Among the changes proposed by the state are the elimination of most favored nation clauses and border tax rates. Under the current compacts, lower tax rates are available for tribal smoke shops within 20 miles of Oklahoma’s borders with Arkansas, Kansas or Missouri, which have lower tobacco tax rates than non-tribal Oklahoma smoke shops.

 

MUSKOGEE, Okla. – Representatives from the State of Oklahoma and several area tribes met Tuesday to begin preliminary compact discussions.

“This is just to open dialogue,” Native American liaison Jacque Secondine Hensley said about the Muskogee meeting. “No one will walk away with a compact in hand.”

Representatives from the Absentee Shawnee Tribe, Cherokee Nation, Citizen Potawatomi Band, Pawnee Nation, Ponca Tribe, Sac and Fox Tribe, Seminole Nation, United Keetoowah Band of Cherokee Indians and the Wyandotte Tribe were among those attending the last of six meetings held across Oklahoma by state officials in advance of tobacco compact negotiations.

Tobacco compacts for 28 of Oklahoma’s tribes expire in June 2013. Nine tribes do not have tobacco compacts with the state and the Muscogee (Creek) Nation signed one earlier this year that is in effect through Aug. 30, 2107.

Steven Mullins, general counsel for Gov. Mary Fallin, announced that he, along with Secretary of State Glenn Coffee, will be the lead negotiators for the state when formal negotiations begin in 2013 and outlined the changes that will be in the state’s initial offers to tribes.

“All nations aren’t the same,” he said. “We will treat each one individually. I am not going to make everyone accept a compact negotiated by 10 powerful tribes.”

Among the changes proposed by the state are the elimination of most favored nation clauses and border tax rates. Under the current compacts, lower tax rates are available for tribal smoke shops within 20 miles of Oklahoma’s borders with Arkansas, Kansas or Missouri, which have lower tobacco tax rates than non-tribal Oklahoma smoke shops.          

“We do not want to use border rates,” Mullins said. “They create an unfair advantage for some tribes and create animosity. Having said that, that doesn’t necessarily mean ‘no more border rates.’ We just won’t start with them when we start negotiations.”

The state also wants to eliminate some tax rate recipients. Under the current compacts, the $10.30 tax on each carton is divided among three or four recipients: the state, the tribe, the retailer and, depending on the compact, the customer via reduced rates. In its first offer, the state will eliminate retailers and the reduced rate option, creating a two-tier system in which the tax revenue from each carton will only divided between the tribe and the state.

“We want to agree on a tax rate and what portion we each get,” Mullins said. “We will make a base offer on the percentages, but I don’t know yet what that will be.”

The proposed changes prompted one tribal leader, Chairman Rocky Barrett of the Citizen Potawatomi Nation, to ask whether a third party would be getting involved in the negotiations.

“Is a big chain of convenience stores in Tulsa going to dictate the rates?” he asked, referring to QuikTrip Corporation, whose leadership has criticized the different tax rates used by tribal smoke shops compared to non-tribally owned retailers.

Mullins said the Tulsa-based chain was not allowed in to the Muscogee (Creek) Nation’s compact negotiations earlier this year and would not be part of the 2013 discussions.

“It’s fair to say that we respect your sovereignty and ask you to respect the state’s,” Mullins said. “We have a better relationship now than we’ve had in the past. It is not ever going to be perfect, but we are making great strides.”

Other compact areas were also touched on, including law enforcement and gaming, although the latter is not up for renewal statewide until 2020.

“We are not initiating those discussions,” Mullins said. “Some tribes are and have approached us about it since they are using eight- and 10-year business plans and that’s fine.

“We are willing to talk, but will not enter into negotiations now. We will respect the compacts that are in place and will enforce them.”

Like the other five meetings across the state, Tuesday’s meeting was held behind quasi-closed doors. The governor’s office does not meet the definition of “public body” outlined in the Oklahoma Open Meetings Act. As sovereign nations, federally-recognized tribes do not fall under that law, prompting Gov. Fallin’s general counsel to describe the meetings as not secret, but not open.

“This has to do with public business,” said Joey Senat, a board member of Freedom of Information Oklahoma, Inc., and an associate professor at Oklahoma State University’s School of Strategic and Mass Communications. “This is using the Open Meeting Act to say “Well, we don’t have to have it open.' However, nothing prohibits them from having the meetings open to the public.”

Members of the public, including the press, could only stay at the compact discussions if all tribal representatives present consented. At Tuesday’s meeting, members of the media were allowed to stay for the first 85 minutes before being asked to leave at the request of two unnamed tribes.

“It’s a fine distinction: the public knows the meeting is going on, but can’t be in there,” Senat said. “That’s not much consolation. It also allows for favoritism: what if one member of the press or the public is allowed to stay but another is excluded?

“Clearly there’s an interest on both sides – both with tribes and the state – in these meetings. There’s jobs and money involved; the public on both sides have an interest in that. Having those discussions with the public present helps everyone understand the final agreement, including what made it in and what didn’t.”