The administrative process by which tribal nations obtain trust status for land to conduct off-reservation gaming or other activities has been criticized by some as cumbersome, lengthy, and overly burdensome.1 With recently implemented amendments to 25 Code of Federal Regulations (CFR) part 151, the Biden Administration seeks to make this process more favorable to Tribes and to economic development through gaming.
Background
In 1934, Congress gave the US Department of the Interior (the Department) the power to take land into trust for individual Native persons or Tribes through the Indian Reorganization Act (IRA).2 The purpose of this Act was to allow Tribes to reclaim lands that may have been removed from tribal ownership to be used to “strengthen self-determination and sovereignty.”3 The land-into-trust or fee-to-trust process allows the Department to hold land that the Tribe owns for the Tribe’s benefit. The benefits of trust status include sovereign immunity within the bounds of the land; freedom from state and local jurisdiction; exemption from taxation of the land; new market tax credits; Indian employment tax credits; tax-exempt financing; discounted leasing rates; federal contracting preferences; foreign trade zone customers duty deferral, elimination or reduction; state/county land use exemptions; and accelerated depreciation for business property on the land.4 Trust land is particularly important for Tribes looking to conduct gaming activity: A Tribe can only conduct Class III (Las Vegas-style) gaming activities on non-reservation lands acquired after 1988 which are taken into trust.5
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In order to be eligible for trust land, a Tribe must be federally recognized and have been “under Federal jurisdiction” in 1934.6 Regulations codified at 25 CFR part 151 govern this land-into-trust process. Generally, they require a detailed application demonstrating eligibility for trust land through historic evidence, consultation with state and local officials with regulatory jurisdiction over the land to be acquired, and compliance with the National Environmental Policy Act (NEPA).7
On December 5, 2022, the Department’s Office of the Assistant Secretary for Indian Affairs published proposed amendments to the regulations governing the land into trust process after consideration
of comments from the tribal community. These proposed revisions were first announced at the 2022 White House Tribal Nations Summit, held on November 30 and December 1, 2022. Secretary Bryan Newland stated that the goal of the amendment is to make this process “easier” for Tribes that have faced barriers with the preexisting system, such as costs, delays, or the complexity of the decision-making process.8 The proposed rules built upon the Secretary of the Interior’s approach, which contrasts with that of the prior administration, to streamline the land-into-trust process by returning approval authority to the Bureau of Indian Affairs (BIA) regional directors and to provide clarity on the compacting process.9
During the rulemaking comment period, the Department met with Tribal representatives during “two listening sessions and four formal consultation sessions” and reviewed comments from Indian Tribes and the public.10 Tribes were largely supportive of the amendments, but some raised concerns about presumptive acquisitions outside of a Tribe’s historic lands and wanted an equal opportunity to comment on acquisitions alongside government stakeholders.11 State and local government commenters opposed the rule on the grounds of lack of administrative authority and federalism and were concerned about the presumptions afforded to applicants, as well as the reduced role of public stakeholders in the process and decreased notice requirements.12
On December 6, 2023, a year after publishing the proposed amendments to the regulations, the Department issued its final rule.13 The updated land-into-trust rule went into effect on January 11, 2024.14 While most of the differences between the proposed version and the final rule were stylistic or clarifying, the provisions regarding evaluation of requests for land received a substantive update to ensure meaningful notice to state and local governments and opportunity for comment.
In its December press release, the Department announced that the final fee-to-trust rule furthered President Biden’s goal of “mak[ing] it easier for Tribes to place land into trust” and made the process “simpler, more efficient, and less expensive.”15 After so many years spent in limbo for some Tribes under the existing process, will this prove true in practice? Only time will tell.
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The Revised Land-into-Trust Process
Notable changes introduced in the final rule for the land-into-trust process include a 120-day maximum period of application review (compared to the existing average of 985 days with no maximum16), a new “initial Indian acquisition” method designed to make it easier for Tribes to receive their first trust land, “presumptions” of approval of a trust land applications for on-reservation acquisitions, acquisitions contiguous to a reservation, and initial acquisitions, reduced review criteria for applicants, and codification of a definition of “under Federal jurisdiction” for determination of trust land eligibility.17 Pending applications will continue under the prior procedure by default, but applicants can elect to apply the new process except for the 120-day rule.18 The final rule also clarifies that its procedures do not apply to grants of trust land by Congress or a court.19
The land-into-trust amendments create a new “presumption” of approval of a trust land application for on-reservation acquisitions, acquisitions contiguous to a reservation, and initial acquisitions, which will simplify and streamline the process for Tribes looking to acquire land already set aside by the federal government for their Tribe or for those looking to acquire trust land for the first time, even if off-reservation.20 This presumption is intended to affirm that the land is for the welfare and use of the Tribe, as well as to address the historical impact of removal of reservation land by the US government. In making all trust land determinations under the amended scheme, the Department will give “great weight” to important purposes for tribal welfare (e.g., protecting tribal homelands).21
Despite opposition from state and local governments, the Department abandoned the “bungee cord” approach for land that is not contiguous to or part of a reservation. That is, there will no longer be heightened scrutiny the greater the distance between the proposed trust land and the location of the Tribe’s reservation. The Secretary of the Interior will instead consider the location of the land broadly in determining whether to take the land into trust. For land that is an initial acquisition, the location of the land is not considered at all unless it is necessary given state and local government comments (e.g., regarding potential conflicts of land use). The rule assumes that the Tribe will benefit from the acquisition and that the Secretary will consider the location of the land and potential conflicts of land use when reviewing the state and local comments in their holistic review of the application. This is significant because it removes a prior constraint on grants of trust land located farther from the Tribe’s lands and may lead to an increase in trust land acquisitions across state lines.
CLICK HERE to read the full article, which was originally published in ALI CLE’s The Practical Real Estate Lawyer.
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