Sen. Reid Indicates that Senate Continues to Negotiate Carcieri Fix Legislation — Vote Delayed

Mr. REID. “As I indicated this morning, we are trying to work our way through a number of issues. We thought we were going to be able to move toward the Carcieri matter this evening, but we are still negotiating this matter, so we are going to have to do that at some subsequent time.”

http://www.gpo.gov/fdsys/pkg/CREC-2012-11-26/pdf/CREC-2012-11-26-senate.pdf, page S6891

Fixing Carcieri for Michigan

Fixing Carcieri for Michigan

Matthew L.M. Fletcher

Congressional action to correct the Supreme Court’s decision in Carcieri v. Salazar would cost American taxpayers nothing and would be an enormous win for Michigan tribes and the Michigan economy. Carcieri, a decision that undermines the certainty of the Department of Interior’s authority to acquire land in trust for some Indian tribes, makes borrowing money for several Michigan tribes more difficult and more expensive – for some Michigan tribes, the price to borrow money for capital growth increases by millions in increased interest or even the inability to borrow. In short, Carcieri costs the Michigan economy jobs and economic growth.

The Carcieri Decision

The Carcieri decision held that the Department of Interior could not take land into trust for the benefit of the Narragansett Indian Tribe in Rhode Island under Section 5 of the Indian Reorganization Act (“IRA”), a statute that authorizes the Secretary of Interior to do so for any Indian tribe. The IRA’s definition of “Indian tribe” includes any tribe “now under federal jurisdiction.” The Interior Department had interpreted the IRA to authorize trust land acquisitions for tribes under federal jurisdiction at the time of the application, using federal recognition as a proxy for federal jurisdiction. But the Supreme Court held that the Narragansetts were under state jurisdiction at the time of the enactment of the IRA in 1934, and so Interior could not take land into trust for them.

The Department of Interior had “administratively terminated” several Michigan Indian tribes – all of the six Ottawa and Potawatomi tribes now federally recognized – in the late 19th century. These tribes are “treaty tribes,” meaning that they have an ongoing treaty relationship with the federal government that has never been extinguished by Congress. The Sixth Circuit has recognized that “administrative termination” was an illegal administrative act, and the concurrences and dissent in Carcieri also recognized that the Michigan tribes probably were “under federal jurisdiction” in 1934. Still, those tribes, and two other tribes in the Upper Peninsula that became federally recognized in the 1970s and 1980s may be affected by Carcieri.

Impacts on Michigan Tribes

The Michigan tribes are among the tribes most adversely affected by the Carcieri decision, even though every one of them is a treaty tribe. They are affected in two important ways:

First, each of the tribes potentially affected by Carcieri may be forced to engage in a costly, protracted historical and legal determination by the Interior Department that they were “under federal jurisdiction” in 1934. In other words, the tribes may have to expend precious tribal resources to prove that they are eligible tribes in the frivolous lawsuits that are destined to be filed. There are currently 62 non-gaming related Michigan tribes trust applications pending in the Department of Interior now. These applications are for agriculture, housing, public safety, and other infrastructure projects. Many of these projects involve multi-million dollar construction jobs and long-term job creation. Every day that these trust applications are delayed slows down Michigan job growth and economic development. Nationally, a Carcieri fix is estimated to generate 140,000 jobs, many of those in Michigan.

Derek Bailey, the former chairman of my tribe, the Grand Traverse Band of Ottawa and Chippewa Indians, testified before Congress in 2009 about the clear economic consequences of trust land acquisition delays:

As one example, Parcel 45 in Antrim County is a 78-acre parcel that is zoned for residential development by the local township and county. In order to obtain this zoning, we spent 1.5 million dollars of tribal money for roads and for sewer, water, and electrical infrastructure to render the parcels ready for individual housing. The parcel contains two homes owned by tribal members, two Grand Traverse Band rental homes, and 22 empty lots available for Tribal members to construct housing. However, until the land is placed into trust, tribal members cannot obtain the Bureau leases necessary to secure housing financing.

Second, the cloud of Carcieri stifles any development project by potentially affected Michigan tribes. Carcieri increases risks to lenders – the risk that a court finds that a tribe is not eligible because of the Carcieri case, even if low, increases exposure – and that translates to millions of dollars in increased interest rates and occasionally shuts down the project altogether by eliminating the ability of the tribe to borrow money at all. Carcieri has all but killed off investment in Indian country. This issue extends to tribes that may have a Carcieri problem and tribes that already have established economic enterprises. Lower Michigan tribes, especially in southwest Michigan, are enormous economic engines that have generated massive economic growth despite the specter of Carcieri. Relieving these economic engines of this unnecessary burden is only going to improve Michigan’s economy.

In conclusion, fixing Carcieri is costless to American taxpayers and a big win-win for Michigan and Michigan tribes.

ICT Coverage of Senate Report on Carcieri

Here.

An excerpt:

The report says that the decision sent “shockwaves” through Indian country “in great part because the record on which the Supreme Court based its interpretation of section 19 of the IRA was noticeably incomplete.” It adds that the decision undermines the intent of the IRA, threatens public safety and law enforcement, and impedes economic development, while increasing costly tribal and federal litigation.

Sen. John Barrasso, R-Wyoming, said in an accompanying view issued within the report that he concurs with most of Akaka’s views regarding the effects of the decision of and the purposes of the IRA, although he said he recognizes there to be other “good faith” understandings of the Supreme Court’s rationale.

“For my part, I do not claim to know enough about the government’s internal deliberations and legal strategies in the Carcieri case to say that there were deliberate or even careless omissions from the record presented to the Supreme Court,” Barrasso says. “But whether that happened or not is ‘water under the bridge’ and therefore much less important than the consequences of the decision itself.”

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New Scholarship on an Administrative Carcieri Fix

Howard Highland has posted his article, “A Regulatory Quick-Fix for Carcieri V. Salazar: How the Department of Interior Can Invoke an Alternative Source of Existing Statutory Authority to Overcome an Adverse Judgment Under the Chevron Doctrine,” on SSRN. The Administrative Law Review published the article in its 2011 volume.

Here is the abstract:

Secretary of the Interior Ken Salazar has requested that Congress enact a “legislative fix” for the Supreme Court opinion in Carcieri v. Salazar. In Carcieri, the Court interpreted the Indian Reorganization Act of 1934 (IRA) to effectuate a perverse distinction between Indian tribes under federal jurisdiction in June 1934 and Indian tribes whose relationship with the federal government was not established until after June 1934. Applying step one of the doctrine articulated in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., the majority opinion of Justice Thomas declared that “the term ‘now under Federal jurisdiction’ in [the IRA] unambiguously refers to those tribes that were under the federal jurisdiction of the United States when the IRA was enacted in 1934.” As a result, a cloud now hangs over any land-into-trust transactions that the Secretary has made for Indian tribes which were not federally recognized until after 1934, and which are now unable to prove that their “post-1934 recognition [was granted] on grounds that implied a 1934 relationship between the tribe and Federal Government that could be described as jurisdictional.”

Whereas other proposals for a Carcieri fix presume the need for new legislation or regulations to fix Carcieri, this Recent Development argues that existing statutes and regulations already authorize the Secretary to overcome the effects of Carcieri. Even though the IRA no longer authorizes the Secretary to take land into trust for Indian tribes not under federal jurisdiction in June 1934, the Secretary’s fee-into-trust regulations under 25 C.F.R. Part 151 rest on several other pillars of statutory authority. 25 U.S.C. §§ 2 and 9 are the strongest alternative sources of statutory authority under which the Secretary may claim delegated authority for fee-into-trust acquisitions on behalf of Indian tribes not under federal jurisdiction in June 1934. Under the Chevron doctrine, 25 U.S.C. §§ 2 and 9 constitute an explicit delegation of authority to the Secretary to promulgate “legislative regulations [which] are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute.” Such legislative regulations are thus entitled to the maximum amount of Chevron deference.

25 U.S.C. §§ 2 and 9 also form the statutory basis for 25 C.F.R. § 83.12(a), which entitles acknowledged tribes to “the privileges and immunities available to other federally recognized historic tribes,” and renders them “eligible for the services and benefits from the Federal government that are available to other federally recognized tribes.” Hence, federal acknowledgment under 25 C.F.R. Part 83 ought to include the benefits available to tribes under 25 C.F.R. Part 151. This Recent Development urges that the ruling in Carcieri does not prohibit the Secretary from asserting that he has always held statutory authority under 25 U.S.C. §§ 2 and 9 to transfer land into trust for Indian tribes acknowledged under 25 C.F.R. Part 83. Although not every tribe federally recognized after 1934 was given status under 25 C.F.R. Part 83, the regulatory quick fix proposed in this paper would minimize the devastating consequences of Carcieri while a legislative fix stalls in Congress.

Sen. Akaka and Rep. Cole on Carcieri Fix: “Create Jobs, Cost Taxpayers Nothing”

Here. An excerpt:

In the Carcieri v. Salazar decision, the Supreme Court reversed 75 years of policy and practice. The Indian Reorganization Act (IRA) of 1934 authorized the secretary of the Interior to take lands into trust for federally recognized tribes. The court threw all tribes into a tailspin of uncertainty by ruling that the secretary did not have the authority to take land into trust for tribes that were not considered “under federal jurisdiction” when the IRA was enacted. The court did not define “under federal jurisdiction,” and in 1934 there wasn’t an official list of federally recognized tribes. The decision creates two classes of tribes: those that can have land in trust and those that cannot. Such a system promises to be both chaotic and unfair.

So much land has been taken from tribes and tribal members — it is unconscionable to make it harder for tribes to gain back their traditional lands. Congress enacted the IRA to protect tribal homelands and to restore land that was previously seized from the native peoples. It is the responsibility of Congress to act when its intentions are misconstrued by the courts, and so we must act now.

And here (hope it is readable):

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