Alaska Tribes and the confusing land trust issue

How will changes in federal regulation affect the state?

The only thing clear so far about lands-into-trust is that lawyers will make a lot of money.

Lands-into-trust refers to the U.S. Interior Department’s change in regulation that will allow Alaska Native Tribal groups to apply for lands owned by Tribes to be placed in trust, where the land is held by the federal government in trust for the Tribe.

Almost everything about this, as it applies to Alaska, is unclear, hence the need for the lawyers.

The only practical way for Tribes to obtain substantial tracts of land is for them to acquire properties from a private Alaska Native corporation, said Michael Walleri, an Alaskan attorney specializing in U.S. Indian law.

However, there is a question as to whether it is legal for a Native corporation to transfer lands to a Tribe, given language in the 1971 Alaska Native Claims Settlement Act prohibiting that, Walleri said in a lecture on lands-into-trust at the University of Alaska Anchorage.

Reality may have already outpaced the law on this, however, because several village corporations have already transferred lands to Tribes.

In a speech given Oct. 6, Lt. Gov. Byron Mallott told the Resource Development Council, an Alaska development advocacy group, that state Attorney General Jahna Lindemuth and other officials have met with Interior Department officials to begin clarifying procedures, currently unclear, as to how Tribes will actually put land into trust.

The Interior Department has said it has received applications for lands-into-trust from some Alaska Tribes, but state officials have not yet been informed of how many applications have been received or who the applicants are, although Interior officials have said this information will be provided.

Walleri said it does seem clear that once a land trust is established it will be exempt from state and local taxes along with many types of regulation now done by states and federal agencies.

Although the extent of regulatory authority is unclear, it does exist, Walleri said. This worries the state’s development community, which is concerned with the potential for 200-plus separate environmental regimes in Alaska that are in addition to the existing state and federal rules.

The Tribes’ regulatory reach could also be expanded by other changes in federal rules being made in the closing months of President Barack Obama’s administration.

On Sept. 26, the U.S. Environmental Protection Agency expanded the authority of recognized Tribes on reservations and reserves to exercise powers under the Clean Water Act to identify impaired waters and to set total maximum daily loads that impaired waters can withstand.

The EPA already allows Tribes to develop their own water quality standards, and these can exceed those set by federal or state agencies.

How this plays out in Alaska is unclear but it will eventually apply in some manner as lands-into-trust. The EPA defines a “Tribe” as a group or community exercising authority over a federal Indian Reserve — and there are already several recognized reserves in Alaska — and it may also apply to many Alaska Native villages and tribes organized under the 1936 U.S. Indian Reorganization Act, or IRA, are also recognized by the government to have a kind of reserve status.

As lands are put into trust status by Tribes the EPA’s delegation of power may also apply.

Tribes may also be able to exercise certain tax authority if they have lands in trust despite the U.S. Supreme Court’s Venetie case in 1998 , which attorneys say was actually narrow in scope to a specific situation where Venetie’s Tribe had applied a tax on a construction contractor working locally.

The Venetie case might not restrict other forms of taxation by Tribes, Walleri said in his lecture at UAA.

Mallot told the RDC that Gov. Bill Walker’s administration has decided not to fight Tribes on putting lands into trust because the federal government has accepted it by changing a previous regulation.

Doing that also mooted a lawsuit over the regulations and an intervention the previous Parnell administration had filed in the case. 

Walker has been criticized for not appealing the decision, but procedurally the only way to continue the case was for the state to file a brand new lawsuit. That was something Walker did not want to do because it would have just stirred up bad relations between Alaska Natives and the state government.

The better course, Mallott said, is to negotiate practical ways to implement lands into trust without impairing state sovereignty. To do that, Attorney General Jahna Lindemuth is initiating a dialogue between the state, Tribes and other stakeholders, Mallott said.

Meanwhile, from a practical standpoint it won’t be inexpensive, or easy, for Tribal groups to put lands into trust. The procedures for doing so are not yet worked out, and there are potential legal problems. Legal costs alone will be an impediment.

Origins of lands-into-trust movement

In his presentation, Walleri said the lands-into-trust movement actually started a few years after the 1971 settlement act passed Congress.

There was a provision in the original ANSCA bill that ended the special protections of Native land, and against shares of Native corporations being sold, 20 years after the act’s passage.

This greatly worried many Native leaders, and there were rumors of major foreign corporations “scouting” Native-owned lands in the 1980s as a way of gaining access to natural resources on Native lands on the cheap, Walleri said.

This fear of losing land helped fuel the “retribalization” movement among Alaska Natives in the 1980s that culminated in the federal recognition of 200-plus tribes in the early 1990s.

At the time this was argued as way to allow the Alaska villages, as tribes, to administer federal health and social service programs, for which recognition by the government is needed. However, the forward path was laid out for tribes to seek to hold lands, perhaps some of the ANSCA lands, and to extend protection to them under trust status.

To achieve the same protective status, the federal Bureau of Indian Affairs was promoting the idea of Alaska Native villages organizing themselves as IRA villages under the 1930s-era federal laws, which carried with them protective status for village lands.

In his lecture, Walleri said there were practical reasons for the push toward tribalization and lands in trust.

One was that many very small ANCSA village corporations had no significant sources of income other than their small shares of 7(i) revenues of regional corporations with resource income. “7(i)” refers to the section of ANCSA that directs a share of natural resource income for one regional corporation to be shared among other Native corporations.

Yet the protection and administration of village-owned lands imposed costs. If the private ANSCA corporation could become a Tribe it could be eligible for federal funds to help with some of this, and there could even be ways for the private village corporation to contract with the Tribe for land administration even if the ownership of the land remained with the ANCSA village corporation.

One other force pushing the tribalization and lands-into-trust initiative was a section in the 1971 ANCSA act that required village corporations to transfer 1,280 acres in each village to the local municipality.

Most villages are organized under state law as second-class cities, most of which are very small, but the requirement holds true for villages within the large boroughs of the state where the populations are mostly non-Native.

To keep the land under Native control, many village corporations moved to transfer lands to Tribes, Walleri said, which satisfied the requirement of ANCSA.

However, this maneuver gets complicated because unless the Tribe also organizes itself as an IRA village, the lands would not be fully protected, Walleri said.

If IRA organization were not an option, lands-into-trust might offer another route to achieve protection.

Issues with LIT

Lands-into-trust isn’t without its problems, Walleri said. A big one is that once lands are given trust status the federal government has the oversight responsibility, which means a Tribe must get federal permission to engage in economic development activities.

This is a problem now for Native families who own Native allotments, which are 160-acre homestead-type holdings that are now held under trust.

Doing any kind of development work on a Native allotment is very complex and cumbersome, to the point that it’s almost not worth the bother.

Still, Lower 48 Indian Tribes have been dealing with these problems for years and have developed successful work-around solutions. There are many successful examples of joint-ventures between private corporations and Lower 48 Tribes, for example, which might provide models for Alaska’s tribes and ANCSA corporations.

He pointed to Palm Springs, Calif., as a place where a local Native American Tribe worked in partnership with developers and became one of the richest Tribes in the nation.

“In Alaska, there’s nothing to stop the Native village of Eklutna, a Tribal entity, from borrowing money and buying a major hotel in downtown Anchorage, perhaps in partnership with a large, sophisticated private Native corporation like Cook Inlet Region Inc.,” Walleri said.

The hotel could be fully exempt from municipal and state taxes and might even be able to operate a casino, he said. 

As to casinos, Duluth, Minn., offers an example where a Tribe established a downtown casino and was up against a great deal of concerns by local leaders. The experiment has proved to be highly successful, however, with the casino helping revitalize a downtown visitor industry for the city.

Tim Bradner can be reached at [email protected].

10/19/2016 - 9:29am