(CN) — Three county commissioners from a small town in northwest Montana seem an unlikely trio to take on the federal government.
One commissioner is a high school basketball coach, another is a rancher and the third is a former sheriff. But together, along with a deputy county attorney who wears sneakers and blue jeans, they have assembled a case that may have national implications for Native American tribes across the United States.
The Flathead Indian Reservation occupies about 2,000 square miles near Flathead Lake just south of Glacier National Park. The reservation is home to about 7,000 enrolled members of the Confederated Salish and Kootenai Tribes and was established in 1855 by the Hellgate Treaty, one of Washington Territory governor Isaac Stevens' final decrees that set aside a reservation for Native Americans.
In 2015, the Confederated Salish and Kootenai tribes bought Kerr Dam on the Flathead River — making the tribes the first tribal nation in the United States to own a major hydroelectric facility.
When the tribes finalized the purchase of Kerr Dam from Northwestern Energy in 2015, they took the dam off the state tax rolls — and about $2 million annually from Lake County's $25 million budget.
Lake County commissioners believe that was illegal, and have sued the Montana Department of Revenue to put the dam back on state tax rolls.
When the Flathead Reservation was established in 1855, it was designed as land that was set aside by the federal government, in reserve, for the tribes. But Congress enacted a law in 1904 that allowed white settlement on the reservation, and the land rush from white settlers was on for this prime agricultural and recreational land.
However, in order to develop the reservation at the foothills of the Mission Mountains and Flathead Lake, Congress decided that infrastructure was needed in the form of water storage, irrigation, electricity, schools — even churches and the National Bison Range. Land would be needed for those projects, so the government established a land status that reserved the land for these purposes “from the reservation,” deputy county attorney Congdon said.
There are three types of land ownership on American Indian reservations: fee simple, tribal and tribal trust. Fee ownership is land that non-tribal members own outright. Trust land is land owned by the federal government and held in trust for the Native Americans on that reservation. Tribal land is owned by the tribes outright.
Tribal businesses on tribal land are not taxable. Neither are tribal land and trust land.
And this is the claim that Lake County is making: that the land that the dam sits on is federal reserve land — not tribal trust land — and is therefore taxable.
So the commissioners have sued the Montana Department of Revenue, requesting the state put the dam back on the tax rolls. But on Jan. 27, state court Judge Blair Jones ruled in favor of the Montana Department of Revenue's motion to dismiss. Jones cited several errors in Lake County's request, including jurisdictional and procedural issues.
In ruling against Lake County's request, Jones said state court is not the proper venue to address taxation of a federal trust property, and that mandamus cannot undo an action already taken.
Wally Congdon, Lake County's deputy civil attorney, is unfazed by Jones’ decision. He is convinced the county has a case with landmark implications and said he will take the issue to the next level: federal court.
