Indian Lands

Pot Capitas: Distributing The Fruits Of Tribal Land

By Anthony Broadman

Assuming the bottom does not drop out of the legal weed market, and that Tribes are able to begin regulating and selling marijuana within their jurisdictions, how will pot farming revenue be spent? If marijuana is a viable business for Tribes, Tribal governments can expect calls for profits to be “per capped” through per-member distributions. Whether per capitas are good governance is a question for Tribes and their constituents.  But the particular treatment of pot per capitas raises new questions about federal trust assets, federal taxation, and whether distributions can provide a new non-taxable trust resource for Tribes and their members.


A profitable tribal pot economy requires several leaps of faith and what would formerly have been some wild assumptions. But presuming the reservation market takes shape, Tribes will likely use the revenue from pot cultivation, like all economic development initiatives, to provide essential governmental services to their members. We should expect tribal pot revenue to offset the burdens of legal pot, to be allocated to education, law enforcement, marijuana regulation, anti-drug initiatives, public health efforts, and the other sorts of programs Tribes have long provided within and beyond their territory. But with profits often come calls for per capita distributions.

The general rule is that every cent of your wealth, whether you are a member of an Indian tribe or not, is taxable by the United States. Section 61(a) of the Internal Revenue Code provides that, except as otherwise provided by law, gross income means all income from whatever source derived.  Under Section 61, Congress is allowed to tax every “accession[] to wealth.”   Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955). Indians are citizens subject to the payment of these income taxes. Squire v. Capoeman, 351 U.S. 1, 6 (1956).

One narrow exception to this rule is that per capita distributions made from funds the Secretary of the Interior holds in a Trust Account for the benefit of a tribe are generally excluded from the gross income of the members receiving the distributions.

Practically, proceeds from trust assets or trust resources are deposited into a tribal Trust Account for a tribe and that tribe subsequently makes a per capita distribution using funds from that Trust Account. Again, those payments are generally not taxable to members. This is different than the treatment of gaming per capitas. The per capita distribution of gaming revenue is taxable to each recipient.

Could trust assets or resources include marijuana grown by a Tribe on Tribal land? Trust resources means any element or matter directly derived from Indian trust property. 25 C.F.R. § 115.002. In fact, it may not be optional for the United States to accept the revenue from tribal pot cultivation into trust. According to federal trust regulations, the Secretary of the Interior “must accept proceed on behalf of tribes or individuals from the following sources . . . [m]oney directly derived from the . . . use of trust lands.” 25 C.F.R. § 115.702. The IRS has wavered on whether trust per capitas are taxable in the last few years. But after Tribal resistance, provided clarity last year in Notice 2014-17.

The IRS often rejects as trust resources that revenue which may be derived from land but is really mischaracterized business profits. But as for marijuana grown on tribal trust land, which is then harvested and sold by the Tribe in the first instance, the resulting revenue is almost certainly money directly derived from the use of tribal trust land. Indeed, there is no difference between pot and timber except that pot is an illegal schedule I controlled substance.

Whether the Secretary can or would accept proceeds from the sale of marijuana grown on Tribal lands – like it does timber – into trust is a different question. Marijuana remains illegal under federal law and even though the DOJ may not be enforcing marijuana laws, participating in what would effectively be the banking of illegal drug revenue feels like a bridge too far. After all, if they won’t let banks easily accept pot profits, how could the feds themselves deposit such funds? Still, the potential for distribution of pot profits could provide tribes with a new source of non-taxable distribution income for members. That, given the stagnating gaming per capita landscape, is a potential novel benefit as Tribes balance the harms and benefits of the marijuana economy.

Anthony Broadman is a partner at Galanda Broadman PLLC. He can be reached at 206.321.2672,, or via Marijuana is illegal under federal law.

Another State Tax Man Smackdown; Tribal Property Tax Win

Today, the Second Circuit Court of Appeals smacked down a New York county assessor's attempt to foreclose upon Cayuga-owned fee lands in a desperate attempt to recover state ad valorem property taxes from the Tribe. Cayuga was a benefactor of both the Oneida Nation's genius mooting of Oneida Indian Nation of N.Y. v. Madison County, before the U.S. Supreme Court, as well as the Bay Mills Tribe's lucky win before the Supreme Court in Michigan v. Bay Mills Indian Community.  Bay Mills should have been mooted too.


The Cayuga decision represents another win in a surprising run for tribes in state property tax or fee assessment disputes before federal circuit courts of appeals.

Last year, the Ninth Circuit struck down property taxes on permanent improvement to Chehalis tribal trust lands in Confederated Tribes of Chehalis Reservation v. Thurston County Bd. of Equalization; and the Seventh Circuit struck down a local assessment of stormwater "fees" against Oneida trust lands in Oneida Tribe of Wisc. Indians v. City of Hobart.

Amidst serial federal court losses in other state-tribal tax contexts (i.e. sales and excise taxation), it seems that Indian property tax or tax-related cases are still winnable.  See also Crow Tribe of Indians v. Montana (9th Cir. 1987).  Granted, Cayuga was a sovereign immunity, not Bracker, case but the county's suggested in rem exception to tribal immunity would have catalyzed state taxation of Indian property nationwide.

In any event, Richard Guest of NARF's advice remains sound:

Stay out of the courts! The federal courts are not your friends anymore.  The majority of judges sitting on the lower federal courts were appointed by Bush II – very conservative, have no understanding of Indian country at all. No interest in your issues. And that can be said of the Roberts court as well. It’s a very difficult place for tribes to secure victories.

Difficult, but thankfully not impossible, at least in the Indian property tax context.

Gabriel “Gabe” Galanda is the Managing Partner at Galanda Broadman, which handled various Indian tax controversies. He is a citizen of the Round Valley Indian Tribes. Gabe can be reached at 206.300.7801 or

Feds Flout Bald Eagle Protection & Tribal Consultation

By Amber Penn-Roco

The American Bird Conservancy (ABC) recently filed a Complaint in the U.S. District Court for the Northern District of California against the U.S. Fish and Wildlife Service (USF&W) and the U.S. Department of the Interior, challenging a final rule that loosened protections for bald and golden eagles for the sake of wind energy developers.

The Bald and Golden Eagle Protection Act and the Migratory Bird Treaty Act prohibit the killing of bald and golden eagles without a federal permit.  In the Complaint, ABC challenged a rule that extended the total maximum duration of the federal permits, from 5 years to 30 years.  ABC alleged that the final rule violates the National Environmental Policy Act, the Bald and Golden Eagle Protection Act and the Administrative Procedure Act. imgres ABC alleged that the rule was “promulgated specifically to respond to the wind power industry’s desire to facilitate the expansion of wind energy projects in areas occupied by eagles.”  ABC argued that by extending the length of the permit, the rule eliminated the need for wind companies to renew permits.  The renewal applications would have required agency decision-making processes, necessitating public comment.  Therefore, ABC argued that the rule interferes with the ability of the public to participate and meaningfully advocate for eagles.

The rule has rightfully drawn opposition from Indian Country. The USF&W initially attempted to consult with Indian Country; the agency met with the National Congress of American Indians.  The meeting did not appear to be effective, as one month later the NCAI passed a resolution accusing the USF&W of failing to meaningfully consult with tribes.  The Nez Perce, San Carlos Apache, Sault Ste Marie Chippewa Indians and Hopi Tribes each submitted public comments opposing the rule, in part due to  of the lack of effective tribal consultation.

Outreach to NCAI is by no means the consultation required by federal law.  Indeed, as one federal court explains: “grouping tribes together (referring to consultation with ‘tribes’) is unhelpful: Indian tribes aren’t interchangeable, and consultation with one tribe doesn’t relieve the [Fed] of its obligation to consult with any other tribe that may be a consulting party.”  See Quechan Tribe of Fort Yuma Indian Reservation v. U.S. Dept. of Interior (S.D. Cal. 2010).  Not to mention, NCAI isn’t even a tribe.

ABC’s lawsuit will hopefully force the United States to reconsider the impacts of the rule on tribally sacred bald and golden eagle populations.  However, none of the plaintiffs in the lawsuit are tribes, and, therefore, the lawsuit may not reflect Indian interests.  Tribes may be formulating their own challenges to the final rule.  Alternatively, as the record reflects a lack of government-to-government consultation, tribes should consider using this as a basis to intervene in ABC’s action.  Unfortunately, as the final rule has been promulgated, tribes must now look to litigation to ensure that tribal interests are considered.

Amber Penn-Roco is an Associate with the Seattle office of Galanda Broadman, PLLC.  Amber’s practice focuses on complex land and environmental issues and multi-party litigation involving tribal sovereignty, torts and hazardous materials.  She is an enrolled Chehalis Tribal Member.

Tribal Police: “We Don’t Need No Stinkin’ State Badges!”

By Joe Sexton

Recently, in State of New Mexico v. Sanchez, the New Mexico State Court of Appeals upheld the DUI conviction of a non-tribal defendant arrested by a tribal police officer on Indian lands in New Mexico. The defendant, on appeal, had challenged the authority of the tribal police officer to arrest him.  At first blush, this seems to be a win for Indian Country and tribal sovereignty in general.  Of course the end result is better than a ruling further eroding the minimal authority Tribal police presently retain in Indian Country after a disastrous line of federal court decisions, including the Supreme Court’s disastrous holding in Oliphant v. Suquamish Indian Tribe roughly 36 years ago.

tribalpolicexBut if you dig into the New Mexico court’s decision enough to understand the reasoning underpinning its holding, the illusory nature of tribes’ sovereign power to police their own lands is revealed.  The only reason preventing the New Mexico court from finding that the tribal police officer lacked the authority to arrest an impaired driver on Indian lands is the fact that the tribal officer had been deputized by the non-tribal county government.  In other words, only through the permission of non-tribal entities—many of which are often openly hostile to tribal authority and jurisdiction—is a tribal police officer allowed to arrest a non-tribal person committing a crime in Indian Country.  One line from the court of appeals’ opinion in particular reveals the hollow nature of the tribal police officer’s authority with respect to non-tribal criminal actors on Indian lands:

“The scope of Officer Vigil’s [the tribal police officer] authority depends on the authority given to him by the Santa Fe County Sheriff.”

When you combine the deep-seated racism and anti-tribal sentiment that has festered for generations in and around Indian Country and has infected non-tribal law enforcement, with the often rural nature of Indian reservations, and the court decisions crippling tribal law enforcement’s ability to protect communities situated in Indian Country, this recipe for calamity generally creates lawless havens for criminals and leads to problems of epidemic proportions.

The movement to stem violence against tribal women makes this painfully clear.  According to Lynn Rosenthal, the White House Advisor on Violence Against Women, “Native American women suffer from violent crime at some of the highest rates in the United States.”    Ms. Rosenthal notes that non-Indians constitute “more than 76 percent of the overall population living on reservations and other Indian lands” and, consequently, many of the “abusers of Native American women are non-Indian men.   Thus, “non-Indian men who batter their Indian wives and girlfriends go unpunished” because of the jurisdictional limitations of tribal courts and law enforcement.

Even though Congress recently debated an “Oliphant fix” with respect to violence against women in particular, legislation regarding this problem should not be necessary, and violence against Native American women is not the only malignancy caused by Oliphant and its progeny.  If sovereignty means anything, it means the inherent authority to protect the communities situated within a sovereign’s territory.  But this authority has been stripped away, leaving Tribal law enforcement at the mercy of local jurisdictions if they want any authority to protect their communities from non-tribal criminals.  As Justice Thurgood Marshall noted in his dissent to the Oliphant majority opinion:

"I agree with the court below that the ‘power to preserve order on the reservation . . . is a sine qua non of the sovereignty that the Suquamish originally possessed.’ . . . In the absence of affirmative withdrawal by treaty or statute, I am of the view that Indian tribes enjoy, as a necessary aspect of their retained sovereignty, the right to try and punish all persons who commit offenses against tribal law within the reservation.”

Put another way, the authority of sovereign Indian tribes to arrest and prosecute non-Indians who decide to commit crimes on Indian lands is inherent, and absent legislation or a Treaty to the contrary, no court has the legitimate authority under our system of law to simply erase that inherent authority.  So in the end, it’s a good thing that the New Mexico Court of Appeals did not expand upon Oliphant and further hamstring tribal law enforcement operating within New Mexico.  But Officer Vigil’s authority on tribal lands does not, and should not, depend on whether Santa Fe County decides to cross-deputize him or not.

Joe Sexton is Of Counsel with Galanda Broadman, PLLC, and practices out of Yakima, Washington.  Joe’s practice focuses on tribal sovereignty issues, including land and environmental issues, economic development matters, and complex Indian Country litigation.

Gabe Galanda Featured Law360 Commentator Re Bay Mills Decision

After the Supreme Court's shocking decision in favor of the Bay Mills Indian Country, leading law blog, Law360, quoted Gabe Galanda at length about the decision, in "Bay Mills Ruling To Fuel New Fights Over Tribal Immunity."

Bay Mills is the most significant Supreme Court win for Native America in the last 25 years, maybe ever," Gabriel S. Galanda 
of Galanda Broadman PLLC told Law360. "It categorically affirms not only timgresribal sovereign immunity from state action, but also tribal sovereignty and Indian gaming in general. ... Still, tribal governments are nowhere near out of the woods.” 

For one thing, both Justice Elena Kagan, in a footnote to the majority opinion, and Justice Clarence Thomas in his dissent, alluded to an open question that remains: Does tribal sovereign immunity extend to an off-reservation tort, like an automobile accident caused by a drunk driver or casino patron? . . .

Lower courts could take the Supreme Court opinion as a cue to abandon sovereign immunity precedent if there's “special justification,” such as if a claimant were unable to secure some form of remedy otherwise, experts say.

“That passage [in the majority opinion] can be read by lower court judges as a signal to develop a remedy for a tort claimant, especially off-reservation, and allow the federal appellate process to go from there,” Galanda said.

Gabe and his partner Anthony Broadman were previously very critical of those federal powers that be, in particular, who did not moot the case before it reached the typically anti-Indian High Court (see here, and here.)

Gabriel “Gabe” Galanda is the Managing Partner at Galanda Broadman. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or



Gabe Galanda to Explain Tribal Sovereignty Issues Re State-Legalized Marijuana

On Monday, Gabe Galanda will address the Affiliated Tribes of Northwest Indians General Assembly, during ATNI's Mid-Year Convention this week at the Chehalis Tribe's Great Wolf Lodge, regarding the tribal and federal legalities associated with state-legalized marijuana, as well as related tribal economic opportunities.

The topic couldn't be hotter. Consider the following recent headlines about legalized marijuana in Indian Country:

Screenshot 2014-04-30 16.06.18

Screenshot 2014-04-30 15.55.28

Screenshot 2014-04-30 15.35.00

Screenshot 2014-04-30 15.29.35

Screenshot 2014-04-30 15.27.46

Screenshot 2014-04-30 15.33.56

Gabriel “Gabe” Galanda is the Managing Partner at Galanda Broadman. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or

So What Is a "Permanent Improvement" to Indian Land?

Much is being made of the new U.S. Department of the Interior leasing regulation, 25 C.F.R. § 162.017, which makes clear that "permanent improvements" to leased Indian land are “not subject to any fee, tax, assessment, levy, or other charge imposed by any State or political subdivision of a State." Related FAQs from those in tribal economic development, include: What is a permanent improvement? What makes an improvement permanent? And most commonly, does [insert type of real or personal property] constitute a tax-exempt permanent improvement? This blog attempts to help folks answer such pivotal questions from a legal point of view.

25 U.S.C. § 465 of course explicitly exempts Indian trust land from state and local taxation. In Mescalero Apache Tribe v. Jones, it was held that Section 465 exempts not only tribal land from state and local taxation, but any tax that the Court deems to be an equivalent to a tax on land, including any “permanent improvements” thereon. 411 U.S. 145, 158 (1973).


Such is true regardless of how the state characterizes those improvements. See Drye v. United States, 528 U.S. 49, 52-53 (1999) (federal law, not state law, defines “property and rights to property” for purposes of a federal tax statute); Confederated Tribes of Chehalis Reservation v. Thurston County Bd. of Equalization, 724 F.3d 1153, 1158 (9th Cir. 2013) (“[I]t is irrelevant whether permanent improvements constitute personal property under [state] law.”).

Under federal law, there is no one definition of a “permanent improvement” for taxation purposes. PPL Corp. v. C.I.R., 135 T.C. 176, 193 (U.S. Tax Ct. 2010).

Instead, courts look to six factors, the “primary focus” of which “is the question of the permanence of depreciable property and the damage caused to it or to realty upon removal of the depreciable property.” Id. (quoting Trentadue v. C.I.R., 128 T.C. 91, 99 (U.S. Tax Ct. 2007)). These factors are as follows:

(1) “Is the property capable of being moved, and has it in fact been moved?” Whiteco Industries Inc. v. Commissioner of Internal Revenue, 65 T.C. 664, 672 (U.S. Tax Ct. 1975).

(2) “Is the property designed or constructed to remain permanently in place?” Id.

(3) “Are there circumstances which tend to show the expected or intended length of affixation, i.e., are there circumstances which show that the property may or will have to be moved?” Id.

(4) “How substantial a job is removal of the property and how time-consuming is it? Is it ‘readily removable’?” Id. at 673.

(5) “How much damage will the property sustain upon its removal?” Id.

(6) “What is the manner of affixation of the property to the land?” Id.

There you have it. So is your improvement permanent?

Gabriel “Gabe” Galanda is the Managing Partner at Galanda Broadman. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or

Indian Land Buy Back Woes

Amidst news of $100 million in offers at Pine Ridge and other gold rush headlines, here's what a few folks are saying about Interior's Indian land buy back program as it hits the ground in select Indian Country locations:

BIA and BLM folks are saying "that there is absolutely no money available for BIA to do surveys unless they are cadastral surveys that support the BIA GIS program for the Buy Back Program. [The BIA] Central Office has taken away all Regional Office discretion in determining how funds for land surveys are made. What little money there has ever been at BIA for surveying to protect tribal boundaries is being swept up for the Buy Back Program. It is supposed to be the Cobell funds that support the Buy Back, not normal BIA operating funds.

Of course this is nothing new. Amidst Cobell, all BIA operating funds were swallowed up with trust reform.

[N]o appraisals came with the past offers or present offers. I will soon get an offer without an appraisal and will have no way to judge whether this offer was "fair" or not.

Appraisals are fundamental to the purchase and sale of any Indian land. Without them, the transactions are illegal.indian_land_Theft_sale

The Buy-Back Program was created as part of the Cobell Settlement to purchase fractionated trust or restricted land from willing sellers at fair market value....If you voluntarily choose to sell, you will receive fair market value, plus a base payment of $75 per offer.

Interior continues to play hide the ball, feigning that the buy back program concerns only "willing sellers," when the agency knows full well that tribe-vs-member forced sales are looming.

As Indian Country fawns over $2 billion in new monies, the unfolding truth about the buy back might surprise folks.

Gabriel “Gabe” Galanda is the Managing Partner at Galanda Broadman. He is an enrolled member of the Round Valley Indian Tribes of Covelo, California. Gabe can be reached at 206.300.7801 or

Ninth Circuit Fails To Protect Tribal Sacred Sites

The Ninth Circuit Court of Appeals recently sustained the long-standing federal policy of subordinating Tribal sacred sites and culture to economic pursuits. The Te-Moak Tribe of Western Shoshone Indians of Nevada v. U.S. Department of the Interior decision highlights the general lack of enforceable protections codified in federal and state laws for Tribal cultural resources, and the inadequacy of President Clinton’s Executive Order 13007 in actually accomplishing what President Clinton ordered–that is, to “protect and preserve Indian religious practices.”

In the case, the Te-Moak Tribe among other Tribes and interested parties appealed the BLM’s approval of a plan to expand gold mining in and around traditional Native sacred sites where religious ceremonies are still held to this day.


The thrust of the Ninth Circuit’s recent holding is that E.O. 13007 “requires only that sacred sites be accommodated ‘to the extent practicable.’  [BLM] determined that further accommodation was not practicable given the lack of specificity as to location and as to the number of Tribal members who use any particular site on the pediment for religious activities.”

Finding no “arbitrary or capricious agency action,” the Ninth Circuit upheld the district court’s summary judgment against the Tribes and other appellants, paving the way for more mining and the destruction of Native American sacred sites.

The sole dissenter hit the nail on the head regarding the majority’s flawed and anti-Tribal reasoning that:

the analysis failed to recognize that comments regarding the proposal did point to the area where the mine is being built as an area in which worship occurs; it demanded quantification of that use as a condition of Executive Order coverage, when no such quantification is necessary; and it required greater specificity of location than comports with Shoshone religious practices. As to the last point, to require greater specificity would interfere with Shoshone religious practices, as those practices appear to regard certain recognized natural areas, rather than specific set locations, as places for worship.

In essence, without teeth (i.e. actual enforcement mechanisms and concrete directives to federal and state governmental agencies), all federal laws and executive orders purporting to “protect and preserve Indian religious practices” and cultural resources have no real authority to effect positive change and truly protect Tribes and their threatened cultures.   As such, Tribes must take a by-any-means-necessary approach to fending off government or private attacks upon Indian religious practices and ways of life.

The entire Ninth Circuit decision in Te-Moak may be found here.  E.O. 13007 may be found here.

Joe Sexton is Of Counsel with Galanda Broadman, PLLC.  Joe’s practice focuses on tribal sovereignty issues, including complex land and environmental issues, and economic development matters.  He can be reached at (509) 910-8842 and  

Indian Lawyer Amber Penn-Roco Joins Galanda Broadman

Galanda Broadman has deepened its bench by adding another Indian lawyer: Amber Penn-Roco. Amber, an enrolled member of the Chehalis Tribe, comes to the firm as an Associate after a three-year stint at K+L Gates, Seattle’s second largest law firm.


“Amber is one of the best and brightest young Indian lawyers around,” said Gabe Galanda, the firm’s managing partner.  “As our tribal law firm continues to grow, we remain very grateful to our tribal clients for the trust they put in us and the opportunity to fight for Indian Country.”

Amber’s practice focuses on complex land and environmental issues and multi-party litigation involving tribal sovereignty, torts and hazardous materials.  Her experience also includes work on transactional matters, including entity formation, environmental compliance and permitting.

Prior to working at K&L Gates, Amber worked in the Native American Unit of the Northwest Justice Project, which strives to afford access to justice to low-income tribal populations. She has served as a Governing Council Member of the Northwest Indian Bar Association.

Amber is a graduate of University of Washington School of Law, and Washington State University (summa cum laude).  While in law school, she served as President of both the Native American Law Students’ Association and the Minority Law Students’ Association.

Galanda Broadman was recently named to the 2014 Edition of U.S. News – Best Lawyers “Best Law Firms,” in the arena of Native American Law.  The six-lawyer firm, which styles itself  “An Indian Country Law Firm,” is dedicated to advancing tribal legal rights and Indian business interests.  With offices in Seattle, Washington and Bend, Oregon, the firm represents tribal governments, businesses and members in critical litigation, business and regulatory matters, especially in matters of Indian Treaty rights, tribal sovereignty and taxation.