Document: Taylor response to Interior letter - Montgomery Alabama news.

Document: Taylor response to Interior letter

Bryan M. Taylor
Attorney at Law

June 6, 2012


As expected, the U.S. Interior Department has replied to the Escambia County Commission with a short, vague letter that sidesteps the Commission's legal questions about the taxable status of the Poarch Band of Creek Indians ("PCI") in light of the U.S. Supreme Court's 2009 decision in Carcieri v. Salazar.   

In the Carcieri case, the U.S. Supreme Court effectively ruled that the Secretary of the Interior does not have legal authority to unilaterally exempt an Indian tribe from state and local taxation if the tribe was not a "recognized tribe under federal jurisdiction" by 1934, when Congress enacted the tax exemption for Indian tribes of the day.  The Poarch Creek Indians were not recognized until 1984, but have not paid property and sales taxes that other county residents and businesses have to pay. 

In April the County Commission wrote the Interior Secretary asking for an explanation of the legal authority under which the PCI could continue to claim tax-exempt status under federal law after the Carcieri decision. 

The Interior Department replied today with a two-paragraph letter that completely ignores the Carcieri ruling and provides absolutely no legal explanation or citation to any legal authority whatsoever.

The Commission finds it telling that the Interior Department will not (or perhaps, cannot) provide a simple explanation of the legal basis for the PCI's tax-exempt status after the Carcieri ruling.

Not surprisingly, the letter is cleverly worded to avoid taking a direct official position on the taxation issue.  Instead, the letter seems to recite facts that nobody disputes and leaves the crux of the legal issue unanswered.  

The Escambia County Commission has never disputed that the Interior Department took PCI lands into federal trust in 1984.  That's not the issue.  The issue is, by what legal authority does the PCI continue to enjoy tax exempt status since the U.S. Supreme Court ruled three years ago that the Interior Secretary has no power to strip state and local governments of their taxation authority in the first place.  

The Commission also wonders why and how the Poarch Band of Creek Indians appears to have received a copy of the letter even before the Commission did.  (The PCI is not listed on the letter as a copied recipient but sent out a press release even before many of the county commissioners were aware of the letter's existence).    

The letter's summary conclusion that the Band is entitled to "all the rights and privileges" to which it is entitled is entirely circular and devoid of any legal analysis; it says nothing about whether those rights and privileges still include exemption from state and local taxation after the Carcieri ruling, and if so, why.  

The Commission -- and, no doubt, the PCI -- would have preferred to receive from the Interior Secretary an unequivocal statement backing up the PCI's claim to tax-exempt status with a citation to some legal authority.  At least that would have provided clarity and perhaps resolved all of the Commission's concerns and questions.

Regrettably, the lack of clarity after the Carcieri ruling still remains:  Is exemption from state and local taxes still one of "all the rights and privileges" enjoyed by the PCI?

From the beginning, the Commission has only sought clarity -- the same clarity that the PCI, themselves, told Congress was lacking after the Carcieri ruling.  (See quote below from the testimony of tribal council member Robbie McGhee before a congressional committee, admitting that the Carcieri decision has created confusion about status).       

Unfortunately, the Interior Department letter does nothing to bring clarity to this situation, and the County Commission is still concerned about the prospect of being sued by a taxpayer under Carcieri for unequal application of the tax laws.        

The Commission just wants to know what the Supreme Court ruling means with respect to the PCI's tax status.  The Interior Department refused to answer that question directly.  The Commission is exploring a number of options to obtain that clarity, including whether the Interior Department's letter may provide a basis for judicial review.  

Testimony of Poarch Creek Tribal Council Member Robert McGhee before the Congressional Subcommittee on Indian Affairs, March 6, 2012:

"As you know, the Supreme Court held in Carcieri v. Salazar that the Secretary of the Interior has authority to take land into trust under the Indian Reorganization Act of 1934 (IRA) only for those tribes that were "under federal jurisdiction" in 1934. The Court's opinion is inequitable because it creates two classes of federally recognized tribes that would be treated differently under federal law – those that were "under federal jurisdiction" in 1934 and those that were not. The decision also opens the door to considerable confusion and potential inconsistencies concerning the status of tribal lands, tribal businesses, and important civil and criminal jurisdictional issues. The 'Carcieri Fix' [legislation] would restore the status quo ante."

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