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STATE OF WISCONSIN

TAX APPEALS COMMISSION


HO-CHUNK NATION

P.O. Box 667

Black River Falls, WI 54615,

Petitioner,

vs.

WISCONSIN DEPARTMENT OF REVENUE

P.O. Box 8907

Madison, WI 53708 -8907,

Respondent.

DOCKET NO. 05-S-56

RULING AND ORDER

DAVID C. SWANSON, COMMISSIONER:

This matter comes before the Commission on cross-motions for summary judgment filed by petitioner and respondent.

Petitioner, Ho-Chunk Nation, a federally recognized Indian tribe (the "Tribe"), appears by Attorney Kenneth J. Artis, the Tribe's Legislative Counsel. Respondent, Wisconsin Department of Revenue (the "Department"), appears by Attorney Lili Best Crane. Petitioner has submitted a brief and affidavits with exhibits and a reply brief with exhibits in support of its motion. The Department has submitted a brief and an affidavit with an exhibit in opposition to petitioner's motion and in support of its own motion.

Having considered the entire record before it, the Commission finds, concludes, rules, and orders as follows:

MATERIAL AND JURISDICTIONAL FACTS

1. By Memorandum dated August 20, 1982 (the "Memorandum"), the Acting Assistant Secretary – Indian Affairs of the U. S. Department of the Interior approved the purchase in trust for the Tribe of a five-acre parcel of real property located in the Town of Blooming Grove, Dane County, Wisconsin (the "DeJope Property"), outside the Tribe's reservation, subject to certain additional requirements.

2. On October 29, 1982, Evan Acres, Inc., executed a deed (the "Deed") transferring the DeJope Property to the United States of America in trust for the Tribe (then known as the Wisconsin Winnebago Tribe).

3. On January 31, 1983, Franklin Annette, Acting Director of the Minneapolis Area Office of the Bureau of Indian Affairs (the "Bureau"), U. S. Department of the Interior, executed and approved the Deed to the DeJope Property.

4. The Deed was recorded by the Bureau's Minneapolis Area Office on March 11, 1983.

5. The Deed was recorded by the Register of Deeds of Dane County, Wisconsin, on March 18, 1983.

6. By letter to the Department dated May 18, 2004, Diane K. Rosen, Superintendent of the Great Lakes Agency Office of the Bureau, stated that the DeJope Property was formally accepted into trust for the Tribe on January 31, 1983, the date that the Bureau approved the Deed to the property.

7. Pursuant to Wis. Stat. 139.323, the Tribe filed with the Department a claim for refund of 70 percent of Wisconsin cigarette taxes paid on sales of cigarettes by the Tribe at the DeJope Property during the periods November 5, 2003 through March 31, 2004 and June 9, 2004 through June 23, 2004 (the "Claim").

8. By letters to the Tribe dated April 7, 2004 and July 19, 2004, Diane L. Hardt, Administrator of the Department's Division of Income, Sales & Excise Taxes, denied the Tribe's Claim.

9. By letter dated July 23, 2004 from John Nordlie, Chief of the Department's Excise Tax Section, the Department again denied the Tribe's Claim.

10. Under date of August 13, 2004, the Tribe filed a petition for redetermination of the Department's denial of the Claim.

11. On March 10, 2005, the Department denied the Tribe's petition for redetermination.

12. On April 7, 2005, the Tribe filed a petition for review with the Commission.

13. In a letter to the Department dated May 11, 2005, Ms. Rosen stated that the DeJope Property was "authorized/designated to be taken into trust" for the Tribe by the Memorandum dated August 20, 1982.

14. The Tribe amended its petition for review on May 16, 2005 and again on June 3, 2005.

15. On June 22, 2005, the Tribe filed a motion for summary judgment with supporting brief, exhibits, and affidavits.

16. On July 21, 2005, the Department filed a brief, supporting exhibit, and affidavit opposing the Tribe's motion or, in the alternative, requesting summary judgment for the Department.

17. On August 19, 2005, the Tribe filed a reply brief with attached exhibits in support of its motion.

APPLICABLE WISCONSIN STATUTES

802.08 Summary judgment.

* * *

(2) MOTION. . . . The judgment sought shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. . . .

* * *

139.30 Cigarette tax; definitions. In ss. 139.30 to 139.44, unless the context otherwise requires:

* * *

(13m) "Trust lands" means any lands in this state held in trust by the U. S. government for the benefit of a tribe or a member of a tribe.[1]

* * *

139.31 Tax imposed; exceptions.

(1) An excise tax is imposed on the sale, offering or exposing for sale, possession with intent to sell or removal for consumption or sale of cigarettes or other disposition for any purpose whatsoever. The tax is imposed at the time and place of the first taxable event occurring in this state. The tax shall be passed on to the ultimate consumer of the cigarettes. All cigarettes received in this state for sale or distribution within this state . . . shall be subject to such tax. . . .

* * *

139.323 Refunds to Indian tribes. The department shall refund 70% of the taxes collected under s. 139.31(1) in respect to sales on reservations or trust lands of an Indian tribe to the tribal council of the tribe having jurisdiction over the reservation or trust land on which the sale is made if all the following conditions are fulfilled:

(1) The tribal council has filed a claim for refund with the department.

(2) The tribal council has approved the retailer.

(3) The land on which the sale occurred was designated a reservation or trust land on or before January 1, 1983.

(4) The cigarettes were not delivered by the retailer to the buyer by means of a common carrier, a contract carrier or the U.S. postal service.

(5) The retailer has not sold the cigarettes to another retailer or to a jobber.

* * *

139.355 Appeals. Sections 71.88(1)(a) and (2)(a), 71.89 and 71.90 as they apply to the taxes under ch. 71 apply to the taxes under this subchapter.

* * *

139.365 Other Refunds. Section 71.75(2), (4) to (7) and (10) as it applies to the taxes under ch. 71 applies to the taxes under this subchapter. Section 71.74(13) as it applies to the refund of taxes under ch. 71 applies to the refund of taxes under this subchapter.

* * *

706.01 Definitions. In this chapter:

(4) "Conveyance" means a written instrument, evidencing a transaction governed by this chapter, that satisfies the requirements of s. 706.02.

* * *


706.02 Formal requisites.

(1) Transactions under s. 706.001 (1) shall not be valid unless evidenced by a conveyance that satisfies all of the following:

(a) Identifies the parties; and

(b) Identifies the land; and

(c) Identifies the interest conveyed, and any material term, condition, reservation, exception or contingency upon which the interest is to arise, continue or be extinguished, limited or encumbered; and

(d) Is signed by or on behalf of each of the grantors; and

(e) Is signed by or on behalf of all parties, if a lease or contract to convey; and

(f) Is signed, or joined in by separate conveyance, by or on behalf of each spouse, if the conveyance alienates any interest of a married person in a homestead under s. 706.01 (7) except conveyances between spouses, but on a purchase money mortgage pledging that property as security only the purchaser need sign the mortgage; and

(g) Is delivered. Except under s. 706.09, a conveyance delivered upon a parol limitation or condition shall be subject thereto only if the issue arises in an action or proceeding commenced within 5 years following the date of such conditional delivery; however, when death or survival of a grantor is made such a limiting or conditioning circumstance, the conveyance shall be subject thereto only if the issue arises in an action or proceeding commenced within such 5-year period and commenced prior to such death.

(2) A conveyance may satisfy any of the foregoing requirements of this section:

(a) By specific reference, in a writing signed as required, to extrinsic writings in existence when the conveyance is executed; or

(b) By physical annexation of several writings to one another, with the mutual consent of the parties; or

(c) By several writings which show expressly on their faces that they refer to the same transaction, and which the parties have mutually acknowledged by conduct or agreement as evidences of the transaction.

* * *


APPLICABLE FEDERAL REGULATIONS

25 CFR 151.2 Definitions.[2]

* * *

(d) "Trust land" or "land in trust status" means land the title to which is held in trust by the United States for an individual Indian or a tribe.

* * *

25 CFR 151.12 Title examination.[3]

If the Secretary determines that he will approve a request for the acquisition of land from unrestricted fee status to trust status, he shall acquire, or require the applicant to furnish, title evidence meeting the Standards For The Preparation of Title Evidence In Land Acquisitions by the United States, issued by the U.S. Department of Justice. After having the title evidence examined, the Secretary shall notify the applicant of any liens, encumbrances, or infirmities which may exist. The Secretary may require the elimination of any such liens, encumbrances, or infirmities prior to taking final approval action on the acquisition and he shall require elimination prior to such approval if the liens, encumbrances, or infirmities make title to the land unmarketable.

25 CFR 151.13 Formalization of acceptance.[4]

Formal acceptance of land in trust status shall be accomplished by the issuance or approval of an instrument of conveyance by the Secretary as is appropriate in the circumstances.

* * *

CONCLUSIONS OF LAW

1. There are no genuine issues of material fact, and this matter is appropriate for summary judgment as a matter of law.

2. The DeJope Property was not designated a reservation or trust land on or before January 1, 1983, and the Tribe thus is not entitled to a refund of 70 percent of Wisconsin cigarette taxes paid on sales of cigarettes on that property under Wis. Stat. 139.323.

OPINION

Summary Judgment

Summary judgment is warranted where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Wis. Stat. 802.08(2). In this case, the parties do not dispute any material facts; rather, they differ only as to the legal conclusions to be drawn from those facts. Thus, there are no genuine issues as to any material fact. In addition, this matter is appropriate for summary judgment as a matter of law. Based on the record before it, the Commission concludes that the facts and law show that the Department, not petitioner, is entitled to summary judgment in this case.

Standard of Review

Where there is ambiguity and doubt in the statute imposing a tax, any such ambiguity and doubt is to be resolved against the party that seeks to impose the tax. Kearney & Trecker Corp. v. Dep't of Revenue, 91 Wis. 2d 746, 753, 284 N.W.2d 61 (1979). Here, the parties agree that a tax is imposed under Wis. Stat. 139.31(1) on sales of cigarettes on the DeJope Property, but dispute whether the Tribe is entitled to a refund of 70% of such taxes paid under Wis. Stat. 139.323.

Statutes that grant exemptions from tax, tax credits or tax refunds are matters of legislative grace, and a taxpayer claiming an exemption must establish that the property or transaction at issue is clearly within its terms, with all doubts being resolved in favor of taxability. Department of Revenue v. Johnson Welding & Manufacturing Company, Inc., 238 Wis. 2d 243, 250, 617 N.W.2d 193 (Ct. App. 2000). The same rule applies when considering a tax exemption granted to Native Americans. Mescalero Apache Tribe v. Jones, 411 U.S. 145, 156 (1973) ("tax exemptions are not granted by implication"). In this case, the Tribe seeks a refund of 70% of cigarette taxes paid pursuant to Wis. Stat. 139.323, which effectively grants the Tribe a partial exemption from collecting cigarette taxes on qualifying sales of cigarettes.

Because the Tribe seeks a refund of taxes pursuant to a statute that effectively grants it a partial exemption, the Tribe has the burden of proof in this case. The Tribe thus has the burden of proving that the Department's legal conclusions in this case are incorrect and that it is entitled to the refund it seeks.

Rules of Statutory Construction

When interpreting a statute, we assume that the legislature's intent is expressed in the statutory language. Statutory interpretation "begins with the language of the statute. If the meaning of the statute is plain, we ordinarily stop the inquiry." State ex rel. Kalal v. Circuit Court, 271 Wis. 2d 633, 663, 681 N.W.2d 110 (2004). "Statutory language is given its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning." Id. Context and structure are also important factors, and construction should strive to avoid absurd or unreasonable results. "If this process of analysis yields a plain, clear statutory meaning, then there is no ambiguity, and the statute is applied according to this ascertainment of its meaning." Id.

Where there is ambiguity in a statute that is intended to benefit Indian tribes, then that statute is to be liberally construed and the ambiguity resolved in the tribes' favor. Bryan v. Itasca County, Minn., 426 U.S. 373, 392 (1976). However, when a statute is clear and unambiguous, the statute must be interpreted on the basis of its plain meaning. Turner v. Gene Dencker Buick-Pontiac, Inc., 240 Wis. 2d 385, 393-394, 623 N.W.2d 151 (Ct. App. 2000).

The specific issue before us is one of first impression. However, in addressing a different question under the same statute, the Attorney General of Wisconsin opined that Wis. Stat. 139.323 is not ambiguous. Op. Wis. Att'y Gen. 25-85 (July 1, 1985). Moreover, the Attorney General stated that "the legislative history of the 1983 amendments to chapter 139 strongly suggests that the conditions set forth in section 139.323 for the seventy percent tribal refund were intended to be mandatory, precise and exclusive." Id. (Emphasis added.) We also find that Wis. Stat. 139.323 is not ambiguous, and therefore must be interpreted according to its plain meaning.

"Designated a reservation or trust land"

Although the parties did not stipulate to the facts in this case, they do not dispute any material facts. Rather, they offer opposing interpretations of the same facts under applicable federal Regulations and Wisconsin law. Furthermore, the Department does not dispute that the Tribe's refund Claim satisfies all of the requirements of Wis. Stat. 139.323 except one, which is that the land on which the cigarette sales occurred must have been "designated a reservation or trust land on or before January 1, 1983." Wis. Stat. 139.323(3). Both sides agree that the DeJope Property is located off the Tribe's reservation.

Consequently, this entire case turns on a single legal conclusion: When was the DeJope Property "designated . . . trust land" under Wisconsin law? If that designation occurred on or before January 1, 1983, then the Tribe is entitled to the refund it seeks. If not, then the Department's denial of the Claim is correct.

Both parties use essentially the same definitions of "designated," yet provide very different interpretations of the word as used in the statute. Both cite the BLACK'S LAW DICTIONARY definition of "designate" as meaning "to indicate, select, appoint, nominate, or set apart to a purpose or duty, as to designate an officer for a command. To mark out and make known; to point out; to name; indicate." Petitioner's Brief, p. 6, quoting BLACK'S LAW DICTIONARY (6th ed. 1990); Respondent's Brief, p. 4. Based on this definition, the Tribe argues that land can be designated as trust land under Wis. Stat. 139.323(3) prior to its actual qualification as trust land. Taking a more direct approach, the Department argues that "designated . . . trust land" simply means land that actually is "trust land" under applicable federal and state definitions, i.e., land that is held in trust by the U.S. government for the benefit of an individual Indian or tribe.

We find the Tribe's argument unconvincing. The Tribe's interpretation of "designated" adds an additional (and apparently optional) step into the well-defined process used to establish trust land. In contrast, the Department relies on an interpretation of "designated" that is consistent with Wisconsin and federal definitions of "trust land" and reflects the plain meaning of the statute. Thus, we conclude that, at minimum, property must qualify as "trust land" as defined by federal and Wisconsin law in order to be "designated . . . trust land" under Wis. Stat. 139.323.

1. The Memorandum of August 20, 1982

By Memorandum dated August 20, 1982 (the "Memorandum"), the Acting Assistant Secretary – Indian Affairs of the U. S. Department of the Interior approved the purchase in trust for the Tribe of the DeJope Property. The Memorandum, in its entirety, reads as follows:

I have reviewed your memorandum of June 9, 1982, and accompanying documentation from the Great Lakes Agency and Wisconsin Winnebago Tribe requesting my approval in purchasing in trust a five acre parcel of off-reservation fee property. I have determined that such action would be in the best interest of the tribe, facilitating tribal self-determination, as well as fostering a needed economic development activity for members of the Wisconsin Winnebago Tribe.

You are, therefore, authorized to accept conveyance to the United States in trust upon consideration of appropriate title evidence in accordance with the requirements of 25 CFR 120a.12.[5]

According to the Tribe, this Memorandum designated the DeJope Property as trust land for the Tribe for purposes of Wis. Stat. 139.323. (Petitioner's Brief, p 5.)

On August 20, 1982, the DeJope Property was still owned by the seller, Evan Acres, Inc., not the Tribe or the U. S. government. The seller did not sign the Deed transferring the Property until October 29, 1982. Thus, the Tribe makes the fairly incredible claim that the DeJope Property was "designated a reservation or trust land" under Wisconsin law while the title was still held in private hands. This is the core of the Tribe's argument: that property can be "designated a reservation or trust land" under Wisconsin law prior to its qualification as "trust land" or "land in trust status" under federal law. The Tribe contends that the Memorandum designated the DeJope Property as trust land under Wisconsin law, even though it clearly fails to establish trust land status under federal law. The Tribe's argument is not consistent with the language of the Memorandum itself, the facts or applicable law.

The Memorandum clearly contemplates that additional action would be necessary to accept the DeJope Property into trust for the Tribe. As the Department points out, the Tribe's interpretation means that property approved for acquisition under federal law could become designated trust land under state law prior to the completion of the acquisition itself. Such a rule could cause enormous confusion, particularly in cases where the planned transfer is never completed. In addition, the question of when property becomes trust land under Wisconsin law may arise under other statutes, including those that concern jurisdiction in criminal cases. See Wis. Stat. 165.92(1)(d) and 938.02(12m). In sum, the administration of law in Wisconsin would benefit from having a uniform rule concerning when property becomes "trust land."

Where there are no significant differences between federal and Wisconsin statutes with respect to a particular legal issue, then it is appropriate to look to federal law for guidance in interpreting the Wisconsin statute in question. See, e.g., Clean Wisconsin v. Public Service Comm'n, 282 Wis. 2d 250, 375, note 43, 700 N.W.2d 768 (2005) (construing federal and Wisconsin environmental statutes); Kolpien v. Family Dollar Stores of Wisconsin, Inc., 402 F.Supp. 971, 980 (W.D. Wis. 2005) (interpreting federal and Wisconsin employment law). The acquisition and classification by the U. S. government of lands to be held in trust for Indians is subject to detailed federal regulations. 25 C.F.R. Part 151. These Regulations defined trust land as follows: "'Trust land' or 'land in trust status' means land the title to which is held in trust by the United States for an individual Indian or a tribe." 25 C.F.R. 151.2(d). The applicable Wisconsin definition of "trust lands" includes very similar language: "'Trust lands' means any lands in this state held in trust by the U. S. government for the benefit of a tribe or a member of a tribe." Wis. Stat. 139.30(13m); see also Wis. Stat. 165.92(1)(d) and 938.02(12m). On August 20, 1982, the title to the DeJope Property was not held in trust by the United States for the Tribe. Even the Tribe contends that the acquisition of the property did not occur until October 29, 1982.

The Regulations indicate that additional action by the Bureau was required before the DeJope Property could be transferred from unrestricted fee status to trust status. Consistent with the Memorandum, 25 C.F.R. 151.12 required the submission and examination of title evidence for the property in question, as well as the completion of any necessary corrective action with respect to the title, "prior to taking final approval action on the acquisition" of the property into trust status. 25 C.F.R. 151.12. The Regulations also envision at least one more step in the process. "Formal acceptance of land in trust status shall be accomplished by the issuance or approval of an instrument of conveyance by the Secretary as is appropriate in the circumstances." 25 C.F.R. 151.13.

The Memorandum was not an instrument of conveyance, nor was it an approval of an instrument of conveyance. The Deed was the instrument of conveyance of the DeJope Property, and it was not executed by the seller until October 29, 1982, over two months after the August 20, 1982 Memorandum. Thus, the Memorandum could not have approved the Deed, because the Deed did not yet exist. On October 29, 1982, the seller, Evan Acres, Inc., executed the Deed, and on January 31, 1983, Franklin Annette, Acting Director of the Minneapolis Area Office of the Bureau, executed and approved the Deed. At minimum, this final approval by the Bureau was required to satisfy 25 C.F.R. 151.12 and 151.13.

The Bureau agrees with this interpretation as well. By letter to the Department dated May 18, 2004, Diane K. Rosen, Superintendent of the Bureau's Great Lakes Agency office, stated as follows with respect to the DeJope Property:

The formal acceptance into trust occurred on January 31, 1983, the date the deed was approved by Franklin Annette, Acting Area Director, Minneapolis, MN in accordance with 25 CFR 151.13 – Title examination and 151.4 – Formalization of acceptance. A copy of the aforementioned CFR is enclosed for your reference.

Approximately one year later, after the Department had denied the Tribe's petition for redetermination, Ms. Rosen sent a second letter to the Department to clarify the statements made in her first letter. In her letter dated May 11, 2005, Ms. Rosen stated as follows:

Subsequent approval of the deed, which is a formality that would not impact the prior authorization/designation was completed on January 31, 1983. The land could only have been acquired into trust, thus taken into trust, after being authorized/designated by the Acting Assistant Secretary – Indian Affairs. (Emphasis in original.)

To support this argument, Ms. Rosen equates "designation" with "authorization." She also implies that the "designation" of the property as trust land occurred prior to the approval of the Deed on January 31, 1983, but she does not state exactly when that designation occurred.

There is no question that the DeJope Property was authorized to be taken into trust by the August 20, 1982 Memorandum. Whether it was then designated a trust land under Wisconsin law is a different question, one that Ms. Rosen's letter does not answer. However, the relevant federal Regulations do not even use the term "designated" with respect to trust lands; rather, that particular word is used only in Wis. Stat. 139.323(3). As an official of the U. S. Bureau of Indian Affairs, Ms. Rosen's opinion as to the meaning of "designated" as used in a Wisconsin tax statute does not appear to be particularly relevant.

Ms. Rosen's reference to the "approval of the deed" as a "formality" is even less helpful. The caption of the Regulation in question, 25 C.F.R. 151.13, is "Formalization of acceptance," and the Regulation states: "Formal acceptance of land in trust status shall be accomplished by the issuance or approval of an instrument of conveyance by the Secretary as is appropriate in the circumstances." (Emphasis added.) In law, formalities have consequences, and we must assume that the applicable definitions and Regulations mean what they say.

In any event, while Ms. Rosen's opinion is relevant with respect to the federal Regulations in question, it does not directly address the central question in this case. That question is whether, under Wisconsin law, the DeJope Property was designated a reservation or trust land on or before January 1, 1983.

The Tribe presents no compelling argument for making a distinction between the Wisconsin definition of "designated . . . trust land" and the federal definition of "'trust land' or 'land in trust status.'" See, Wis. Stat. 139.30(13m) and 139.323(3); 25 C.F.R. 151.2(d). Consequently, we hold that the definition of "trust land" under Wis. Stat. 139.323 is consistent with the applicable federal definition. Applying the federal and state definitions uniformly, the DeJope Property was not "designated . . . trust land" by the Memorandum under Wis. Stat. 139.323, because it was not yet "trust land."

2. The Deed Dated October 29, 1982

On October 29, 1982, Evan Acres, Inc., executed the Deed to transfer the DeJope Property to the United States of America in trust for the Tribe (then known as the Wisconsin Winnebago Tribe). The Deed provides that "Title is taken pursuant to the provisions of the Act of June 18, 1934 (48 Stat., 984)" (i.e., the Indian Reorganization Act of 1934, relevant portions of which are encoded at 25 U.S.C. 465). The Deed was approved by the United States of America on January 31, 1983. The Deed then was recorded by the Bureau's Minneapolis Area Office on March 11, 1983 and by the Register of Deeds of Dane County, Wisconsin, on March 18, 1983.

As previously discussed, the federal definition of "trust land" requires that title to the land be held in trust by the United States for an individual Indian or a tribe. 25 C.F.R. 151.2(d); see also 25 U.S.C.A. 465. Under applicable federal statutes, only an authorized agent of the U. S. government has the authority to accept an offer to sell land to the U. S. government to be held in trust for an Indian tribe. Slobojan v. U. S., 136 Ct. Cl. 620 (1956). Furthermore, in Wisconsin, title to real property can only be transferred by a written conveyance, which must be signed by all parties thereto to be effective. Wis. Stat. 706.01(4) and 706.02(1).

Although the Deed states that it was made on October 29, 1982, the United States of America did not take title to the property on that date. The Deed itself provides that title to the DeJope Property could only be taken subject to applicable federal law. The Deed was not signed by an authorized agent of the U. S. government until the final approval required by 25 C.F.R. 151.13 was granted on January 31, 1983. Moreover, the Deed was recorded twice after the final approval was granted, but not before. The record is devoid of any evidence indicating that the transfer of the property was completed on or before January 1, 1983. While the seller may have intended to transfer title to the DeJope Property on October 29, 1982, there is simply no evidence that the United States of America accepted title to the property on that date or took any other action with respect to the property between that date and January 1, 1983.

Because the United States of America did not take title to the property until January 31, 1983, the DeJope Property did not become "'trust land' or 'land in trust status'" under applicable federal Regulations on or before January 1, 1983. Consequently, applying a uniform definition of "trust land," we find that the DeJope Property was not "designated . . . trust land" for purposes of Wis. Stat. 139.323 on or before January 1, 1983.

Conclusion

The parties' dispute is limited to the meaning of "designated" as used in Wis. Stat. 139.323(3). That is a question of law, not a question of fact, and, consequently, summary judgment is entirely appropriate in this case. The facts and applicable law indicate that the Department's interpretation of Wis. Stat. 139.323 is correct. We hold that, at minimum, property must qualify as "trust land" as defined by federal and Wisconsin law in order to be "designated . . . trust land" under Wis. Stat. 139.323. For purposes of Wis. Stat. 139.323, the DeJope Property was not designated trust land on or before January 1, 1983, and the Tribe thus is not entitled to the refund it seeks.

IT IS ORDERED

1. Petitioner's motion for summary judgment is denied.

2. The Department's motion for summary judgment is granted, and its action on petitioner's petition for redetermination is affirmed.


Dated at Madison, Wisconsin, this 15th day of February, 2006.

WISCONSIN TAX APPEALS COMMISSION

(Dissenting in part) Jennifer E. Nashold, Chairperson

Diane E. Norman, Commissioner

David C. Swanson, Commissioner

ATTACHMENT: "NOTICE OF APPEAL INFORMATION"

JENNIFER E. NASHOLD, CHAIRPERSON, DISSENTING IN PART:

I concur with the majority's denial of summary judgment to the Tribe, but dissent from that part of the ruling which grants summary judgment to the Department.

This case involves interpretation of Wis. Stat. 139.323(3). This provision sets forth one of five requirements an Indian tribe must meet to be entitled to a 70 percent refund of sales taxes on cigarettes, namely, that "[t]he land on which the sale occurred was designated a reservation or trust land on or before January 1, 1983." Wis. Stat. 139.323(3).[6] The dispute centers on what is meant by the statute's use of the term "designated" or the phrase "was designated." The majority concludes that to be designated as trust land, the land must actually be trust land on or before January 1, 1983. This conclusion is based on the premise that to be established "trust land" under federal law, certain requirements must be met; therefore, those requirements should also be met under state law.[7] If, however, "designated" means something short of becoming acquired trust land, then federal law for acquiring trust land is largely irrelevant.

The majority apparently assumes that the term "designated" adds nothing to the statute. It is a cardinal rule of statutory construction that "[a] statute should be construed so that no word or clause shall be rendered surplusage and every word if possible should be given effect."Donaldson v. State, 93 Wis. 2d 306, 315, 286 N.W.2d 817 (1980). See also State v. Achterberg, 201 Wis.2d 291, 299, 548 N.W.2d 515 (1996) (statutory construction that renders a word or phrase superfluous must be avoided).[8]

Each party refers to the definition of "designate" in BLACK'S LAW DICTIONARY (6th ed. 1990), arguing for a "plain meaning" which supports its own interpretation of the statute. This definition states:

Designate: To indicate, select, appoint, nominate, or set apart for a purpose or duty, as to designate an officer for a command. To mark out and make known; to point out; to name; indicate.

Much of this definition appears to support the Tribe's view that something short of actual establishment as trust land is sufficient to designate the property as trust land, whereas some parts appear to support the Department's view that the property must be acquired as trust land to be designated as trust land.

While dictionary or other definitions of "designate" will no doubt be useful in ultimately deciding this case, I disagree with the majority that the issue of when the DeJope property was designated as trust land is simply a matter of law which may be decided without input from those officials in the federal system who are vested with the authority to effect transfers of land to the federal government in trust for Indian tribes. Even the Department repeatedly characterizes the issue as one of fact, not law. (Department's Brief, pp. 2, 8, and 10.)

Because it is the federal government which would have the power to designate property as trust land, it is reasonable to look to appropriate officials within the relevant federal agencies to determine when, if ever,[9] a designation occurs, and what, if any, requirements must be met for a given property to be designated as trust land. In fact, the Wisconsin Department of Revenue did just that in making its determination that the DeJope property was not designated as trust land until January 31, 1983, the date the Deed was approved by the Minneapolis Acting Area Director of the Bureau of Indian Affairs. In an affidavit submitted by the Department, Special Agent Clifton A. Korn states as follows:

4. On May 18, 2004, I met with Bureau of Indian Affairs Realty Specialist Carole A. Kraft at the Great Lakes Agency Office in Ashland, Wisconsin. I asked her, "What is the date this property [DeJope Casino property] was designated as trust land for the Wisconsin Winnebago Tribe by the U.S. Department of the Interior?"

5. Ms. Kraft told me that the date of designation was the date the Minneapolis Area Office Acting Director, Franklin Annette, approved the warranty deed. That date was January 31, 1983.

6. Ms. Kraft explained that establishment of trust land status must follow the procedures outlined in 25 CFR 151.12 and 151.13. Ms. Kraft provided me copies of the law and explained that the Secretary will approve the request for acquisition of land from fee status to trust status after the applicant furnishes title evidence. Once this is done, the formal acceptance of land in trust status shall be accomplished by the issuance or approval of an instrument of conveyance by the Secretary.

7. Ms. Kraft explained at our meeting that until the title is examined, the deed is still fee land until approved by the Area Office Director.

8. I asked Ms. Kraft for a written response from the Bureau and she consulted with Great Lakes Agency Office Superintendent Diane Rosen. The letter, dated May 18, 2004 from Superintendent Rosen to me was this written response.

The May 18, 2004 letter from Ms. Rosen, attached to Mr. Korn's affidavit, states in part:

In response to your visit and correspondence dated May 18, 2004 concerning the date the warranty deed executed on October 29, 1982 was transferred into trust for the Ho-Chunk Nation . . . we provide the following information.

The formal acceptance into trust occurred on January 31, 1983, the date the deed was approved by Franklin Annette, Acting Area [] Director, Minneapolis MN in accordance with 25 CFR 151.13 ― Title examination and 151.4 ― Formalization of acceptance.

If this were the only submission before the Commission regarding when the designation occurred, summary judgment in favor of the Department might be appropriate. The problem here, and the reason summary judgment must be denied to both parties, is that Ms. Kraft's alleged representation that the designation occurred on January 31, 1983 is directly contradicted by a later letter to the Department from Superintendent Rosen, dated May 11, 2005, which states in relevant part:

We would like to clarify a significant point as to when the property known as the DeJope property was designated trust land for purposes of 139.323 Wis. Stats. We understand that you have taken the position that the DeJope property was not designated as trust land until the approval of the deed on January 31, 1983.

On August 20, 1982, the DeJope parcel was authorized/designated to be taken into trust by a memorandum . . . from the Acting Assistant Secretary ― Indian Affairs, Office of the Secretary, United States Department of Interior, to the Minneapolis Area Director, Bureau of Indian affairs. The memorandum states:

[August 20, 1982 Memorandum, quoted in the majority opinion, above.]

Subsequent approval of the deed, which is a formality that would not impact the prior authorization/designation was completed January 31, 1983. The land could only have been acquired into trust, thus taken into trust, after being authorized/designated by the Acting Assistant Secretary ― Indian Affairs. (Emphasis in original.)

Ms. Rosen's second letter stating that designation occurred August 20, 1982 does not necessarily contradict her first letter stating that formal acceptance into trust occurred January 31, 1983. The Department emphasizes, however, that Ms. Rosen's initial letter was in response to Mr. Korn's specific inquiry into when the DeJope property was designated trust land. The Department asserts that it should be given the opportunity to cross-examine Ms. Rosen regarding the different implications of her two letters, and that the difference between the letters indicates a factual dispute, making summary judgment inappropriate.

The Tribe, in turn, questions Mr. Korn's statement that the question he initially posed was when designation occurred (versus acquisition of the property). If this were the question posed on May 18, 2004, the Tribe's counsel asks, then why does Ms. Rosen's letter, dated that same date, not discuss designation at all, but instead characterize Mr. Korn's inquiry as one involving the date the deed was transferred into trust? (Petitioner's Reply Brief, p. 7.) This is an area which is appropriate for further factual development.

More significantly, however, Ms. Rosen's second letter decidedly contradicts Ms. Kraft's statement to Mr. Korn that designation occurred January 31, 1983. Based on the contradictory submissions before the Commission, I agree with the Department that summary judgment is inappropriate because there exists a genuine issue of material fact.

The standards governing motions for summary judgment are well-established. On summary judgment, the moving party has the burden to establish the absence of a genuine, that is, disputed, issue as to any material fact. Grams v. Boss, 97 Wis. 2d 332, 338-39, 294 N.W.2d 473 (1980). On summary judgment, the court does not decide the issue of fact; it decides whether there is a genuine issue of fact. Id. Summary judgment should not be granted unless the moving party demonstrates a right to a judgment with such clarity as to leave no room for controversy. Id. Doubts as to the existence of a genuine issue of material fact should be resolved against the party moving for summary judgment. Id.

The papers filed by the moving party are carefully scrutinized. Id. The inferences to be drawn from the underlying facts contained in the moving party's material should be viewed in the light most favorable to the party opposing the motion. Id. If the movant's papers before the court fail to establish clearly that there is no genuine issue as to any material fact, the motion must be denied. Id. If the material presented on the motion is subject to conflicting interpretations or reasonable people might differ as to its significance, it is improper to grant summary judgment. Id.

I conclude that there are genuine issues of material fact as to what constitutes a designation under the federal system and when such a designation occurred in this case. Indeed, the Department itself argues that "genuine issues of fact exist regarding when the land on which the cigarette sales occurred was designated trust land," (Department's Brief, p. 10, see also pp. 2 and 8), and only perfunctorily argues in the alternative for summary judgment in its favor. To grant summary judgment to either side would be to discredit or disregard materials supporting the nonmoving party, a procedure at odds with standards governing motions for summary judgment.[10] The parties should have their day in court.

Respectfully submitted,

Jennifer E. Nashold, Chairperson

ATTACHMENT: NOTICE OF APPEAL INFORMATION;

March 31, 2006 Petition for rehearing denied pursuant to Wis. Stat. s.227.49(3)

April 26, 2006 Appealed to Dane County Circuit Court (06CV1351)

July 31, 2007 Case No. 2006CV1351 - Dane County Circuit Court - For the reasons stated above I affirm the decision of the Wisconsin Tax Appeals Commission and deny the various motions raised by the H0-Chunk Nation.

August 28, 2008 Appealed to Wisconsins Court of Appeals (07AP1985)

May 1, 2008 APPEAL from an order of the Dane Counry Cirsuit Court - affirmed

June 16, 2009 Review of a decision of the Wisconsin Court of Appeals by Supreme Court of Wisconsin Affirmed


[1] The Tribe notes that this provision was added to the Statutes in 1999, some 17 years after the issuance of the Memorandum in 1982. However, the taxes and refund at issue in this case relate to portions of 2003 and 2004, when this provision had long been in effect.

[2] All cites to the C.F.R. are to the April 1, 1982 revision, which was in effect on October 29, 1982 and January 31, 1983, the dates recorded on the Deed of transfer of the DeJope Property. The sections of 25 C.F.R. Part 151 quoted herein have remained the same since then, although some were renumbered in 1995.

[3] Now 25 C.F.R. 151.13.

[4] Now 25 C.F.R. 151.14.

[5] The garbled C.F.R. cite likely was intended to refer to 25 C.F.R. 151.12.

[6] The parties agree that the DeJope property is not on a designated reservation.

[7] The majority also expresses concern that if property could be designated trust land prior to completion of the acquisition itself, this would cause confusion, especially where the planned transfer is never completed. This possibility would be of no consequence, however, because if the transfer is not completed, an Indian tribe would not be eligible for the 70 percent refund because there would be no "sale[] on reservation or trust lands," as required for eligibility under Wis. Stat. 139.323.

[8] That Wis. Stat. 139.323 uses the phrase "sales on reservations or trust lands" when discussing the sales subject to the 70 percent refund, but uses the phrase "designated a reservation or trust land" when discussing the date by which the land must be designated to be eligible for the refund further suggests that use of the term "designated" was deliberate. See Gittel v. Abram, 255 Wis. 2d 767, 784, 649 N.W.2d 661 (Ct. App. 2002), citing American Motorists Ins. Co v. R & S Meats, Inc., 190 Wis. 2d 196, 214, 526 N.W.2d 791 (Ct. App. 1994) (different word choices in different parts of same statute, particularly within same section, may create inference that enacting body intended different, distinct meanings; it is logical to assume enacting body had entire statute or section in mind when it chose the different words).

[9] Even a determination that there is no designation process under the federal system would be factual in nature.

[10] One final point deserves mention. An alternative reading of the statute might be that the phrase "was designated" refers only to "a reservation" and not to "trust land;" that is, a reservation must be "designated" a reservation, whereas trust land must actually be trust land by January 1, 1983. Neither party considers this interpretation, and a non-exhaustive review of legislative history cuts against it. See Fiscal Bureau Note in Senate Amendment to 1983 Senate Bill 1983 ("Further, eligibility for the refund requires that . . . the reservation or tribal trust land on which the sales are made have been so designated as of January 1, 1983.")