On Jan. 3, 2008, Assistant Department of the Interior Secretary Carl Artman unilaterally issued a six-page memorandum titled “Guidance on taking off-reservation land into trust for gaming purposes” (Guidance). The department then cited the Guidance in denying fee-to-trust applications for 11 tribes. Fee-to-trust applications for another 12 tribes were returned for incompleteness and other reasons. The Guidance will undoubtedly impact action on other pending gaming trust applications and possibly non-gaming trust applications as well. But no one knows — or can know — either the limits or full impact of its future application, because of the unilateral and non-consultative manner in which the Guidance was issued.
The Test
The Guidance purports to adopt a new “commutable distance” test for evaluating off-reservation gaming proposals under the Indian Gaming Regulatory Act (IGRA). The test essentially requires a determination as to whether the anticipated benefits of off-reservation gaming outweigh the potential negative consequences to the tribe in terms of preservation and development of its existing community and local economy.
The Guidance refrains from specifying a mileage limit, and neither the Indian Reorganization Act of 1934 (IRA) nor IGRA mention distance as a factor for BIA consideration in determining gaming or non-gaming-related trust applications. The distances involved in the applications that the BIA denied on Jan. 3 ranged from as close as 70 miles to as far away as 550 miles from existing reservations. Whether any particular distance satisfies the commutable distance test, however, is elusive and uncertain to everyone the test may affect.
The Guidance seeks to link the vaguely articulated commutable distance test to long-established IGRA policy and interpretations. It recognizes that IGRA was clearly intended to promote tribal economic development by means of Indian Gaming, but then also asserts that IGRA “was not intended to encourage the establishment of Indian Gaming facilities far from existing reservations.”
Under the Guidance, the BIA presumably will now give greater scrutiny to a tribe’s land-into-trust application for an off-reservation casino in order to determine the casino’s likely impact on the tribe’s sovereignty and existing reservation by using the commutable distance test. The new policy will also accord greater weight to the concerns and interests of local and state governments where the proposed new trust acquisition is located, through use of the commutable distance test as well.
It is certainly not debatable that IGRA intended to give fair consideration to the concerns of local and state governments, in part through limiting the expansion of Indian Gaming to land not in trust at the time of IGRA’s enactment, except in certain specified exceptions. However, the language of the Guidance suggests a new and stronger emphasis on protecting the tax base and community environments of states and non-tribal communities from the potential political, social and economic impacts of off-reservation tribal trust acquisitions by distant tribes for gaming enterprises.
In particular, in denying the gaming trust acquisitions earlier this year, BIA officials mainly relied on the commutable distance test and cited the distance between the proposed new gaming site and the tribe’s existing reservation as the principal basis for its decision. The BIA denial letters said that because of the distance, tribal members would not directly benefit from jobs at the new casinos and might even be forced to leave their homes to obtain employment. For example, the letter to the chiefs of the St. Regis Mohawk Tribe of New York stated that “the operation of the gaming facility would not directly improve the employment rate of tribal members living on the reservation.” The expressed concern was that the distant location of the new proposed gaming facility could encourage and require reservation residents to leave the tribe’s existing reservation for an extended period to take advantage of the job opportunities created by the new gaming facility. The resulting departure of a significant number of reservation residents and their families could thus have serious and far-reaching implications for the remaining tribal community and its continuity. Obviously, the BIA saw such effects from distant, off-reservation Tribal Gaming as inconsistent and contrary to the stated purposes of IGRA and underlying federal Indian policy to promote and strengthen the self-government and self-sufficiency of established Indian communities and their tribal culture and economies.
Nearly identical statements were found in the trust application denial letters to the other tribes.
Challenges to the Guidance
In the aftermath of the Guidance’s issuance and related trust application denials, the House Committee on Natural Resources Oversight held hearings on the policy, focusing on how the new Guidance was developed, whether it was lawfully issued, its ramifications for all off-reservation fee-to-trust applications, and whether this signifies an attempt by the administration to change federal policy toward Indian tribes. As committee chair Nick J. Rahall (D-W.V.) put it in his opening statement, “[We] have to question if this administration is advocating a policy to keep Indians on the reservation.”
Artman’s testimony before the committee suggests that there may be a mileage cap under the Guidance that is even lower than the initial wave of denials. “We are taking land into trust that is off-reservation,” Artman testified. ”Most of those are 40 miles or below.”
The reaction of the tribes to the Guidance has been swift and almost unanimously negative. Of particular concern to tribes was the absence of any meaningful consultation prior to its issuance, which left the tribes feeling that they had been blind-sided by a new criterion with no prior notice or opportunity for input before.
Consistency with Purposes of IRA and IGRA?
In order to put this controversy in context, it is necessary to review two critical pieces of legislation — the IRA and the IGRA — and their relationship to the land-into-trust question.
The Indian Reorganization Act of 1934, the so-called Wheeler-Howard Act, was designed with two objectives. The first was to reverse the effects of the Dawes Act of 1887 and end the era of allotment, termination and forced assimilation by creating strong tribal governments on established federal reservations. The second objective was to reverse the loss of tribal lands and, if possible, re-establish the aboriginal territories of many tribes. The scope of this problem is highlighted by consideration of the following:
• Between 1887 and 1934, the U.S. government took more than 90 million acres from the tribes without compensation — nearly two-thirds of all reservation lands — and sold it to settlers.
• Only about 8 percent of that land has been reacquired in trust status since the IRA was passed 74 years ago.
There is a more specific purpose behind IRA, namely to rehabilitate Indians’ economic and political life by establishing “the machinery whereby Indian tribes would be able to assume a greater degree of self-government, both politically and economically.” (Morton v. Mancari, 417 U.S. 535, 542 (1973).)
IGRA is more specific than IRA in furthering this federal Indian policy, by establishing a statutory framework for tribes to conduct and regulate gaming on their Indian lands as a means of promoting tribal economic development, self-sufficiency, and strong tribal government operations and programs. IGRA attempts to balance the interests and concerns of tribes and the states regarding Indian Gaming and its expansion to new reservation or trust lands after IGRA’s enactment. Sections 20(a) and (b) of IGRA, 25 U.S.C. § 2719 (b), in particular, provide the principle provisions addressing this statutory purpose.
Section 20(a) of IGRA provides for a general prohibition of Indian Gaming on off-reservation land acquired after IGRA’s Oct. 17, 1988, enactment, subject to several exceptions listed in Section 20(b). One of the persistent issues since IGRA’s enactment has focused on how narrow and restrictive those listed exceptions were intended to be construed by the BIA. The new commutable distance test articulated by Artman in his Guidance memorandum is clearly intended to significantly narrow and restrict those statutory exceptions. In response, tribes argue that the Guidance and commutable distance test are arbitrary and capricious, and inconsistent with the purposes of both IRA and IGRA, because they artificially restrict the ability of tribes to reach government-to-government accord with the states to reacquire their former aboriginal lands as IRA intended, or to acquire agreed equivalent lands that offer greater gaming or other economic potential than their current reservation as IGRA intended.
Probably the most relevant Section 20 exception adversely affected by this new test is the so-called “two-part determination” exception (25 U.S.C. § 2719 (b)(1)(A)), where land may be taken into trust for gaming if the secretary of the interior determines that the acquisition would be in the best interest of the Indian tribe and would not be detrimental to the surrounding community, and the governor of the state where the land is located concurs with the secretary’s determination. Interestingly, there is absolutely no mention whatsoever in IGRA of distance from the tribal applicant’s reservation as a factor for the secretary’s consideration in making the required two-part determination or in implementing any of the other listed exceptions to Section 20’s general prohibition of Indian Gaming on land taken into trust after IGRA’s enactment. In fact, it would seem logical that distance should have no relevance if the state, through its governor, concurs with the secretary’s determination.
Nevertheless, the assistant secretary’s Guidance, for the reasons articulated therein, posits that the distance from the existing reservation is not only relevant, but can be determinative of all Section 20 exceptions, including the two-part determination exception.
Likely Impact on Other Section 20 Exceptions
Another sub-section of Section 20 in IGRA (25 U.S.C. § 2719 (b)(1)(B)) applies to post-1988 trust acquisitions of land 1) for gaming purposes, 2) as part of settlement of land claims, 3) for initial reservations of newly recognized tribes, or 4) restoration of land for restored tribes. Absent state or local tribal and non-tribal consent to the trust acquisition, it would appear that distance and temporal factors are more logically relevant to these exceptions. At a minimum, it is reasonably predictable that the new commutable distance test will likely be applied to each of these Section 20 exceptions as well, to ensure consistency in implementation and decision-making by the BIA under Section 20.
The BIA has been in the process of promulgating regulations for all of the Section 20 exceptions in IGRA for several years, which makes issuance of the Guidance memorandum and new commutable distance test all the more objectionable. These proposed rules have been properly subject to a lengthy tribal consultation process; however, the date of their final publication remains uncertain. In contrast, absolutely no meaningful consultation occurred prior to issuance of the Guidance. It was issued with no advance notice or warning to the tribes and came as a total surprise. Therefore, the BIA’s unilateral devisal and application of a new commutable distance test, with no prior consultation or connection to the proposed Section 20 regulations, has understandably raised the ire of all affected or potentially affected tribes.
If, as Artman indicated in his testimony before the House Natural Resources Committee, this new test may also be applied to nongaming-related trust acquisitions, tribal economic development may be greatly constricted to the nearby areas surrounding their existing reservations by administrative fiat without the basis of statute or promulgated rule. This potential trend is a definite threat to the goals and purposes of IRA and IGRA, and the federal Indian policy they are intended to promote and further.
Conclusion
Absent state and local tribal and non-tribal consent to post-1988 trust acquisition, distance, cultural nexus and temporal factors have always been relevant to the BIA’s consideration of off-reservation, new reservation or restored lands trust acquisitions. These factors are part and parcel of accurately evaluating a tribe’s historical and current cultural ties and community connection to a proposed land acquisition — criteria which have been commonly weighed and considered in the past by the BIA to determine whether the prohibition and exceptions of Section 20 are applicable to the trust acquisition. In this context, the Guidance is clearly a well-intended attempt to clarify application of this past analytical practice by the BIA. However, its unilateral issuance has had an opposite effect, instead highlighting the need for promulgated federal rules regarding the governing administrative criteria that BIA will utilize in deciding when the Section 20 prohibition doesn’t apply as a result of either a two-part secretarial determination and governor’s concurrence, or the other specified exceptions in Section 20. Such rules can and must only come from meaningful government-to-government consultation, which unfortunately never preceded issuance of the assistant secretary’s controversial, unilateral Guidance memorandum.
The subsequent negative tribal reactions to that memorandum vividly demonstrate the confusion, suspicion and harm that the absence of such consultation causes. In retrospect, such reactions could have been effectively avoided through meaningful government-to-government consultation and publication of resulting rules and their underlying rationale and limitations. Because of the lack of prior consultation, the rationale and limits of the new commutable distance test are unknown and ominous to all potentially affected tribes. Instead of certainty, the surprise issuance of the Guidance memorandum has bred tribal uncertainty and fear. Affected tribal and non-tribal parties have no reliable way of knowing what to expect from the BIA on pending trust applications. And consequently, the assistant secretary’s unilateral Guidance memorandum and new commutable distance test provide little or no assurance of either consistent or predictable consideration of both parties’ interests in the BIA’s application of the Section 20 exceptions, in furtherance of the stated goals and purposes of IRA and IGRA or their underlying federal Indian policy.
Pat Leen, Co-Owner of Gaming Regulatory Consultants, was a founding member of the Michigan Gaming Control Board. He can be reached at (517) 256-8619 or pleen@grcgaming.com.
Tom Nelson, Co-Owner of Gaming Regulatory Consultants, was the first Director of Licensing and Enforcement for the MGCB and served for 22 years as Michigan’s Assistant Attorney General. He can be reached at (719) 440-6611 or tnelson@grcgaming.com.
Nelson Westrin is a Partner for Honigman Miller Schwartz and Cohn LLP in Lansing, Mich., where he specializes in federal Indian law and gaming regulatory matters.
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