AGO Opinion 97062
Taxation of Real Property Owned by the Ponca Tribe of Nebraska.
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,
L. Jay Bartel
Assistant Attorney General
Knox County Attorney
P.O. Box 41
Center, NE 68724-0041