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Doing Business With Our Neighbor: the Salt River Pima-Maricopa Indian Community

The tribe's economic development efforts often create opportunities for non-Indians as partners, clients and customers

Scottsdale shares its eastern border with the Salt River Pima-Maricopa Indian Community (the "Community"). The Reservation was created by Executive Order on June 14, 1879 by President Rutherford B. Hayes. Tribal enrollment exceeds 5,700 people and is comprised of two Indian tribes, the Pima and the Maricopa, who share a common cultural heritage. Its prime location and undeveloped land ensures that it will be a potential site for new economic activities in the Valley.

A traditional agricultural people, the Community has diversified to include a golf course, a sand and gravel operation, a solid waste facility and the Scottsdale Pavilions, a 140-acre shopping mall. This economic development has opened up additional opportunities for citizens of Scottsdale and the Valley to visit the Community for the purposes of shopping, working and otherwise engaging in business with the Community. As with any communities that border each other, close proximity brings opportunities and challenges. In addition to the traditional opportunities and challenges that neighbors may anticipate, the Community’s status as a federally recognized Indian tribe raises new and different challenges.

In considering doing business on an Indian reservation, the following points are helpful to remember.

Sovereignty

Tribes are independent entities with inherent powers of self-government. As such, tribes govern themselves within their reservations and provide those governmental services necessary to economic development. By example, the Community provides police and fire protection, health and safety inspections and enforces zoning regulations. Congress does, however, have the power to regulate and modify the status of tribes and has permitted the states a role in areas traditionally left to the tribes. Federal legislation allowing the states to negotiate gaming compacts with tribes is a prime example of Congressional legislation in this area.

Immunity

The general rule is that, absent an effective waiver or consent, a tribe may not be sued in tribal, state or federal court. A department of the tribe or a tribally-owned business may also be immune from suit. A waiver of immunity is necessary in order to resolve disputes that arise between the tribe and its non-Indian partners. Each tribe has its own procedures for waiving its immunity.

Jurisdiction

Tribes have their own courts, can prosecute criminal misdemeanors by Indians, and may resolve civil disputes among Indian and non-Indian parties. When a civil lawsuit does not involve any tribal members and does not affect tribal self-government, then state courts have jurisdiction. When Indians or Indian interests are involved and the events occur on trust land, and the plaintiff is an Indian, the claim must be resolved in tribal court; when the plaintiff is a non-Indian, the claim may be resolved in either state or tribal court.

Tribal Land

Land on an Indian reservation is held in common, with the exception of allotments. Title to the land is held by the United States for the benefit of the tribe. The Salt River Pima-Maricopa Indian Community Reservation includes approximately 55,000 acres of which approximately 30,000 acres are held in common. As a result of the trust relationship of the United States to the tribes, the Secretary of the Interior must approve any lease of land and any agreement that involves trust assets.

Allotments

In the Dawes Act of 1887, Congress provided for reservation lands to be allotted to individual Indians. Congress stopped this program and indefinitely extended the trust period of all allotments still in trust in the Indian Reorganization Act of 1934. Today, legal title to allotment land is held by the United States for the benefit of the allottees. Due to the overwhelming inheritance through intestate succession, the beneficial interest of many 40-acre parcels may be shared by as many as 100 allottees. This results in practical problems in developing large-scale leasing and development projects. The Scottsdale Pavilions is located on allotment land and is leased under two separate lease agreements to a non-Indian land developer. The leases provide that the possession of the land will revert and the buildings and improvements will become the property of the allottees at the end of the lease term. The allottees receive rents from the developer. The Community acts as the allottees’ agent for the payment of the rent.

Taxation

Tribes have the authority to levy taxes on sales of goods and services on their reservations. Taxation is a new phenomenon on most reservations. The tribes’ ability to tax is being limited by the willingness of the United States to permit states to also tax business activities on Indian reservations. In a 1995 decision by the federal courts, the State of Arizona’s right to collect sales and rental taxes from businesses at the Pavilions was affirmed.

Conclusion

The Salt River Pima-Maricopa Indian Community will continue to pursue economic development opportunities as a means of benefiting its members. Frequently, these opportunities will permit the participation of non-Indians as partners, clients and customers. Keeping in mind the unique legal features of doing business on Indian reservations will facilitate the interaction.