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Osage Nation stands firm in reservation dispute

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DENVER – The Osage Nation of northeastern Oklahoma is refusing to back down on its longstanding contention that the Osage Reservation was never dissolved and that tribal members living and working there do not have to pay state income tax.

The 10th U.S. Circuit Court of Appeals was asked April 2 for a rehearing on its decision that the reservation was abolished at the time of the Osage Allotment Act of 1906. The Osage Nation asserts that nothing in the Osage Act supports the reservation’s disestablishment and that, according to the Supreme Court, any ambiguity in the law must be interpreted to the benefit of Native litigants.

In its decision March 5, the appeals court acknowledged that the language of the Osage Act does not unambiguously abolish the reservation, but said congressional hearings at the time suggested that the Osages “recognized that the allotment process would terminate reservation status.” The Osage Nation counters that the statement “is based solely on one remarkably ambiguous statement from an Osage representative” through an interpreter.

The Osage contend their reservation is coterminous with 2,300-square-mile Osage County, the largest county in Oklahoma, whose 44,000-plus population includes 5.4 percent of residents who identified as Osage tribal members in the last census.

Inferring that a reservation was disestablished solely from allotment conflicts with Supreme Court rulings and those of two other circuit courts of appeal and “presents a question of exceptional importance,” the Osage petition maintains, terming the 10th Circuit’s decision “unprecedented.”

“The Osage Act of 1906 is not a surplus land act. The Osage Act did not open any portion of the reservation for settlement or restore Indian lands to the public domain.

Reservation surface lands were allotted solely to tribal members and the entire subsurface was retained in tribal trust.”

Taken in the context of the Osage resistance to Dawes Act-type allotment, “Congress intended to preserve, rather than terminate the Osage Reservation,” the petition states, noting that it did not open “surplus lands” to non-Indian entry.

The federal appellate court in March upheld a lower court in Tulsa that ruled against the tribe on grounds that “Recognizing Osage County as a reservation and ousting Oklahoma income taxation over Osage members would have significant practical consequences not only for income taxation, but potentially for civil, criminal and regulatory jurisdiction in Osage County.”

The case has raised issues of competing sovereignty exercised by the tribe, state and even local government in terms of taxing and services provided. Three years ago, despite potential “far-reaching implications on Oklahoma sovereignty,” the 10th Circuit said the Osage Nation could legally sue individual members of the Oklahoma Tax Commission, the current respondents.

“It’s a justice issue as to whether the state ever had the authority to tax our citizens,” Jim Gray, principal chief of the Osage Nation, said at the time on the initial tax case. “Our reservation was never disestablished.”

The Osage Nation had sued the State of Oklahoma for taxing the income of tribal members who were employed on trust land within Osage County but who did not reside on trust land in the county.

The appellate judges said that the “essence of (that) case is whether the nation or the State of Oklahoma is the supreme sovereign with respect to Osage County or whether some form of dual sovereignty may apply.”

There was apparent concern that the Osage Nation would tax or otherwise exert punitive control if the sovereignty issue was resolved in the tribe’s favor, Gray said, dismissing the allegations as false.

Although the current appeal is against members of the Oklahoma Tax Commission, 12 groups support the commission as friends of the court, including state and local farm bureaus and cattlemen’s associations, electric cooperatives, petroleum interests, wildlife and environmental associations, Public Service Company of Oklahoma, the Oklahoma State Chamber of Commerce, and others.

In the current round of litigation, the 10th Circuit ruled that because it found the reservation had been dissolved it did not need to address whether its tribal residents were exempt from state income tax.

The Osage Nation seeks either rehearing by the three-judge panel or rehearing by the full circuit court (en banc).