➢(e) The impact of removal from the tax rolls; ➢(f) Jurisdictional problems and potential conflicts of land use; and ➢(g) additional responsibilities for Bureau. When land is off and not contiguous to a reservation the following criteria are considered: ➢(a) The criteria listed in §151.10 (a) through (c) and (e) through (h); ➢(b) The location of the land relative to state boundaries, and its distance from the boundaries of the tribe’s reservation, shall be considered as follows: as the distance between the tribe’s reservation and the land to be acquired increases, the Secretary shall give greater scrutiny to the tribe’s justification of anticipated benefits from the acquisition. The Secretary shall give greater weight to the concerns raised pursuant to paragraph (d) of this section. ➢(c) Where land is being acquired for business purposes, the tribe shall provide a plan which specifies the anticipated economic benefits associated with the proposed use. ➢(d) Contact with state and local governments pursuant to §151.10 (e) and (f) shall be completed as follows: Upon receipt of a tribe’s written request to have lands taken in trust, the Secretary shall notify the state and local governments having regulatory jurisdiction over the land to be acquired. The notice shall inform the state and local government that each will be given 30 days in which to provide written comment as to the acquisition’s potential impacts on regulatory jurisdiction, real property taxes and special assessments. Common Objections Need for Land ➢Objectors have argued that the tribe needs to show a need for the land to be in trust, not just a need for the land. ➢Objectors have argued that the tribe is economically successful so does not “need” land. (Used in 1998 to deny transfer of MWCC property, but overturned in 2007). ➢Applicants have argued for a very broad approach in determining what constitutes need including economic development, reclaiming old land, housing, security, services, agriculture, etc. Tax Impact ➢Objectors have argued that the cumulative impact of all trust land must be considered when reviewing criteria such as loss of tax revenue, jurisdiction and land use planning. ➢Objectors have argued that the loss of revenue is especially important because the objector must still provide services. Miscellaneous Objections ➢Sufficient information was not available for them to respond to the application. ➢Bureau was biased or that the individual making the decision was biased. ➢Patchwork of jurisdiction and the resulting conflicts. ➢Bureau’s ability to administer the land. ➢Environmental issues and concerns. Constitutional Objections ➢Due Process –lack of information, notice, time/opportunity to review. ➢Due Process/Equal Protection –non-Indians cannot participate in tribal government but may be subject to its jurisdiction. ➢Discrimination/Privileges/Immunities –discriminates against non- Indians. ➢Unlawful delegation of power –power delegated is unconstitutional. ➢10th amendment –jurisdiction over land is a State not a congressional power. ➢Deprived of republican form of government –taking jurisdiction away from the State. ➢In order to qualify for fee to trust transfers the applicant must be an “Indian” which 25 USC 479 defines as “members of any recognized Indian tribe now under Federal jurisdiction…” ➢In 2009 the US Supreme Court held that in order to qualify as an Indian the required federal jurisdiction must have been in existence in 1934 when the Indian Reorganization Act was adopted. Carcieri v. Salazar, 555 U.S. 379 (2009). ➢The Supreme Court did not define the remainder of the terms, leaving several open questions. Eligibility Objections ➢Two Part Analysis. (i) recognized Indian tribe; and (ii) now under Federal jurisdiction. However, the courts disagree as to whether someone must meet both parts of the analysis or just one. ➢Recognized Indian Tribe –When. Courts disagree on whether the “recognized Indian tribe” factor is to be assessed at any time in history or specifically in 1934. Carcieri determined that the second factor, now under federal jurisdiction, applies to the tribe’s status in 1934. However, Carcieri did not address the recognition factor and therefore made no finding on whether the recognition factor is applied in 1934 or another point in time. Eligibility Open Questions ➢The BIA has certified the SMSC as eligible for transfers. This is not definitive but BIA directives are often given extra weight. ➢The BIA has approved a number of SMSC fee to trust transfers and several have been upheld by the federal courts. SMSC Eligibility Successful Objections Denials have generally been due to the following reasons: ➢Tribe successful so does not “need” land (1998 denial of SMSC transfer – overturned in 2007). This argument has not met with success in cases since 2007. ➢Individual Tribe members requesting the transfer (different criteria) ➢Not a recognized Indian Tribe (must be an “Indian” to qualify for transfer). ➢Pending dispute in tribal government (wait until dispute is resolved) ➢Gaming applications (different criteria) ➢Change in use (tribe applied identifying one use but prior to final approval changed the use) ➢Remand back to Secretary (did not sufficiently consider the criteria or facts) History of SMSC Fee to Trust Transfers 1982 –35 Acres –Approved ➢Tribe applied to transfer land for housing. City opposed transfer (proposed housing exceeded the density in the City’s zoning code and comprehensive plan; future effect on development including extension of streets and utilities). The transfer was approved. 1987 –44 Acres –Already in Trust ➢Tribe applied to transfer land for housing and economic development. The City response indicated that the property in question was already in trust. 1992 –No Result in Files ➢There is a notice of application but no final decision in our files. There is no record in our files of the need for the transfer. 1993 –Menden –No Result in Files ➢Tribe applied to transfer land for parking for the casino. City supported the transfer as parking was needed for the casino, but expressed long term concerns (loss in tax revenue, loss of developable land). There is no final decision in our files. MWCC 1995 –MWCC -Withdrawn ➢Tribe applied to transfer the MWCC property without stating the need for the land. ➢Shakopee sued in US District Court to prevent the transfer. The court concluded that it did have jurisdiction because it was not confident in the administrative process for transfers (this case was prior to the existing process). The court did not make any substantive findings on the application but did express its opinion that the application was not complete. ➢The Tribe withdrew the application. MWCC 1998 –MWCC –Denied ➢Tribe applied to transfer the MWCC property into trust for economic development (ie economic foundation for long term survival), housing, and governmental uses (cultural center, library, public works etc). ➢County, Shakopee and State opposed the transfer (loss of tax revenue, effect of development on ground and surface water, land use conflicts, safety and transportation issues, no need for additional land in trust). ➢The transfer was denied because the Bureau determined that the Tribe’s economic success showed that it did not need land in trust in order to continue to manage and develop land resources. MWCC 2000-07 –MWCC –Approved ➢Tribe applied to transfer the MWCC property into trust with additional property for housing and governmental uses (archival facility, govt facility, cultural center, school, etc.). Extensive correspondence spanning 7 years between the BIA, County, Prior Lake, Shakopee, SMSC and legislators. County, Prior Lake and Shakopee sent a delegation to Washington. ➢City initially opposed the transfer (economic success of tribe, loss of tax revenue, loss of land use control, fragmented jurisdiction). ➢Met Council letter to City implies opposition to transfer –transfer “reduces the potential to implement smart growth within this region”. ➢State, County, and Shakopee all opposed the transfer (State access to mineral rights, no need for land due to success of tribe, loss of tax revenue, land control conflicts, infrastructure cost and services). MWCC ➢The application was deemed incomplete in 2001, was updated by the Tribe in 2005 and reconsidered. ➢In 2005 the City expressed support for the transfer. There was correspondence between the City and Tribe relating to transfer of some trust land to public right of way. ➢Transfer was approved in 2007. ➢The Assistant Secretary stated in the approval: “After review of the statutory and regulatory requirements, and legal developments since the 1998 Decision by the Minneapolis Area Director, I have concluded that acquiring this land in trust status is authorized and appropriate under Section 5 of the IRA and 25 C.F.R. Part 151, and will support tribal self-determination and tribal housing needs.” Recent Transfers -Approved 2009 –Dolan –Approved ➢Tribe applied to transfer land for long term security through jurisdictional oversight, government uses, and sustainable environment to maintain traditional customs. The City supported the transfer and it was approved. 2012 -Wozupi –Approved ➢Tribe applied to transfer land for self-determination and economic development (existing certified organic garden). Scott County opposed the transfer (tribe’s success, not enough information relating to need, eligibility) but it was approved. 2013 -Eagle Creek -Approved ➢Tribe applied to transfer land for sovereignty, self-determination, ingress/egress to tribal housing, and trust land consolidation. State was the only jurisdiction to respond and it did not take a position on the transfer. Transfer was approved. 2014 –YMCA –Approved ➢Application filed October 2014. Tribe applied to transfer land for preservation of natural areas, food sovereignty, cultural uses, sovereignty and self-determination, and land consolidation (forest). The City expressed specific concerns (outlet channel, use of property) as well as the cumulative effect of transfers. No decision has been issued. 2015 –ICO –Approved ➢Application filed June 2015 for housing, cultural restoration and self- determination (housing). 2015 –Meadows –Approved ➢Application filed July 2015 for economic development, cultural restoration, surface water drainage and self-determination (golf course, housing, pow-wow and drainage). 2016 –Group P –No Decision ➢Application filed October 2016. Tribe applied to transfer land for housing, economic development and self-determination. The application included North Berens Rd. The City requested that the BIA ensure the road was maintained as a public road and was constructed and maintained as the Tribe stated it would be. The City also expressed specific concerns (use of property, economic advantage of convenience store, impact on school district, jurisdiction) as well as the cumulative effect of transfers. No decision on the fee to trust application has been issued. Transfers Waiting on decision 2017 –Wozupi II/Mni Yuskapi Makoce –Pending ➢Applications filed in December 2017. Mni Yuskapi Makoce is the 1.17 acre parcel under the water treatment plant (surrounded entirely by trust land and sold by the County to the SMSC in 2017). Wazupi II is 5.59 acres in Prior Lake, along with property in Shakopee. The property is primarily agricultural and residential. City response is due February 12, 2018. 2017 -Four Corners South –Pending ➢Tribe filed application in December 2017 but BIA has not issued notice of application, which starts the clock and the City’s involvement. Pending Transfers City’s Options The City has the following options in regards to the pending transfers: ➢No Position (with or without concerns) –City can respond to Bureau’s notice without taking any position on the transfer. City can include concerns about the specific transfer and/or the long term impact of transfers (the option the City selected in regards to the YMCA transfer). ➢Support (with or without concerns) –City can support the transfer. City can include concerns about the specific transfer and/or the long term impact of transfers. ➢Oppose –City can oppose the transfer. Questions? Competitive Advantage ➢A private business operating on trust land (restaurant, hotel, office, etc.) can operate without paying property taxes. ➢To compensate, some cites imposed fees on the private leases, charging the private business not the tribe and the transaction not the land. ➢In response, in 2014 Congress passed 25 CFR 162.017, which prohibits the imposition of a tax, charge, fee, or assessment on leases and business activities. ➢Cities have begun to use this as an objection to fee to trust transfers. ➢The Supreme Court has not considered this issue yet and only once circuit court has. The circuit court avoided the argument, holding that the challenge was essentially a challenge to the process itself. It also held that the State could impose sales and excise taxes so it was a State issue (the court did not address how limited the State’s power in this area is). ➢The IBIA has started to hear this argument but has generally dismissed it on technical grounds (not raised previously, remanded to director). There was one case in which the IBIA considered the issue but it dismissed the claim on standing grounds.