After tabling it on April 1, House Tax voted on April 9 to pass Senate Bill (SB) 214 out of committee. Now, it will move to the House floor for the full House of Representatives to consider. Like SB 138, its predecessor, SB 214 has deep roots in anti-indigenous policy. Opponents to this bill have made that clear. At the bill’s March 24 hearing, 20 opponents, including tribal leaders, testified in opposition, while just two proponents spoke in favor of the bill. Lawmakers should keep this in mind when casting their vote.
SB 214 relies on policy from 1887, when Congress passed the General Allotment Act, also known as the Dawes Act, with the ultimate purpose of dissolving tribal governments and reservations and assimilating American Indians into non-Indian society. This forced allotment of reservations opened tribal land to property taxation and made SB 214 possible today.
What Is Senate Bill 214?
SB 214 would change an existing five-year tribal property tax exemption for fee-to-trust transfers that the 2011 Legislature created with bipartisan support when it passed SB 412. The proposed changes under SB 214 would allow counties to recapture taxes on exempt property if either the five-year period expires (meaning the process with the federal government takes longer than five years) or if the federal government denies the fee-to-trust transfer.
In February, Senate Tax tabled SB 138, which would have outright repealed the temporary exemption. In 2019, the Legislature opposed two similar bills: House Bill (HB) 401 and HB 733. Lawmakers’ first decision to table SB 214 was the right one.
How Is Senate Bill 214 Connected to Allotment?
SB 214 is possible because of allotment. When Congress began the allotment and assimilation era in 1887, it divided communally held reservation lands into individual parcels without tribal consent, allocated parcels to tribal citizens and households, and sold “surplus” parcels to non-Indian settlers, most often without compensating tribal nations. In total, the U.S. government took more than 90 million acres (roughly the size of present-day Montana) from tribal nations.
Now, reservation lands are a patchwork pattern of ownership and land status types, with land generally falling into one of two status types: trust or fee. Trust land is held in trust by the federal government and includes land collectively owned by a tribal nation and allotments to tribal citizens. Trust land is exempt from property taxes. Fee land, on the other hand,is generally private property and can be owned by American Indians and non-Indians. Because of the forced allotment of reservation lands, state and local taxing jurisdictions may assess property taxes on tribally owned fee land.
As intended, allotment had devastating consequences for tribal communities. In 1934, Congress ended the allotment era when it passed the Indian Reorganization Act (IRA). Under the IRA, tribal nations and the federal government can return fee land to trust status. However, the process can be lengthy and costly to tribal nations. To facilitate those transfers and to recognize that one government did not want to tax another while the wheels of the federal government turn slowly, the 2011 Legislature passed SB 412.
By attempting to change this exemption, SB 214 ultimately would punish tribal nations for the federal government moving too slowly. Because proposed changes would allow counties to collect back taxes, SB 214 could also incentivize counties to delay fee-to-trust transfers by challenging those applications.
A Better Path Forward
Rather than impose property taxes on tribally owned reservation land, the Legislature should dismantle the legacy of allotment by expanding the tribal property tax exemption. This would be consistent with the treatment of other government-owned property in Montana, where property that is owned by federal, state, and local governments is tax-exempt. SB 214 targets land owned by tribal governments, disregarding and dishonoring the government-to-government relationship and political status of tribal nations as sovereign.
Expanding the exemption would also be consistent with the approach that other states take. Oregon, for example, exempts tribal lands from property taxes when a fee-to-trust application is pending. There are no time constraints. Idaho exempts tribally owned reservation land altogether, in an effort to treat all government properties the same, whether federal, state, county, or tribal.
What Is Next?
Although it was recognized as bad policy long ago, tribal nations continue to feel the impacts of allotment today. MBPC opposes SB 214 and will continue to track its progress.
In the meantime, tell your Representative to oppose this bill by sending them a message at https://leg.mt.gov/web-messaging/ or by calling 406-444-4800.
For a deeper dive into the land status of Indian Country, see MBPC’s report, Policy Basics: Land Status of Indian Country.
MBPC is a nonprofit organization focused on providing credible and timely research and analysis on budget, tax, and economic issues that impact low- and moderate-income Montana families.