AGO Opinion 97062

Taxation of Real Property Owned by the Ponca Tribe of Nebraska.
Opinion 97062

DATE: December 2, 1997

SUBJECT: Taxation of Real Property Owned by the Ponca Tribe of Nebraska.

REQUESTED BY: John Thomas, Knox County Attorney

WRITTEN BY: Don Stenberg, Attorney General

L. Jay Bartel, Assistant Attorney General

You have requested our opinion concerning the taxability of

certain real estate in Knox County acquired by the Ponca Tribe of

Nebraska. The deeds provided with your request indicate the

properties were transferred to the Ponca Tribe of Nebraska

[hereinafter the "Tribe"] in October, 1997. The real estate

transfer statements you have provided indicate the real estate

consists of improved and unimproved agricultural land. You ask

whether the lands are subject to real property taxation.

With respect to the taxability of lands owned by Indian tribes

outside Indian country, one leading commentator on Indian law has


Tribal property located outside the governmental

jurisdiction of the tribe (that is, outside tribal Indian

country) has been the subject of few contests over state

taxes. Most tribal real property is associated with

tribal Indian country and thus not subject to state

taxing jurisdiction in any case. Some statutes specify

that particular off-reservation interests shall be

taxable or nontaxable. . . .[O]ff reservation interests

have been assumed by all concerned to be taxable when

unrestricted and previously taxable, and nontaxable when

held in trust.

F. Cohen, Handbook of Federal Indian Law, 430 (1982 ed.) (emphasis

added) (footnotes omitted).

"It is well-established that states have the right to impose

taxes on Indian property located outside the boundaries of

reservations, so long as the tax is nondiscriminatory." Salt River

Pima-Maricopa Indian Community v. Yavapai County, 50 F.3d 739, 740

(9th Cir. 1995). "Absent express federal law to the contrary,

Indians going beyond reservation boundaries have generally been

held subject to non-discriminatory state law otherwise applicable

to all citizens of the State." Mescalero Apache Tribe v. Jones,

411 U.S. 145, 148-49 (1973). This includes application of "a

State's tax laws" to "tribal activities conducted outside the

reservation. . . ." Id.

The information you have provided indicates the real estate is

owned directly by the Tribe, not held in trust by the United

States. Consistent with the foregoing authorities, the land is

subject to property taxation.

If, however, the lands were held by the United States in trust

for the Tribe, they would not be subject to taxation by the State.

McCurdy v. United States, 264 U.S. 484 (1924); United States v.

Rickert, 188 U.S. 432 (1902). In this regard, we note the

potential effect of certain provisions of federal legislation

enacted in 1990 to restore certain rights and privileges to the

Tribe. 25 U.S.C. §§ 983 to 983h. Subsection (b) of § 983b.


The Secretary [of the Interior] shall accept not more

than 1,500 acres of any real property located in Knox or

Boyd Counties, Nebraska, that is transferred to the

Secretary for the benefit of the Tribe. Such real

property shall be accepted by the Secretary (subject to

any rights, liens, or taxes that exist prior to the date

of such transfer) in the name of the United States in

trust for the benefit of the Tribe and shall be exempt

from all taxes imposed by the Federal Government or any

State or local government after such transfer. The

Secretary may accept any additional acreage in Knox or

Boyd Counties pursuant to his authority under the Act of

June 18, 1934 (25 U.S.C. 461 et seq.). (emphasis added).

In addition to this provision, § 983h. requires the

establishment of an economic development plan for the Tribe. The

plan is required to provide that "real property acquired by or for

the Tribe located in Knox or Boyd Counties, Nebraska, shall be

taken by the Secretary in the name of the United States in trust

for the benefit of the Tribe;. . . ." 25 U.S.C. § 983h.(c)(1).

While real property taken in trust by the Secretary is subject to

"all legal rights and interests in such land held by any person at

the time of acquisition of such land by the Secretary, including

any lien, mortgage, or previously levied outstanding State or local

tax" (25 U.S.C. § 983h.(c)(2)(A)), "any real property transferred

pursuant to such plan shall be exempt from Federal, State, and

local taxation of any kind." 25 U.S.C. § 983h.(c)(3).

If the properties in question are taken in trust by the United

States for the benefit of the Tribe pursuant to these federal

statutes, the lands would be exempt from property taxation. If

they are exempt for this reason, neither the Tribe nor the United

States would be required to file an application for exemption, as

the property cannot be taxed pursuant to federal law.

Very truly yours,


Attorney General

L. Jay Bartel

Assistant Attorney General

John Thomas

Knox County Attorney

P.O. Box 41

Center, NE 68724-0041