Crow Tribe of Indian v. MT ST Dept Rev, et al

Filing 797

ORDER GRANTING JOINT MOTION FOR DISMISSAL. Signed by Judge Susan P. Watters on 11/30/2016. (Attachments: # 1 Agreement) (EMH, )

AGREEMENT CONCERNING STATE SEVERANCE AND GROSS PROCEEDS TAXES
AND THE RELEASE OF CLAIMS IN CROW TRIBE OF INDIANS v. STATE OF MONTANA,
ET AL., Cause No. CV-78-110, BLG-JDS (D. Mont.), AND RELATED APPEALS, PURSUANT
TO MONTANA CODE ANNOTATED§§ 85-20-901-905

THIS AGREEMENT, dated October _ _, 2016, is entered into among the CROW
TRIBE OF INDIANS, a federally recognized Indian Tribe whose address is P.O. Box 159,
Crow Agency, Montana 59022 (the "Tribe"); the STATE OF MONTANA, including its
Department of Revenue, and Ye!lowstone, Big Hom, and Treasure Counties ("Montana"), whose
addresses are: Office of the Governor, State Capitol, P.O. Box 200801 , Helena, Montana
59620-0801; Yellowstone County, 217 North 27th Street, Billings, Montana 59101; Big Hom
County, P.O. Box 908, Hardin, Montana 59034; Treasure County, 307 Rapelje Avenue,
.
Hysham, Montana 59038; and the UNIT£D STATES OF AMERICA, by and through
Lt.~ .DoJ
, whose address is 1 °0 +- .PG,, . s- i J"""'"" :·c::... /V~the "United States").
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WHEREAS, the Crow Indian Reservation (as defined herein) and the Ceded Strip (as
defined herein) are underlain by large deposits of Tribal Coal (as defined herein), and income
derived from the production and sale of such Tribal Coal is critical to Tribal economic
development and self-government; and

WHEREAS, the issue of whether Montana has the right and power to apply its
Severance Tax and Gross Proceeds Tax (both as defined herein) to Tribal Coal was the subject of
extensive litigation beginning in the U.S. District Court for the District of Montana in 1978,
Cause No. CV-78-110-BLG-JDS; and
WHEREAS, in that litigation, the Federal courts determined that Montana's Severance
and Gross Proceeds Taxes in existence at that time did not apply to the Tribal Coal at issue,
because under the facts of the litigation these taxes were preempted by Federal law and policies
and interfered with Tribal self-government, and further held that Tribal Coal in the Ceded Strip is
"a component of the reservation land itself." Crow Tribe v. Montana, 819 F.2d 895, 898 (9th
Cir. 1987), ajj'd, 484 U.S. 997 (1988); citing Crow Tribe of Indians v. Montana, 650 F.2d 1104,
1117 (9th Cir. 1981 ). As a result of those determinations, all Severance and Gross Proceeds
Taxes that Montana had paid into the U.S. District Court's registry pursuant to orders of such
court were paid to the United States in trust for the benefit of the Tribe, and Montana has not
subsequently collected Severance or Gross Proceeds Taxes on Tribal Coal; and
WHEREAS, further litigation ensued in Cause No. CV-78-110-BLG-JDS on the issue of
whether the Tribe was to receive payment of Severance and Gross Proceeds Taxes that Montana
had collected on Tribal Coal prior to the U.S. District Court's orders to pay such taxes into the
court registry (i.e., before February 1983 in the case of Severance Tax and before November
1987 in the case of the Gross Proceeds Tax). See Montana v. Crow Tribe, 523 U.S. 696, 705708 (1998). On remand from the U.S. Supreme Court, the U.S. District Court held that the Tribe
was not entitled to receive any pre-registry taxes. See Order dated February 16, 1999. The Tribe
appealed to the U.S. Court of Appeals for the Ninth Circuit, and that appeal remains pending
(Nos. 99-35400, 99-35401 and 99-3541 O); and

WHEREAS, the Tribe's appeal on pre-escrow taxes collected by Montana remains
pending in the Ninth Circuit; and
WHEREAS, as part of the consideration for the Tribe's agreement in the 1999 Crow
Tribe-Montana Water Rights Compact (the "Compact") to protect certain water rights
recognized under State law and to release all claims asserted in Cause No. CV-78-110-BLG-JDS
and related appeals, Montana agreed that future Severance and Gross Proceeds Taxes that it may
collect on Tribal Coal will be paid to the Tribe, Mont. Code Ann. § 85-20-902(4); and
WHEREAS, in addition to the payment of future Severance and Gross Proceeds Taxes
that may be collected on Tribal Coal after this agreement is in effect, the Compact provides that
Montana shall contribute the sum of fifteen million dollars ($15,000,000.00) paid into an escrow
account for the benefit of the Tribe as the remainder of its cost-share obligation for the Compact,
Mont. Code Ann. § 85-20-901 (Article VI, Section A of the Compact), and payment of such
funds to the Tribe is contingent, among other things, on the Tribe and the United States having
furnished releases of all claims asserted in Cause No. CV-78-110-BLG-JDS and any pending
appeal, Mont. Code Ann. § 85-20-904(1)(d); and
WHEREAS, Montana is authorized by Mont. Code Ann.§§ 85-20-902-905 to enter into
this agreement with the Tribe and the United States; and
WHEREAS, the Chairman of the Crow Tribe is authorized to enter into this agreement
on behalf of the Crow Tribe pursuant to the affirmative vote of the Crow Tribal General Council
on March 19, 2011 approving the Compact, and the Constitution and Bylaws of the Crow Tribe;
and
WHEREAS, the United States approved the Compact in the Crow Tribe Water Rights
Settlement Act of 2010, Pub. L. 111-291 (Title IV), and the Crow Tribal General Council
approved the Compact by vote on March 19, 2011; and
WHEREAS, the United States is authorized to enter into this agreement pursuant to the
Settlement Act of2010, Pub. L. 111-291 (Title IV), and 28 U.S.C. §§ 516 and 517; and
NOW, THEREFORE, in consideration of the mutual covenants and promises herein
and in the Water Compact, the parties agree as follows:
1. Definitions. As used in this Agreement:
"Ceded Strip" means the area covered by Article II of the Act of April 27, 1904 (33 Stat.
352), as depicted on the map attached to the Compact as Appendix 5;
"Compact" means the Crow Tribe-Montana Water Compact set forth in Mont. Code Ann.
§ 85-20-901 and its appendices;

"Crow Tribe of Indians v. State of Montana, et al., Cause No. CV-78-110-BLG-JDS and
any pending appeal" (or any version of that phrase) means all legal claims or actions arising out
of the facts as asserted in Cause No. CV-78-110-BLG-JDS and subsequent appeals;
"Gross Proceeds Tax" means the coal production tax levied by Montana pursuant to
Mont. Code Ann.§§ 15-23-701, et seq.;
"Montana" as used in this Agreement means all of the following entities together: the
State of Montana (as herein defined), the Montana Department of Revenue, and Yellowstone,
Big Horn and Treasure Counties.
"Reservation" means the Crow Indian Reservation consisting of the area as presently
reserved for the Crow Tribe pursuant to the following Treaty and laws: Article 2 of the Fort
Laramie Treaty of May 7, 1868 (15 Stat. 649); the Act of April 11, 1882 (22 Stat. 42); the Act of
March 3, 1891 (26 Stat. 989); the Act of April 27, 1904 (33 Stat. 352); the Act of August 31,
1937 (50 Stat. 884); and the Act of November 2, 1994 (I 08 Stat. 4636), as depicted on the map
attached to the Compact as Appendix 4;
"Severance Tax" means the coal production tax levied by Montana pursuant to Mont.
Code Ann.§§ 15-35-101, et seq.;
"State of Montana" as used in this Agreement means the executive branch of the state
government of Montana under the authority of the governor;
"Tribe" means the Crow Tribe of Indians, a federally recognized Indian Tribe whose
address is P.O. Box 159, Crow Agency, Montana 59022; and
"Tribal Coal" means coal that the United States holds in trust for the benefit of the Crow
Tribe which is located on the Reservation or the Ceded Strip.

2.

Future Severance and Gross Proceeds Taxes Collected by Montana
(a) The Parties agree that this Agreement concerns only the Severance Tax and the Gross
Proceeds Taxes.
(b) In the event that Montana levies and collects any Severance and Gross Proceeds Taxes on
Tribal Coal after this Agreement is in effect, Montana agrees that it shall promptly
transmit such tax collections directly to the Tribe in accordance with the following
provisions:
(i)

All payments shall be made by Montana within thirty (30) days
after receipt by Montana, by electronic funds transfer or any other
method as directed in writing by the Chairman of the Tribe;

(ii)

Payment shall be made only to the Tribe;

(iii)

In the case of a producer's under- or over-payment of any
Severance and Gross Proceeds Taxes collected by Montana and
paid to the Tribe, future payments to the Tribe shall be adjusted by
the same amount(s) received from or credited or refunded by
Montana to the producer. In the event there are no state taxes to
offset an overpayment by a producer, the Tribe shall refund the
appropriate tax amount to the producer;

(c)
Nothing in this Agreement shall be construed to mean the Tribe has surrendered,
suspended, contracted away, or limited in any way its power to tax;
(d) Nothing in this Agreement shall be construed to mean Montana has surrendered,
suspended, or contracted away its power to tax;
(e) This Agreement applies only to the Crow Tribe and the Severance and Gross
Proceeds Taxes defined herein. This Agreement does not apply to other tribes or types of tax.

3.

Release of Claims.

As of the date this Agreement takes effect, the Tribe and the United States hereby release
and discharge Montana from any and all claims, including but not limited to claims for costs and
attorney fees, asserted in Crow Tribe of Indians v. State of Montana, et al., Cause No. CV-78110-BLG-JDS and any pending appeal.

4.

Effective Date and Implementation of this Agreement.

(a)
This Agreement shall become effective upon its execution by all parties
("Effective Date").
(b)
Within one ( 1) business day after the Effective Date, the parties to Crow Tribe of
Indians v. State of Montana, et al., Cause No. CV-78-110-BLG-JDS shall file a "Joint Motion
for Indicative Ruling Pursuant to Fed. R. Civ. P. 62.l(a)," and a "Joint Motion for Expedited
Ruling on Pending Motions" in the U.S. District Court for the District of Montana, seeking an
indicative ruling that the district court will enter an order incorporating this Agreement and
retaining jurisdiction. Within one (1) business day of the granting of that motion, the parties shall
file a "Joint Motion for Limited Remand Pursuant to Rule 12.1 (b )" with regard to the appeals
pending in the U.S. Court of Appeals for the Ninth Circuit, Nos. 99-35400, 99-35401 and 9935410. Within one (1) business day of the entry of an order granting the "Joint Motion for
Limited Remand Pursuant to Rule 12.l(b)," the parties shall file in the U.S. District Court for the
District of Montana a "Joint Motion for Dismissal of the Action and Enforcement of this
Agreement," together with a proposed order incorporating this Agreement and retaining
jurisdiction.

(c)
This Agreement shall be entered as or incorporated into the dismissal order and
judgment in the Action by the U.S. District Court for the District of Montana and shall be
enforceable in such Court. If there is a dispute over compliance with any term or provision of
this Agreement, and the parties have not resolved the dispute within sixty (60) days after notice
by a disputing party, either party may file a motion requesting that the Court enforce the relevant
term(s) or provision(s) of this Agreement.
(d)
Upon the Agreement's execution by all parties, the condition specified in Section
A.2 of Article VI of the Compact and Mont. Code Ann.§ 85-20-904(l)(d) for payment to the
Tribe of the settlement funds held in escrow shall be deemed satisfied and the Attorney General
shall within one (I) business day provide notice to the escrow agent that all conditions have been
met for the release of the funds in escrow.
5.

Miscellaneous Provisions.

Except to the extent that the parties have agreed to the continuing jurisdiction of the
District Court for the enforcement of this Agreement, nothing in this Agreement shall be
construed as any waiver whatsoever of the Tribe's or the United States', or Montana's sovereign
immunity from suit.

IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set
forth next to their signatures below.

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STATE OF MONT ANA

Steve Bullock
Governor

Date:
Mike Kadas
Director, Department of Revenue

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My signature below certifies that all releases, pleading and proposed orders with regard to Crow
Tribe of Indians v. State of Montana, et al., Cause No. CV-78-110-BLG-JDS and any pending
appeals, have been furnished to me and are in acceptable form when executed by all parties.
This Agreement is legally sufficient and is approved pursuant to the terms of the Compact, and
Mont. Code Ann. § 18-11-105 and § 85-20-904 ( 1)( d):

Date:
Tim Fox
Attorney General

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YELLOW STONE COUNTY

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BIG HORN COUNTY

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TREASURE COUNTY

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