83 FR 13294 - HEARTH Act Approval of Business Leasing Regulations
DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs Federal Register Volume 83, Issue 60 (March 28, 2018)
Bureau of Indian Affairs
Federal Register Volume 83, Issue 60 (March 28, 2018)
| Page Range | 13294-13295 | |
| FR Document | 2018-06231 |
[Federal Register Volume 83, Number 60 (Wednesday, March 28, 2018)] [Notices] [Pages 13294-13295] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2018-06231] ----------------------------------------------------------------------- DEPARTMENT OF THE INTERIOR Bureau of Indian Affairs [189A2100DD/AAKC001030/A0A501010.999900] HEARTH Act Approval of Business Leasing Regulations AGENCY: Bureau of Indian Affairs, Interior. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: On December 28, 2017, the Bureau of Indian Affairs (BIA) approved the Pechanga Band of Luiseno Mission Indians 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. 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 [[Page 13295]] 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 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 Pechanga Band of Luiseno Mission Indians. 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 Pechanga Band of Luiseno Mission Indians. Dated: December 28, 2017. John Tahusda, Principal Deputy Assistant Secretary--Indian Affairs Exercising the Authority of the Assistant Secretary--Indian Affairs. [FR Doc. 2018-06231 Filed 3-27-18; 8:45 am] BILLING CODE 4337-15-P
![13294 Federal Register / Vol. 83, No. 60 / Wednesday, March 28, 2018 / Notices
environmental review process, and then against a backdrop of ‘‘traditional leasing regulations in the first instance
must obtain the Secretary’s approval of notions of Indian self-government,’’ and providing technical assistance,
those regulations prior to entering into requires a particularized examination of upon request by a Tribe, for the
leases. The Act requires the Secretary to the relevant State, Federal, and Tribal development of an environmental
approve Tribal regulations if the Tribal interests. We hereby adopt the Bracker review process. The Secretary also
regulations are consistent with the analysis from the preamble to the retains authority to take any necessary
Department’s leasing regulations at 25 surface leasing regulations, 77 FR at actions to remedy violations of a lease
CFR part 162 and provide for an 72,447–48, as supplemented by the or of the Tribal regulations, including
environmental review process that analysis below. terminating the lease or rescinding
meets requirements set forth in the Act. The strong Federal and Tribal approval of the Tribal regulations and
This notice announces that the interests against State and local taxation reassuming lease approval
Secretary, through the Assistant of improvements, leaseholds, and responsibilities. Moreover, the Secretary
Secretary—Indian Affairs, has approved activities on land leased under the continues to review, approve, and
the Tribal regulations for the Ramona Department’s leasing regulations apply monitor individual Indian land leases
Band of Cahuilla, California. equally to improvements, leaseholds, and other types of leases not covered
and activities on land leased pursuant to under the Tribal regulations according
II. Federal Preemption of State and Tribal leasing regulations approved
Local Taxes to the part 162 regulations.
under the HEARTH Act. Congress’s Accordingly, the Federal and Tribal
The Department’s regulations overarching intent was to ‘‘allow tribes interests weigh heavily in favor of
governing the surface leasing of trust to exercise greater control over their preemption of State and local taxes on
and restricted Indian lands specify that, own land, support self-determination, lease-related activities and interests,
subject to applicable Federal law, and eliminate bureaucratic delays that regardless of whether the lease is
permanent improvements on leased stand in the way of homeownership and governed by Tribal leasing regulations
land, leasehold or possessory interests, economic development in tribal or part 162. Improvements, activities,
and activities under the lease are not communities.’’ 158 Cong. Rec. H. 2682 and leasehold or possessory interests
subject to State and local taxation and (May 15, 2012). The HEARTH Act was may be subject to taxation by the
may be subject to taxation by the Indian intended to afford Tribes ‘‘flexibility to Ramona Band of Cahuilla, California.
tribe with jurisdiction. See 25 CFR adapt lease terms to suit [their] business
162.017. As explained further in the and cultural needs’’ and to ‘‘enable Dated: December 29, 2017.
preamble to the final regulations, the [Tribes] to approve leases quickly and John Tahsuda,
Federal government has a strong interest efficiently.’’ Id. at 5–6. Principal Deputy Assistant Secretary—Indian
in promoting economic development, Assessment of State and local taxes Affairs, Exercising the Authority of the
self-determination, and Tribal would obstruct these express Federal Assistant Secretary-Indian Affairs.
sovereignty. 77 FR 72440, 72447–48 policies supporting Tribal economic [FR Doc. 2018–06233 Filed 3–27–18; 8:45 am]
(December 5, 2012). The principles development and self-determination, BILLING CODE 4337–15–P
supporting the Federal preemption of and also threaten substantial Tribal
State law in the field of Indian leasing interests in effective Tribal government,
and the taxation of lease-related economic self-sufficiency, and territorial DEPARTMENT OF THE INTERIOR
interests and activities applies with autonomy. See Michigan v. Bay Mills
equal force to leases entered into under Indian Community, 134 S. Ct. 2024, Bureau of Indian Affairs
Tribal leasing regulations approved by 2043 (2014) (Sotomayor, J., concurring) [189A2100DD/AAKC001030/
the Federal government pursuant to the (determining that ‘‘[a] key goal of the A0A501010.999900]
HEARTH Act. Federal Government is to render Tribes
Section 5 of the Indian Reorganization more self-sufficient, and better HEARTH Act Approval of Business
Act, 25 U.S.C. 465, preempts State and positioned to fund their own sovereign Leasing Regulations
local taxation of permanent functions, rather than relying on Federal AGENCY: Bureau of Indian Affairs,
improvements on trust land. funding’’). The additional costs of State Interior.
Confederated Tribes of the Chehalis and local taxation have a chilling effect
Reservation v. Thurston County, 724 on potential lessees, as well as on a ACTION: Notice.
F.3d 1153, 1157 (9th Cir. 2013) (citing Tribe that, as a result, might refrain from SUMMARY: On December 28, 2017, the
Mescalero Apache Tribe v. Jones, 411 exercising its own sovereign right to Bureau of Indian Affairs (BIA) approved
U.S. 145 (1973)). Similarly, section 465 impose a Tribal tax to support its the Pechanga Band of Luiseno Mission
preempts State taxation of rent infrastructure needs. See id. at 2043–44 Indians leasing regulations under the
payments by a lessee for leased trust (finding that State and local taxes HEARTH Act. With this approval, the
lands, because ‘‘tax on the payment of greatly discourage Tribes from raising Tribe is authorized to enter into the
rent is indistinguishable from an tax revenue from the same sources following type of leases without BIA
impermissible tax on the land.’’ See because the imposition of double approval: Business.
Seminole Tribe of Florida v. Stranburg, taxation would impede Tribal economic
No. 14–14524, *13–*17, n.8 (11th Cir. growth). FOR FURTHER INFORMATION CONTACT:
2015). In addition, as explained in the Similar to BIA’s surface leasing Sharlene Round Face, Bureau of Indian
preamble to the revised leasing regulations, Tribal regulations under the Affairs, Division of Real Estate Services,
regulations at 25 CFR part 162, Federal HEARTH Act pervasively cover all 1849 C Street NW, MS–4642–MIB,
daltland on DSKBBV9HB2PROD with NOTICES
courts have applied a balancing test to aspects of leasing. See 25 U.S.C. Washington, DC 20240, at (202) 208–
determine whether State and local 415(h)(3)(B)(i) (requiring Tribal 3615.
taxation of non-Indians on the regulations be consistent with BIA SUPPLEMENTARY INFORMATION:
reservation is preempted. White surface leasing regulations).
Mountain Apache Tribe v. Bracker, 448 Furthermore, the Federal government I. Summary of the HEARTH Act
U.S. 136, 143 (1980). The Bracker remains involved in the Tribal land The HEARTH (Helping Expedite and
balancing test, which is conducted leasing process by approving the Tribal Advance Responsible Tribal
VerDate Sep<11>2014 20:30 Mar 27, 2018 Jkt 244001 PO 00000 Frm 00073 Fmt 4703 Sfmt 4703 E:\FR\FM\28MRN1.SGM 28MRN1](https://thefederalregister.org/doc/83_FR_13354/page/1.svg)
![Federal Register / Vol. 83, No. 60 / Wednesday, March 28, 2018 / Notices 13295
Homeownership) Act of 2012 (the Act) U.S. 145 (1973)). Similarly, section 5108 infrastructure needs. See id. at 2043–44
makes a voluntary, alternative land preempts state taxation of rent payments (finding that State and local taxes
leasing process available to Tribes, by by a lessee for leased trust lands, greatly discourage Tribes from raising
amending the Indian Long-Term Leasing because ‘‘tax on the payment of rent is tax revenue from the same sources
Act of 1955, 25 U.S.C. 415. The Act indistinguishable from an impermissible because the imposition of double
authorizes Tribes to negotiate and enter tax on the land.’’ See Seminole Tribe of taxation would impede Tribal economic
into agricultural and business leases of Florida v. Stranburg, No. 14–14524, growth).
Tribal trust lands with a primary term *13–*17, n.8 (11th Cir. 2015). In Similar to BIA’s surface leasing
of 25 years, and up to two renewal terms addition, as explained in the preamble regulations, Tribal regulations under the
of 25 years each, without the approval to the revised leasing regulations at 25 HEARTH Act pervasively cover all
of the Secretary of the Interior. The Act CFR part 162, Federal courts have aspects of leasing. See 25 U.S.C.
also authorizes Tribes to enter into applied a balancing test to determine 415(h)(3)(B)(i) (requiring Tribal
leases for residential, recreational, whether State and local taxation of non- regulations be consistent with BIA
religious or educational purposes for a Indians on the reservation is preempted. surface leasing regulations).
primary term of up to 75 years without White Mountain Apache Tribe v. Furthermore, the Federal government
the approval of the Secretary. Bracker, 448 U.S. 136, 143 (1980). The remains involved in the Tribal land
Participating Tribes develop Tribal Bracker balancing test, which is leasing process by approving the Tribal
leasing regulations, including an conducted against a backdrop of leasing regulations in the first instance
environmental review process, and then ‘‘traditional notions of Indian self- and providing technical assistance,
must obtain the Secretary’s approval of government,’’ requires a particularized upon request by a Tribe, for the
those regulations prior to entering into examination of the relevant State, development of an environmental
leases. The Act requires the Secretary to Federal, and Tribal interests. We hereby review process. The Secretary also
approve Tribal regulations if the Tribal adopt the Bracker analysis from the retains authority to take any necessary
regulations are consistent with the preamble to the surface leasing actions to remedy violations of a lease
Department’s leasing regulations at 25 regulations, 77 FR at 72,447–48, as or of the Tribal regulations, including
CFR part 162 and provide for an supplemented by the analysis below. terminating the lease or rescinding
environmental review process that The strong Federal and Tribal approval of the Tribal regulations and
meets requirements set forth in the Act. interests against State and local taxation reassuming lease approval
This notice announces that the of improvements, leaseholds, and responsibilities. Moreover, the Secretary
Secretary, through the Assistant activities on land leased under the continues to review, approve, and
Secretary—Indian Affairs, has approved Department’s leasing regulations apply monitor individual Indian land leases
the Tribal regulations for the Pechanga equally to improvements, leaseholds, and other types of leases not covered
Band of Luiseno Mission Indians. and activities on land leased pursuant to under the Tribal regulations according
Tribal leasing regulations approved to the part 162 regulations.
II. Federal Preemption of State and under the HEARTH Act. Congress’s
Local Taxes Accordingly, the Federal and Tribal
overarching intent was to ‘‘allow tribes interests weigh heavily in favor of
The Department’s regulations to exercise greater control over their preemption of State and local taxes on
governing the surface leasing of trust own land, support self-determination, lease-related activities and interests,
and restricted Indian lands specify that, and eliminate bureaucratic delays that
subject to applicable Federal law, regardless of whether the lease is
stand in the way of homeownership and
permanent improvements on leased governed by Tribal leasing regulations
economic development in tribal
land, leasehold or possessory interests, or part 162. Improvements, activities,
communities.’’ 158 Cong. Rec. H. 2682
and activities under the lease are not and leasehold or possessory interests
(May 15, 2012). The HEARTH Act was
subject to State and local taxation and may be subject to taxation by the
intended to afford Tribes ‘‘flexibility to
may be subject to taxation by the Indian Pechanga Band of Luiseno Mission
adapt lease terms to suit [their] business
Tribe with jurisdiction. See 25 CFR Indians.
and cultural needs’’ and to ‘‘enable
162.017. As explained further in the [Tribes] to approve leases quickly and Dated: December 28, 2017.
preamble to the final regulations, the efficiently.’’ Id. at 5–6. John Tahusda,
Federal government has a strong interest Assessment of State and local taxes Principal Deputy Assistant Secretary—Indian
in promoting economic development, would obstruct these express Federal Affairs Exercising the Authority of the
self-determination, and Tribal policies supporting Tribal economic Assistant Secretary—Indian Affairs.
sovereignty. 77 FR 72,440, 72,447–48 development and self-determination, [FR Doc. 2018–06231 Filed 3–27–18; 8:45 am]
(December 5, 2012). The principles and also threaten substantial Tribal BILLING CODE 4337–15–P
supporting the Federal preemption of interests in effective Tribal government,
State law in the field of Indian leasing economic self-sufficiency, and territorial
and the taxation of lease-related autonomy. See Michigan v. Bay Mills DEPARTMENT OF THE INTERIOR
interests and activities applies with Indian Community, 134 S. Ct. 2024,
equal force to leases entered into under 2043 (2014) (Sotomayor, J., concurring) Bureau of Indian Affairs
Tribal leasing regulations approved by (determining that ‘‘[a] key goal of the
the Federal government pursuant to the Federal Government is to render Tribes [189A2100DD/AAKC001030/
HEARTH Act. more self-sufficient, and better A0A501010.999900]
Section 5 of the Indian Reorganization positioned to fund their own sovereign
daltland on DSKBBV9HB2PROD with NOTICES
Act, 25 U.S.C. 5108, preempts State and functions, rather than relying on Federal HEARTH Act Approval of Apache Tribe
local taxation of permanent funding’’). The additional costs of State of Oklahoma Indian Lands Leasing Act
improvements on trust land. and local taxation have a chilling effect of 2017 Regulations
Confederated Tribes of the Chehalis on potential lessees, as well as on a AGENCY: Bureau of Indian Affairs,
Reservation v. Thurston County, 724 Tribe that, as a result, might refrain from Interior.
F.3d 1153, 1157 (9th Cir. 2013) (citing exercising its own sovereign right to
ACTION: Notice.
Mescalero Apache Tribe v. Jones, 411 impose a Tribal tax to support its
VerDate Sep<11>2014 20:30 Mar 27, 2018 Jkt 244001 PO 00000 Frm 00074 Fmt 4703 Sfmt 4703 E:\FR\FM\28MRN1.SGM 28MRN1](https://thefederalregister.org/doc/83_FR_13354/page/2.svg)
Document Created: 2018-11-01 08:55:19
Document Modified: 2018-11-01 08:55:19
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| Action | Notice. | |
| 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. | |
| FR Citation | 83 FR 13294 |
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