WAMPSVILLE, N.Y. - Gov. George E. Pataki has brokered a tentative deal with the Oneida Indian Nation that, if ratified by the state Legislature and Congress, could resolve a bitter 31-year-old dispute over a quarter-million acres that the Oneidas maintain the state bought from them illegally through treaties in the 19th century.
Under the agreement, the state and federal governments would pay three branches of the tribe $500 million and the tribe would drop its claim to most of the land. Tribal leaders would use part of the money to buy back about 35,000 acres from willing sellers in Madison and Oneida counties, with about 5,000 acres set aside as wilderness. The land would not be contiguous, and the current owners would not be forced to give up their property.
The Oneida Nation already owns 14,000 acres in the two counties.
The Indians and the state would also set up a $100 million fund to compensate the counties for lost tax revenue and would agree not to acquire more than 5,000 acres in the first 10 years of the deal. To mollify angry merchants who say that Indian convenience stores undercut their prices, the Oneidas would also charge an Indian tax equivalent to the sales taxes collected at other stores.
The tentative agreement assumes that one of the three Oneida branches, a group from Wisconsin, will agree to end the current litigation, which is far from certain. Pataki, however, played down the possibility of the Wisconsin Oneidas scuttling the deal.
The deal comes as the New York Oneidas are negotiating with the state over a compact for a second casino in Sullivan County, and though the two negotiations are not officially linked, the Pataki administration anticipates putting some of the state's revenue from the new casino in the fund for the counties.
If approved by Congress, the state Legislature and the people of the Oneida Nation, the land deal would be a major coup for Pataki, a Republican seeking re-election in the fall.
The Oneida land claim has been wending its way through federal court since 1970.
In recent years, the land claims have also provoked widespread anxiety and anger among private landowners and local government officials.
Local business owners also contend that the Oneidas' tax-free status is putting them out of business, especially given the draw of Turning Stone, the tribe's casino near Oneida, which has become one of the region's largest employers.
The claim stems from the Oneidas' contention that New York state violated the federal Indian Trade and Intercourse Act of 1790, which banned states from buying land from Indians without federal approval.
Between 1795 and 1840, the state and local governments acquired more than 270,000 acres from the Oneidas through 26 treaties and several other agreements with the Oneidas. None of those transactions were approved by Congress.
In 1985, the Oneida claim gained weight when the U.S. Supreme Court agreed with the tribe in a case involving just 900 acres.
In 1998 the Justice Department intervened in the large land-claim lawsuit on the part of the Indians, creating great anxiety on the part of local homeowners.
Later the governor prevailed on Washington to drop the homeowners from the lawsuit.
Pataki administration officials, speaking on the condition of anonymity, said that it was the Legislature's decision last fall granting the governor the ability to negotiate deals for six new Indian casinos that finally made the tentative agreement possible.
Seeing a second, more lucrative casino on the horizon, the officials said, the Oneidas agreed to accept far less land than they had originally sought, and to help finance the fund to pay the county governments in lieu of taxes.
A final deal still faces several obstacles. To begin with, the Wisconsin branch has been pushing the Pataki administration for a Catskills casino, and has threatened to continue the land-claim lawsuit if it does not get one, officials said, speaking on the condition of anonymity.
The governor and leaders of the New York Oneidas pledged to fight together against any legal action the Wisconsin Oneidas might take. Without a united front, the out-of-state group has little chance of prevailing in court, Pataki said.
The Legislature must also appropriate the money for the deal, and getting the Assembly's Democratic majority and Senate's Republican majority to agree on such a large appropriation is never easy. Such bills often become entangled in extraneous legislative bargains built into the state's budget.
Congress must also contribute $250 million to make the proposal work.
Even so, the tentative agreement was the most hopeful moment in many years of stymied talks that have frustrated mediators and federal jurists alike.
"This agreement in concept is an historic step toward resolving an issue that has plagued the region for many years," said the highest-ranking official in the Oneida Indian Nation, Ray Halbritter.