qualla 2020: diversifying the qualla economy fourth meeting may 21, 2014
TRANSCRIPT
Qualla 2020:Diversifying the Qualla Economy
Fourth MeetingMay 21, 2014
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Agenda - Morning
9:00 Welcome and Introduction
9:15 Trust Land Law and Regulation - Presentation
10:00 Real Estate Action Plans
10:45 Knowledge Industries – Presentation
11:15 Knowledge Industry Action Plans
12:00 Lunch
Agenda - Afternoon
12:30 Review Potential Action Plans; Add New Ones- Enterprise Structure- Tourism- Small Business
2:30 Next Steps, Assignments
3:00 Adjourn
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Qualla 2020 Goals
The purpose of the Qualla 2020 Project is to diversify the Cherokee economy and reduce its risks so that it can better ensure the well-being of the Cherokee population into the future.
In order to do this, the Qualla 2020 Project will seek to mitigate the dependence of the economy on gaming revenues, and to develop and expand businesses in ways that uphold the core values of the Cherokee people.
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Qualla 2020 Process
Six Committee meetings Tuesday, February 25, 9:00 am – 3:00 pm Friday, March 21, 9:00 am – 3:00 pm
Yellow Hill Activity Center (Old Hardware Store) Wednesday, April 23, 9:00 am – 3:00 pm Wednesday, May 21, 9:00 am – 3:00 pm Friday, June 27, 9:00 am – 3:00 pm Tuesday, July 15, 9:00 am – 3:00 pm
Task teams will meet by phone between Committee meetings to develop detailed action plans for Committee review
Committee will choose action plans to recommend to EBCI Administration, EBCI Tribal Council and Cherokee Preservation Foundation
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Action Plan Definition
Action plan criteria: Achievable with the resources controlled by institutions and
individuals on the Qualla Boundary Create visible differences within a year or two Support traditional Cherokee values and culture
Action plan elements:
Goal Participants Activities Organizational leadership Resources required Funding sources Timeline
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Agenda - Morning
9:00 Welcome and Introduction
9:15 Trust Land Law and Regulation - Presentation
10:00 Real Estate Action Plans
10:45 Knowledge Industries – Presentation
11:15 Knowledge Industry Action Plans
12:00 Lunch
Trust Land Law and Regulation
In order to streamline and simplify the leasing process, it will be critical to have oversight of leasing moved from the BIA to the Tribe. There are three key legal and regulatory areas that are important to understand:
EBCI Statutory Law – individual possessory holdings HEARTH Act – leasing regulations for trust land Contracting and Compacting – Tribal assumption of part or all
of the Realty function
We also will look briefly at state property tax on the Boundary
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EBCI Statutory Law: Individual Possessory Holdings
The EBCI Attorney General holds that because of the specific way in which EBCI land is held in trust, individual possessory holdings are governed by EBCI statute, not by federal law
Section 47 - Real Property of the Cherokee Code contains the statutes governing real property; Section 47-4 stipulates the rights granted to a member when a possessory holding is issued
The fact that the individual possessory holdings are governed by EBCI statute implies that EBCI Tribal Council has the authority to change the statutes governing individual possessory holdings without having to consult with the BIA
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Source: Hannah Smith, Attorney General’s Office
EBCI Statutory Law: Individual Possessory Holdings
The way that the law is currently written involves the BIA in leasing. Section 47-4(f):
“The possessory holder may grant leases or permits on this possessory holding to a member, or nonmember of the Band for a definite period of time and for a prescribed consideration, in accordance with the then applicable rules and regulations of the Bureau of Indian Affairs and the Tribe, and subject to the approval of the Business Committee and the Secretary of the Interior or his authorized representative.”
This law clearly requires the BIA to be involved in leasing – but this law can be changed without the BIA’s involvement or consent.
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HEARTH Act – Overview
HEARTH Act (Helping Expedite and Advance Responsible Tribal Home Ownership Act of 2012) establishes new framework for leasing tribal trust lands
The HEARTH Act allows all tribes to opt-out of the secretarial approval requirement when leasing their own lands for the first time in the history of federal Indian law. In effect, the HEARTH Act restores tribes’ inherent authority over the use and development of their own lands.
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Details adapted from Bryan Newland, Fletcher PLLC
HEARTH Act
To opt-in, tribes must adopt their own leasing regulations
Tribal regulations must be approved by the Secretary of the Interior
Secretary has 120 days to review tribal regulations
Law is limited to tribally-owned trust lands Doesn’t apply to individually-owned lands
Law is limited to surface leasing
No oil & gas leasing
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Details adapted from Bryan Newland, Fletcher PLLC
HEARTH Act Requirements
Tribal regulations must: Be “consistent” with BIA’s leasing regulations Establish an environmental review process
Environmental review process requirements
Identification of significant environmental effects Public notice and comment Tribe must respond to substantive public comments NOTE: NEPA doesn’t apply > this is a tribal process
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Details adapted from Bryan Newland, Fletcher PLLC
Tribes Whose Regulations Have Been Accepted Under HEARTH Act
1. Graton Rancheria (CA)
2. Pueblo of Sandia (NM)
3. Pokagon Band of Potawatomi (MI)
4. Ak-Chin Indian Community (AZ)
5. Santa Rosa Band of Cahuilla Indians (CA)
6. Citizen Potawatomi Band (OK)
7. Ewiiaapaayp Band of Kumeyaay Indians (CA) 8. Kaw Nation (OK) 9. Dry Creek Rancheria (CA)
10. Jamestown S’Klallam (WA)
11. Mohegan Tribe (CT)
12. Wichita and Affiliated Tribes (OK)
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Details adapted from Bryan Newland, Fletcher PLLC
Taking Over the Realty Function:Contracting and Compacting
Tribes have the authority to take over a part (contracting) or all (compacting) of the administrative functions performed by the BIA, the HIS, and other government entities.
EBCI has already compacted the administration of the Cherokee Indian Hospital from the HIS
More than 100 tribes have compacted one or more functions
Legal framework: Self-Determination contracts are authorized under the
1975 Indian Self Determination and Education Assistance Act. Self-Governance compacts are made possible by 1994
amendments to the 1975 Indian Self Determination and Education Assistance Act.
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From Self-Governance: The Red Book by The Office of Self Governance
Self-Determination Contracts (Realty)
Tribe negotiates with local BIA Agency/Area
Tribe agrees to provide specific services that otherwise would be provided as part of the activities of the BIA
The Tribe is paid a specific amount (fixed price) for each contracted service
The Tribe submits quarterly reports on expenditures in each contract
BIA rules, regulations and manual apply
The BIA has ultimate responsibility for ensuring services are delivered appropriately.
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From Self-Governance: The Red Book by The Office of Self Governance
Self-Governance Compacts (Realty)
Tribe negotiates with Office of Self-Governance (DC)
Tribe agrees to take over an entire function that otherwise would be provided as part of the activities of the BIA. This may include Realty Services and Title Plant
Tribe may redesign programs and activities within that function Tribe must have appropriate data and management system, such as
BIA Trust Asset and Accounting Management System
Tribe has an annual funding agreement from the BIA for the function (not program by program or service by service)
The Tribe submits quarterly reports on total expenditures; has authority to shift expenditures within function (up to a limit)
BIA rules and regulations apply, but Tribe may replace BIA guidelines with its own guidelines. BIA manual doesn’t apply.
The Tribe has the ultimate responsibility for ensuring that services are delivered appropriately.
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From Self-Governance: The Red Book by The Office of Self Governance
Page 18Lummi Tribe: Example of Realty Compact
Advice on Compacting
Confederated Salish and Kootenai Tribes (CSKT) began compacting BIA Real Estate Services in 1990’s and added BIA Title Plant Services in 1994
BIA compact revenue is $5.6 million annually. CSKT supplements this with its own funds to improve the quality of service.
CSKT advice for other Tribes considering compacting: Be extremely well-prepared and flexible before beginning self-
governance negotiations. Backlog issues Reporting requirements Is there a passion for providing these services?
Tribe and BIA should both be flexible and recognize the importance of a continued partnership after the initial self-governance compact
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State Taxation of Property on the Boundary
North Carolina property tax is levied by counties both on real estate and on business property (computers, office equipment, etc.).
NC regards a long-term lease as being real property, and therefore subject to property tax
NC holds that when the Tribe or a Tribal member enters into a long-term lease with a non-member, the non-member will owe property tax to the local county on the value of the leasehold interest and business property whether or not the property is on the Boundary.
Example: Food Lion Shopping Center – the lessee is paying property tax to Jackson County
New BIA regulations (25 CFR Part 162) suggest that NC’s view is not correct, and no property tax can be levied on the Boundary, regardless of who holds the lease
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Agenda - Morning
9:00 Welcome and Introduction
9:15 Trust Land Law and Regulation - Presentation
10:00 Real Estate Action Plans
10:45 Knowledge Industries – Presentation
11:15 Knowledge Industry Action Plans
12:00 Lunch
Real Estate Action Plans
Two action plans under development for review today Create implementation plan for compacting BIA Realty
function Develop draft statutes to required to change individual
possessory holding legal framework
EBCI Attorney General’s Office, Commerce Department and Finance Department are actively reviewing HEARTH Act, so no need for an action plan on this subject
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Create Implementation Plan for Compacting BIA Realty Function
Goal: create an implementation plan for compacting the BIA Realty function.
What questions should the implementation plan answer? Options: What are the potential different options for compacting
the Realty function? Finances:
How much it would cost the Tribe to take over the function? How much money would the BIA pay the Tribe to provide the service?
Operations: What are the requirements in terms of people, software, and machines? What will be the impact on jobs?
Examples: What other tribes have done this and what has their experience been?
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Create Implementation Plan for Compacting BIA Realty Function
Activities: Assessment of current Tribal Land Records documents
management by BIA Analysis of Realty Services workflow and procedures Recommendations and modifications to Land Records
Management database schema Estimate of the initial startup implementation cost Estimate of the long-term operating cost
Organizational leadership – Commerce Department Organizational participants in addition to Commerce
Tribal Housing Program - Paulette Cox EBCI Courts – Hannah Smith and her staff Chief’s Office - Paxton Myers Finance – Corey Blankenship or his designee GIS Office – David Wyatt
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Create Implementation Plan for Compacting BIA Realty Function
Resources: Hiring of independent contractor to facilitate development of
implementation plan and development of new procedures $15,000
Travel cost for GIS office staff site visits to two other Tribes and National Tribal GIS conference
$14,000 GIS database schema modification cost and custom workflow
programming $20,000
Supplies $1,000
Total cost of implementation plan development: $50,000 Funding sources - TBD Timeline – 18 months
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Develop Draft Statutes for Individual Possessory Holding Legal Framework
Goal: Fund the legal work required to conduct research on how/whether other tribes
have changed statutes regarding individual possessory interests, and to develop draft statutes and regulations that would simplifying the process for leases and sales of individual possessory interests
Activities: Engage outside expert counsel Survey relevant tribal experience Review existing EBCI statutes, regulations and case law Develop initial draft of new proposed statutes and review with Executive and Tribal
Council leadership Public comment and community engagement
Prepare final draft of new proposed statutes for submission to Council Develop regulations and procedures required to fully implement new statutes
Resources required: approximately $40,000 for research, legal drafting and community engagement
Funding sources – TBD
Timeline – 18 months
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Agenda - Morning
9:00 Welcome and Introduction
9:15 Trust Land Law and Regulation - Presentation
10:00 Real Estate Action Plans
10:45 Knowledge Industries – Presentation
11:15 Knowledge Industry Action Plans
12:00 Lunch
Knowledge Industries
Knowledge Industry definition Businesses whose operations and success depends mainly on
knowledge, innovation and technology. Examples include software, high-tech manufacturing, communications, R&D, and finance.
Knowledge workers are workers whose main asset is knowledge. They are paid to “think for a living”. Typical examples may include software engineers, architects, engineers, scientists and lawyers.
We will focus on a segment of knowledge industry: Knowledge industry clusters that are growing in NC, and for
whom the “5-9’s” reliability and bandwidth provided by BalsamWest are “mission-critical”
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Knowledge Industry Clusters Growing in NC and That Require “5-9s” Reliability
Existing clusters Computer programming, systems design, & related services Health sciences (incl. pharmaceuticals) and informatics Surgical and medical instruments
Emerging clusters Magnetic & optical media manufacturing & reproduction Data processing, Internet hosting, & related services Software publishing Banking and finance Internet publishing & broadcasting, ISPs & search portals, &
other information services Business, scientific, & technical consulting services Rapid prototyping and specialized design services
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Business Attraction: Mountain West Alliance
Qualla Boundary and seven westernmost NC counties are each too small individually to have the resources and the sites necessary to compete effectively to attract knowledge businesses
Have formed Mountain West Alliance to work together to be able to identify and pursue potential knowledge industries
Regional approach has been successful for other rural NC communities in attracting knowledge industries
Example: “Data center corridor” in rural NC, including Alexander, Burke, Caldwell, Catawba and Iredell counties.
Data centers from Google, Apple, financial services, etc.
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Key Assets for Attracting Knowledge Industries
Infrastructure: “5 9’s” high bandwidth fiber, inexpensive redundant power, plentiful water
Workforce: skilled labor for knowledge industry applications
Build on WCU, community college training Public sector: supportive, business friendly Quality of life: natural resources, housing, schools
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Profile of Entrepreneur/Firm Owner
Interest in outdoor recreation Mountain roots Rural lifestyle preference Family at Western Carolina University, or alumni Retirement transitioning
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Attracting Knowledge Industries
Conduct market research to determine best potential areas/networks in which to recruit
Develop “market offering”: sites, information, incentives to share with potentially interested companies.
Locations available Information on workforce, quality of life, industry clusters Incentive packages and assistance
Develop and launch marketing campaign
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Knowledge Industry Action Plans
To be reviewed today Marketing plan for attraction of Knowledge Industries Feasibility study for fiber-enabled office building and co-
working space
On hold Tribally-owned data center
This is already being explored by EBCI Commerce. Call center to service Harrah’s and other Caesar’s properties
This is being reviewed by a team at Harrah’s
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Marketing Plan for Attraction of Knowledge Industries
Goal: identify and attract small-midsize knowledge businesses to Boundary and 7 counties of Western NC
Activities: Inventory and quantify the key assets of Mountain West
Alliance region make it uniquely attractive to small, growing, entrepreneurial knowledge industry businesses
Conduct market research to develop clear profiles of target market segments/customers who would find the assets of Mountain West Alliance locations attractive.
Develop “market offering”: sites, information, incentives to share with potentially interested companies.
Develop and launch marketing campaign
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Marketing Plan for Attraction of Knowledge Industries
Organizational home: Southwest Commission Potential Partners
EBCI Commerce, Economic Development Depts of 7 Western Counties, Duke Energy, Drake Software
Resources: TBD Potential funding in cash and in kind
Drake Software? Special assessment from 7 counties? EBCI? Cherokee Preservation Foundation?
Timeline: 18 months
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Feasibility Study for Fiber-Enabled Office Building and Co-Working Space
Goal: determine whether sufficient demand exists at specific rental price points to support cost of fiber-enabled office building/co-work space (similar to Mojo in Asheville)
Activities: Develop profile of potential users Conduct individual interviews and online survey of tech and
home-based entrepreneurs businesses within a 30-mile radius/located in Jackson or Swain County
Develop estimate of potential demand for office and co-working space and a suite of services at particular price points
Organizational leadership: Sequoyah Fund and Southwestern Commission
Potential Partners: Chamber of Commerce, EBCI Commerce Department, WCU Small Business Technical Development Center, Haywood Committee College Entrepreneurial Program and the TERO Office.
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Agenda - Afternoon
12:30 Review Potential Action Plans; Add New Ones- Enterprise Structure- Small Business- Tourism
2:30 Next Steps, Assignments
3:00 Adjourn
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Small Business Action Plans
Small Business and Entrepreneurship Action Plans for discussion today:
Expand sales of Cherokee art Strengthen Chamber of Commerce Create an economic coalition to support small business
development and growth Build a more vibrant entrepreneurial culture on the Boundary
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Success Factors for Small Business
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Action Plan: Expand Sales of Cherokee Art
Goal – Expand sales by Cherokee artists, both traditional and contemporary art.Activities -Create online sales using available social media toolsDevelop a Cherokee authenticity labelDevelop a distinctive Cherokee brandCreate a Cherokee artist councilInclude both traditional and contemporary artBroker Cherokee art off-BoundaryProvide entrepreneurial trainingQualify Cherokee artist as trainersSupport creation of artist portfoliosProvide micro-loans to artistsSupport artists’ sales booths at various events
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Action Plan: Expand Sales of Cherokee Art
Organizational leadership – Sequoyah FundParticipantsSequoyah Fund – Russ Seagle, Hope HuskeyQualla Arts & Crafts – Vicki CruzResources required – Estimates to be developed by Sequoyah FundFunding sources – Primarily Sequoyah FundTimeline – Steps being taken now
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Action Plan: Strengthen the Chamber of Commerce
Goal – Strengthen Cherokee Chamber of Commerce financially and operationallyActivitiesDevelop a business case for supporting the Chamber from levy and privilege taxes on Cherokee businessesWork with EBCI Finance to develop potential formulas for obtaining funding from levy and privilege taxesSeek sources of ongoing funding from levy and privilege taxes through EBCI Administration and Tribal CouncilIn parallel with the above, create a plan for expanding business assets in CherokeeDevelop and provide a complete array of small business services to CherokeeCollaborate with surrounding Chambers and economic development agencies to seek small business growth
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Action Plan: Strengthen the Chamber of Commerce
Organizational leadership – Cherokee Chamber of CommerceParticipantsCherokee Chamber of Commerce – Amy ParkerEBCI Finance – TBDSurrounding Chambers and E.D. agenciesResources required - TBDFunding sources - TBDTimeline - TBD
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Action Plan: Create Economic Development Coalition
Goal – Create an economic coalition to support small business attraction, development and growthActivities Develop a coordinated strategy to create new jobs in all sectors of existing businesses through expansion and growthCreate and implement a coordinated plan to attract businesses to locate in Cherokee and the surrounding three countiesDevelop a strategy that encourages entrepreneurial efforts to start businesses in targeted fieldsCoordinate and integrate the efforts of economic development on the Boundary with neighboring interests, including economic development agencies and Chambers in Swain, Jackson and Haywood Counties
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Action Plan: Create Economic Development Coalition
Organizational leadershipCherokee Chamber of Commerce – Amy ParkerEBCI Commerce – Jason LambertSequoyah Fund – Russ SeagleDestination Marketing – Skooter McCoySwain, Jackson and Haywood CountiesSmoky Mountain HostWCU – Steve MorseCPF – Mary Jane FergusonResources required – TBDFunding sources – TBDTimeline - TBD
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Action Plan: Build a More Vibrant Entrepreneurial Culture
Goal – Build a more vibrant entrepreneurial culture on the Boundary.Entrepreneurial Small Business needs:MarketsLocation to lease or buildAccess to CapitalEmployeesSmall Business Training/Development ResourcesBusiness Services – Insurance, Accounting, Marketing, etc.Clear, Concise Information about the Selected EnvironmentSupply and Distribution Chain InformationConnectivityInspiration
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Action Plan: Build a More Vibrant Entrepreneurial Culture
ActivitiesEstablish a baseline description of a desirable/optimal small business environmentComplete research necessary to map the small business environment in CherokeeIdentify gaps/constraints between Cherokee environment and baselinePrioritize the challenges and attack the problemCreate incentives to come to CherokeeDevelop the resources and avenues to connect with potential small businesses locally, regionally and beyondOffer Indianpreneurship trainingStart, gain momentum, and sustain the effort
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Action Plan: Build a More Vibrant Entrepreneurial Culture
Organizational leadershipSequoyah Fund – Russ SeagleEBCI Commerce – Jason LambertTCGE – Ray RoseEBCI Destination Marketing – Skooter McCoyCherokee Chamber of Commerce – Amy ParkerResources required - TBDFunding sources -TBDTimeline - TBD
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Tourism Action Plan
Goal – Develop options for increasing tourism, utilizing cultural and natural assetsOrganizational Leadership - Skooter McCoy, Destination MarketingActivities -
New programs for Unto These Hills being discussed with CHA Board Relocate Oconaluftee village near the Museum Add fly fishing museum along with trout exhibit/aquarium Create a downtown Base Camp of the Smokies with appropriate retail Relocate Fairgrounds to old high school site Add convention center to high school site Develop wildlife attraction at the Oconaluftee Village site Improve attractiveness of Saunooke Village Add visitor amenities to the gaming destination Create all new visitor way-finding signage Develop a fishing pond for children Prepare a community gathering place
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Tourism Action Plan
Next Steps Bring the concept to the CHA and Museum Boards, and get their acceptance and approval…discussions under wayCommunicate the district concept to EBCI Administration, Planning Board, Tribal Council, business owners, and community leadersConvene a coalition of organizations within each district to provide input during the transitionDevelop a master plan with renderings with cost estimates for the creation of the districtsConduct feasibility studies for the major element of the programStart archeological and Phase I environmental studiesOrganizational leadership – EBCI Destination MarketingResources required - TBDFunding sources - TBDTimeline - TBD
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Next Steps
Fourth meeting of task teams by phone Continue work on options
Research Interviews Financial analysis Exploration of funding sources Development of recommendations
BWB Solutions and Medicine Root will staff and facilitate tasks teams and conduct additional research as necessary
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Appendix
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State Taxation of Property on the Boundary
North Carolina property tax is levied both on real estate and on business property (computers, office equipment, etc.).
The tax is levied by and paid to the counties. Each county sets its own property tax rate.
Jackson $.28 per $100 of valuation; Swain $.36 per $100 NC regards a long-term lease as being real property, and
therefore subject to property tax NC position on taxation
Property owned, developed and held by the Tribe is not subject to property tax (example: Harrah’s)
Property owned, developed and held by Tribal members is not subject to property tax.
If the Tribe or a Tribal member enters into a long-term lease with a non-member, the non-member will owe property tax to the local county on the value of the leasehold interest, whether or not the property is on the Boundary.
Example: Food Lion Shopping Center – the leasee is paying property tax to Jackson County
Business property held by a non-member is subject to property tax, whether or not the business property is on the Boundary.
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New BIA Leasing Regulations: A Contrary Position
New BIA leasing regulations (25 CFR Part 162) provide a position contrary to NC’s position
162.017. “The purposes of residential, business, and wind/ solar resource leasing on Indian land are to promote Indian housing and to allow Indian landowners to use their land profitably for economic development, ultimately contributing to tribal well-being and self-government.”
162.017(a). “Subject only to applicable Federal law, permanent improvements on trust or restricted land are not taxable by States or localities, regardless of who owns the improvements.”
162.017(b). “Subject only to applicable Federal law, activities conducted under a lease of trust or restricted land that occur on the leased premises are not taxable by States or localities, regardless of who conducts the activities.”
These new regulations open the door to changing the current property tax situation on the Boundary.
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