Piliero Mazza & Pargament, PLLC Vol. 4, Issue 8 September 2002
Addressing Tribal and Alaska Native Corporation Legal and Business Issues
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A R T I C L E S
GOVERNMENT CONTRACTING: SBA Area Office Applies 8(a) Tribal Affiliation Exemption to HUBZone Determination
BUSINESS: BIA Hosts Indian Economic Summit
GAMING: NIGC Withdraws Proposed Game Classification Rule
SMALL BUSINESS: Native American Small Business Development Act Approved by Senate Committee
REGULATIONS: Internal IRS Ruling Asserts Agency Authority Over Tribes
ASK THE ADVOCATE: Indian Country Scores Victory in Passage of FY 2003 Appropriations Bill
SBA Area Office Applies 8(a) Tribal Affiliation Exemption to HUBZone Determination
Two recent Small Business Administration area office (Area Office) size determinations may provide a resolution to the discrepancy between the general small business affiliation rules and the more lenient 8(a) Program affiliation rules for tribally-owned companies and Alaska Native Corporations (ANCs).
As a general rule, the SBA regulations state that two concerns are “affiliated” with each other when either party “controls or has the power to control the other, or when a third party controls or has the power to control both.” However, both the 8(a) regulations and the general affiliation regulations contain exemptions to this rule for tribally-owned companies. The 8(a) regulations state that size of a tribally-owned concern shall be determined “independently without regard to its affiliation with the tribe, any entity of the tribal government, or any other business enterprise owned by the tribe, unless . . . one or more of the business concerns have obtained, or are likely to obtain, a substantial unfair competitive advantage within an industry category.”
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BIA Hosts Indian Economic Summit
Beginning on September 17, 2002, the Department of the Interior, Bureau of Indian Affairs (BIA) will host a three-day National Summit on Emerging Tribal Economies in Phoenix, Arizona. According to Secretary Gale Norton, the Summit “will be an opportunity for tribes, government and business to discuss how to develop, strengthen and sustain tribal economies while promoting job growth.”
The purpose of the Summit is to allow tribes and Native Americans to meet with government and corporate business interests in an effort to remove barriers to tribal economic progress and coordinate federal program resources. The ultimate goals of the Summit are the creation of 100,000 new jobs in Indian country by 2008 and the establishment of sustainable, market-driven tribal economies by 2020.
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NIGC Withdraws Proposed Game Classification Rule
On July 12, 2002, the National Indian Gaming Commission (NIGC) withdrew a controversial proposed rule that would have established a formal process for the classification of gaming activities under the Indian Gaming Regulatory Act (IGRA).
The proposed rule was issued on November 10, 1999, in the face of numerous prior and ongoing disputes between federal state and tribal governments regarding the classification of certain gaming activities under the operational definitions promulgated and enacted in April 1992. (See article in January 2000 issue of the Tribal Advocate discussing proposed rule.) These disputes centered on whether certain gaming activities qualified as “Class III” activities, which would require a tribal-state compact under IGRA. Because many courts had declined to rule on these disputes in light of sovereign immunity issues, NIGC attempted to resolve the issues through the establishment of a formal process for classifying games.
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Native American Small Business Development Act Approved by Senate Committee
On July 24, 2002, the Senate Committee on Small Business and Entrepreneurship unanimously approved and sent the Native American Small Business Development Act (NASBDA or Act) to the full Senate for review. The Act would create an Office of Native American Affairs (ONAA) at the Small Business Administration and establish two programs to support small business development in Native American communities. (See interview in June 2002 issue of the Tribal Advocate for more information regarding NASBDA.)
The ONAA would be tasked with assisting Native Americans and tribes to establish and build economic opportunities in their communities. This initiative would help to increase the presence and stability of small businesses in Native American communities that, in turn, would lead to greater access to capital and increased employment opportunities for tribal members.
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Internal IRS Ruling Asserts Agency Authority Over Tribes
Although federally-recognized Indian tribes are not subject to federal income taxation and are generally immune from suit, the General Counsel’s Office of the U.S. Internal Revenue Service (IRS) recently issued an opinion stating that the federal Tax Court has the authority to enforce an IRS subpoena for tribal business records.
The request arose during the investigation of a private company’s interest in a business partnership with a federal Indian tribe. The IRS issued a subpoena for the tribal financial records to support its contention that the revenues attributed to the tribe should, in fact, have been attributed to the private company and, therefore, not exempt from taxation. The tribe refused to comply with the subpoena on sovereign immunity grounds.
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ASK THE ADVOCATE
Indian Country Scores Victory in Passage of FY 2003 Appropriations Bill
On July 9, 2002, the House Appropriations Committee (Committee) passed the fiscal year 2003 Appropriations bill for the Department of the Interior. The version that was approved by the Committee included an extremely controversial provision proposed by Representative Frank Wolf (R-VA), that would have established a “Commission on Native American Policy” composed of both federal and state actors to conduct further tribal gaming studies.
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