Federal Register / Vol. 83, No. 130 / Friday, July 6, 2018 / Notices 31563 

environmental review process that 

meets requirements set forth in the Act. 

This notice announces that the 

Secretary, through the Assistant 

Secretary—Indian Affairs, has approved 

the Tribal regulations for the San 

Manuel Band of Mission Indians, 

California. 

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 San 

Manuel Band of Mission Indians, 

California. 

Dated: June 11, 2018. 

John Tahsuda, 

Principal Deputy Assistant Secretary—Indian 

Affairs, Exercising the Authority of the 

Assistant Secretary—Indian Affairs. 

[FR Doc. 2018–14520 Filed 7–5–18; 8:45 am] 

BILLING CODE 4337–15–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Indian Affairs 

[189A2100DD/AAKC001030/ 

A0A501010.999900] 

HEARTH Act Approval of the 

Confederated Tribes of the Warm 

Springs Reservation of Oregon’s Tribal 

Code 

AGENCY: Bureau of Indian Affairs, 

Interior. 

ACTION: Notice. 

SUMMARY: On June 11, 2018, the Bureau 

of Indian Affairs (BIA) approved the 

Confederated Tribes of the Warm 

Springs Reservation of Oregon (Tribe) 

leasing regulations 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 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, 

Washington, DC 20240, 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 


daltland on DSKBBV9HB2PROD with NOTICES
31564 Federal Register / Vol. 83, No. 130 / Friday, July 6, 2018 / Notices 

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 

Confederated Tribes of the Warm 

Springs Reservation of Oregon. 

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 

[T]ribes to exercise greater control over 

their own land, support selfdetermination, and eliminate 

bureaucratic delays that stand in the 

way of homeownership and economic 

development in [T]ribal 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 

Confederated Tribes of the Warm 

Springs Reservation of Oregon. 

Dated: June 11, 2018. 

John Tahsuda, 

Principal Deputy Assistant Secretary—Indian 

Affairs, Exercising the Authority of the 

Assistant Secretary—Indian Affairs. 

[FR Doc. 2018–14519 Filed 7–5–18; 8:45 am] 

BILLING CODE 4337–15–P 

DEPARTMENT OF THE INTERIOR 

Bureau of Land Management 

[LLOR957000.L63100000.HD0000.

18XL1116AF.HAG 18–0123] 

Filing of Plats of Survey: Oregon/ 

Washington 

AGENCY: Bureau of Land Management, 

Interior. 

ACTION: Notice. 


daltland on DSKBBV9HB2PROD with NOTICES