Disposal and Taxation of Public Lands Act

Disposal and Taxation of Public Lands Act

WHEREAS, in 1780, the United States Congress resolved that “the unappropriated lands that may be ceded or relinquished to the United States, by any particular states, pursuant to the recommendation of Congress of the 6 day of September last, shall be granted and disposed of for the common benefit of all the United States that shall be members of the federal union, and be settled and formed into distinct republican states, which shall become members of the federal union, and have the same rights of sovereignty, freedom and independence, as the other states: . . . and that upon such cession being made by any State and approved and accepted by Congress, the United States shall guaranty the remaining territory of the said States respectively. . . . That the said lands shall be granted and settled at such times and under such regulations as shall hereafter be agreed on by the United States in Congress assembled, or any nine or more of them”; and

WHEREAS, under these express terms of trust, the land claiming states, over time, ceded their western land to their confederated Union and retained their claims that the confederated government dispose of such lands to create new states “and for no other use or purpose whatsoever” and use the proceeds of any sales of such lands only for the purpose of paying down the public debt; and

WHEREAS, the United States Supreme Court, in State of Texas v. White, 74 U.S. 700, 1868, defined “State”, in the constitutional context, as “a political community of free citizens, occupying a territory of defined boundaries, and organized under a government sanctioned and limited by a written constitution, and established by the consent of the governed”, and added, “This is undoubtedly the fundamental idea upon which the republican institutions of our country are established”; and

WHEREAS, by resolution in 1790, the United States Congress declared “That the proceeds of sales which shall be made of lands in the Western territory, now belonging or that may hereafter belong to the United States, shall be, and are hereby appropriated towards sinking or discharging the debts for the payment whereof the United States now are, or by virtue of this act may be holden, and shall be applied solely to that use, until the said debt shall be fully satisfied”; and

WHEREAS, in 1833, referring to these land cession compacts which arose from the original 1780 congressional resolution, President Andrew Jackson stated, “These solemn compacts, invited by Congress in a resolution declaring the purposes to which the proceeds of these lands should be applied, originating before the constitution, and forming the basis on which it was made, bound the United States to a particular course of policy in relation to them by ties as strong as can be invented to secure the faith of nations”; and

WHEREAS, with respect to the disposition of the federal territorial lands, the Northwest Ordinance of July 13, 1787 provides, “The legislatures of those districts or new States, shall never interfere with the primary disposal of the soil by the United States in Congress assembled, nor with any regulations Congress may find necessary for securing the title in such soil to the bona fide purchasers”; and

WHEREAS, the United States Supreme Court, in Downes v. Bidwell, 182 U.S. 244, 1901, stated with reference to Article IV, section 3, cl. 2 of the United States Constitution, “The question of territories was dismissed with a single clause, apparently applicable only to the territories then existing, giving Congress the power to govern and dispose of them”; and

WHEREAS, the territorial and public lands of the United States are dealt with in Article IV, section 3, clause 2 of the United States Constitution, referred to as the Property Clause, which states, “The Congress shall have power to dispose of and make all needful rules and regulations respecting the territory or other property belonging to the United States.” And

WHEREAS, with this clause, the Constitutional Convention agreed that the Constitution would maintain the “status quo” that had been established with respect to the federal territorial lands being disposed of only to create new states with the same rights of sovereignty, freedom, and independence as the original states; and

WHEREAS, in 1828, United States Supreme Court Chief Justice John Marshall, in American Ins. Co. v. 356 Bales of Cotton, 26 U.S. 511, 1828 confirmed that no provision in the Constitution authorized the national government to indefinitely exercise control over western public lands beyond the duty to manage these lands pending the disposal of the lands to create new states when he said, “At the time the Constitution was formed, the limits of the territory over which it was to operate were generally defined and recognised (sic). These limits consisted in part, of organized states, and in part of territories, the absolute property and dependencies of the United States. These states, this territory, and future states to be admitted into the Union, are the sole objects of the Constitution; there is no express provision whatever made in the Constitution for the acquisition or government of territories beyond those Limits;” and

WHEREAS, in Shively v. Bowlby, 152 U.S. 1, 1894, the U.S. Supreme Court confirmed that all federal territories, regardless of how acquired, are held in trust to create new states on an equal footing with the original states when it stated, “Upon the acquisition of a territory by the United States, whether by cession from one of the states, or by treaty with a foreign country, or by discovery and settlement, the same title and dominion passed to the United States, for the benefit of the whole people, and in trust for the several states to be ultimately created out of the territory;” and

WHEREAS, the Enabling Act of {insert state} states, in part, that until the title to the unappropriated public lands lying within the state’s boundaries, and to all land owned or held by any Indian or Indian tribes “shall have been extinguished by the United States, the same shall be and remain subject to the disposition of the United States, and said Indian lands shall remain under the absolute jurisdiction and control of the Congress of the United States; that no taxes shall be imposed by the State on lands or property therein belonging to or which may hereafter be purchased by the United States or reserved for its use”; and

WHEREAS, the state of [insert state] only temporarily suspended its right to tax the public lands pending the national government’s imminent discharge of its trust obligation to dispose of all of the unappropriated public lands; and

WHEREAS, the 1934 Taylor Grazing Act declared that “In order to promote the highest use of the public lands pending its final disposal, the Secretary of the Interior is authorized, in his discretion, by order to establish grazing districts or additions thereto and/or to modify the boundaries thereof, of vacant, unappropriated, and unreserved lands from any part of the public domain of the United States (exclusive of Alaska [and other territorial exclusions]) . . . Nothing in this subchapter shall be construed . . . as limiting or restricting the power or authority of any State as to matters within its jurisdiction”; and

WHEREAS, in 1976, after nearly 200 years of trust history regarding the obligation of Congress to dispose of western lands to create new states and use the proceeds to discharge its public debts, the United States Congress stated in the Federal Land Policy Management Act, “By this Act, Congress declares that it is the policy of the United States that the public lands be retained in Federal ownership, unless … it is determined that disposal of a particular parcel will serve the national interest”; and

WHEREAS, at the time of the [state’s] Enabling Act the course and practice of the United States Congress with all prior states admitted to the Union had been to fully dispose, within a reasonable time, all lands within the boundaries of such states, except for those Indian lands, or lands otherwise expressly reserved to the exclusive jurisdiction of the United States; and

WHEREAS, the state of {insert state} did not, and could not have, contemplated or bargained for the United States failing or refusing to dispose of all lands within its defined boundaries within a reasonable time such that the State of {insert state} and its [Permanent Fund] for its Public Schools could never realize the bargained-for benefit of the deployment, taxation, and economic benefit of all the lands within its defined boundaries; and

WHEREAS, in a unanimous 2009 decision, the United States Supreme Court, in Hawaii v. Office of Hawaiian Affairs, stated, “. . . [a subsequent act of Congress] would raise grave constitutional concerns if it purported to ‘cloud’ Hawaii’s title to its sovereign lands more than three decades after the State’s admission to the Union. . . . ‘[T]he consequences of admission are instantaneous, and itignores the uniquely sovereign character of that event … to suggest that subsequent eventssomehow can diminish what has already been bestowed’. And that proposition applies afortiori [with even greater force] where virtually all of the State’s public lands . . . are at stake;” (emphasis added); and

WHEREAS, from 1780 forward it is unmistakable that the federal government only held bare legal title to the western public lands as a trustee in trust to dispose of them to create new states and to use the proceeds to pay the public debt; and

WHEREAS, the Federal Government did comply with its express trust obligation to imminently dispose of the public lands for all states to the eastern edge of Colorado and also with the state of Hawaii; and

WHEREAS, [state’s] Enabling Act contemplates that [state’s] temporary suspension of its sovereign right to tax the public lands within its borders for the benefit of its public schools and the common good of the state ends the very moment that the national government discharges of its trust obligation to imminently dispose of [state’s] public lands within its borders; and

WHEREAS, the national government has failed to abide by the terms of its preexisting trust obligations to imminently dispose of the public lands from the eastern edge of the state of Colorado to the west coast and the state of Alaska; and

WHEREAS, under Article I, Section 8, Clause 17 of the United States Constitution, the national government is only constitutionally authorized to exercise right, title, and jurisdiction over lands that are “purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;” and

WHEREAS, the United States Congress never purchased land designated as national parks nor did it ever seek or obtain the consent of the [state] Legislature as required under Article I, Section 8, Clause 17 of the United States; and

WHEREAS, because of the failure of the national government to imminently dispose of land within the borders of [state], [state]  bears the burden of the inestimable entanglements and expectations over the multiple use of these public lands that were required to be disposed of that have accumulated for more than [number of years since state’s admission] years; and

WHEREAS, [state] should have had total control over its public lands from [year of state’s admission], plus a reasonable time for disposition of the lands; and

WHEREAS, [state] has been substantially damaged in its ability to provide funding for education because the national government has unduly retained control of nearly [  ]% of lands lying within [state]‘s borders; and

WHEREAS, had the national government sold the land in or about [year of state’s admission], [if applicable under state’s enabling act–95% of the net proceeds should have been applied to paying down the national public debt, and 5% should have gone to the state of [state]‘s permanent fund for the support of the public schools in [state]; and

WHEREAS, [state] consistently ranks high among all states in class size and low in per pupil funding for education; and

WHEREAS, had the national government disposed of the land in or about [year of admission], [state]  would have, from that point forward, generated substantial tax revenues to the benefit of its public schools and to the common good of the state; and

WHEREAS, it is estimated that the current fair market value of the public lands within the state is approximately $[billion]; and

WHEREAS, had the national government disposed of the public lands in or about [year of state’s admission] as it was bound to do, it is estimated that the value of those public lands today would be more than $[ billion], such that annual tax revenues are estimated to be in excess of $[ billion] per year; and

WHEREAS, the national government gives [state] less than half of the proceeds of mineral lease revenues and severance taxes generated from the lands within its [state]‘s borders; and

WHEREAS, [state] has been substantially damaged in mineral lease revenues and severance taxes in that, had the national government disposed of land in or about [year of admission], [state] would realize 100% of the mineral lease revenues and severance taxes from the lands; and

WHEREAS, [state] has been damaged by the inordinate cost and substantial uncertainty regarding the national government’s infringement on [state]‘s sovereign control of public lands within its borders; and

WHEREAS, the United States Congress disposed of lands within the boundaries of the states of Tennessee and Hawaii directly to those states; and

WHEREAS, because of the entanglements, expectations, the breach of [state]‘s Enabling Act, and the damages resulting from it, the United States Congress should imminently dispose of the public lands lying within the state of [state] directly to the state of [state]; and

WHEREAS, the national government has an obligation, to present and all future generations, to pay the public debt, yet has demonstrated a reckless disregard for the growing national debt even as it continues to worsen at an exponential rate; and

WHEREAS, the Legislature of the state of [state], upon disposal by the national government of the public lands directly to the state, intends to cede the national park land to the national government on condition that the lands permanently remain national park lands, that they be not sold, transferred, or conveyed to any party other than the state of [state], and that the current borders of national park land are not directly or indirectly expanded, including by means of “buffer zones”; and

WHEREAS, in order to effectively address the accumulated entanglements and expectations over [state]‘s public lands, a [state] Public Lands Commission should be formed to review and manage multiple use of the public lands and to determine, through a public process, the extent to which public land may be sold; and

WHEREAS, to the extent that the Public Lands Commission determines through a public process that any such land should be sold to private owners, that [refer to terms of state’s enabling act—e.g. 95% of the net proceeds should be paid to the national government to pay down the national debt];

NOW, THEREFORE, BE IT RESOLVED that the Legislature of the state of {insert state} demands that the Federal Government immediately dispose of the public lands within [state]’s borders directly to the state of [state].

BE IT FURTHER RESOLVED that the Legislature of the state of {insert state} urges the United States Congress in the most strenuous terms to engage in good faith communication, cooperation, coordination, and consultation with the state of {insert state} regarding the immediate disposal of the public lands directly to the state of [state].

BE IT FURTHER RESOLVED that, upon disposal of the public lands directly to the state of [state], the Legislature intends to affirmatively cede the national park lands to the federal government, under Article I, Section 8, Clause 17 of the United States Constitution, on condition that the lands permanently remain national park lands, that they not be sold, transferred, or conveyed to any party other than the state of [state], and that the current borders of national park land are not expanded and contain no “buffer zones.”

BE IT FURTHER RESOLVED that the Legislature calls for the creation of a [state] Public Lands Commission to review and manage multiple use of the public lands and to determine, through a public process, the extent to which public land may be sold.

BE IT FURTHER RESOLVED that, to the extent that the Public Lands Commission determines through a public process that any such land should be sold to private owners, that [refer to terms of [state]’s enabling act] 5% of the net proceeds shall be paid to the Permanent Fund for the public schools and 95% of the net proceeds should be paid to the national government to pay down the national debt].

BE IT FURTHER RESOLVED that a copy of this resolution be sent to the United

States Department of the Interior, the Majority Leader of the United States Senate, the Speaker of the United States House of Representatives, the members of the congressional delegation of {insert state}, and the Governors, Senate Presidents, and Speakers of the House of the 49 other states.

BE IT ENACTED:

Section 1. Definitions. As used in this chapter:

(1) “Governmental entity” is as defined in [state code section].

(2) “Net proceeds” means the proceeds from the sale of public lands, after subtracting expenses incident to the sale of the public lands.

(3) “Public lands” means lands within the exterior boundaries of this state except:

(a) lands to which title [or other interest] is held by a person who is not a governmental entity;

(b) lands owned or held in trust by this state, a political subdivision of this state, or an independent entity;

(c) lands reserved for use by the state system of public education as [state code];

(e) a national park affirmatively ceded to the United States by state statute;

(f) lands ceded to the United States in accordance with [state code for certain military related purposes];

(g) real property or tangible personal property owned by the United States if the property is within the boundaries of a municipality [this is intended to exclude from the definition of public lands property such as a court house, post office, or federal building - this definition should be reviewed by interested parties]; or

(h) lands, including water rights, belonging to an Indian or Indian tribe, band, or community that is held in trust by the United States or is subject to a restriction against alienation imposed by the United States.

Section 2. Disposal and taxation of public lands.

(1) On or before December 31, 2014, the United States shall:

(a) extinguish title to public lands; and

(b) transfer title to public lands to the state.

(2) If the state sells public lands with respect to which the state receives title under Subsection (1)(b), the state shall:

(a) [based on express terms of state’s enabling act — retain 5% of the net proceeds of the sale of the public lands; and

(b) pay [95% -- based on express terms of state’s enabling act]  of the net proceeds of the sale of the public lands to the United States.

(3) [If applicable to state’s enabling act — In accordance with [state code, if applicable], the amounts the state retains in accordance with Subsection (2)(a) shall be deposited into the permanent State School Fund].

(4) Beginning on January 1, 2015, public lands with respect to which the United States has not extinguished title and transferred title to the state as of December 31, 2014, are subject to property taxation in accordance with [state code Collection of Taxes].

Section 3. Severability clause.

If any provision of this chapter or the application of any provision to any person or circumstance is held invalid by a final decision of a court of competent jurisdiction, the remainder of this chapter shall be given effect without the invalid provision or application. The provisions of this chapter are severable.

Section 4.  [Appropriate Legislative Committee] study.

(1) During the 2012 interim, the [Appropriate Legislative Committee] shall prepare proposed legislation:

(a) creating a public lands commission to administer the disposal of public lands;

(b) making any necessary modifications to the definition of “public lands” in [Section 1(3) above];

(c) making a determination of or a process for determining interests, rights, or uses related to:

(i) easements;

(ii) geothermal resources;

(iii) grazing;

(iv) mining;

(v) recreation;

(vi) rights of entry;

(vii) special uses;

(viii) timber;

(ix) water; or

(x) other natural resources or other resources;

(d) to establish the conditions under which the state may cede a national park to the United States, which may include:

(i) any circumstances under which a national park shall revert to the state;

(ii) the retention of interests, rights, or uses described in Subsection (1)(c); and

(iii) whether the state should retain any power to:

(A) impose a tax, fee, or charge on activities conducted within a national park; or

(B) serve civil or criminal process on a person who is within the boundaries of a national park; and

(e) determining what constitutes “expenses incident to the sale of public lands” described in [Subsection 1(2) above].

(2) During the 2012 interim, the [Appropriate Legislative Committee] shall study and determine whether to prepare proposed legislation:

(a) to administer the process for:

(i) the United States to extinguish title to public lands;

(ii) the state to receive title to public lands from the United States; or

(iii) the state to sell public lands the state receives in accordance with this Disposal and Taxation of Public Lands Act;

(b) establishing procedures and requirements for subjecting public lands to property taxation as required by Subsection 2(4),including the creation of a lien and the seizure and sale of the public lands; and

(c) establishing other requirements related to national forests, national monuments, national recreation areas, or other public lands administered by the United States.

(3) The [Appropriate Legislative Committee] may study any other issue related to the disposal and taxation of public lands as determined by the [Appropriate Legislative Committee].

(4) The [Appropriate Legislative Committee] shall report its findings and recommendations to the [executive management committee as appropriate] on or before the November 2012 interim meeting.

Approved by ALEC Board of Directors January 15, 2012.

Keyword Tags: Public Lands