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Hearing of the Committee on Indian Affairs on Taking Lands into Trust

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Hearing of the Committee on Indian Affairs on Taking Lands into Trust

STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR FROM ARIZONA, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

In 1934, the Indian Reorganization Act provided broad discretionary authority to the Secretary of the Interior to
take land into trust for Indian tribes. This authority was given the Secretary to counter the devastating effects of the
General Allotment Act under which Indian tribes lost over 90 million acres of land between 1887 and 1934. Once held in trust
by the United States, the property is considered Indian country, subject to Federal and tribal law, and in most circumstances State and local laws and regulations do not apply, including zoning and tax laws.

One particular application of the authority to take land into trust that is unclear to many is how the process is
applied to land that is outside reservation boundaries. When the purpose of that off-reservation trust land will be the
establishment of a gaming facility, the impacts on surrounding communities are even greater and the need for clarity is at its
highest.

Under the Indian Gaming Regulatory Act, trust lands outside of a reservation are generally not eligible for gaming if
acquired after October 17, 1988, the date IGRA was enacted. However, IGRA provides four exceptions to the ban on gaming on post-1988 lands. In recent years, this committee has been informed of numerous attempts to use these exceptions,
including the exceptions for settlement of land claims and for initial reservations, to obtain casinos far from Indian
reservations, sometimes in other States.

Many Indian tribes are finding that concerns about whether lands should be taken into trust for gaming purposes is
impacting all land decisions of the BIA, with many applications for non-gaming purposes taking years to be approved.

I believe it is time this committee reviewed these exceptions to determine if they are being used as we originally
intended in 1988. Today, the committee will hear from a variety of witnesses to inform us on how the land-into-trust process
works and how IGRA impacts that process.

BREAK IN TRANSCRIPT

The Chairman. Thank you very much.

Maybe for the record you could describe to us how and why land is going out of trust.

Mr. Skibine. I think that land is going out of trust, that land that is owned by individual Indians. I think it goes out
of trust through probate; if there is a debt that results in foreclosure and for a variety of other issues. I am not aware
that land is going out of trust that is in trust by the United States for the benefit of a tribe. My understanding was

The Chairman. These are individuals who own land in trust.

Mr. Skibine. Yes.

The Chairman. So there is a difference here when we say all this land is going out of trust. It is not as if tribes are
giving up land. It is individuals who are for one reason for another, including wills.

Mr. Skibine. That is correct. Right.

The Chairman. That give land to non-Indians, which is their right to do, to give their land to whoever they want to. So I
think that is an important item here because, in all due respect to my colleagues, the impression was created that somehow we are depriving Indian tribes of their land by taking land out of trust and I do not think that is the case, at least that is the information that I have.

Would you agree, Mr. Skibine, that there are significant problems today with perception, to a large degree, and to some
degree reality, with this process? People hear that an Indian tribe is willing to give up its claim to most of a State in
return for a small couple of acres in a downtown metropolitan area that they can engage in gaming. Is that really what we
think of Native Americans trying to obtain land, to return to their tribal ways and their tribal customs?

Now we see, and one of the reasons why we are having this hearing today is I keep hearing bitter complaints from people
who live near Indian tribes or live near land that they hear is being taken into trust solely for the purpose of gaming. Do you
agree that there is a perception out there that this is a serious problem, at least in some communities?

Mr. Skibine. Yes; I agree with that. I think that the one instance I can think of was not too long ago I testified at a
hearing in Colorado at the Western Governors Association, where essentially there is a tribe in Oklahoma that was seeking to
settle its alleged land claim in Colorado, on millions of acres in Colorado, with a casino at the airport. The Governor was
very much opposed to that.

I think we advised the tribe that we did not think the claim was valid in this particular instance. So there was no
application submitted, but it certainly has created an uproar in the State of Colorado.

The Chairman. I know you do not follow closely the workings of this committee, but I am sure you saw the entire Connecticut delegation show up in the last hearing we had over their concern and the Attorney General's concern about this whole issue of additional recognition of tribes for gaming purposes.

But also on the other hand, isn't it true that in most of these cases if there is land taken into trust that it requires
the approval of the Governor of the State under IGRA?

Mr. Skibine. For land that is off-reservation and subject to the two-party determination, then it requires the Governor.
If it is for the settlement of a land claim, then it is one of the exceptions that essentially goes around the Governor's
concurrence. I think that is one of the issues.

The Chairman. How many of those are exceptions, roughly?

Mr. Skibine. On the settlement of a land claim, we have approved one acquisition under that exception.

The Chairman. Out of 10?

Mr. Skibine. No; since the beginning.

The Chairman. Since the beginning?

Mr. Skibine. Right, since 1988.

The Chairman. So generally speaking, then we would expect disgruntled citizenry to contact their Governor and their State
government to ``protect'' them if they feel they need it.

Mr. Skibine. Yes; that is right, under the two-part determination or under the settlement of the land claim. Settlement of a land claim, we have determined it will require a judicial settlement. Usually, it will require the legislature of the State to pass legislation regarding the settlement. And then it will require congressional legislation, so that this body will have to pass a law and the President will have to sign it.

So by the time one of the settlement legislations is enacted, I think it has gone through an incredibly rigorous
process. For instance, I met with a delegation from a town in Ohio not too long ago regarding a potential Oklahoma tribe
moving into Ohio. They were very much in favor of this, and they thought it would happen this year because when the tribal
developer of this project wanted to generate

The Chairman. Could I interrupt?

Mr. Skibine. Yes.

The Chairman. This movement would be based on the concept of aboriginal lands, is that right?

Mr. Skibine. No; I think it would have been based on a land claim of that tribe in the State of Ohio. If that happens

The Chairman. Because the tribe was moved from Ohio to Oklahoma?

Mr. Skibine. Yes, right; essentially, what I told them is that because it would require congressional settlement
legislation, the chance of this happening is essentially down the road a year or two at the very best, if that is the
exception that they seek to qualify on. They can always use a two-part determination for that because neither IGRA nor our
regulations, nor the IRA, imposes a test that is based on whether there are state lines in between the tribe and the
proposed acquisition.

Although we have never approved at Interior a proposed gaming establishment for a tribe that seeks to have gaming in a
State in which it is not currently located.

The Chairman. If a tribe commits not to acquire land for purposes of Indian gaming, it is free after acquiring that land
to change its mind. Is that correct?

Mr. Skibine. Yes; that is what I said.

The Chairman. How often has that happened?

Mr. Skibine. That apparently has happened a number of times. I do not know exactly, but I think the Inspector General
found at least 10 instances when he testified here, where this has happened. We are aware that this has happened in the State of Oklahoma, for instance. But the change of the use of the land to gaming cannot occur unless there is compliance with the requirements of the Indian Gaming Regulatory Act.

So for instance, if a tribe acquires land in trust off-reservation, say in the State of Oklahoma. That will not work
too well in Oklahoma. Let's say the State of Texas. Well, that is not good either. [Laughter.]

The Chairman. How about Arizona?

Mr. Skibine. Arizona, yes. That is a good one. [Laughter.]

Then essentially the tribe will not be able to game on the land unless it meets the requirements of IGRA. In this
particular case, it will have to submit a request for a two-part determination under section 20(B)(1)(a). So we will have
to go through the process of consulting with appropriate State and local officials, and of doing environmental documentation.
If we make a positive two-party determination for this tribe, then it will be subject to the Governor's veto.

The Chairman. So State governments in general, and Governors in particular are seduced by the prospect of sharing
in Indian gaming revenues, and the concerns of the local citizenry are therefore overridden?

Mr. Skibine. Well, I think that for the two-part determination process, we in the Department, we have to find
where there is a detrimental impact to the surrounding community. To do that, we do extensive consultation with the
appropriate State and local officials. In our checklist, I think we say it is a flexible standard, in more or less 10 miles.

The Chairman. But we keep hearing from local officials who say they were not consulted. Do you have any recommendations at this time for amendments to IGRA or legislation that may help in reducing this problem?

Mr. Skibine. I did not come prepared with legislative solutions, but we certainly recognize that there is certainly a
perception issue, and that we are working on this issue, and we will contact the tribes and Congress if we have any solutions
to offer to some of these issues.

The Chairman. We would be very eager to hear.

BREAK IN TRANSCRIPT

The Chairman. Thank you very much, Senator Dorgan.

Mr. Skibine, one of the things that we did in Arizona and it was approved by the voters, a compact, was a revenue-sharing
proposal, as you know, so remote tribes would be able to at least have some share of the gaming revenues. That seems to me
one of the attractive aspects of the compact that was overwhelmingly approved by the voters of Arizona. Do you think
that there should be more referenda of that type?

Mr. Skibine. Yes; we think that the Arizona compacts are very successful, and we approve those and we feel that it was
very productive. I think that the compacts or the law that provides for revenue-sharing between wealthy tribes and tribes
that may elect not to game, I think are something that should be encouraged.

The Chairman. Thank you very much. It is good to have you back before the committee. We look forward to some
recommendations that you might have that we can use. This problem is perception and reality both. We cannot legislate
perception, but there may be something we can do to correct some of the realities.

I thank you, sir.

Mr. Skibine. Thank you very much.

The Chairman. Our next panel is David K. Sprague, chairman, Gun Lake Tribe, Dorr, MI; James T. Martin, executive director, United South and Eastern Tribes, Nashville, TN; Mike Jandernoa, 23 Is Enough, Grand Rapids, MI; and David Crosby, Santa Ynez, CA and other spots around the Earth. Please come forward.

Chairman Sprague, we will begin with your testimony. We would like to try to keep opening statements to 5 minutes if
possible. Your complete statements will all be made part of the record without objection.

BREAK IN TRANSCRIPT

The Chairman. Thank you very much, Mr. Crosby.

Chairman Sprague, did you decide where you wanted the land taken into trust for your initial reservation, or did the
Department tell you that there was a certain area where it would take land into trust for your reservation?

Mr. Sprague. No, sir; we as a council decided where we would take land into trust. We were not dictated by the Bureau.

The Chairman. Under normal procedures, your tribe's engaging in gaming would require the approval of the Governor,
is that correct? Under normal procedures, I am talking about under IGRA.

Mr. Sprague. We are a newly federally acknowledged tribe and we are going to use

The Chairman. So this is an exception?

Mr. Sprague. This is an exception.

The Chairman. This does not require the approval of the Governor.

Mr. Sprague. Right.

The Chairman. Would you care to respond to Mr. Jandernoa's comments that actually gaming is not helpful economically to
the region? Would you identify yourself again, sir, for the record?

Mr. Shagonaby. My name is John Shagonaby. I am the tribal council treasurer.

The Chairman. Okay, thank you. Please proceed.

Mr. Shagonaby. Yes; I would like to respond to that. We are the 12th recognized tribe in the State. There are 11 tribes
with compacts. They are operating casinos. We took a page from tribes on what their economies were in the State.

It is demonstrated that their economies were gaming-related, so naturally we saw what they have done with their
proceeds and what they have done for their communities. So that was a natural fit. After we polled our membership, they voted
overwhelmingly to support it. I feel that we have worked as demonstrated by the board with the local communities and they
are very supportive of our project.

The Chairman. My question was that Mr. Jandernoa asserts that there has been an actual decline in the economy, increase
in crime, increase in bankruptcies, et cetera. Would you care to address that?

Mr. Shagonaby. We did a study for the record and it showed that it will have a positive economic impact in the area. I
think the Bureau agreed with us.

The Chairman. Would you submit that for the record?

Mr. Shagonaby. Yes.

The Chairman. Thank you.

Mr. Martin, your testimony is critical of so-called ``reservation shopping'' through assertion of land claims. Yet
several tribes that are members of your organization were able to successfully negotiate land claims that resulted in lands
that were subsequently used for casinos. How do you distinguish between these situations?

Mr. Martin. In those instances, Mr. Chairman, those were related to land claims and to land taken into trust were in
their aboriginal lands in the State into which they were currently occupying.

The Chairman. So you feel there is a significant difference in some of the practices you see going on between that that you
see ongoing today, as opposed to the way that tribal members of your organization, tribes that are members of your rganization
were able to take land into trust and engage in gaming?

Mr. Martin. Yes, sir.

The Chairman. And repeat to me again how that is different?

Mr. Martin. The individual tribes of our organization had land claims and they took land into trust associated with those
land claims in the State into which they were occupied at that given time. They did not jump across State lines or even across
multiple States to take this land into trust. It was associated with their aboriginal lands.

The Chairman. What about if a tribe has aboriginal land in another State?

Mr. Martin. In those areas, it would have to be judged on a case-by-case basis. Our point in those particular areas is that
many times, and as you talked earlier with Mr. Skibine, it is also perception as much as reality. We are trying to assist the
committee and offer suggestions on areas to curtail the perception.

A few tribes, and I am not saying it is just running rampant all over, but you come to a few tribes that are being I
believe misused by developers that create false expectations to those tribes, and try to look for loopholes and the stick of
potential litigation. And then they are being encouraged even by Governors in States to want to look for revenue sharing and
those types of things.

We believe that it should be judged on a case-by-case basis, but there should be some clarity brought to the
regulations, and if not enough clarity to those regulations, then legislation that would bring a systematic and much more
thorough review of these land-into-trust applications, particularly just for gaming.

The Chairman. Mr. Jandernoa, Chairman Sprague showed a pretty impressive display of local support for his tribe and
their entering into gaming activities. How do you respond to that?

Mr. Jandernoa. I think, Senator, the big issue comes around what you call the local community or the regional area. In the
slide that was shown there, and it will, and we acknowledge, and the economic study clearly states there will be jobs added
in that small area, within that 10-mile radius, that will affect and add jobs.

But the economic studies show and the facts show those jobs are going to come from surrounding areas. It will come into
Allegan. We have 2,500 employees in Allegan at Perrigo Company, my company. And the jobs will come from Kalamazoo and Holland and Allegan itself and Grand Rapids into the Wayland area. We do not dispute that there will be jobs added, but they are not new incremental jobs to the entire area.

The other study shows and the impact shows in Detroit particularly, which is where they did a lot of the analysis,
that the expectation and the profits

The Chairman. Those were non-Indian casinos.

Mr. Jandernoa. Two were non-Indian and one was an Indian, but again it is a casino. Again, we do not have anything
against the tribal casinos themselves, or the tribes. It is the issue of a casino and its impact, unfortunately, on many people.

The Chairman. Look, I do not pretend to be an expert on the Michigan economy, and I know to at least some degree you are, but everybody I talk to says that the reason why the State's economy is in trouble is because they are experiencing the most wrenching transition from a manufacturing-based economy to trying to grapple with a world global manufacturing situation
which is putting many of them out of business or in serious difficulty. I had never heard that Indian gaming impacted the
State's economy either way.

Go ahead.

Mr. Jandernoa. Yes; I think you are absolutely right. We are suffering a crisis in Michigan in jobs in our area, both
from the automotive industry and particularly in our area, the furniture industry. China has had an incredible affect on us,
and Japan is making more of the auto parts. So if you look at the United States big three share of cars, our jobs, which have
been in Michigan, are going to Japan for the most part making those parts.

So we are affected, but it is our productivity. Our company, Perrigo, has grown from 200 to 2,500 right in Allegan,
and we have done that because we are the most productive and we have the best quality. We cannot afford to have our employees tardy or absent in keeping up that quality because we are competing with China and India now. We need the jobs we have. We cannot afford to put those employees at risk of doing a great job for us. We want to create opportunities for them to be successful, not to be distracted.

The Chairman. Mr. Crosby, the BIA testified that local communities are able to participate in the land-into-trust
process. Did you or any of your neighbors participate, have the opportunity to participate and have your comments considered?

Mr. Crosby. We participated in town meetings.

The Chairman. With the BIA?

Mr. Crosby. Well, BIA has been present at some of them. These were called by members of our board of supervisors, and
representatives from the BIA came. We have unanimously expressed our disapproval and pretty clearly. The impact on
towns is an interesting subject and you will hear testimony on both sides of it.

I think it would help a great deal if you called to witness here some of the law enforcement people from towns where
casinos are and asked them what the truth is. I think they will tell you. Casinos are not good neighbors.

The Chairman. Did the BIA indicate that lands recently taken into trust would be eligible for gaming?

Mr. Crosby. Yes; the lands that we were talking about were specifically for that.

The Chairman. You state that, and I quote from your statement, ``land should be taken into trust only when truly
needed to promote tribal self-sufficiency.'' I think I agree with that statement. Would you consider the need for additional
housing or a health clinic needed to promote tribal self-sufficiency?

Mr. Crosby. Yes; I think those are legitimate. I even think that their wanting to have a casino is legitimate. What
disturbs us is the idea that they can take large tracts, in particular in this case the center of our valley, into trust,
off of the tax rolls, and out of zoning. Zoning is critical to this. Zoning is a compact between all of us who live there as
to what kind of place it will be and how we can raise our kids.

If they can absent themselves from these rules and laws, it is unfair to all of the other people who live there. I think
that is blatantly obvious.

The Chairman. I am sure that some of our tribal leaders would respond to that by saying if they were subject to local
zoning, it would be an infringement on tribal sovereignty, but also because of local situations, they might not do too well
under it. This gets into the issue of tribal sovereignty, which is of course one which remains fraught with controversy.

Finally, let me just say that the problem and dilemma that we face here on the committee as regards to Indian gaming, we
can have our personal opinions as to the morality or immorality, as you mentioned, whether it is addictive or not. I leave that up to experts. I do not in any way feel that I am a judge of that.

But we do know that Native Americans have been deprived for 400 years of their rights. They have been discriminated
against. They have been underfunded. We have never complied with our treaty obligations.

Finally, at least some tribes, through engaging in Indian gaming, have been able to profit and be able to take care of
their tribal members. So this is a dilemma that we face, but I also agree with Mr. Martin, in particular, and other witnesses
that it is time we reviewed a 17-year old piece of legislation and profited from the experiences that we have undergone, and
make whatever necessary changes in order to deal with an $18.5-billion and continuing to grow industry that, as I have
repeatedly said, none of us ever anticipated would reach this size when we passed the act in 1988.

It is going to be a delicate proposition, but for us not to go back and review and revise the legislation in light of how
it has evolved I think would be an abrogation of our responsibilities. I agree with you, Mr. Crosby and Mr. Jandernoa, that there is some way that we have to try to get more local participation in the decisionmaking process because I have seen the impact on local communities. Some of it is good, job creation. Some of it is bad, as we have seen in other aspects of social impact.

So I thank the witnesses today and I thank you for being here. This is a very tough issue.

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