Tahlequah Daily Press

February 8, 2013

Despite tax status, trust lands benefit area

Staff Writer

TAHLEQUAH — The Cherokee Nation and Tahlequah are inextricably linked through history, geography and community. But sometimes, due to the effects of treaties, the question of who holds title to the land can become complicated.

The Cherokees were removed from their homeland in the Southeast U.S., along the Trail of Tears to Northeast Oklahoma, and were promised by the federal government the land would belong to them “as long as water flows, or grass grows upon the earth...” according to an 1828 treaty.

Anyone who has studied Cherokee history knows the treaty fell by the wayside following the formation of the Dawes Commission. Land was parceled out to individual Cherokees, and over time, some of that land was sold to non-Indians. Much of the land within Tahlequah’s city limits was lost to the Cherokee Nation, and over the past few years, the has tribe purchased a number of properties.

Today, Indian tribes purchasing land have the option to place that land in trust. Simply put, land into trust is a real estate transaction that converts land from private or individual title, or “fee title,” to federal title. Once the process is complete, the land belongs to the federal government, and is then placed under the control of a federally-recognized Indian tribal government with the federal government acting as fiduciary, or asset manager.

Trust status came about when Congress in 1934 passed the Wheeler Howard Act, or the Indian Reorganization Act, with the intent of re-acquiring land sold to individuals during the allotment period and to re-establish distinct tribal communities and governments.

Once land is placed in trust, the property becomes exempt from state and local government taxes, as well as local land use regulations. The Cherokee Nation has a history of making donations to nonprofit organizations, schools, law enforcement and infrastructure projects, in part to compensate for the lack of taxes paid.

While some may assume land owned by the Cherokee Nation is exempt from ad valorem and other taxes, not all of the land owned by the tribe has trust status, according to CN Director of Real Estate Services Ginger Brown.

“In Cherokee County, the tribe has 845 acres of land in trust,” said Brown. “[This includes] the W.W. Keeler Complex, the Cherokee Courthouse Square, the Cherokee National Prison Museum, the Cherokee Arts Center and the Cherokee Casino-Tahlequah. Other tracts are in the trust application process.”

In addition to the aforementioned properties, the Cherokee Nation also owns Sequoyah Schools, the old Markoma School site, the property on the east side of Water Street between Choctaw and Delaware, to name a few. Most recently, the tribe purchased 175 acres known as the Berry farm, upon which Cherry Springs Golf course is situated; 113 acres adjoining the W.W. Keeler Complex near the tribe’s existing golf course; the Oak Creek Village Shopping Center south of Tahlequah on U.S. 62; and the American Woodmark property in the Tahlequah Industrial Park.

Trust status is not automatically granted. The process – from application to completion – often takes years, during which time the tribe is responsible for paying the appropriate taxes. Although the Berry, Oak Creek and complex-area property may eventually be placed into trust, and thus exempt from any taxation outside the tribe, the American Woodmark property was purchased with the stipulation trust status would not be sought.

According to Glenda Farmer, first deputy in the Cherokee County assessor’s office, tracts of land are taxed in two different ways.

“Property tracts 20 acres an under are taxed at 11 percent of the sale price,” said Farmer. “For instance, a 20-acre tract that sells for $100,000 would be assessed at 11 percent of $100,000. Tracts over 20 acres are gauged by soil type and taxed that way.”

In light of the recent purchases by the tribe, a couple of local residents have voiced concerns about the potential loss of tax revenue for the area as a whole.

But Cherokee Nation District 4 Tribal Councilor Chuck Hoskin Jr., who is one of three attorneys on the council, said placing land into trust is an exercise permitted through tribal sovereignty.

“I think the initial issue [when considering trust status] is, does the tribe benefit?” said Hoskin. “If the answer is yes, then we should put it into trust. The tribe particularly benefits when we  have an opportunity to regulate the activity on that piece of land, which is an exercise of our sovereignty.”

Hoskin said the tribe also considers the net benefit to the community in which the land is located.

“While taking land into trust includes taking the property off the tax rolls, it also harnesses millions in federal funds to invest in the community,” said Hoskin. “In the final analysis, the tremendous net benefit to Tahlequah and all the communities within the tribe’s 14-county jurisdiction is something I think any person would applaud, including when we put land into trust.”

Hoskin said the question about trust land is fair, but that the tribe is sensitive to the loss of tax revenue.

“We could have very easily not engaged in a compact with the state with regard to tribal car tags, but we decided to go ahead with it, and as a result, schools, law enforcement and road projects benefit from that income,” said Hoskin. “There is so much we do that is beneficial.”

In an earlier report on the State of the Community, Cherokee Nation Principal Chief Bill John Baker reminded attendees of the event of the tribe’s partnership with city and the university, pointing out that recent land purchases in Tahlequah will ultimately benefit the community through job creation.

Baker said placing land into trust aids in this endeavor.

“The Cherokee Nation and the community of Tahlequah mutually benefit from our lands held in federal trust,” said Baker. “We have a strong and historic relationship to the Tahlequah community and have arranged multiple ways to support local efforts in lieu of ad valorem taxes. For example, a portion of the proceeds from the Cherokee Nation car tags go directly to the local school system and infrastructure maintenance – roads, bridges – in Tahlequah. Sovereign tribal governments place land into trust for economic development and job creation, for things like housing and schools, and for cultural preservation.”