IRS Teleconference On Cobell Settlement Taxes - June 26

The IRS's Indian Tribal Governments unit will host a phone forum on June 26th at 2:00 p.m. (EDT) to discuss tax issues for settlement payments in the Cobell case, payments made in response to discrimination claims in the Keepseagle case, and settlement payments covered in Notice 2013-1 (Per Capita Payments From Proceeds of Settlements of Indian Tribal Trust Cases).

Space is limited and participants are encouraged to register early by clicking HERE.

If you already have questions regarding the issues covered, please email: tege.itg.askus@irs.gov using the subject line: Indian Tribal Settlement Phone Forum. The IRS will attempt to address your questions during the forum.
 

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NFL Commissioner Says Redskins Is A "Positive" Nickname

NFL commissioner Roger Goodell has said the Washington Redskins' nickname has “a positive meaning” in a letter to 10 members of Congress, who had earlier urged team owner Daniel Snyder and the NFL to change the name because it is offensive to many Native Americans.

The members of Congress sent their letters to Snyder, Goodell and the other 31 NFL franchises in May. Goodell's response was sent June 5, a copy of which can be viewed on the Indian Country Today Media Network.

 "The Washington Redskins name has thus from its origin represented a positive meaning distinct from any disparagement that could be viewed in some other context," Goodell stated. "For the team's millions of fans and customers, who represent one of America's most ethnically and geographically diverse fan bases, the name is a unifying force that stands for strength, courage, pride and respect."

Betty McCollum (D-Minn.) and Eni Faleomavaega (D-American Samoa) responded to Goodell's letter with statements of their own. McCollum said Goodell's letter was "another attempt to justify a racial slur on behalf of Dan Snyder and other NFL owners who appear to be only concerned with earning ever larger profits, even if it means exploiting a racist stereotype of Native Americans." Faleomavaega said that Goodell "completely missed the point regarding the Washington franchise's name."

The letter to Snyder said that "Native Americans throughout the country consider the 'R-word' a racial, derogatory slur akin to the 'N-word' among African Americans or the 'W-word' among Latinos." The nickname is the subject of a long-running legal challenge from a group seeking to have the team lose its trademark protection. The team’s owner has vowed he will never change the name.
 

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Justice Department Reports Increase In Prosecutions For Crimes On Reservations

The New York Times has published a Justice Department statement indicating that it has increased the rate of criminal prosecutions in Native communities by more than 50% in the past four years, to help combat an increase in violent crime impacting Tribes.

The report states that United States attorneys prosecuted about 69 percent of the 3,145 criminal cases referred to their offices from Tribes last year — an improvement over 2011, when the federal government tried 63 percent of 2,840 criminal cases in Indian country.

The report is partly a response to criticism of the Justice Department by tribal officials who say United States attorneys pursue far too few violent criminal cases on reservations. Prosecutors say they must decline many Tribal cases — about 60 percent of the total — because of a lack of evidence.

Federal prosecutions of crime on Indian lands rose by nearly 54 percent from the 2008 fiscal year, when the Justice Department prosecuted 1,091 cases, to the 2012 fiscal year, when it prosecuted 1,677 cases, the report said.  However, the information on violent crimes presented a more pessimistic picture: the Justice Department files charges in only about half of reservation murder investigations and one-third of sexual assault cases. The data also showed the number of prosecutions by United States attorneys of violent crimes fell by 3 percent from 2000 to 2010, even as crime on some reservations increased by 50 percent or more. The report released this week does not separate the number of federal prosecutions for violent crimes. Instead, the report groups them with drug cases and white-collar crime.
 

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Developing Sustainable Economies For Tribes - Perspectives From Bob Whitener

Sustainability truly matters to the tribes. The rivers and the fish kept them alive. Their natural resources provided them with jobs. They still want—and need—to provide jobs. And sustainability can help do that.

That’s one of the main reasons why investing in sustainable companies, partnerships and projects that have a chance to change the future makes a lot of sense for the tribes today.

The tribes have always prioritized the health of their environment, and I strongly believe that the economic and social conditions are ripe for them to contribute meaningfully to environmental improvement right now.

I used to be a tribal fisherman who dug clams, but now I’m a consultant who advises the tribes when it comes to natural resources, economic development and environmental protection.

As part of my upbringing, and part of my current job, I know how important it is for the tribes to diversify their holdings beyond gaming. But I also know that this diversification absolutely must preserve the tribes’ ethical and social values. This is simply non-negotiable.

Indeed, many green technologies need investment, and those tribes whose economic resources permit can play an important role by providing financial support that allows profit-oriented enterprises in this area to thrive.

Looking forward, the alignment of environmental values and economic opportunity creates a synergistic benefit for future tribe generations. Greater wealth helps all tribe members, and a better environment leads to increased health for the tribes, too.

There’s also long-lasting tribe pride in having enhanced both the economy and the environment.

I’ve seen several good examples that illustrate how the tribes are achieving both these goals through smart sustainability investing and commitments.

Washington State-based MicroGREEN, for example, is transforming recycled water bottles into recyclable products for retail, food-service and packaging needs. The company is the closest thing to full-cycle recycling I’ve seen. And it’s a rare kind of business, because it can make money and still be good for the environment. Some day in the future, I believe that MicroGREEN’s cups will be ubiquitous, and the tribes that have invested in it will be very proud.

In the wind-power market, the Cheyenne and Arapaho Tribes are installing wind turbines on their land in order to offset fossil fuels and power all operations with wind energy. This move is expected to save more than $9 million for the tribes over the next four decades. In the past, the tribes have spent more than $200,000 a month for electricity, including generators that help power its casinos.

One of the nation’s first 100 percent Native American-owned-and-operated renewable energy companies can be found on the Pine Ridge Reservation in South Dakota. Founded in 2006, Lakota Solar Enterprises (LSE) manufactures solar air collectors and complete supplemental solar heating systems. It also provides employment and green-jobs training for Native Americans.

Meanwhile, the Confederate Salish and Kootenai Tribes (CSKT) in Montana are developing a pioneering project aimed at creating a viable biofuel industry using waste wood that blankets the region’s vast forestlands. The CSKT have agreed to partner with a team of researchers from the Northwest Advanced Renewables Alliance (NARA) on an expansive $40 million research project. NARA is a broad collective of scientists and engineers from public universities and private industry that is studying the feasibility of creating jet fuel using wood debris and residuals.

Working with companies that prioritize environmental sustainability, such as MicroGREEN, will help the tribes diversify their economies and help green, in a cost effective way, their gaming operations if they have them."

Bob Whitener is a member of the Squaxin Island Tribe and co-owner and managing partner of The Whitener Group, a consulting firm dedicated to the sustainability and advancement of Native communities. The company advises Tribes and businesses/organizations that want to work with Tribes to advance tribal objectives. Prior to The Whitener Group's establishment in 2009, Bob Whitener served as the CEO/Board President for Island Enterprises Inc., Squaxin Island's economic development corporation, and served for over 6 years as the executive director of the Squaxin Island Tribe.

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Are You Still An "Indian"? Affordable Care Act May Tax Those Who Are Not

The Affordable Care Act requires all Americans to participate in some form of health care insurance, or else pay an annual tax penalty. People who are recognized by the federal government as Native American are generally exempt from the tax penalty, which will reach a minimum of $695 when fully implemented, because most Native Americans are eligible for some form of health care from the federal Indian Health Service. However, the definition of “Indian” under the Affordable Care Act is limited to those who can document their membership in one of about 560 tribes recognized by the U.S. Bureau of Indian Affairs.

This federal definition is creating a significant gap that could force many Native Americans to pay the tax penalty. More than 100 tribes nationwide are recognized only by states and not the federal government, leaving their members outside the federal definition. Many tribes do not allow their members to enroll before they are 18, meaning some school-age children whose parents are Native American might not come within the definition in the act. Other tribal governments have complicated blood-quantum requirements or rules that all members must live on the reservation, even though nearly two-thirds of Native Americans and Alaska Natives now live in metropolitan areas.

The definition of “Indian” in the Affordable Care Act is roiling emotions on reservations and in native enclaves across the country, but U.S. Department of Health and Human Services spokeswoman Erin Shields said the agency is powerless to change it without an act of Congress. The problem is so new that the federal government is still seeking to establish how many people might be affected, although Indian health advocacy groups estimate it could be up to 480,000.

"We have and will continue to encourage a robust dialogue with American Indian and Alaska Native communities about this matter, and welcome their input and ideas for solutions," Shields said in a statement to The Associated Press. "Under the law, it would require a legislative rather than regulatory change to address this matter. And as we consider approaches to the best possible solution, we are eager to work with Congress."

The IRS has not yet decided how the agency will verify who qualifies as “Indian”, or how it will assess the penalty on tax returns. The IRS and U.S. Treasury have scheduled a May 29 public hearing on their proposed rules establishing who qualifies for an exemption from the insurance coverage requirement.

Republican Rep. Tom Cole, a member of the Chickasaw Nation in Oklahoma and one of just two federal legislators who are members of a federally recognized tribe, said he was aware of the concerns and would ensure that care for native people was not compromised as the health overhaul rolls out. He declined to comment about whether he would sponsor a bill to address the issue. "This could lead to some tribal citizens being required to purchase insurance or face penalties even though they are covered by IHS," he said in a statement to The Associated Press, referring to the federal Indian Health Service. "I am watching the situation closely to ensure that those individuals already benefiting from care through IHS continue to receive it."

The 2010 Census found that nearly one-third of the 6.2 million people who self-identify as American Indian or Alaska Native lack health insurance and that 28 percent live in poverty.
 

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Tribal Pay Day Loans Increasing - And Being Watched

David Lazarus of the LA Times has reported that a growing number of Indian tribes are getting into the payday loan business, seeking to raise revenue for their reservations while helping cash-strapped consumers nationwide. But federal officials suspect that, at least in some cases, tribes are being paid to offer their sovereign immunity to non-Indian payday lenders that are trying to dodge state regulations.

They may now face a crackdown by the federal Consumer Financial Protection Bureau.

"The states have historically been the ones that have regulated and overseen the payday-loan industry," said Tom Feltner, director of financial services for the Consumer Federation of America. "They're the ones that have implemented rules for interest rates or even whether a payday loan can be issued," he said. "The vast majority of these tribal lenders are not complying with state laws."

In California, payday lenders are prohibited from lending more than $300 at a time, and they can't charge more than 15% interest. Thus, a borrower who received a loan of $200 for two weeks would owe $230 when his or her paycheck arrived. On an annual percentage basis, that works out to 460%. Internet-based loan fees can be even higher. "These online payday loans can have annual percentage rates of 600% or more," said Ellen Harnick, senior policy counsel for the Center for Responsible Lending, an advocacy group. "This is a relatively new way for the industry to get out from under state laws."

Barry Brandon, executive director of the Native American Financial Services Assn., says the organization now counts 16 tribes as members and is adding one nearly every month. "Tribal lending is a financial lifeline for many tribes," Brandon said, noting that some tribes' reservations are too remote for casinos.

But there have been reports of some tribes extending their sovereign status to non-Indian payday lenders in what some have called "rent a tribe" deals.

The Federal Trade Commission filed a lawsuit last year against AMG Services, a Kansas payday loan company that allegedly tied up with Indian tribes to avoid state regulations. According to the FTC suit, AMG, founded by race car driver Scott Tucker, claimed that it was owned by the Miami and Modoc tribes of Oklahoma and the Santee Sioux of Nebraska. But Colorado officials, who also are trying to crack down on tribal lenders, have said in separate state court hearings that the tribes received only a small fraction of AMG's earnings.

A question now is how much authority the federal Consumer Financial Protection Bureau has over tribal lenders. The answer is unclear, and a legal battle is almost inevitable. Richard Cordray, the director of the bureau, served notice last year that he believes his agency has jurisdiction over tribal lenders. "If there is legitimately a tribal entity that can oust a state of effective jurisdiction to enforce laws against that entity, it does not oust the federal government," he said.

Brandon at the Native American Financial group said tribes may be willing to compromise by accepting the consumer bureau as a "co-regulator" of the industry, along with the tribes' own oversight of loan businesses.

Sen. Jeff Merkley (D-Ore.) has sponsored the Stopping Abuse and Fraud in Electronic Lending Act, which, among other things, would require online lenders to abide by the rules of the state where a borrower lives. This would theoretically require tribal lenders to follow state regulations or not do business in a particular state.
 

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Cobell Land Share Purchases Slated To Begin This Year

The Bureau of Indian Affairs hopes to start the land consolidation portion of the $3.4 billion, Cobell trust fund settlement by the end of 2013. The settlement provides $1.9 billion for the BIA to acquire fractionated interests from Indian beneficiaries. The land will then be returned to the local tribal governments.

"Our goal is to start making offers on fractionated land interests by the end of the year," says BIA Chair Kevin Washburn.

The land consolidation program is voluntary, and the settlement authorizes up to $60 million in scholarships to be awarded to Indian students based on how many people agree to sell their fractionated land interests. If the purchase price is less than $200, $10 will be contributed to the fund. If the purchase price is between $200 and $500, $25 will go into the fund. For purchases greater than $500, 5 percent will be paid to the fund.

"Until we start purchasing land, there won't be any funding in the scholarship fund," Washburn noted.

The terms of the Cobell settlement require the BIA to spend the $1.9 billion in land consolidation funds within 10 years. The BIA gets to keep an administrative fee of 15 percent, or $285 million.
 

Details on the BIA's process for purchasing land under the Cobell settlement can be accessed HERE.

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Tribal Trust & Investment Workshop -- May 22-23, 2013

Registration is now open for the first annual Tribal Trust & Investment Workshop, May 22 & 23, 2013 at the Radisson Hotel & Conference Center Green Bay

The Oneida Trust Committee and Rodgers Investment Consulting are partnering with Breakwater Investment Group to host the First Annual Tribal Trust & Investment Workshop in Green Bay, WI. There will also be a reception with an Iroquois Traditional Social, performed by Oneida Tribal members.

This workshop is modeled after the successful Aboriginal Trust and Investment Workshop held annually in Canada. This event will cover detailed aspects of Tribal trusts and investments. Tribes from across the United States and First Nations from Canada will be participating.

Topics to be covered:
• Fiduciary Duty
• Sustainable Nations and Sustainable portfolios (intergenerational Equity)
• Native Trust Vision, Mission, Trust Agreements and other governing documents
• Structure of the Investment Industry and Designations
• Effective Manager Search
• Performance Reporting & Manager Monitoring
• Impact Investing
• Trust Office Structure
• Key issues to consider when developing and amending a Trust agreement
• National Aboriginal Trust Officers Association (NATOA)
• Introduction of Sponsors & Investment Jeopardy
• Strategies for Building Financial Literacy
• Employer Retirement Plans
• Asset Allocation - Minors Trusts
• Investment Committee / Board Roles - group risk, best practices

The registration portal and conference agenda are available on the website: www.tribaltrustandinvestment.com.

There is also a group on LinkedIn for this program - http://www.linkedin.com/groups/Tribal-Trust-Investment-Workshop-4874315/about.
 

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Paris Auction House To Sell Sacred Hopi Masks

Heaume Korosto Sacred Mask (AFP)

Despite pleas from Hopi Tribal officials, supported by the U.S. Ambassador and actor Robert Redford, a court in Paris has allowed French auction house Neret-Minet Tessier & Sarrou to go forward with the sale of 70 traditional Hopi masks through an art auction. The Hopi Tribe asserts that the masks have sacred value, representing the spirits of their ancestors, and that the masks must have been stolen from their rightful owners.

Gilles Neret-Minet, of the Neret-Minet Tessier & Sarrou auction house, said “I'm happy that French law was respected."

"I am also very concerned about the Hopis' sadness, but you cannot break property law," he said. "These are in (private) collections in Europe: they are no longer sacred. When objects are in private collections, even in the United States, they are desacralized."

The most commercially-valuable of the masks is expected to sell for at least $65,500. The French auction house will receive a commission for each Hopi mask it sells.

Ironically, the decision comes as the French government is increasing its efforts to return art stolen by the Nazis during WWII to its original Jewish owners. Since 1999, the French Commission for the Compensation of Spoliation Victims has returned numerous works of art and paid $44 million in compensation to Jewish families whose artworks were stolen and brought to France.

Foster Pepper attorneys Lauren King (Muscogee Creek) and Joanna-Plichta Boisen are working with the new Indian Arts and Crafts Committee to create partnerships and programs for the protection of Native artists, their creative works, and the cultural heritage of Native people.  If you are interested in helping with this effort, please contact Lauren and Joanna at 206.447.4400 or through the Foster Pepper website www.foster.com.

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FCC Announces $50 Million Funding Program For Tribal Telecommunications

The FCC’s Office of Native Affairs and Policy (ONAP) has issued a Public Notice regarding the Tribal Mobility Fund Phase I program, which is now open for public comment. The Tribal Mobility Fund Phase I will distribute $50 million in one-time high-cost universal service support to eligible telecommunications providers (ETCs) serving Tribal lands that currently lack 3G or better mobile voice and broadband services.

The $50 million will be distributed via reverse auction, known as Auction 902. Important information in this Public Notice includes:

  • The Tribal Mobility Fund Phase I auction (Auction 902) is scheduled for October 24, 2013;
  • The Notice identifies the eligible Tribal areas (including maps) and provides a challenge process (paragraphs 17 to 23); and
  • The Notice describes the proposed auction procedures and seeks comment on them (paragraphs 24 to 60).

Comments are due on May 10th, 2013 and reply comments are due on May 24th. After ONAP reviews the comments, the Wireless Telecommunications Bureau will release a final procedures Public Notice, which will include a final list of Tribal areas eligible for the auction, and will announce when the applications for participation in Auction 902 are due. For any Tribally owned entities considering participating in Auction 902, ETC designation petitions must also be filed by the Auction 902 short form deadline.

To access the Public Notice and the maps of eligible areas, click HERE.
 

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