Palm Springs Tribal Attorney Keeps Up with New Tribal Land Law Regulations

New Tribal Land Law Regulations

Local taxing regulations in Palm Springs will be seriously affected when a federal regulation that governs tribal land surface rights is changed. The impact will be especially significant in western Coachella Valley where property holdings usually require negotiations between different local governments and the Agua Caliente Band of Cahuilla Indians.

The changes in the “possessory” property tax will effectively eliminate the taxes received from tribal lease land, which amount to $29 million. Leaseholders pay the possessory interest tax to the riverside County, which shares it with different local jurisdictions, including:

* Palm Springs Unified School District – $8 million
* Riverside County’s educational augmentation fund – $4.5 million
* Riverside County’s general fund – $3.3 million
* Palm Springs City – $3 million
* College of the Desert – $2.2 million

According to the Riverside County Auditor-Controller, the changes can also affect other taxes, including utility and sales taxes. The result will be elimination or diversion of tens of millions of dollars that currently fund healthcare districts, cities, parks, fire departments, libraries and schools.

A complaint was filed March 29, 2013 in Central California’s District Court to stop the new federal regulation from being enforced. Defendants named in the lawsuit include the Interior Department, former Interior Secretary Ken Salazar, Assistant Secretary for Indian Affairs Kevin Washburn and the Bureau of Indian Affairs.

The case points to a statement the Interior Department published in November 2012 explaining that possessory interest and permanent improvements on leased land were not subject to any levy, assessment, fee or tax that any state or its political subdivision imposes “without regard to ownership of those improvements.”

However, improvements and possessory interests “may be subject to taxation by the Indian tribe with jurisdiction.” The regulation prohibits all charges for activities performed under a lease, such as gross revenue, public utility, business use, excise and privilege taxes.

Many Riverside County residents are opposed to the county’s possessory tax. The legal hurdles involved require the services of a skilled Palm Springs tribal attorney.