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Ketchikan Gateway Borough v. Ketchikan Indian Corp. (8/15/2003) sp-5726
Ketchikan Gateway Borough v. Ketchikan Indian Corp. (8/15/2003) sp-5726
Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
KETCHIKAN GATEWAY BOROUGH and )
KETCHIKAN GATEWAY BOROUGH ) Supreme Court No. S-10332
BOARD OF EQUALIZATION, )
) Superior Court Nos.
Appellants, ) 1KE-00-226 CI
) 1KE-00-403 CI
v. )
)
KETCHIKAN INDIAN CORPORATION, ) O P I N I O N
)
Appellee. ) [No. 5726 - August 15,
2003]
)
Appeal from the Superior Court of the State
of Alaska, First Judicial District,
Ketchikan, Trevor N. Stephens, Judge.
Appearances: Scott A. Brandt-Erichsen,
Borough Attorney, Ketchikan, for Appellants.
Jahna M. Lindemuth, Dorsey & Whitney LLP,
Anchorage, for Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
MATTHEWS, Justice.
FABE, Chief Justice, with whom CARPENETI, Justice,
joins, dissenting.
The superior court applied the implied federal
preemption doctrine to exempt from borough taxes all space in a
building that contains a tribally operated clinic that is subject
to detailed oversight by the Indian Health Service. The narrow
question presented here is whether space in the building that is
not committed to use by the clinic should be exempt. We answer
in the negative because such space is not necessarily part of a
pervasively and comprehensively regulated federal program and the
borough's interest in taxing the property is not inconsequential.
I. FACTS AND PROCEEDINGS
In 1997 the United States conveyed a three-quarter-acre
parcel located in Ketchikan to the Ketchikan Indian Corporation
(KIC). KIC began to construct a five-story building that, when
completed, was intended primarily to contain a clinic run by KIC
but funded by the Indian Health Service. As of the tax day,
January 1, 2000, the building was more than half complete.
KIC requested a tax exemption for the property from the
Ketchikan Gateway Borough. The borough assessor initially
granted a ten percent charitable exemption. He determined that
ten percent of the services offered by KIC were available to the
community at large and not restricted to Alaska Natives. KIC
appealed to the Borough Board of Equalization. At a hearing
before the board the assessor modified his position. He
continued to adhere to the theory that the building could have a
ten percent charitable exemption, but added that another fifty
percent could be exempt as space committed to clinic use.1 The
sixty percent exemption, based on an appraised value of the land
and partially completed building as of January 1, 2000, of
$2,360,300, resulted in a taxable value of $944,100. The board
accepted the assessor's position but made no specific findings.
The evidence presented to the board concerning the
amount of space in the building that was not committed to clinic
purposes was both sparse and conflicting. KIC's zoning permit
application indicated that two floors would be used for the
clinic, one floor would be used for offices, and two floors would
be "lease space." The plans of the building indicate two floors
of clinic space, one floor of office space, one floor of lease
space, and one floor of daycare space. But it is unclear whether
the zoning application or the plans reflected the intent of KIC
as of January 1, 2000, regarding the use of the building. At the
board hearing KIC's attorney argued that all of the floor space
that "is being used, is being used for hospital purposes." But
he acknowledged that there were unused spaces and that "[t]he
intent of KIC for the unused space is still unknown," although
"long-term plans and strategy includes expansion of their
hospital functions into those unused spaces." KIC's general
manager acknowledged that there is space in the building which
might either be leased or used for other programs of KIC. He
stated that KIC would be obligated to devote lease revenues to
Indian Health Services programs, but later stated that lease
revenues could be used to pay the debt service on the building.
KIC paid under protest the resulting taxes, $12,462.12,
both appealing the board's decision and filing a separate suit
seeking a tax refund. The borough cross-appealed the board's
decision, arguing that the exemption should only have been ten
percent rather than sixty percent, and filed a counterclaim
seeking a declaration that the clinic is not a nonprofit
hospital. The superior court consolidated the cases.
Following briefing and argument, the superior court
(1) dismissed the cross-appeal on the grounds that the
borough lacked standing and, alternatively, that the borough was
precluded from appealing from a decision that adopted the
assessor's position in its entirety;
(2) held that the property was entirely exempt because of
implied federal preemption, based on Ramah Navajo School Board,
Inc. v. Bureau of Revenue of New Mexico;2
(3) awarded full fees of $62,694.70 and costs to KIC under
AS 29.45.500(a); and
(4) ruled that its earlier decision dismissing the borough's
cross-appeal in effect dismissed the borough's counterclaim.
On appeal, the borough challenges the superior court's
decision on the merits only to the extent that it exempted
portions of the building that were not committed for use as part
of the clinic. The borough also challenges the award of full
attorney's fees.
II. STANDARD OF REVIEW AND GENERAL PRINCIPLES RELEVANT TO TAX
EXEMPTION CASES
The main question involved in this case is one of law
in which "we apply our independent judgment and adopt the rule of
law that is most persuasive in light of precedent, reason, and
policy."3
Taxpayer exemptions are strictly construed against the
taxpayer and in favor of the taxing authority.4 The burden of
proving eligibility for an exemption is on the taxpayer.5 The
policy underlying the rule of strict construction and the burden
of proof is:
All property is benefited by the
security and protection furnished by the
State, and it is only just and equitable that
expenses incurred in the operation and
maintenance of government should be fairly
apportioned upon the property of all.[6]
Notwithstanding the rule of strict construction, where
the question is whether federal law requires the exemption of
tribal interests from taxation, ambiguities in federal law should
be resolved in favor of the tribe.7
Boards of equalization may spatially apportion exempt
from nonexempt uses of a building and tax the nonexempt space.
In all contested cases boards of equalization are required to
make findings of fact sufficient to explain the reasons for their
decisions.8 Such findings are reviewed deferentially and will be
affirmed if they are supported by substantial evidence.9
III. DISCUSSION10
A. Space in the Building that Has Not Been Committed
for Use by the Clinic Is Not Exempt under the Implied
Federal Preemption Doctrine.
The superior court concluded that the implied federal
preemption doctrine as reflected in the 1982 decision of the
United States Supreme Court in Ramah Navajo School Board, Inc. v.
Bureau of Revenue of New Mexico11 applied to the property in
question and resulted in its total exemption from borough
taxation. Implied federal preemption in Indian tax cases is
distinct from federal preemption in other areas of the law. The
law of federal preemption generally requires that one "start with
the assumption that the historic police powers of the States were
not to be superseded by [a] Federal Act unless that was the clear
and manifest purpose of Congress."12
To determine whether Congress has
preempted state action in a particular arena
. . . [g]enerally, we apply a two-step
analysis to preemption questions. First, we
look to see whether Congress has overtly
preempted the subject matter the state wishes
to regulate, either explicitly, by declaring
its intent to preempt all state authority, or
implicitly, by occupying the entire field of
regulation on the subject in question. See
Webster, 621 P.2d at 897-98. Second, if
neither kind of direct preemption is found,
we look to whether federal and state law
conflict in this particular instance. If
state and federal regulations openly conflict
or if state regulations obstruct the purpose
of federal regulations, then the supremacy
clause blocks the state regulation. See id.
at 897, 900-01; Bald [v. RCA Alascom, 569
P.2d 1328, 1331 (Alaska 1977)].[13]
In contrast, questions of implied federal preemption in
Indian tax cases "are not resolved by reference to standards of
pre-emption that have developed in other areas of the law" and
are "not limited to cases in which Congress has expressly - as
compared to impliedly - pre-empted the state activity."14
Instead, we have applied a flexible pre-
emption analysis sensitive to the particular
facts and legislation involved. Each case
"requires a particularized examination of the
relevant state, federal, and tribal
interests." Ramah Navajo Sch. Bd., Inc. v.
Bureau of Revenue of New Mexico, 458 U.S.
832, 838 (1982).[15]
Ramah involved the application of New Mexico's gross
receipts tax to receipts that a non-Indian construction firm
received from a tribal school board for the construction of a
school for Indian children on a reservation. The Supreme Court
held that federal law impliedly preempted application of the tax,
following a methodology established in White Mountain Apache
Tribe v. Bracker,16 requiring "a particularized examination of the
relevant state, federal, and tribal interests."17 The Court noted
the federal policy of encouraging tribal control of education and
explained in detail the "comprehensive and pervasive" regulatory
system pertaining to the construction and financing of Indian
schools.18 By contrast, the Ramah Court found that the state's
interest in the tax was inconsequential. Noting the historical
fact that the state had closed the only public school near the
reservation, the Court stated:
[T]he State does not seek to assess its tax
in return for the governmental functions it
provides to those who must bear the burden of
paying this tax. Having declined to take any
responsibility for the education of these
Indian children, the State is precluded from
imposing an additional burden on the
comprehensive federal scheme intended to
provide this education - a scheme which has
"left the State with no duties or
responsibilities."[19]
The Court also observed that the "case would be different if the
State were actively seeking tax revenues for the purpose of
constructing, or assisting in the effort to provide, adequate
educational facilities for Ramah Navajo children."20
The other United States Supreme Court case finding an
implied federal preemption is Bracker.21 It has in common with
Ramah the twin factors of a comprehensive and pervasively
regulated activity concerning tribal interests and an
inconsequential state taxing interest. In Cotton Petroleum Corp.
the United States Supreme Court summarized Bracker as follows:
In Bracker, we addressed the question
whether Arizona could impose its motor
carrier license and use fuel taxes on a
nonmember logging company's use of roads
located solely within an Indian reservation.
Significantly, the roads at issue were
"built, maintained, and policed exclusively
by the Federal Government, the Tribe, and its
contractors," 448 U.S. at 150, and the State
was "unable to identify any regulatory
function or service [it] performed . . . that
would justify the assessment of taxes for
activities on Bureau and tribal roads within
the reservation," id., at 148-149. See also
id., at 174 (Powell, J., concurring) ("The
State has no interest in raising revenues
from the use of Indian roads that cost it
nothing and over which it exercises no
control."). Moreover, it was undisputed in
Bracker that the economic burden of the taxes
ultimately fell on the Tribe. Id., at 151.
Based on these facts and on our conclusion
that collection of the taxes would undermine
federal policy "in a context in which the
Federal Government has undertaken to regulate
the most minute details" of the Tribe's
timber operations, we held that the taxes
were pre-empted. Id., at 149.[22]
In Board of Equalization for the Borough of Ketchikan
v. Alaska Native Brotherhood & Sisterhood, Camp No. 14, we had
occasion to rule on the application of the implied federal
preemption doctrine to municipal real estate taxes.23 At issue
was the taxability of a federally funded building built by KIC
and held by it under a long-term lease. KIC conducted "various
cultural, educational, vocational, health and community service
programs" in the building.24 We observed that the tax revenues
"will be used to provide police and fire protection to the
premises, as well as to provide water, electrical and sewer
services to the building. . . . Ketchikan has a strong interest
in raising these revenues by taxing the property because they are
for services that must be provided to the property."25 We
concluded that the borough taxes were not preempted in light of
the services that the borough was providing:
[W]e conclude that our analysis is in
complete accordance with Ramah. In that
case, the Supreme Court struck down a state
gross receipts tax imposed on a non-Indian
subcontractor of a school building
constructed for the Navajo tribe on their
reservation. The Court held that the tax was
implicitly preempted by the comprehensive
federal regulatory scheme governing the
construction of autonomous Indian educational
facilities. The Court noted that the tax
served only to generate revenue for the
state, which was not providing any
correlative services to the tribe. The
Court's opinion specifically indicates: "In
this case, the State does not seek to assess
its tax in return for the governmental
functions it provides to those who must bear
the burden of paying this tax." [458 U.S. at
843.]
In the case before us, however, the
taxes assessed by Ketchikan are in return for
the governmental functions it provides to the
property leased by KIC. Accordingly, the tax
is not impermissible, nor is it preempted by
federal regulations because it is apparent
that when the "relevant state, federal, and
tribal interests," Ramah, 458 U.S. at [838],
are examined and balanced, Ketchikan's
assertion of taxing authority is
reasonable.[26]
In the present case, in our view the space in the
building that is not used or committed to use as part of the
clinic cannot be considered as exempted from borough taxation
under the implied federal preemption doctrine. One essential
feature of the doctrine is that the activities in question must
be subject to comprehensive and pervasive federal oversight.
While the operation of the clinic may well be subject to such
oversight, the same cannot be said concerning the uncommitted
space. Since as of the tax date it was uncertain how the
uncommitted space would be used, the space cannot be considered
to be part of any particular program, much less one which is
pervasively regulated.27
We also believe that the second element of the implied
federal preemption cases - relatively inconsequential state
interest - is missing in this case. Our observations in Board of
Equalization concerning the substantial services that the borough
afforded to the building and the tribe are as applicable now as
they were in that case.28
Accordingly, it seems clear that the uncommitted space
is not entitled to a tax exemption.29 But there is much
uncertainty in the record before us as to how much space was
uncommitted as of January 1, 2000. The board made no findings on
this or any other subject, and the parties' presentations on this
point were vague and unfocused. A remand for a new hearing
before the board will be necessary in order to determine an
appropriate spatial apportionment. The board should make written
findings supporting its determination.
B. Costs and Attorney's Fees.
Because we are remanding for a new hearing to determine
the appropriate spatial apportionment between clinic and non-
clinic use, it is no longer certain that KIC will prevail. We
therefore vacate the superior court's grant to KIC of full
reasonable costs and attorney's fees. If it prevails on remand,
however, KIC will be entitled to full reasonable costs and
attorney's fees under AS 29.45.500(a) and Ketchikan Gateway
Borough Code 45.13.110.30
IV. CONCLUSION
We REVERSE the superior court's holding that space in
the building not committed to use by the clinic is exempt from
borough taxes and REMAND to the board for a new hearing to
determine the appropriate spatial apportionment between clinic
and non-clinic areas. In light of this remand, we VACATE the
superior court's award of costs and attorney's fees to KIC.
FABE, Chief Justice, with whom CARPENETI, Justice, joins,
dissenting.
I disagree with the court's conclusion that the
uncommitted space in KIC's building is not exempt from borough
taxes. In my view, KIC has presented a sufficiently strong
federal and tribal interest to allow extension of its tax
exemption to temporarily unused spaces.
As the court's opinion recognizes, the United States
Supreme Court held in Ramah that questions of implied federal
preemption in Indian tax cases require "a particularized
examination of the relevant state, federal, and tribal
interests."31 Informing the preemption analysis are "the
traditional notions of tribal sovereignty, and the recognition
and encouragement of this sovereignty in congressional Acts
promoting tribal independence and economic development[.]"32
Relevant federal statutes, therefore, "must be examined in light
of `the broad policies that underlie them and the notions of
sovereignty that have developed from historical traditions of
tribal independence.' "33
Consideration of the federal and tribal interests is
the first step of the balancing required by implied federal
preemption analysis. The court's opinion concludes that there is
no weight at all on this half of the scale because there is not a
comprehensive and pervasive federal program dealing with unused
spaces. But I believe that the court has unduly narrowed the
scope of inquiry. The proper question is whether an Indian tribe
that is operating a health care facility under the aegis of the
Indian Self-Determination and Education Assistance Act (ISDEAA)34
can be granted reasonable flexibility in extending its tax
exemption to temporarily unused spaces in the building - a
situation not uncommon in such facilities.
Looking at this broader question, the federal and
tribal interests are clear and strong. Provision of Indian
health care services is comprehensively and pervasively
regulated; this is manifest both in the ISDEAA and in the Indian
Health Care Improvement Act (IHCIA).35 Congress expressed its
intention in the ISDEAA that those operating under self-
determination contracts receive the same amount of funding as
would the federal government if one of its departments was still
providing the services in question.36 In Ramah, the Court found
that the burden imposed by the state's taxation impeded "the
clearly expressed federal interest in promoting the `quality and
quantity' of educational opportunities for Indians by depleting
the funds available for the construction of Indian schools."37
Local taxes on unused spaces could similarly impede the federal
interest in promoting Indian health care by reducing the funds
available to Indian tribes that have clinic buildings with
unoccupied space.38
KIC's counsel argued at the board hearing that "[t]he
intent of KIC for the unused space is still unknown, although
there [are] long term plans and strateg[ies that] include[]
expansion of their hospital functions into those unused spaces."
Allowing KIC the flexibility to maintain tax-exempt open space
for expansion or reorganization of health services comports with
the federal policy of encouraging tribal sovereignty and
promoting tribal independence and economic development.
The state interests constitute the other half of the
balancing analysis. In Ramah, the state interest was merely the
collection of revenue; the state provided no services to the
school being constructed on the reservation.39 The Court
determined that this was insufficient to justify the burdens
imposed by the tax.40 Here, KGB is providing governmental
functions to the KIC building. The opinion accurately compares
this provision of services to those in Board of Equalization for
the Borough of Ketchikan v. Alaska Native Brotherhood &
Sisterhood, Camp No. 14, in which we upheld the Borough's taxing
authority.41 The federal and tribal interests in that case,
however, were different. There, we only examined whether KIC was
exempt from ad valorem taxes under the Indian Reorganization Act,42
under a theory of tribal sovereignty,43 or under a theory of
federal instrumentality.44 We concluded that none of these
theories had merit,45 in part "because the Borough's interest in
generating the revenue from the non-discriminatory tax to pay for
services provided to the property exceeds KIC's interest in
retaining the revenue to provide governmental programs to its
members."46
Here, in contrast, we are addressing clearer and
stronger federal and tribal interests as expressed in the ISDEAA
and IHCIA, as well as the explicit congressional desire for
Indian tribes to have the same funding that the federal
government would have to provide health services. Striking the
balance between these competing interests is thus more difficult
than in Board of Equalization. Given the congressional desire
for Indian tribes to have equal funding, the obstacle to that
goal that could be presented by allowing Borough taxation of
unused spaces in a health care facility, and the policy expressed
in Cotton Petroleum Corp. that ambiguities concerning the
exemption of tribal interests from taxation should be resolved in
favor of the tribe,47 I would conclude that the balance tips in
favor of the federal and tribal interests - and thus exemption.
KIC should be granted the flexibility to maintain some
unused space in its health services building without sacrificing
its tax-exempt status for those spaces.48 Accordingly, I would
affirm the superior court's decision. I therefore respectfully
dissent from the court's opinion.
_______________________________
1The assessor testified that the third and fourth floors and some
common areas were for clinic use.
2458 U.S. 832 (1982).
3State, Dep't of Transp. & Pub. Facilities v. Sanders, 944 P.2d
453, 456 (Alaska 1997).
4Sisters of Providence in Washington, Inc. v. Mun. of Anchorage,
672 P.2d 446, 447 (Alaska 1983).
5City of Nome v. Catholic Bishop of N. Alaska, 707 P.2d 870, 877
(Alaska 1985).
6Id. at 879 (quoting Animal Rescue League v. Bourne's Assessors,
37 N.E.2d 1019, 1021 (Mass. 1941)).
7Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163, 177 (1989).
8City of Nome, 707 P.2d at 875.
9Balough v. Fairbanks North Star Borough, 995 P.2d 245, 254
(Alaska 2000).
10KIC contends that this appeal is untimely. We conclude to the
contrary, because the notice of appeal was filed before the court
ruled that the borough's counterclaim was dismissed. The
counterclaim sought declaratory relief and thus was not subject
to the year-specific procedural defenses on which the dismissal
of the borough's cross-appeal was based. The prematurity of a
notice of appeal may be ignored where no harm is done, and that
is the case here. Garrison v. Dixon, 19 P.3d 1229, 1232 (Alaska
2001).
11458 U.S. 832 (1982).
12Webster v. Bechtel, Inc., 621 P.2d 890, 898 (Alaska 1980)
(quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230
(1947)).
13Tlingit-Haida Reg'l Elec. Auth. v. State, 15 P.3d 754, 766-67
(Alaska 2001).
14Cotton Petroleum, 490 U.S. at 176-77.
15Id. at 176.
16448 U.S. 136 (1980).
17Ramah, 458 U.S. at 838.
18Id. at 839-41.
19Id. at 843 (quoting Warren Trading Post Co. v. Arizona Tax
Comm'n, 380 U.S. 685, 691 (1965)).
20Id. at 844 n.7.
21448 U.S. 136 (1980).
22490 U.S. at 184. We note that the Ninth Circuit takes the
position that the Bracker implied preemption doctrine does not
apply outside of Indian country. Malabed v. North Slope Borough,
2003 WL 21524776 (9th Cir. 2003) ("[T]he Supreme Court has
unmistakably held that nondiscriminatory state laws that apply to
Native Americans outside of Indian country may be preempted only
by an `express federal law to the contrary,' not by a generalized
federal policy. White Mtn. Apache Tribe v. Bracker, 448 U.S.
136, 144 n.11 (1980)."). 2003 WL 21524776 * 6. See also Blunk
v. Arizona Dep't of Transp., 177 F.3d 879, 882-84 (9th Cir. 1999)
("White Mountain balancing test" does not apply outside of Indian
country).
23666 P.2d 1015, 1022 n.5 (Alaska 1983).
24Id. at 1017.
25Id. at 1022.
26Id. at 1022 n.5.
27In Dist. of Columbia v. Catholic Univ. of Am., 397 A.2d 915, 921-
22 (D.C. 1979); Our Savior Lutheran Church v. Dep't of Revenue,
562 N.E.2d 1198, 1201 (Ill. App. 1990); and United Way of the
Midlands v. Douglas County Bd. of Equalization, 337 N.W.2d 103,
107 (Neb. 1983), all cited in footnote 18 of the dissenting
opinion, the unused space, when used, was intended to be used for
tax-exempt purposes. By contrast, in the present case it is
unknown how the unused space will be used, but it appears that at
least for near-term purposes it will either be leased to others
or used for other programs of KIC. See supra page 3.
28See Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163 (1989),
where the Court declined to apply the Ramah/Bracker implied
preemption approach to a state severance tax on oil produced by
non-Indians on a reservation. One of the reasons given for this
conclusion was that the state provided substantial services to
the tribe and to the oil producer, whereas Ramah and Bracker
"involved complete abdication or noninvolvement of the State in
the on-reservation activity." Cotton Petroleum Corp., 490 U.S.
at 185.
29Following a New Mexico Court of Appeals case, Ramah Navajo Sch.
Bd., Inc. v. New Mexico Taxation & Revenue Dep't, 977 P.2d 1021
(N.M. App. 1999), cert denied, 981 P.2d 1207 (N.M. 1999), cert
denied, 528 U.S. 928 (1999), the superior court found that the
borough taxes were also preempted under the "general preemption
doctrine." However, as Congress has not overtly preempted the
tax, and because state and federal laws do not conflict in this
area, the borough is not barred by federal preemption from taxing
the space in the building not dedicated to use by the clinic.
See Tlingit-Haida Reg'l Elec. Auth. v. State, 15 P.3d 754, 766-67
(Alaska 2001).
30See Kenai Peninsula Borough v. Port Graham Corp., 871 P.2d 1135
(Alaska 1994); Kenai Peninsula Borough v. Cook Inlet Region,
Inc., 807 P.2d 487 (Alaska 1991).
31Slip Op. at 7; Ramah Navajo Sch. Bd., Inc. v. Bureau of Revenue
of N.M., 458 U.S. 832, 838 (1982).
32Ramah, 458 U.S. at 838.
33Id. (quoting White Mountain Apache Tribe v. Bracker, 448 U.S.
136, 144-45 (1980)).
3425 U.S.C. 450-458bbb-2 (2001).
3525 U.S.C. 1601-1683 (2001).
3625 U.S.C. 450j-1(a)(1) (2001); see also Ramah Navajo Sch. Bd.,
Inc. v. N.M. Taxation & Revenue Dep't, 977 P.2d 1021, 1033 (N.M.
App. 1999), cert. denied, 981 P.2d 1207 (N.M. 1999), cert.
denied, 528 U.S. 928 (1999) ("Congress has provided that Indian
communities will not suffer financially by the transfer of
services from the federal government to tribal agencies. . . .
The Act's purpose of providing tribes with the same funding that
the federal agency would receive for the same service is undercut
if the State imposes a tax that makes performance of the service
more expensive for the tribe than for the federal agency.").
37Ramah, 458 U.S. at 842.
38Imposing the tax in this case will result in KIC having
$12,462.12 less to provide medical services. This effect does
not seem compatible with Congress's intent, in enacting the
ISDEAA, to see that those operating under self-determination
contracts would receive the same amount of funding as would the
federal government if one of its departments was still providing
the services in question. In addition, imposing a tax on KIC for
space that it could have decided to use in the future for clinic
space may well foreclose that possibility by creating a present
need to generate revenue from the space. This effect seems
contrary to the federal interest, evident in the IHCIA, in
promoting Indian health care. See, e.g., 25 U.S.C. 1601(b)
(2001) ("A major national goal of the United States is to provide
the quantity and quality of health services which will permit the
health status of Indians to be raised to the highest possible
level and to encourage the maximum participation of Indians in
the planning and management of those services.").
39Ramah, 458 U.S. at 843, 845.
40Id. at 845.
41666 P.2d 1015 (Alaska 1983).
4225 U.S.C. 465 (2001); 666 P.2d at 1018.
43666 P.2d at 1019.
44Id. at 1022.
45Id. at 1023.
46Id.
47Cotton Petroleum Corp. v. New Mexico, 490 U.S. 163, 177 (1989).
48Cf. Dist. of Columbia v. Catholic Univ. of Am., 397 A.2d 915,
921-22 (D.C. 1979) ("A school the size of Catholic University
must have some flexibility in its operation and its exempt status
should not be disturbed merely because it elects, for a given
period, not to use a given classroom, or portion of a dormitory,
or other building . . . ."); Our Savior Lutheran Church v. Dep't
of Revenue, 562 N.E.2d 1198, 1201 (Ill. App. 1990) ("We do not
think that mere temporary vacancy or lack of use of a portion of
an otherwise exempt parcel of property renders that portion
taxable. To hold that when a portion of a building otherwise
used for an exempt purpose becomes temporarily vacant or unused
it loses its exempt status is nonsensical and impractical of
application."); United Way of the Midlands v. Douglas County Bd.
of Equalization, 337 N.W.2d 103, 107 (Neb. 1983) ("The facts here
are similar to the not unusual situation of unused rooms in a
charitable hospital or in the dormitory of an educational
institution. Oftentimes a qualified organization acquires or
maintains building space in reasonable anticipation of full
occupancy for an exempt purpose but cannot do so because of
economic conditions or other legitimate reasons.").
