83 FR 62601 - HEARTH Act Approval of Prairie Band Potawatomi Nation Regulations

DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs

Federal Register Volume 83, Issue 233 (December 4, 2018)

Page Range		62601-62602
FR Document		2018-26340

On September 18, 2018, the Bureau of Indian Affairs (BIA) approved the Prairie Band Potawatomi Nation Business Site Leasing Ordinance under the Helping Expedite and Advance Responsible Tribal Homeownership Act of 2012 (HEARTH Act). With this approval, the Tribe is authorized to enter into business and other authorized purposes leases without further BIA approval.

Federal Register, Volume 83 Issue 233 (Tuesday, December 4, 2018)

[Federal Register Volume 83, Number 233 (Tuesday, December 4, 2018)]
[Notices]
[Pages 62601-62602]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-26340]


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DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

[190A2100DD/AAKC001030/A0A501010.999900]


HEARTH Act Approval of Prairie Band Potawatomi Nation Regulations

AGENCY: Bureau of Indian Affairs, Interior.

ACTION: Notice.

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SUMMARY: On September 18, 2018, the Bureau of Indian Affairs (BIA) 
approved the Prairie Band Potawatomi Nation Business Site Leasing 
Ordinance under the Helping Expedite and Advance Responsible Tribal 
Homeownership Act of 2012 (HEARTH Act). With this approval, the Tribe 
is authorized to enter into business and other authorized purposes 
leases without further BIA approval.

FOR FURTHER INFORMATION CONTACT: Ms. Sharlene Round Face, Bureau of 
Indian Affairs, Division of Real Estate Services, 1849 C Street NW, MS-
4642-MIB

[[Page 62602]]

Washington, DC 20240, or by telephone at (202) 208-3615.

SUPPLEMENTARY INFORMATION:

I. Summary of the HEARTH Act

    The HEARTH 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 HEARTH 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 
(Secretary).
    The HEARTH 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 HEARTH 
Act requires the Secretary to approve Tribal regulations if the Tribal 
regulations are consistent with the Department of the Interior's 
(Department) leasing regulations at 25 CFR part 162 and provide for an 
environmental review process that meets requirements set forth in the 
HEARTH Act. This notice announces that the Secretary, through the 
Assistant Secretary--Indian Affairs, has approved the Tribal 
regulations for the Prairie Band Potawatomi Nation.

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 
Prairie Band Potawatomi Nation.

    Dated: September 18, 2018.
Tara Sweeney,
Assistant Secretary--Indian Affairs.
[FR Doc. 2018-26340 Filed 12-3-18; 8:45 am]
BILLING CODE 4337-15-P

62602 Federal Register / Vol. 83, No. 233 / Tuesday, December 4, 2018 / Notices

Washington, DC 20240, or by telephone Section 5 of the Indian Reorganization positioned to fund their own sovereign
at (202) 208–3615. Act, 25 U.S.C. 5108, preempts State and functions, rather than relying on Federal
SUPPLEMENTARY INFORMATION: local taxation of permanent funding’’). The additional costs of State
improvements on trust land. and local taxation have a chilling effect
I. Summary of the HEARTH Act Confederated Tribes of the Chehalis on potential lessees, as well as on a
The HEARTH Act makes a voluntary, Reservation v. Thurston County, 724 Tribe that, as a result, might refrain from
alternative land leasing process F.3d 1153, 1157 (9th Cir. 2013) (citing exercising its own sovereign right to
available to Tribes, by amending the Mescalero Apache Tribe v. Jones, 411 impose a Tribal tax to support its
Indian Long-Term Leasing Act of 1955, U.S. 145 (1973)). Similarly, section 5108 infrastructure needs. See id. at 2043–44
25 U.S.C. 415. The HEARTH Act preempts state taxation of rent payments
(finding that State and local taxes
authorizes Tribes to negotiate and enter by a lessee for leased trust lands,
into agricultural and business leases of greatly discourage Tribes from raising
because ‘‘tax on the payment of rent is
Tribal trust lands with a primary term indistinguishable from an impermissible tax revenue from the same sources
of 25 years, and up to two renewal terms tax on the land.’’ See Seminole Tribe of because the imposition of double
of 25 years each, without the approval Florida v. Stranburg, No. 14–14524, taxation would impede Tribal economic
of the Secretary of the Interior *13–*17, n.8 (11th Cir. 2015). In growth).
(Secretary). addition, as explained in the preamble Similar to BIA’s surface leasing
The HEARTH Act also authorizes to the revised leasing regulations at 25 regulations, Tribal regulations under the
Tribes to enter into leases for CFR part 162, Federal courts have HEARTH Act pervasively cover all
residential, recreational, religious or applied a balancing test to determine aspects of leasing. See 25 U.S.C.
educational purposes for a primary term whether State and local taxation of non- 415(h)(3)(B)(i) (requiring Tribal
of up to 75 years without the approval Indians on the reservation is preempted. regulations be consistent with BIA
of the Secretary. Participating Tribes White Mountain Apache Tribe v. surface leasing regulations).
develop tribal leasing regulations, Bracker, 448 U.S. 136, 143 (1980). The Furthermore, the Federal government
including an environmental review Bracker balancing test, which is
process, and then must obtain the remains involved in the Tribal land
conducted against a backdrop of
Secretary’s approval of those regulations leasing process by approving the Tribal
‘‘traditional notions of Indian self-
prior to entering into leases. The government,’’ requires a particularized leasing regulations in the first instance
HEARTH Act requires the Secretary to examination of the relevant State, and providing technical assistance,
approve Tribal regulations if the Tribal Federal, and Tribal interests. We hereby upon request by a Tribe, for the
regulations are consistent with the adopt the Bracker analysis from the development of an environmental
Department of the Interior’s preamble to the surface leasing review process. The Secretary also
(Department) leasing regulations at 25 regulations, 77 FR at 72,447–48, as retains authority to take any necessary
CFR part 162 and provide for an supplemented by the analysis below. actions to remedy violations of a lease
environmental review process that The strong Federal and Tribal or of the Tribal regulations, including
meets requirements set forth in the interests against State and local taxation terminating the lease or rescinding
HEARTH Act. This notice announces of improvements, leaseholds, and approval of the Tribal regulations and
that the Secretary, through the Assistant activities on land leased under the reassuming lease approval
Secretary—Indian Affairs, has approved Department’s leasing regulations apply responsibilities. Moreover, the Secretary
the Tribal regulations for the Prairie equally to improvements, leaseholds, continues to review, approve, and
Band Potawatomi Nation. and activities on land leased pursuant to monitor individual Indian land leases
Tribal leasing regulations approved and other types of leases not covered
II. Federal Preemption of State and
under the HEARTH Act. Congress’s under the Tribal regulations according
Local Taxes
overarching intent was to ‘‘allow Tribes to the Part 162 regulations.
The Department’s regulations to exercise greater control over their
governing the surface leasing of trust own land, support self-determination, Accordingly, the Federal and Tribal
and restricted Indian lands specify that, and eliminate bureaucratic delays that interests weigh heavily in favor of
subject to applicable Federal law, stand in the way of homeownership and preemption of State and local taxes on
permanent improvements on leased economic development in Tribal lease-related activities and interests,
land, leasehold or possessory interests, communities.’’ 158 Cong. Rec. H. 2682 regardless of whether the lease is
and activities under the lease are not (May 15, 2012). The HEARTH Act was governed by Tribal leasing regulations
subject to State and local taxation and intended to afford Tribes ‘‘flexibility to or Part 162. Improvements, activities,
may be subject to taxation by the Indian adapt lease terms to suit [their] business and leasehold or possessory interests
Tribe with jurisdiction. See 25 CFR and cultural needs’’ and to ‘‘enable may be subject to taxation by the Prairie
162.017. As explained further in the [Tribes] to approve leases quickly and Band Potawatomi Nation.
preamble to the final regulations, the efficiently.’’ Id. at 5–6.
Federal government has a strong interest Assessment of State and local taxes Dated: September 18, 2018.
in promoting economic development, would obstruct these express Federal Tara Sweeney,
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. 2018–26340 Filed 12–3–18; 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
interests and activities applies with Indian Community, 134 S. Ct. 2024,
equal force to leases entered into under 2043 (2014) (Sotomayor, J., concurring)
Tribal leasing regulations approved by (determining that ‘‘[a] key goal of the
the Federal government pursuant to the Federal Government is to render Tribes
HEARTH Act. more self-sufficient, and better

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Document Created: 2018-12-04 00:42:37
Document Modified: 2018-12-04 00:42:37

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		Ms. Sharlene Round Face, Bureau of Indian Affairs, Division of Real Estate Services, 1849 C Street NW, MS- 4642-MIB Washington, DC 20240, or by telephone at (202) 208-3615.
FR Citation		83 FR 62601

83 FR 62601 - HEARTH Act Approval of Prairie Band Potawatomi Nation Regulations

DEPARTMENT OF THE INTERIORBureau of Indian Affairs

Federal Register Volume 83, Issue 233 (December 4, 2018)

DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs