BIA will Allow Alaskan Land to be Taken into Trust

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On December 19, 2014, the Bureau of Indian Affairs announced the promulgation of a final rule that will allow land to be taken into trust for federally-recognized tribes in Alaska. Allowing trust lands in Alaska is a seismic shift in federal policy for Alaska Natives, and could create greater opportunity for economic development for Alaskan tribes.

In 1971, Congress enacted the Alaska Native Claims Settlement Act, Pub. L. No. 92-203, 85 Stat. 688, (“ANCSA”), which revoked all Indian reservations in Alaska (except the Annette Island Reserve) and extinguished all aboriginal claims to Alaska land. Pursuant to ANCSA, Alaska Native corporations were formed to select and hold real property for Alaska Natives, including surface and subsurface rights in land in fee simple.

As a result of the fee nature of the land holdings by Alaskan tribes, Alaskan tribes were largely prevented from exercising the same type of governmental authority over tribal lands as tribes in the lower 48 states.

See, e.g., Alaska v. Native Village of Venetie Tribal Govt., 522 U.S. 520, 528-34 (1998) (discussing how nature of land factors into analysis of whether land qualifies as “Indian country” and holding that tribal government in Alaska lacked authority to impose taxes on non-native construction business).

The final rule announced on December 19 allows trust acquisitions in Alaska by deleting language from 25 C.F.R. § 151.1

The final rule announced on December 19 allows trust acquisitions in Alaska by deleting language from 25 C.F.R. § 151.1 (which governs the acquisition of land by the United States in trust for individual Indians and tribes) that previously stated “These regulations do not cover the acquisition of land in trust status in the State of Alaska, except acquisitions for the Metlakatla Indian Community of the Annette Island Reserve or its members.”

This language is commonly known as the “Alaska Exception,” and has always been controversial.

The exception owes its genesis to a 1978 memorandum from the Assistant Solicitor of Indian Affairs and was included in 25 C.F.R. § 151.1 since its promulgation in 1980. In 2001, the 1978 memorandum was rescinded but the Alaska Exception remained in the regulations.

In March 2013, a federal district court held that the Alaska Exception was invalid as it discriminated among Indian tribes. Akiachak Native Cmty. v. Salazar, 935 F. Supp. 2d 195, 2010-11 (D.D.C. 2013). It was this decision that prompted the BIA’s issuance of the December 19, 2014 final rule.

The BIA’s decision to delete the Alaska Exception is notable because it demonstrates the BIA’s willingness to react to litigation.

The final rule goes as far as to specifically state that it is intended to clarify the law (rather than change it), which could be of significance to the ongoing appeal in Akiachak.

The BIA’s announcement of the final rule also specifically states that there should not be different classes of federally recognized tribes.

The BIA’s announcement notes its other policy considerations in promulgating the final rule include enhancing law enforcement and furthering economic development. Some commentators were opposed to the regulation, noting the BIA’s history of ineptitude in managing Indian affairs.

In response, the BIA noted that having land put into trust is a voluntary process for tribes. Some commentators also expressed concern that taking land into trust in Alaska could affect the State of Alaska’s jurisdiction over certain lands, to which the BIA responded that trust decisions would be made on a case-by-case basis “sensitive to inter-jurisdictional concerns.”

The economic development consequences to Alaska Natives of this final rule could be significant.

As specifically noted in the BIA’s final rule, tribal taxation opportunities will be created for activities on trust lands and tribes will be eligible for federal programs tied to use of trust lands.

Not noted in the BIA’s final rule, but equally significant, is the opportunity for Class II and Class III gaming that is created by this change in policy, through the process established in Section 20 of the Indian Gaming Regulatory Act, 25 U.S.C. § 2719.