Tribal Taxes & Tribulations

Idaho legislature to consider fuel tax deals

BOISE, Idaho -- Idaho Governor C.L. "Butch" Otter intends to send four fuel tax agreements negotiated with the state's Indian tribes to lawmakers for their approval, despite questions over whether the deals need legislative consent.

"Rather than having a debate about whether or not we should, I think the governor feels it's important to share that with the legislature, let them see what the final product is, the hard work and dedication and result of our efforts," David Hensley, legal counsel to the governor, told The Spokesman-Review.

"And in doing so, see if the legislature can [image-nocss] give us a positive response in the form of support," Hensley said.

Last year, lawmakers passed legislation over tribal objections to impose the state's gasoline tax unilaterally on reservation fuel sales. Lawmakers also provided an exemption for any tribe that signed a negotiated agreement with the governor by Dec. 1, 2007.

Otter reached agreements with the three Idaho tribes that operate gas stations—the Coeur d'Alene, Nez Perce and Shoshone-Bannock tribes—before the December deadline, said the report. A deal also was reached with the Kootenai Tribe, which could get into the fuel business in the future.

"We were able to negotiate in good faith," Coeur d'Alene Tribal Chairman Chief Allan told the newspaper. "It was a give and take on both sides."

For years, the state has tried to tax reservation fuel sales, but lost in court on grounds barring states from imposing taxes on sovereign Indian nations. In the most recent court case, a judge ordered Idaho to pay back millions of dollars in improperly collected fuel taxes, plus interest, to the Coeur d'Alene, Nez Perce and Shoshone-Bannock tribes.

Under terms of the new deals, each tribe committed to keep its fuel tax in line with the state tax, the report said. The tribes also pledged to spend fuel tax revenues on transportation needs, on and off the reservation, in partnership with other entities, including federal and state agencies, counties, cities and highway districts.

Otter called it "a good agreement" that's "fair to all."

Yet at least one lawmaker disagrees, the report said. "I don't see where we did any negotiation, I really don't," said State Representative Dick Harwood (R). "They can purchase land, acquire land on any road. It just seemed pretty open to me."

Allan said he wasn't surprised by Harwood's remarks. Harwood represents a district that includes the Coeur d'Alene reservation. "He probably will vote against it, but that's to be expected, just because he always is taking a stance against the tribe," Allan said.

Senate President Pro Tem Bob Geddes (R) called the agreements a good deal for both sides and predicted legislative support. "The money they collect will be spent on the reservation to improve roads," he said. "I can't think of a way that we could do it more fairly than that."

Geddes also said he believes the agreements need the Legislature's endorsement, even though the legislation specified only that the agreements be signed by the governor and tribes by the December deadline. "I think it's good that the governor wants us to be involved and put our stamp of approval on it," he told the paper.