Provides state assistance to certain counties in which an Indian nation is located

BILL NUMBER:S5864

Title of bill

An act to amend the state finance law, in relation to state assistance to certain counties in which an Indian nation is located

Purpose

This bill provides a mechanism for the counties of Cayuga and Seneca to receive reimbursement from New York State on a year to year basis for property taxes that the Cayuga Indian Nation refuses to pay. Although these tax revenues remain uncollected, counties are required to pay municipalities and school districts within such counties amounts equal to-such uncollected taxes, even though such taxes have not been remitted by certain Indian Nations. This Bill would make the counties whole for these property tax shortfalls.

Summary of provisions

Section 1. Amends the state finance law by adding new section 54-m - State assistance to eligible counties in which an Indian Nation is located. This section creates a new appropriation in the next fiscal year which provides funds to the eligible counties of Cayuga, and Seneca for reimbursement of monies expended by them to pay municipalities and school districts tax revenue due from Indian Nations but unpaid by Indian Nations and uncollectable by judicial proceedings.

Section 2. Contains the Effective Date -immediately.

Justification

In a decision dated August 20, 2012, United States District Court Judge Charles J. Siragusa granted the Cayuga Indian Nation of New York a preliminary injunction prohibiting Seneca County from foreclosing on certain real property owned by the Nation within the boundaries of the 64,000-acre Cayuga Indian Reservation acknowledged by the 1794 Treaty of Canandaigua.

The Court followed the Second Circuit Court of Appeal's decision in Oneida Indian Nation of New York v. Madison County and Oneida County, 605 F.3d 149 (2d Cir. 2010) in holding that the doctrine of tribal sovereign immunity from suit precludes the foreclosure actions against the Cayuga Nation.

This decision is currently being appealed by Seneca County and will take many years before resolutions of these claims are reached. During the pendency of this case, counties are prohibited from foreclosing on lands owned or recently acquired by Indian Nations. This decision causes a significant hardship on the affected counties. Indian Nations are actively acquiring properties on the open market

and then claiming immunity from property taxation. Regardless of whether or not property taxes are collected from an Indian nation, counties are required by law to pay the amount equal to those uncollected taxes to school districts and municipalities in each county. Under this scenario counties are left with large expenditures with no revenue to offset them. These expenditures cause the taxpayers of each county to suffer a higher property tax burden.

This Bill provides a mechanism for Cayuga County and Seneca County to seek reimbursement from the State for these expenditures. Ultimately, the resolution of these Indian claims is a federal matter and should be funded by our federal government. Until, our federal government takes responsibility for these unresolved Indian controversies, the State of New York should bear the burden of Indian claims of immunity from taxation and provide relief to local taxpayers of this tremendous burden.

Legislative history

New.

Fiscal implications

To be determined county by county on yearly basis.

Local fiscal implications

None.

Effective date

Immediate.