Is the Eastern Band of Cherokee Indians eligible to receive grants from the North Carolina Clean Water Management Trust Fund?

Plain-English summary

NC's Clean Water Management Trust Fund (CWMTF) was created in 1996 to fund water-quality projects across the state. Under N.C.G.S. § 113-145.4(a), grants from the Fund can go only to three categories of recipients:

1. A State agency;
2. A local government or other political subdivision of the State or a combination of such entities;
3. A nonprofit corporation whose primary purpose is the conservation, preservation, and restoration of NC's environmental and natural resources.

The Eastern Band of Cherokee Indians, whose reservation lands include extensive watershed property in western NC, was interested in CWMTF funding. The Fund asked the AG whether the Tribe was eligible.

Nonprofit category, easy no. The Tribe is not a nonprofit corporation with a primary purpose of conserving NC's environmental resources. That left the State-agency and local-government categories as the only possibilities.

State-agency or local-government? Also no. The AG worked through the Tribe's complex legal status:

• Until 1835, the Cherokee were a separate sovereign nation. The Treaty of Echota that year forced the cession of lands east of the Mississippi and the Trail of Tears removal. About 1,200 Cherokee remained in NC.
• By 1868, members of the Eastern Band had become NC state citizens, and Congress had directed the Secretary of the Interior to supervise the Eastern Band like other tribes.
• In 1889, the NC legislature issued a state corporate charter to the Eastern Band, giving it power to sue and be sued and other corporate powers.
• Federal courts have repeatedly held that none of these state-citizenship and state-charter events converted the Tribe into a state agency or political subdivision. The Eastern Band is "a domestic, dependent nation" with retained inherent sovereign powers (Wildcatt v. Smith, 69 N.C. App. 1 (1984)).

The decisive federal case was Toineeta v. Andrus, 503 F. Supp. 605 (1980), which the AG quoted at length. That decision concluded: "The granting of a charter of incorporation to the Tribe by the State of North Carolina does not make the Tribe an arm or agency of the State." A series of Fourth Circuit decisions reaching back to 1897 had reached the same conclusion: the Eastern Band of Cherokee Indians is an Indian Tribe under the U.S. Constitution and laws, not a NC municipal corporation or state agency.

The "local government" definition didn't help either. NC statutes define "local government" or "unit of local government" in terms of political subdivisions and special-purpose districts created by the State legislature. G.S. § 120-30.42 lists counties, cities, towns, villages, sanitary districts, mosquito control districts, hospital districts, sewerage and water districts, airport districts, and county and city boards of education. None of those describe an Indian tribe.

Bottom line. As § 113-145.4(a) was then written, the Eastern Band of Cherokee Indians was ineligible for a CWMTF grant. The General Assembly would have to amend the statute, either by defining "local government" to expressly include the Tribe or by adding a fourth recipient category, to make the Tribe eligible.

On state regulation of tribal activities. The AG also briefly answered a related question about NC's ability to regulate Tribal activities. The answer was case-by-case: it depends on the specific regulation, how much the federal government has occupied the field, and the scope of tribal self-governance. No general rule.

Currency note

This opinion was issued in 1998. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

NC has since amended several statutes to expressly include the Eastern Band of Cherokee Indians as an eligible recipient or partner in specific programs. The General Assembly added explicit Tribal eligibility to certain natural-resource and economic-development statutes through individual amendments rather than a blanket recategorization. Anyone checking current CWMTF eligibility (or the eligibility of the Tribe for any specific NC grant program) should pull the current text of the program's statute and look for express Tribal references.

Common questions

Q: What is the Eastern Band of Cherokee Indians?
A: A federally recognized Indian tribe whose tribal lands (the Qualla Boundary) lie in the mountains of western NC. The Eastern Band consists of descendants of Cherokee who escaped or were exempted from the Trail of Tears removal. The Tribe is governed by a Principal Chief, Vice Chief, and Tribal Council.

Q: Why couldn't the Tribe just be treated like a "political subdivision"?
A: Because federal and state courts have repeatedly held that NC's state-citizenship and state-corporate-charter actions do not change the Tribe's status as a domestic dependent nation under federal Indian law. State and local sovereigns are creatures of the State; tribes are something different.

Q: Did the AG say the Tribe should be ineligible as a matter of policy?
A: No. The AG was answering a legal question about the statute as written. The opinion explicitly noted that the legislature could amend the statute to make the Tribe eligible, and offered two drafting paths (broaden "local government" or add a fourth category).

Q: Could the Tribe still get CWMTF funding indirectly?
A: The opinion is silent on this. In principle, the Tribe could partner with an eligible recipient (a state agency, a local government, or a conservation nonprofit) on a joint project. Whether the CWMTF would approve such an arrangement is a programmatic question, not a legal one.

Q: Does this opinion affect other NC grant programs?
A: Only by analogy. Each program has its own eligibility statute. The principle here is that "State agency" and "local government" in NC statutes generally mean political subdivisions created by the State, not Indian tribes. A program statute that wants to include the Tribe needs to say so explicitly.

Q: What is the difference between federal recognition and state recognition?
A: Federal recognition (which the Eastern Band has) confers tribal sovereignty under federal law, including access to federal Indian programs and government-to-government dealings with the federal government. State recognition is a separate state-law status. NC also recognizes several state-recognized tribes (Lumbee, Haliwa-Saponi, Coharie, etc.) that lack federal recognition. The CWMTF eligibility question would arise differently for state-recognized tribes; the AG's analysis addresses the Eastern Band's specific federal status.

Background and statutory framework

NC's Clean Water Management Trust Fund was created in 1996 (S.L. 1996, 2d Ex. Sess., ch. 18, s. 27.6) with a dedicated revenue stream to fund water-quality protection and restoration. The Fund is administered by an independent board of trustees and makes competitive grants to eligible recipients for stream buffer protection, wastewater facility upgrades, riparian land acquisition, and similar projects.

The eligibility list in § 113-145.4(a) is narrow by design. The Fund's policy framework anchored funding to entities that are accountable to the public through democratic political processes (State agencies, local governments) or that have a primary purpose aligned with the Fund's mission (conservation nonprofits). Indian tribes do not fit either model: they are accountable to their tribal governments under federal law, not to State or local political processes; and they are general-purpose governments, not single-mission conservation nonprofits.

The AG's analysis sits in a long line of federal cases preserving the distinct legal status of tribes against state efforts (intentional or accidental) to reclassify them. Cherokee Nation v. Georgia, 30 U.S. 1 (1831), Chief Justice Marshall's foundational decision, described tribes as "domestic dependent nations." Federal courts in the Fourth Circuit have applied that framework specifically to the Eastern Band since at least United States v. Boyd in 1897.

The opinion is a clean example of statutory interpretation under a closed eligibility list. Where the statute provides a fixed set of categories and the applicant does not fit any, the answer is no, even if policy considerations might cut the other way. The fix is legislative, not interpretive.

Citations

• N.C. Gen. Stat. § 113-145.4(a) (Clean Water Management Trust Fund grant eligibility)
• N.C. Gen. Stat. § 120-30.42 (definition of "unit of local government" listing political subdivisions)
• N.C. Gen. Stat. § 158-32(5) (definition referencing local government)
• N.C. Gen. Stat. § 159I-3 (definition referencing local government)
• Wildcatt v. Smith, 69 N.C. App. 1, 316 S.E.2d 870 (1984) (Eastern Band as domestic dependent nation with inherent sovereign powers)
• Toineeta v. Andrus, 503 F. Supp. 605 (1980) (Eastern Band is an Indian tribe, not a NC municipal corporation or state agency)
• Wright and Haile v. Saunooke, 246 F.2d 293 (4th Cir. 1957)
• United States v. Boyd, 83 F. 547 (4th Cir. 1897)
• United States v. Colvard, 89 F.2d 312 (4th Cir. 1937)
• United States v. 7,405.3 acres of land, 97 F.2d 417 (4th Cir. 1938)
• Blair v. McAlhaney, 123 F.2d 142 (4th Cir. 1941)
• United States v. Parton, 132 F.2d 886 (4th Cir. 1943)

Source

• Landing page: https://ncdoj.gov/opinions/eligibility-of-the-eastern-band-of-cherokee-indians-for-a-grant/

Original opinion text

Best-effort transcription based on the text NCDOJ publishes at the landing URL; the published page omits the salutation block and may not be the full opinion. The linked landing page is authoritative.

• (1)
• A State agency;
• (2)
• A local government or other political subdivision of the State or a combination of such entities;
• (3)
• A nonprofit corporation whose primary purpose is the conservation, preservation, and restoration of our State's environmental and natural resources.

N.C.G.S. § 113-145.4(a). The Eastern Band of Cherokee Indians clearly does not constitute a nonprofit corporation with the primary purpose of conserving, preserving or restoring the State's environmental and natural resources. Thus, the remaining question is whether the Tribe has, by virtue of its history, become either a state agency or a local government.

Generally, federally recognized tribes retain powers inherent to a sovereign state, except as qualified and limited by Congress. The Eastern Band of Cherokee Indians has a more complex historical relationship to the State of North Carolina than is usual, however, and that history must be considered in order to answer your question. Until 1835, the Cherokee living in North Carolina and what is now South Carolina, Tennessee, Georgia and Alabama, were members of a separate, sovereign nation with inherent powers of self government. By the Treaty of Echota in 1835, the Cherokee ceded all lands east of the Mississippi River to the United States and agreed to relocate to the west. Some 1,200 Cherokee remained in North Carolina, however, and for several years their status was uncertain.

The federal government, exercising its plenary power over Indians, finally provided that those Cherokee remaining in North Carolina would thereafter be subject to state law and by 1868 members of the Eastern Band of Cherokee had become state citizens. Meanwhile, the Cherokees' relationship with the federal government continued to develop. By 1868, Congress had instructed the Secretary of the Interior to exercise the same supervisory role over the Eastern Band of Cherokee Indians as over other Indian tribes. Later acts of Congress also recognized the Eastern Band of Cherokee Indians as having full tribal status even though tribe members were also citizens of North Carolina. In 1889, the North Carolina legislature issued a corporate charter under the name of the Eastern Band of Cherokee Indians with power to sue and be sued and to exercise other powers belonging to corporations under the laws of the State.

The CWMTF statutes do not define "local government" or "unit of local government", but a number of other state laws define the term to include counties, municipal corporations, special purpose districts and public authorities. For example, N.C.G.S. §§ 120-30.42 defines "unit of local government" as follows:

…"unit of local government" means counties, cities, towns, and incorporated villages, sanitary districts, mosquito control districts, hospital districts, metropolitan sewerage districts, metropolitan water districts, county water and sewer districts, special airport districts, water and sewer authorities, county boards of education and city boards of education.

Definitions in other sections of the General Statutes similarly define "local government" in terms of political subdivisions and special purpose districts created by and deriving their authority from the State by action of the legislature. See, e.g. N.C.G.S. §§ 158-32(5) and 159I-3.

Based on the history of federal/state relations with the Eastern Band of Cherokee Indians, our courts have concluded that "the Eastern Band [of Cherokee Indians], like all recognized Indian tribes, possesses the status of a 'domestic, dependent nation', with certain retained inherent sovereign powers." Wildcatt v. Smith, 69 N.C. App. 1, 5-6, 316 S.E.2d 870 (1984). The federal appellate courts have also concluded that neither North Carolina citizenship nor the issuance of a state charter to the Eastern Band of Cherokee Indians converted the Tribe into a state agency or political subdivision of the State:

The granting of a charter of incorporation to the Tribe by the State of North Carolina does not make the Tribe an arm or agency of the State…If the charter could be construed as that of a municipal corporation the prior decisions of the Court of Appeals for the Fourth Circuit and the Acts of Congress would nullify such construction because it is now a tribe.

In Wright and Haile v. Saunooke, 246 F.2d 293 (4th Cir. 1957); United States v. Boyd, 83 F. 547, 555 (4th Cir. 1897); United States v. Colvard, 89 F.2d 312 (4th Cir. 1937); United States v. 7,405.3 acres of land, 97 F.2d 417 (4th Cir. 1938); Blair v. McAlhaney, 123 F.2d 142 (4th Cir. 1941), and United States v. Parton, 132 F.2d 886 (4th Cir. 1943), the Court has held that the Eastern Band of Cherokee Indians is an Indian Tribe within the meaning of the Constitution and laws of the United States. These decisions and the Acts of Congress clearly dictate the conclusion that the Eastern Band of Cherokee Indians is not a municipal corporation or any other agency of the State of North Carolina… Toineeta v. Andrus, 503 F. Supp. 605, 608 (1980).

The decision in Toineeta compels the conclusion that the Eastern Band of Cherokee Indians is neither a "state agency" nor a "local government" within the meaning of N.C.G.S. § 113-145.4(a) as currently written. The statute would have to be amended (either to define "local government" to expressly include the Cherokee or by designating the tribe as a fourth category of grant recipients) in order to make the tribe eligible to receive grants from the Clean Water Management Trust Fund.

You also asked about the State's ability to regulate Tribal activities. Because of the complex nature of the relationship between the Tribe and both the State and federal governments, there is no simple answer to that question. The answer will be different depending on the specific nature of the State regulation; the degree to which the federal government has regulated within the same subject area; and the scope of tribal self-governance. I would suggest that those issues be addressed as they arise.

Thank you for your inquiry. Please advise if we can be of further assistance.

signed by:

Daniel C. Oakley
Senior Deputy Attorney General

Robin W. Smith
Assistant Attorney General