Montana is trying to force its coal-tax dispute with the Crow tribe - a case that has been kicking around the federal courts for 19 years - to yet another hearing before the U.S. Supreme Court.
The tribe won the first round in
1988, when the Supreme Court declared in a $46.8 million judgment
that the state had improperly collected coal severance taxes from
Crow-owned coal since 1976. The ruling also held that coal owned by
an Indian tribe was not subject to state taxation. However, the
tribe rejected the judgment and is holding out for its original
demand of $93 million.
But this March, Montana
Gov. Marc Racicot and Attorney General Joseph P. Mazurek refused a
Crow request to draft legislation to settle the case. The next step
for the state would be to petition the Supreme Court for an
Meanwhile, the money from the original
judgment - which would be paid from Montana's coal-tax trust fund -
is gathering interest at a rate yet to be determined by a lower
If the tribe wins, the state may wish it
had listened to former state Sen. Thomas Towe, author of Montana's
Coal Severance Tax, who urged the Legislature in 1984 to settle the
case out of court. Towe, now a Billings lawyer, recently said the
case could drag on for another five years. In the end, the state
may have to pay a potential $300 million judgment with interest
earned from the original judgment. That could wipe out the
principal balance of the Coal Tax Trust Fund, which began back in
1975 with a 30 percent severance tax on coal.
guess is that the Supreme Court will simply refuse to review it,"
Towe says. "The state should try to settle with the tribe right
now, out of the trust fund, with some negotiated rate of interest."
The Coal Severance Tax Trust Fund was set up to
help avoid a repeat of the plunder-and-run tradition of the 19th
century copper kings and, later, the Anaconda Co. The idea was to
keep some of the wealth in the state for future generations after
the resource was hauled away. Coal-tax revenues have also been used
to mitigate coal-mining-related impacts on schools, roads and other
Pat Dawson writes in