Regulatory Updates

Interior's New Commutable Distance Test for Off-Reservation Gaming

Sam Cohen
Sam Cohen

Sam Cohen, Government and Legal Specialist
Santa Ynez Band of Chumash Indians

On January 4, 2008, Carl Artman, the Assistant Secretary for the Department of the Interior (Interior) issued new “Guidance” as to off-reservation gaming and Interior sent 22 denial letters to various applicants on the Office of Indian Gaming (OIG) list of Pending Gaming Applications. This list was in part inadvertently expanded by Senator John McCain who proposed to almost completely eliminate
off-reservation gaming in his proposed Indian Gaming Regulatory Act (IGRA) amendments in 2006. The McCain amendment grandfathered in IGRA off-reservation gaming applications filed with OIG prior to April 15, 2006 and created a flurry of “prophylactic” filings. As of May 2006 there were 52 pending off-reservation gaming applications on the OIG list.

IGRA limits gaming on Indian lands to those lands within the boundaries of a tribe's reservation as of the enactment date of IGRA on October 7, 1988. Gaming on Indian lands taken into trust on behalf of a tribe after that date is limited to the exceptions in Section 20 of IGRA as codified at 25 U.S.C. Section 2719. Most of the Pending Gaming Applications on the OIG list are under the so-called “two-part” test that requires Interior to determine that such off-reservation gaming is in the best interest of the applicant tribe and would not be detrimental to the surrounding community. 25 U.S.C 2719(b)(1)(A). In addition, the governor of the state where such land is located has to “concur” with such two-part determination.

In addition, in 2005, Interior rejected a tribal-state compact between the Confederated Tribes of Warm Springs and the State of Oregon at “Cascade Locks” because the land was not already taken into trust by the federal government on behalf of the tribe. This compact was for lands to be taken into trust after October 17, 1988 and would require the approval of Interior under the two-part test and the
concurrence of the governor of the State of Oregon. This requirement to have proposed off-reservation gaming lands taken into trust before any compact approval by Interior was also incorporated in the September 2007 revision of the OIG, “Checklist for Gaming Acquisitions, Gaming-Related Acquisitions and IGRA Section 20 Determinations,” as a requirement prior to any two-part determination by Interior and any environmental review of such two-part determination.

It seems, therefore, that Interior is trying to force all off-reservation gaming applicant tribes to go first through the fee-to-trust process before (or while simultaneously) making their off-reservation gaming application to Interior/OIG. The technical rules for fee-to-trust transfers are governed by Part 151 of the Code of Federal Regulations, specifically Section 151.10 and Section 151.11.

Section 151.10 governs on-reservation transfers and Section 151.11 governs off-reservation transfers. Off-reservation fee-to-trust transfers under Section 151.11 include the Section 151.10 requirements and add the following two additional requirements that, as the distance between the tribe's reservation and the land to be acquired increases, the secretary shall give:

a) Greater scrutiny to the tribe's justification of anticipated benefits from the acquisition; and

b) Greater weight to concerns raised by state and local governments as to the acquisition's potential impacts on regulatory jurisdictions, real property taxes and special assessments. 25 CFR 151.11(b).

As of December 21, 2006 in regards to the St. Regis Mohawk two-part concurrence on the part of then New York Governor George Pataki and later in a series of letters to all the applicants on the OIG list of Pending Gaming Applicants in early 2007, Interior has repeatedly cautioned:

As a result of the public concerns be reflected in the aforementioned proposed legislation and other concerns raised by local jurisdictions, the Department will be reviewing the regulations that govern the processing of fee-to-trust applications (25 C.F.R. Part 151). We anticipate changes to the rules that may result in fewer off-reservation properties being accepted into trust. In particular we expect to consider a paradigm where the likelihood of accepting off-reservation land into trust decreases with the distance the subject parcel is from the tribe's established reservation or ancestral lands and the majority of tribal members.

This language was somewhat consistent with the positions of many tribes to restrict off-reservation gaming to the aboriginal lands/territory of a particular tribe (while recognizing the ambiguities and difficulties of precisely defining such aboriginal lands/territories).

Instead, the January 4, 2008 “Guidance” articulated a new standard that off-reservation gaming fee-to-trust applications must be within a “commutable distance” from the applicant tribe's existing reservation. A “commutable distance” is defined as the distance a reservation resident could reasonably commute on a regular basis. Such distance is not further specified but an operational definition can be gleaned from examining the ten applications rejected for being too far and the one that was close enough but rejected for other reasons:

Applications Rejected as Being Beyond a Reasonable Commute

Seneca Cayuga Tribe - 1,500 miles
Stockbridge Munsee Community - 1,035 miles
Big Lagoon Tribe - 550 miles
Hanahville Indian Community - 457 miles
St. Regis Mohawk Tribe - 350 miles
Lac Du Flambeau Band - 304 miles
Pueblo of Jemez - 293 miles
Mississippi Choctaw - 175 miles
Chemehuevi Indian Tribe - 135 miles
Los Coyotes Tribe - 115 miles

Application Within a Reasonable Commute (but rejected because of opposition)

United Keetowah Band - 70 miles

It is not clear if this a bright-line rule as to distance or a requirement that these rejected applications be resubmitted under the new Guidance. The press release for the Guidance specifies that all the rejected applications were in excess of 100 miles. The Guidance claims that applications beyond a commutable distance might be granted if they “carefully and comprehensively analyze potential negative impacts on reservation life and clearly demonstrates why these are outweighed by the financial benefits of tribal ownership in a distant gaming facility.” The Guidance assumes that off-reservation gaming beyond a commutable distance will force tribal members to leave the reservation. The Guidance specifies that the following issues must also be addressed:

a) What is the unemployment rate on the reservation? How will it be affected by the operation of the
gaming facility?

b) How many tribal members (with their dependents) are likely to leave the reservation to seek employment at the gaming facility? How will their departure affect the quality of reservation life?

c) How will the relocation of reservation residents affect their long-term identification with the tribe and the eligibility of their children and descendents for tribal membership?

d) What are the specifically identified on-reservation benefits from the proposed gaming facility? Will any of the revenue be used to create on-reservation job opportunities?

The analysis of benefits to the tribe is then broken down into two components: income stream and job training and employment. Income alone is not enough. Secondary increases in employment due to increased disposable income were rejected in Lac Du Flambeau Band because such secondary employment was not on the reservation. No guidance is provided as to how one would clearly demonstrate how speculative negative impacts on reservation life are clearly outweighed by the demonstrable financial benefits from ownership of a “distant gaming facility.”

Finally, the Guidance gives extra weight to concerns raised by state and local governments as to the acquisition's potential impacts on regulatory jurisdictions. Land use for the fee-to-trust parcel must be consistent with local zoning and consistent with the uses of adjoining and contiguous parcels. The failure of the United Keetoowah Band to get an intergovernmental “MOU” for services and opposition by the governor and local governments was fatal even though the off-reservation fee-to-trust parcel was within a commutable distance of 70 miles.

It is unclear as to the future of the new “commutable distance” test. Certainly it did not follow any of the notice and publication requirements that would have been necessitated by the promulgation of a new regulation. Rejecting applications based on a new standard that was not previously articulated seems rather harsh and unfair. Nonetheless, if a tribe desires to continue pursuing an off-reservation opportunity, the “commutable distance” test will need to be addressed at least in the short-term.

Sam Cohen is a Government and Legal Specialist for the Santa Ynez Band of Chumash Indians. He can be reached by calling (805) 688-7997 or email scohen@santaynezchumash.org.