Category Archives: law
Proposed Rulemaking on Qualified Opportunity Funds
Created by the Tax Cuts and Jobs Act (enacted December 2017), Opportunity Zones are economically distressed areas where investments in development projects can receive special tax breaks. Opportunity Funds use the investments to stimulate development in these areas.
Currently, investors can defer taxes on capital gains invested in these Funds when the investment is sold or exchanged by the Opportunity Fund or December 31, 2026 at the latest. If an investor has money in the Fund for more than five years, then 10% of the capital gains earned are excluded from calculating income and deferred taxes. If the investment is held for more than seven years, the percentage increases to 15%. After ten years, the fair market value at the time of sale or exchange determines the amount of any deferred taxes or exclusions.
Opportunity Funds may be corporations, LLCs, or partnerships making investment business structures flexible. It is unclear how the opportunity zone system will affect tribal areas because states nominate census areas for opportunity zone designation. There is potential for future regulations to include consultation with tribal governments for designating opportunity zones.
The IRS has released proposed regulations for implementing the new Opportunity Zone tax breaks. The open comment period will begin after official publication in the Federal Register and will last for sixty days. Additionally, the IRS is planning a tribal consultation to obtain additional input on the proposed rules, including guidance on trust land leases and other potential tribal concerns. IRS Pre Notice of Proposed Rulemaking
RES 2019 – Tribal 8(a) – Hemp legalization Opportunity Zones
We attended Res 2019 in Nevada, where they had a record attendance of Native Business and Tribal leaders. The work sessions included the interest Tribes and tribal businesses are showing in the production Hemp as a crop and development of Hemp products since the legalization of Hemp in the Farm Act. And, the conference provided sessions with detailed information on how to start up a tribal economic development division. There were also interesting sessions on taking advantage of the Opportunity Zone Tax incentives, created by the Tax Cuts and Jobs Act, that offers new options for investment in economically distressed communities. Certain investors believe that the creation of Qualified Opportunity Zones will be significant.
Our firm is currently active in drafting Hemp production ordinances for clients and understanding the market for Hemp and Hemp products. We also can help clients understand the Tax Cuts and Jobs Act and the potential offered by Opportunity Zones. And, many of those attending RES are part of or have started Tribal 8(a) corporations. Our firm has experience in this area as well, and won a significant case for a Tribal 8(a) that had been terminated, by reversing the agencies decision. Please let us know if we can assist you with tribal 8(a) or individual 8(a) issues in some way. We discovered at the conference that many Native 8(a) applications had been lost by SBA after the government shut down. We would very much like to assist you, if you have similar 8(a) questions or concerns.
We offer consultation and legal services for tribal owned enterprises, contractors, and other businesses in Indian Country. We can assist you with the SBA 8(a) process, understanding federal program requirements, applying for government contracts, and legal issues that arise from venturing with non Native Corporations.
In addition we can help with:
- Enacting a Tribal code for creating corporations and other business entities
- Choosing a structure that best serves your business needs
- Obtaining Tribal 8(a) certification and status
- Forming a business under appropriate law
- Seeking joint venture partners
- Understanding government regulations and impact on business
- Contacting the federal government procurement offices.
Medicare and Medicaid Funding in Jeopardy
USET and other organization are asking for help lobbying for tribal consultation on the changes to Medicare and Medicaid funding to Indian country. The rules have changed that leave it to State’s to set work requirements for eligibility for Medicaid funding through the 1115 waiver process. This could severely impact Indian Health service funding. Therefore AI/AN Medicaid recipients must be made exempt from these barriers to accessing the health care to which they are entitled, and CMS has a duty to ensure that this occurs as a part of the waiver process. Medicaid currently represents 67% of 3rd party revenue at IHS, and 13% of overall IHS spending. Tribal organization are advocating that any proposed changes to the administration of Medicaid must be preceded by comprehensive consultation with Tribal Nations. Currently, the 1115 waiver process requires that states engaged in Tribal Consultation prior to submission of 1115 Demonstrations to CMS. CMS must ensure Tribal consultation with Tribal Nations occurs at both the state and federal levels before state waiver applications can proceed.
Congress springs into action with an omnibus bill, and concerns rise about the 2019 appropriations
At the relief of Indian County Congress passes an Omnibus bill in March, holding the course and adding a little money to the Indian Affairs budget. It was an uncertain, beginning to the year, that saw continuing resolutions, potential government shutdowns, a deal to raise budget caps, and a last-minute veto threat from the President. At the end the legislation provides $1.3 trillion in omnibus appropriations for the remainder of Fiscal Year (FY) 2018.
Congressional appropriators rejected the deep cuts proposed in the President’s FY 2018 Budget Request, including those for federal Indian programs. Some of these provisions include:
- Bureau of Indian Affairs (BIA): BIA is funded at a total of $3.01 billion, an increase of $203.8 million or 7.1%.
- Indian Health Service (IHS): IHS is funded at a total of $5.5 billion, an increase of $497.9 million or 10%.
- Victims of Crime Act (VOCA) Funding: The bill contains a 3% set aside for Tribal Nations within the VOCA fund, or $133 million for the delivery of victim services in Indian Country.
- Opioid Epidemic: From a total of $1 billion in new grant funding to address the opioid crisis directed at state and Tribal governments, $50 million is set aside for Tribal Nations. In addition, $5 million is set aside for Tribal Nations to provide medication-assisted treatment. Finally, $7.5 million is provided for the BIA’s Law Enforcement Opioid initiative.
Significant increases:
- Infrastructure: spending would increase for BIA and IHS construction, BIA road maintenance, and a $100 million competitive grant program is added under Native American Housing Block Grants (NAHBG) in addition to the $655 million provided for the NAHBG formula grants.
- Road Maintenance: will receive a 14 percent increase to $34.6 million.
- Restoration of the Tiwahe initiative: at the fiscal year 2017 enacted level.
- Violence Against Women Act: $2 million to implement both training and specific Tribal court needs, and $13 million to address the needs of Tribes affected by Public Law 83- 280.
- BIA Construction: would increase by $162 million to $354.1 million, an 84 percent increase.
- Opioid initiative:5 million for the Bureau of Indian Affairs Law Enforcement.
See Link: Budget Report
An interesting strategy has been proposed this last week to handle 2019 appropriations bills. Nearly, 16 Republican senators announced a willingness to work through August recess to complete spending bills and confirm more of President Donald Trump’s nominees. Sen. David Perdue of Georgia, who has led the effort, hinted that a letter to Majority Leader Mitch McConnell of Kentucky would be forthcoming. “The Senate should immediately begin work on one or several consolidated appropriations bills, so they can be openly debated and amended accordingly,” the senators wrote. “Our defense priorities are bipartisan, and they should come first.”
That letter signals a willingness by the conservatives to bundle spending bills together, perhaps using the “minibus” strategy in which several regular appropriations measures get combined on the floor. Normally, senators would not want the chamber in session well into August during an election year, with lawmakers eager to be home and meeting with constituents and voters. The Republicans seem to want to avoid a last minute continuing resolution to keep the government funded past the end of September and they want to confirm a large number of Trump nominations as August approaches. Some of the 77 confirmations that took place by unanimous consent or voice votes as the August recess got underway in 2017 might have happened without a cancellation threat since that’s been the normal practice of the Senate.
These 16 senators, however, believe the threats affected the behavior of Senate Democrats. “Our diligence was rewarded with reason, and that can happen again,” the senators wrote.
Meanwhile dozens of Indian Country leaders were on Capitol Hill last week to present their budget priorities to key members of Congress before the Appropriations subcommittee on Interior. The testimony from tribes and Indian organization, representing every region of the nation, had a consistent message – Indian Country needs additional funding as part of the federal government’s trust and treaty responsibilities. The panel’s Republican and Democratic leaders, for the large part, have embraced that goal.
After hearing from the tribal witnesses, the House Appropriations subcommittee on Interior will spend the next month or so drafting the Interior appropriations bill. The package is typically released sometime in June, with lawmakers aiming to get it passed before October 1, the start of fiscal year 2019.
Environmental Assessment Not Vacated on Remand in Dakota Access
The DC District Court demands defendants fulfill statutory obligations.
Here are the documents in the matter of Standing Rock Sioux Tribe et al v. U.S. Army Corps of Engineers et al (D.D.C. 16-cv-01534):
Other materials posted here.
Excerpt:
In light of the “serious possibility” that the Corps will be able to substantiate its prior conclusions, the Court finds that vacatur is not the appropriate remedy in this case. That determination does not, however, excuse Defendants from giving serious consideration to the errors identified in this Court’s prior Opinion. Compliance with NEPA cannot be reduced to a bureaucratic formality, and the Court expects the Corps not to treat remand as an exercise in filling out the proper paperwork post hoc. After the agency’s further work on remand, the parties may well disagree over the sufficiency of its conclusion. If and when such a dispute arises, they will again have the…
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Land-in-Trust challenge against Ione Band stopped in Ninth Circuit; U.S. Supreme Court Carcieri Ruling Distinguished.
On Oct. 6, the Ninth Circuit affirmed the Eastern District of California’s grant of summary judgment in favor of the Department of Interior (DOI). In 2005, the County of Amador challenged the 2012 Record of Decision placing land into trust and approving casino development for the Ione Band of Miwok Indians. Specifically, the challenge focused on the determination that the Tribe was under federal jurisdiction, per the Indian Reorganization Act (IRA), and was a restored tribe receiving restored lands under the Indian Gaming Regulatory Act (IGRA).
The Ninth Circuit, interpreting Carcieri v. Salazar, 555 U.S. 379 (2009), decided that a tribe must have interacted with the federal government prior to 1934 and must be officially recognized at the time of the trust application submission. Land purchase negotiations over the course of the late 19th and early 20th centuries involved Congress and the Department in Ione Band affairs.
The appellate court understood this to mean that the Tribe had been under federal jurisdiction and that the intent of the IRA allowed recognition to occur at any point as long as federal jurisdiction was established in 1934 or earlier. The Ninth Circuit examined the legislative history of the IRA, in addition to contemporaneous administrative findings, and found that Congress intended the Act to apply to tribes recognized after 1934.
DOI’s interpretation of “under federal jurisdiction” separated the meaning of “recognized” from the phrase. The Department considered federal jurisdiction to mean an action or series of actions that establishes or reflects Federal obligations, authority, and duties for or to a tribe. The Court accepted this interpretation, affirmed the district court, and also ruled that the IGRA “restored tribe” exception was met.
In a related case, No Casino in Plymouth v. Zinke, the appellate circuit remanded to the Eastern District of California with instructions to dismiss for lack of subject-matter jurisdiction and organizational standing. The plaintiffs had not submitted specific facts showing that its members would have individual standing and its evidence was not allowed for a motion of summary judgment. Read case
Washington Update: Budget, Health Care, and Tribal Energy
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Washington Update: Tax Reform
Mark Trahant: Indian Country goes ignored as Republicans focus on tax reform: Oct 3, 2017
Indians don’t pay taxes?
Or why the coming tax debate matters so damn much
By Mark Trahant
Trahant Reports
TrahantReports.ComThe Senate has given up on destroying Medicaid and much of the health care system and is now focused on restructuring the federal tax system (and destroying entitlement programs in the process).Here is what Speaker Paul Ryan said Sunday on CBS’ Face the Nation: “We’re going to double that standard deduction. We’re going to make it so he can fill out his taxes on a postcard. We’re going to lower his taxes. That’s really important. So he has more tax-home pay. But there’s another component to this is, look at this machine shop, this business pays about a 40 percent tax rate but it competes with companies all around the world who pay an average 22 and a half percent on their taxes.”The GOP Framework begins with this set of principles: “President Trump has laid out four principles for tax reform: First, make the tax code simple, fair and easy to understand. Second, give American workers a pay raise by allowing them to keep more of their hard-earned paychecks. Third, make America the jobs magnet of the world by leveling the playing field for American businesses and workers. Finally, bring back trillions of dollars that are currently kept off-shore to reinvest in the American economy.”So how does Indian Country fit into that framework? Indians don’t pay taxes, remember? Actually if you Google that phrase it returns 2.17 million hits. It’s still a myth that will not fade away. But the larger issue of tax reform and its impact on Indian Country is still a complicated question, one that starts with the definition of “taxes.”Most so-called middle-income wage earners pay income taxes. Roughly one-third of all wage earners do not pay income taxes — and that would include a lot of tribal citizens, especially those living in their tribal nations. There are nearly 150 million tax returns filed every year and 36 million end up paying no tax at all. Another 16 million had taxable income but didn’t pay anything because of tax credits, deductions and other adjustments.And, many of Indian Country’s working class especially benefit from one such credit, the Earned Income Tax Credit. This is a hugely successful policy that returns cash money to some 7 million family incomes; a paid bonus of sorts for working.“Numerous studies show that working-family tax credits boost work effort,” according to The Center for Budget and Policy Priorities. “The EITC expansions of the 1990s contributed as much to the subsequent increases in work among single mothers and female heads of households as the welfare changes of that period, extensive research has found. Women who benefited from those EITC expansions also experienced higher wage growth in subsequent years than otherwise-similar women who didn’t benefit. And, by boosting the employment and earnings of working-age women, the EITC boosts the size of the Social Security retirement benefits they ultimately will receive.”In addition, the research shows that by boosting the employment of single mothers, the EITC reduces the number of female-headed households receiving cash welfare assistance,” according to the center.So far, at least, there is no plan to end the Earned Income Tax Credit. However the House Budget Committee has proposed that the IRS require more proof from taxpayers and audit homes with an error. (Auditing the poor seems a long way from the Willie Horton philosophy of tax collection, or bank robbing, and that’s the idea you go where the money is.)Read full article:
Native Law Policy 