State Legal Issues

This page describes some legal issues at the state level concerning tribal energy development.

Taxation

States may not impose taxes on tribes or tribal members doing business on reservations. If the tribe's project involves the delivery of goods or services, arrangements should be made to have those goods or services delivered to the tribe on the reservation. Non-tribal or nonmember businesses are subject to state income and business taxes, even when operating on the reservation. Though tribes are generally exempt from workers compensation laws, federal laws governing contracts and grants usually require that some type of worker compensation protection be provided to employees. Tribes may self-insure or voluntarily participate in state programs. Contracts with outside parties should require some type of protection for workers. The same would apply to unemployment programs.

Building Codes

As a general rule, state regulatory laws do not apply on reservations. In some states, electric power companies will not connect service to new facilities until there has been a state inspection. Some states agree to conduct these inspections as a courtesy so that power may be connected. State building codes do not apply to construction on Indian lands. These codes are formatted under the Uniform Building Code (UBC). A tribe may consider adopting the UBC, or requiring compliance with the UBC in the construction documents. The tribe might also consider hiring a retired building inspector to monitor construction, and require that the cost be included in the bid as a construction cost.