Native American Legal Update : Native American Law : Foster Pepper Law Firm : Northwest, Seattle, Spokane, Portland Lawyer & Attorney

The IRS has just released Notice 2009-51 soliciting applications for and providing interim guidance on the $2 billion of Tribal Economic Development Bonds authorized in the American Recovery and Reinvestment Tax Act, and providing an application form for Tribes to use.

Tribal Economic Development Bonds can be used to finance on a tax-exempt basis anything that a State or local government could finance on a tax-exempt basis, whether with tax-exempt governmental bonds or tax-exempt private activity bonds, except for any portion of a building in which gaming is conducted or any property actually used for gaming and facilities not located on the reservation.

The IRS notice appears to establish that no portion of a building may be financed with these bonds if gaming is conducted in any other portion of the same building, even if those portions are physically discrete from each other. The notice provides a safe harbor under which a structure will be treated as a separate building if it has an independent foundation, independent outer walls and an independent roof. Connections such as doorways, covered walkways or other enclosed common area connections between two adjacent independent walls of separate buildings may be disregarded as long as such connections do not affect the structural independence of either wall.

Other notable points from the IRS guidance include:

The volume cap for these bonds will be allocated in two $1 billion tranches.

Applications for an allocation from the first tranche must be filed with the IRS by August 15, 2009, and the bonds must be issued by December 31, 2009.

Applications for an allocation from the second tranche must be filed with the IRS after August 15, 2009 and before January 1, 2010, and the bonds must be issued on or before December 31, 2010.

No single Tribal government may be awarded more than $30 million from the first tranche, but there is authorization for projects to be financed jointly. If the total of applications for the first tranche exceed $1 billion each award will be reduced pro rata so the total does not exceed $1 billion.

A similar limit is expected to apply to applications for the second tranche, but the IRS reserves the right to change or eliminate the limit.

Unused volume cap for these bonds would carry over to future years under a process to be determined at some future date.
 

For further information on accessing funding and developing projects through Tribal Economic Development Bonds, contact William Tonkin.

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Youth advocacy and policy experts recently announced a study that shows Native American children are not only three times more likely to be placed in the foster care system but also fare much worse than other children nationally. The phrase “fare worse” refers to reports that show that children of color are treated more poorly than white children in foster homes.

Advocates for these youth are hopeful that new legislative updates such as the Fostering Connections to Success and Increasing Adoptions Act, which Congress passed in 2008, will improve the current situation for Native children. This legislation is considered to be a groundbreaking reform in the foster care system because it provides federal funds to tribal governments so that more Native children can stay in their communities. Under the law, participating tribes are required to match funds if they enter into direct agreements with the federal government to perform child welfare services under the Title IV-E Foster Care and Adoption Assistance program. But, according to reports, the law does not force tribes to end any ongoing tribal-state foster care agreements, and, tribal officials do not have to immediately establish their own child welfare system if they believe that the current structures of their agreements with states are working well for Native children. The National Indian Child Welfare Association is currently working on ways to empower tribes.

The Annie E. Casey Foundation (AECF) is also calling on federal fiscal policy to better promote permanence and well-being for all kids in the child welfare system. According to AECF, in order for the federal government to make a meaningful difference in the child welfare system, it must take a leadership role in reducing racial disparities and require states to disaggregate by race all data on key child welfare performance indicators; set aggressive goals for ultimately eliminating racial disparities; and regularly publish a progress report keeping these goals in mind. Simultaneously, tribal officials are pushing for federal government to work more closely with tribes on foster care matters that directly affect Native youth.

Hopefully, all of these efforts combined will help reshape and restructure the foster care system so that Native children find loving homes and no longer have to fare worse in a system that currently is failing them.

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When the National Indian Gaming Commission released the 2008 gaming revenues at the North American Gaming Regulators Association conference on June 3rd, the results were surprising, given the state of the economy. According to the figures, Indian gaming took in $26.7 billion in 2008, which amounts to a 2.3% increase over the prior year and represents growth of more than $500 million over 2007. These figures imply that Indian gaming remains a strong means of economic development for Indian nations.

According to surveys, over the past decade, Indian gaming has more than doubled from $9.8 billion to last year’s $26.7 billion. The rate of growth of Indian gaming has, however, steadily decreased over the past few years.

Reports show that although the Washington region has the fewest number of gaming operations it is the second top regional earner because it is home to two of the largest casinos in the country. The next biggest earner was the St. Paul region, which includes Iowa, Michigan, Minnesota, Montana, North Dakota, Nebraska, South Dakota, Wisconsin and Wyoming. But the biggest percentage increases are in the Tulsa and Oklahoma City regions, which include Kansas, eastern and western Oklahoma and Texas. The gross gaming revenues represent the amounts bet or wagered by gaming patrons, less the amounts paid out as wins or prizes.

It is likely that we will continue to see an increase in Indian gaming given the attractive and high quality entertainment tribes provide to the public. Gaming and casinos just may prove to be one of those few precious areas that are somewhat recession proof.
 

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(Photo courtesy of Martha Lou Perritti)

In nearly every jurisdiction throughout the United States, local governments derive a significant portion of their operating revenue from property taxes.  The money land owners pay in property taxes goes to fund basic infrastructure such as roads and schools and services such as police and fire protection.

There is however one jurisdiction within which the local government cannot collect property taxes: Tribal lands held in federal trust.

Tribal governments cannot impose property taxes on reservation land that has been taken into trust by the federal government, which is typically most if not all of the land owned by Tribal members within the bounds of a reservation.  Tribes are thus deprived of the benefit of countless millions of dollars in revenue that would normally be available to any other municipality.  With poverty and sub-standard facilities still endemic on reservations throughout America, there is a sad irony in the fact that the place where property taxes could do the most good are the only places they cannot be collected and put back into the community.

The denial of taxing authority to Tribes also has another negative impact on Native Communities, this time in the context of the national consciousness.  In order to make up for unavailable property tax revenue, many Tribes utilize alternative income sources such as casino gaming and discounted tobacco products to finance basic services within their reservations.  Since in most states these offerings are only available within the sovereign territory of a Tribe, many Americans hold an ill-informed view that Native Americans enjoy "special privileges", and that other benefits and services to Tribes should therefore be curtailed.  The lack of understanding of why these alternative revenue sources are necessary could perhaps be overcome by touring the decrepit infrastructure with which many Tribal Communities continue to be saddled, but such ventures by non-Natives are far from routine.

There's no insurmountable obstacle to allowing Tribes to tax land within their jurisdictions.  The federal government could enter into taxing agreements with Tribes that would allow for collection of some form of property tax, which Tribes could help structure so as to increase revenue without placing an undue financial burden on Tribal members.  Numerous models for such agreements already exist, in the form of retail sales tax compacts between state and Tribal governments for business activities occurring on reservations.

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HHS Secretary Kathleen Sebelius (mediamonarchy.com)

Health and Human Services Secretary Kathleen Sebelius says she will launch a new multiyear effort to improve health care for Native Americans, calling previous federal programs a "historic failure."  Recruitment of health care providers for reservations and preventive care for Tribal members are top priorities. "(We need to) begin to lay the groundwork with Congress right now to say here's where we need to be," Sebelius said. "I think often the Tribal issues just fade away."

Dating back to a treaty signed in 1787, the federal government assumed an obligation to provide Native Americans with health care on reservations. Yet the chronically-underfunded Indian Health Service only has about half of the money it needs, often leaving Tribes in remote areas with severely substandard care.

President Barack Obama campaigned notably in Tribal communities and promised better health care for Native Americans. The 2010 federal budget includes an increase of $454 million, or about 13 percent, for IHS funding and the stimulus bill signed earlier this year provided for construction and improvements to health clinics on reservations.

Nevertheless, Sebelius says the funding increase still falls well short of the IHS’ actual needs. "One of my challenges to the new head of the Indian Health Service is that we need a multiyear strategy, we need an end goal," she said. "The most severe disparity between quality care and what goes on with health outcomes is in the Native American population."
 

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Statue of Chief Sealth (VictoriaExcelEnt.com)

Seattle takes its name from Chief Sealth, an icon of Coastal history and culture.  Yet despite being the namesake for one of America's foremost cities, Chief Sealth's own Duwamish Tribe does not enjoy federal recogition status.

Rep. Jim McDermott (D-WA) aims to change that, and has introduced legislation in the House of Representatives calling for federal recognition of the Duwamish Tribe.  “Despite the Treaty of Point Elliot the Duwamish signed in good faith with the United States in 1855, federal recognition has not been extended and this is wrong," he said. "Promises were made to the Duwamish, but not kept. And it is time to correct this injustice for the Duwamish...”

The Duwamish Tribe appeared to have secured federal recogniton in the waning days of the Clinton Administration, but that status was denied by the Bush Administration. McDermott's legislation would determine the Tribe's status conclusively and permanently.  Speaking before the House, McDermott said: “It is my hope that the new day dawning across America is bright enough to shine enough light for us to see and correct the injustices endured for too long by the first Americans.”
 

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The Western Shoshone native people are taking an important stand to protect land they believe has great spiritual and cultural meaning. On June 10, 2009 the Ninth Circuit Court of Appeals will decide if a mining company, Barrick Gold (BG), should be allowed to construct an open pit gold mine on Mt. Tenabo, located in Nevada.  The Western Shoshones are arguing, in part, that BG should not be allowed to mine on lands that are spiritually important and have deep cultural significance.

BG’s plans are to construct a large cyanide heap leach processing facility and dump over 1.5 billion tons of mine waste on Mt. Tenabo that would pump over 16.5 billion gallons of groundwater from the land to keep the pit dry for mining. In order to achieve this goal the company plans to blast a new mine pit into Mt. Tenabo. The BG mine expansion would disturb approximately ten square miles of land.

The Shoshone people believe that water at Mt. Tenabo “must be protected to sustain life and peace on Mother Earth” because water is sacred and signifies life. The plaintiffs are three tribal groups and two conservation organizations. They hope a preliminary injunction will stop BG from expanding the existing gold mining operation onto Mt. Tenabo. If the court grants the injunction, the merits of the case will be argued later in U.S. District Court in Nevada.

Relevant case history goes back to November 8, 2008 when the U.S. Bureau of Land Management (BLM) approved the construction of the gold mine on Mt. Tenabo. The following January the U.S. District Court in Reno denied a preliminary injunction sought by the native people that would have stopped mining operations at Mt. Tenabo. The plaintiffs hope the appellate court will overturn the Reno court ruling. The Ninth Circuit ruling will be critical on the legal issue of whether the BLM has the authority to deny such a destructive mining project in such an important place.

It is difficult not to agree with the Western Shoshone’s supporters that the mining industry needs to recognize that there are some places where it is not appropriate to mine and that a company's economic interests should not be put over the rights of the people who have lived sustainably on lands for thousands of years. It will be interesting to see how the court rules on Wednesday.

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Tribal leaders and business experts from across the nation will gather at the Tulalip Resort June 1-2 for the Northwest Native American Economic Development Conference.  Speakers include:

• Mel Sheldon, Chairman, Tulalip Tribes of Washington

• Chief J. Allan, Chairman, Coeur d'Alene Tribe

• Cedric BlackEagle, Chairman, Crow Nation

• Bob Garcia, Chairman, Confederated Tribes of Coos, Lower Umpqua & Siuslaw Indians

• Ralph Sampson Jr., Chairman, Yakama Indian Nation

• Edward K. Thomas, President Emeritus, Central Council Tlingit & Haida Indian Tribes of Alaska & Board of Directors - Sealaska Corporation

• Jerry Lamb, Director of Economic Development, Confederated Salish and Kootenai Tribes

• Kary Nichols, Director of Business Development, Colville Tribal Enterprise Corporation

• Professor Ron Whitener, University of Washington Native American Law Center

The conference will cover a vast array of topics relating to the development of economic enterprises in Native lands, including:

• Tribal Leaders Roundtable: Defining Economic Development

• Tribal Economic Development Bonds: Strategic Financing for Business Ventures

• Tribal Gaming Outlook: Planning for the Future

• Reinventing your Casino & Resort Facilities

• Housing & Infrastructure Projects on the Reservation

• Renewable Energy Projects

• Taking Care of Your Own: Community Member Wealth

For anyone interested in the development of Tribal economies, this seminar is not to be missed. 

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In a move that puts traditional Native rights at odds with animal rights advocates, the Nuu-chah-nulth Tribe of Vancouver Island is planning to reinstate sea otter hunts, after reaching a tentative agreement with the Canadian Department of Fisheries and Oceans. The deal will allow the members of the Nuu-chah-nulth Tribal Council to hunt roughly one per cent of the sea otter population in their territory on the central section of the west coast of Vancouver Island every year. Based on current figures, the take would amount to approximately 20 otters per annum.

Cliff Atleo, president of the Nuu-chah-nulth Tribal Council, stated: "For us, it's not about the numbers. It's about reconnecting with the pelts worn by our chiefs, the heads of our governments," Council Member Keith Atleo said expects opposition to the hunt, especially since sea otters are known for their cute looks, but said the hunt is necessary to stop the sea otters from decimating sea urchin and shellfish stocks, which are a valuable source of food for First Nations communities and commercial fishermen. "We have a lot of cute children in our community that depend on the seafood, and we'd rather they have a good future. Sea otters have affected the balance in our food, traditionally and culturally," he said.

Sea otters were hunted out of existence in British Columbia during the lucrative fur trade between colonialists and West Coast natives in the late 1700s and 1800s. In the 1960s and 1970s, animals from the surviving population in Alaska were reintroduced to the B.C. coast. The otter population is now estimated at 3,500 and the species is now listed as "at risk," rather than endangered. The Nuu-chah-nulth otter hunt agreement still is awaiting final approval from First Nations leaders and the Canadian government, and the hunt is not yet scheduled.
 

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