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110th Congress                                            Rept. 110-541
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 2

======================================================================



 
TO PROVIDE FOR AND APPROVE THE SETTLEMENT OF CERTAIN LAND CLAIMS OF THE 
                       BAY MILLS INDIAN COMMUNITY

                                _______
                                

 April 4, 2008.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Conyers, from the Committee on the Judiciary, submitted the 
                               following

                             ADVERSE REPORT

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 2176]

      [Including cost estimate of the Congressional Budget Office]

      The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2176) to provide for and approve the settlement of 
certain land claims of the Bay Mills Indian Community, having 
considered the same, reports unfavorably thereon without 
amendment and recommends that the bill do not pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background.......................................................     2
Hearings.........................................................     8
Committee Consideration..........................................     8
Committee Votes..................................................     9
Committee Oversight Findings.....................................     9
New Budget Authority and Tax Expenditures........................    10
Congressional Budget Office Cost Estimate........................    10
Performance Goals and Objectives.................................    11
Constitutional Authority Statement...............................    11
Advisory on Earmarks.............................................    11
Section-by-Section Analysis......................................    11
Additional Views.................................................    12

                          Purpose and Summary

    H.R. 2176 would preemptively ratify a land claim settlement 
concluded between the Bay Mills Indian Community and the 
Governor of Michigan. Specifically, the bill would direct the 
Secretary of the Interior to accept in trust, in settlement of 
a claim by the Tribe to lands in Charlotte Beach, Michigan, in 
Michigan's Upper Peninsula, close to the Tribe's reservation--a 
claim the Tribe has already lost in court--a parcel of land in 
Port Huron, Michigan, as a new addition to its reservation, 
even though it is located hundreds of miles away. It would also 
make the newly acquired land automatically eligible for casino 
gaming, by preemptively deeming it to qualify under an 
exception to the Indian Gaming Regulatory Act's prohibition of 
gaming on newly acquired land.
    In doing so, the bill would override the established 
procedures of the Indian Gaming Regulatory Act, promises made 
to the other Michigan Tribes, and the express wishes of the 
citizens of Michigan as reflected in a State-wide referendum 
passed just a few short years ago. It would set a dangerous 
precedent, a blueprint for flouting established law to build a 
casino in the name of an Indian tribe in any corner of the 
country.

                               Background

       BACKGROUND AND HISTORY OF THE INDIAN GAMING REGULATORY ACT

    The Indian Gaming Regulatory Act (``IGRA'')\1\ was enacted 
in 1988 to provide a legal framework for regulating the 
operation of gaming on Indian lands. Congress enacted IGRA in 
response to California v. Cabazon Band of Mission Indians, 480 
U.S. 202 (1987), in which the Supreme Court had held that, in 
the absence of any governing Federal statute, the States' 
interest in regulating gaming on Indian lands within their 
borders was outweighed by the Tribes' interest in promoting 
such gaming for the Tribe's economic benefit. In recognition of 
Tribal rights, IGRA incorporates the key holding of Cabazon, 
which recognizes a Tribe's right to conduct gaming under 
specified conditions even when it does not conform to the law 
of the State in which the Indian lands are located. The type of 
gaming at issue in the two bills before the Committee is class 
III gaming, or full-scale casino gaming.
---------------------------------------------------------------------------
    \1\Pub. L. 100-497, 102 Stat. 2467, 25 U.S.C. Chapter 29.
---------------------------------------------------------------------------
    Under IGRA, the term ``Indian lands'' includes not only 
lands within the limits of any Indian reservation, but also 
lands to which title either is held in trust by the United 
States for the benefit of an Indian Tribe or individual Native 
American, or is held by an Indian Tribe or individual Native 
American subject to restriction by the U.S. against alienation 
and with an Indian Tribe exercising governmental power.
    A number of statutes, including the Indian Reorganization 
Act of 1934, authorize the Secretary of the Interior to acquire 
land in trust for individual Indian Tribes. Procedures for such 
land acquisition are specified in 25 C.F.R., Part 151. By this 
process, Indian owners of land in fee--i.e., unencumbered by 
liens that impair marketability--may apply to have their fee 
title conveyed to the Secretary to be held in trust for their 
benefit. This removes the land from State and local tax rolls, 
and precludes the land from being sold, and from being taken by 
legal process.
    One central objective of IGRA was to place limits on the 
potential proliferation of Indian gaming. Under section 20 of 
IGRA, 25 U.S.C. Sec. 2719, lands acquired in trust by a Tribe 
after IGRA's enactment are generally not eligible for gaming if 
they are not within or contiguous to the boundaries of the 
Tribe's reservation. There are several exceptions, however.
    The first exception authorizes the Secretary to permit 
gaming on newly acquired lands if (1) the governor of the State 
in which the lands are located consents and (2) the Secretary 
determines, after consulting with State and local officials, 
including officials of other Tribes, that permitting gaming on 
those lands ``would not be detrimental to the surrounding 
community.''
    There are five other exceptions, under which gaming may be 
permitted on newly acquired lands without meeting those 
conditions. Four of those exceptions involve newly recognized 
Tribes, Tribes restored to recognition, or Tribes that had no 
reservation at the time IGRA was enacted, factors clearly not 
present here.
    The fifth exception is for lands taken into trust as a land 
claim settlement. This is the exception that the two bills 
purport to be relying on. IGRA also requires that the Tribe and 
the State have entered into a compact setting forth the terms 
under which class III gaming will be conducted on the Indian 
lands in question, including how State criminal and civil laws 
will apply. The State-Tribe compact must be approved by the 
Secretary, but approval will be forthcoming as long as it 
complies with Federal law and the government's trust 
obligations. The Tribe must also have adopted an ordinance 
permitting class III gaming on those lands, which the Chairman 
of the National Indian Gaming Commission must find was not 
unduly influenced by anyone who, in light of criminal record, 
prior activities, reputation, or associations, poses a threat 
to the public interest or effective regulation, or a risk of 
unsuitable, unfair, or illegal activities.

                  INDIAN LAND CLAIM SETTLEMENT PROCESS

    Prior to enactment of the Indian Claims Commission Act of 
1946,\2\ each Indian land claim required prior specific 
congressional authorizing legislation. That Act created the 
Indian Claims Commission (``ICC'') to resolve such claims. When 
the ICC was dissolved in 1978, remaining unresolved claims were 
transferred to the U.S. Court of Claims, and all new claims are 
required to be filed there as well. A land claim may proceed to 
judgment, or may be resolved through negotiated settlement. The 
judgment or settlement agreement then becomes the basis for 
congressional resolution of the land claim. The entire process, 
from the initial assertion of the land claim to its eventual 
resolution, typically takes many years.
---------------------------------------------------------------------------
    \2\25 U.S.C. Sec. Sec. 70-70v.
---------------------------------------------------------------------------

                  CASINOS ON TRIBAL LANDS IN MICHIGAN

    According to the National Indian Gaming Commission, there 
are currently 19 Tribal casinos operated in the State of 
Michigan by 10 Tribes. The Bay Mills Tribe, now seeking a new 
casino pursuant to the bill, operates two of them.
    The Bay Mills Tribe was among seven Michigan Tribes who in 
1993 entered into parallel compacts with the State of Michigan 
governing the operation of class III gaming, including any 
development of off-reservation gaming.\3\ A provision in those 
compacts, intended to forestall a proliferation of Indian 
gaming across the State, requires that any revenue generated by 
off-reservation gaming be shared among the seven Tribes:
---------------------------------------------------------------------------
    \3\This was the first Michigan compact. Other compacts were entered 
into in 1998 covering four other Tribes in Michigan who had recently 
been granted Federal recognition.

        An application to take land into trust for gaming 
        purposes pursuant to Sec. 20 of IGRA (25 U.S.C. 
        Sec. 2719) shall not be submitted to the Secretary of 
        Interior in the absence of a prior written agreement 
        between the Tribe and the State's other federally 
        recognized Indian Tribes that provides for each of the 
        other Tribes to share in the revenue of the off-
        reservation gaming facility that is the subject of the 
---------------------------------------------------------------------------
        Sec. 20 application.

This provision requires each signatory Tribe to negotiate an 
agreement with the others to distribute a portion of the 
revenues from a casino opened on off-reservation lands acquired 
after the signing of the compact in 1993. This provision is 
still in effect.

           OTHER MICHIGAN CASINO GAMING--THE DETROIT CASINOS

    In 1994, Michigan voters approved a State-wide referendum 
that authorized three casinos in Detroit. Civic leaders 
promptly began discussions with interested parties, and the 
three casinos were opened within a few years. The MGM Grand 
opened in 1999, and its permanent resort facility opened in 
October 2007. The MotorCity opened in 1999 in a 1915 building 
that long housed the Wonder Bread bakery; with a permanent new 
casino and hotel both opening last year. The Greektown, of 
which the Sault Ste. Marie Tribe is majority owner, opened in 
2000, and is constructing a permanent facility that is 
scheduled to open later this year.
    The construction of these three casinos has brought 
significant economic development to the area. The MotorCity 
construction project has been valued at $400 million, and the 
MGM Grand project at $800 million, one of the largest projects 
in the State. These projects have also been a centerpiece of 
broader economic revitalization efforts in Detroit. Under the 
terms of the referendum, a portion of the earnings from the 
casinos is provided to the City of Detroit for police and fire 
protection services, and to the State for public education. By 
one measure, Detroit has already received well over a billion 
dollars in revenues. That is in addition to the multi-year 
construction jobs, permanent casino jobs, and other jobs 
directly or indirectly attributable to the casinos.
    In 2004, concerned about attempts to expand casino gaming 
into horse-racing facilities, Michigan voters approved another 
State-wide referendum to restrict the expansion of gaming by 
requiring that any new private gaming expansion be approved in 
a general election by a State-wide majority as well as a 
majority of voters in the local community.

NEW INTERIOR GUIDANCE--WHETHER TO TAKE OFF-RESERVATION LAND INTO TRUST 
                               FOR GAMING

    On January 3, 2008, the Interior Department issued 
``Guidance on Taking Off-Reservation Land into Trust for Gaming 
Purposes.'' It applies to all applications, pending or yet to 
be received, that involve requests to take land into trust that 
is off-reservation. 25 C.F.R. 151.11 sets forth the factors the 
Department will consider in making the determination. As the 
distance between a Tribe's reservation and the land to be 
acquired increases, the Department will ``give greater scrutiny 
to the Tribe's justification of anticipated benefits from the 
acquisition'' and give ``greater weight to concerns raised by 
State and local governments as to the acquisition's potential 
impacts on regulatory jurisdiction, real property taxes, and 
special assessments.''
    The guidance explains that, as a general principle, the 
farther the economic enterprise is from the reservation, the 
greater the potential for significant negative consequences on 
reservation life. Tribes seeking off-reservation gaming desire 
the economic benefits of such activity--not only the income 
stream from the gaming facility, but also the related 
employment and job training opportunities for Tribe members. 
Because such employment programs foster a strong tribal 
government and community, they are a crucial benefit of tribal 
gaming facilities.
    While greater distance from the reservation is not likely 
to have an impact on the income stream, it can have a 
deleterious effect on reservation life. A gaming facility that 
is ``not within a commutable distance of the reservation'' will 
not improve the employment rate of Tribal members living on the 
reservation. Instead, an off-reservation gaming facility would 
encourage Tribal members to leave the reservation.
    Although the income stream from the gaming facility may 
help offset potential negative impacts, the guidance states 
that ``no application to take land into trust beyond a 
commutable distance from the reservation should be granted 
unless it carefully and comprehensively analyzes the 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.''
    Section 151.14 also states that the Department will give 
``greater weight to the concerns of State and local 
governments'' with regard to the potential conflicts of land 
use and the removal of the land from the tax rolls as the 
distance between the Tribe's reservation and the land to be 
acquired increases. This is because the increase in distance 
makes it more likely that the transfer of Indian jurisdiction 
to the proposed parcel of land will ``disrupt established 
governmental patterns'' in distant communities that may not be 
conversant with the unique regulatory practices of tribal 
governments. Furthermore, the farther from the reservation the 
land acquisition is, the more difficult it will be for the 
Tribal government to exercise its authority appropriately. 
According to the guidance, any application which does not 
satisfactorily address these issues should be denied.

             THE BAY MILLS AND SAULT STE. MARIE LAND CLAIMS

    The Bay Mills Tribe traces its ancestry, as does the Sault 
Ste. Marie Tribe, to two Chippewa bands headed by O-Shaw-Wan-O 
and Shaw-wan. Its claim to the Charlotte Beach land stems from 
an 1857 deed from a non-Indian couple, Boziel Paul and his 
wife, to the Governor of Michigan. The deed purported to convey 
the land to the Governor in trust for the benefit of the two 
Chippewa bands. The Pauls had obtained the land in 1855 by 
Federal land patent. Approximately 30 years later, the State of 
Michigan sold the land, to non-Indians, to recover delinquent 
property taxes. The Governor had apparently never acknowledged 
the conveyance.
    More than a hundred years after the sale by the Governor, 
the Bay Mills Tribe commenced two lawsuits concerning the 
Charlotte Beach land. In 1996, it filed a Federal action 
against the Charlotte Beach landowners seeking equitable 
title.\4\ Around this time, the Tribe also filed a State suit 
against the State of Michigan for damages.\5\ The Federal suit 
was dismissed for the Bay Mills Tribe's failure to join the 
Sault Ste. Marie Tribe of Chippewa Indians, which also has a 
claim to the Charlotte Beach lands, as an indispensable party--
the Sixth Circuit ruled that because the Bay Mills and Sault 
Ste. Marie Tribes share a common ancestry, both Tribes have ``a 
potential interest in the Charlotte Beach property.''\6\ The 
Bay Mills Tribe lost the State suit on both substantive and 
procedural grounds. Around this time, the Bay Mills Tribe filed 
an application with the Department of Interior, pursuant to 25 
C.F.R. Part 151, to put the land into trust for gaming 
purposes. The fee trust application was withdrawn within months 
of its filing. On August 23, 2002, the Tribe entered into a 
settlement agreement with the Governor of Michigan; an addendum 
to this agreement was signed by the current Governor, Jennifer 
Granholm, on November 13, 2007.
---------------------------------------------------------------------------
    \4\Bay Mills Indian Community v. Western United Life Assurance Co., 
2000 WL 282455 (6th Cir., March 28, 2000).
    \5\Bay Mills Indian Community v. State of Michigan, et al., Mich. 
Ct. App. Docket No. 218580.
    \6\Bay Mills Indian Community v. Western United Life Assurance Co., 
2000 WL 282455 (6th Cir., March 28, 2000).
---------------------------------------------------------------------------
    The Sault Ste. Marie Tribe has never filed suit to claim 
the Charlotte Beach land.

                        THE PROPOSED LEGISLATION

    H.R. 2176 would ratify an agreement executed on August 23, 
2002, between the Bay Mills Tribe and Governor Jennifer 
Granholm of Michigan to transfer to the Tribe non-contiguous 
lands in Port Huron, Michigan--located 350 miles from its 
reservation and outside its historical and aboriginal 
territory--to settle its dubious claim to the Charlotte Beach 
lands, located in its historical territory in the Upper 
Peninsula of the State. The bill directs the Secretary to take 
the lands into trust within 30 days after receiving a title 
insurance policy showing that they are not subject to impairing 
encumbrances.
    The bill provides that immediately upon the receipt of the 
new lands in trust, they will be considered part of the Tribe's 
reservation, and deemed eligible for gaming as lands ``taken 
into trust as part of a settlement of a land claim'' in 
compliance with 25 U.S.C. Sec. 2719(b)(1)(B)(i). The bill 
extinguishes the land claim, and ratifies the transfer in 
settlement. And it specifies as the court of jurisdiction for 
resolving any dispute regarding the land claim the United 
States District Court for the Western District Court of 
Michigan--where the lands subject to the claim are located, but 
not the lands to be transferred in settlement.
    The process set forth in the bill departs from the normal 
processes envisioned in IGRA and in Michigan law in a number of 
significant respects.
    First, the time it normally takes the Interior Department 
to take lands into trust for gaming purposes is normally not a 
matter of days, as the bill prescribes, but years, even 
decades. Each of the four steps deemed immediately satisfied by 
the bill--taking the lands into trust, approving the compact, 
designating the lands as eligible for gaming under an exception 
in IGRA, and declaring the lands as reservation--requires a 
separate administrative procedure in the Interior Department. 
One of the important administrative processes is the extensive 
environmental review required by the National Environmental 
Policy Act. Another is the rigorous review at Interior of the 
extent of any legal and historical connections the Tribe has to 
the requested lands, as part of the determination whether the 
lands qualify for gaming pursuant to one of IGRA's exceptions. 
This review is considered particularly important when the lands 
to be taken into trust are not within or contiguous to the 
Tribe's reservation lands, as set forth in 25 C.F.R. Part 151.
    Second, the land claim settlement agreements that the bill 
ratifies state that the lands have been obtained in settlement 
of a land claim under section 20 of the Indian Gaming 
Regulatory Act, 25 U.S.C. Sec. 2719(b)(1)(B)(i), when there has 
been no claim against the United States considered or processed 
by Interior, no agreement reached with any duly authorized 
representative of the United States prior to its execution. 
Instead, this is essentially a negotiation between the Tribes 
and the Governor, to transfer lands to the Tribe, with no 
involvement by an ordinarily essential party to such a claim 
and such a transfer. While the Governor and the Tribe have 
another option for bypassing the normal process set forth in 
IGRA--namely, going to the voters of Michigan--they have opted 
to bypass that established route as well.
    Third, the settlement agreement alters central provisions 
of the 1993 compacts to which the Tribe is signatory. These 
compacts were negotiated between the Tribe and the Governor, 
executed by them, then ratified by the Michigan State 
Legislature, then submitted to, reviewed, and approved by the 
Secretary of the Interior. The settlement agreement, however, 
provides that a core commitment in the 1993 compact, that a 
Tribe seeking off-reservation gaming locations would enter into 
revenue-sharing agreements with the other signatory Tribes, 
either does not apply, or is waived if deemed to apply. 
Withdrawing from this core commitment ordinarily would require 
going back to the legislature and the Secretary for approval, 
as is required under Michigan and Federal law.
    Fourth, the bill would, apparently for the first time, 
legislatively ratify what is essentially a Tribal-State gaming 
compact, which under IGRA the Department of Interior must 
review, approve, and publish in the Federal Register before the 
Tribe may conduct class III gaming. In its testimony before the 
Committee, the Department of Interior expressed a number of 
concerns about departing from normal IGRA procedure and 
eliminating Interior's evaluation.
    Fifth, this Indian land claim is unusual in the sense that 
it is against the State of Michigan--alleging wrongful sale of 
the lands by the State for back property taxes before the lands 
were in the legal possession of the Tribe--and the land claim 
settlement agreement is likewise between the Tribe and the 
State of Michigan. The land claim could thus be settled without 
any Federal involvement, by agreement between the State and the 
Tribe. The United States is not, and has never been, a party to 
the land claim, nor has it been involved with the negotiation 
of the land claim settlement agreement, which is unusual for a 
land claim submitted for ratification by Congress.
    Sixth, the claim asserted by the Tribe has already been 
litigated and lost. It was pursued in both Michigan and Federal 
courts, by the Bay Mills Tribe. The Federal court dismissed the 
case without prejudice, on the ground that the Sault Ste. Marie 
Tribe was an indispensable party due to its own claim on the 
same land--the two Tribes had once been parts of the same 
Tribe--but had not been joined. But the Michigan case was 
dismissed with prejudice, barring re-litigation of the claim.
    Seventh, the lands identified for transfer in settlement of 
the claims are far removed from the Tribes' ancestral lands, 
from the Tribe's current reservation, and from the lands 
subject to the claims. They are completely outside the 12 
million acre area originally ceded by the Tribe to the United 
States, and approximately 350 miles from both the Tribes' 
reservation and the Charlotte Beach lands. While it is not 
unusual for land claim settlements to involve acquisition of 
lands outside a Tribe's reservation, it is highly unusual to 
acquire lands that are such a great distance away. And it may 
be unprecedented for a Tribe to acquire lands outside of its 
historical territory in settlement of a land claim.
    Finally, the bill would, apparently for the first time, 
specifically deem the lands acquired pursuant to a land claim 
settlement agreement to qualify for gaming. Staff is not aware 
of any Federal legislation that has previously directed 
specific off-reservation lands to be taken into trust and at 
the same time designated those lands as qualifying for gaming 
under an exception to IGRA.

                                Hearings

    The Committee held a legislative hearing on H.R. 2176 on 
Friday, March 14, 2008. Witnesses at the hearing were: Rep. 
Carolyn Kilpatrick (D-MI); Rep. Shelly Berkley (D-NV); Carl 
Artman, Assistant Interior Secretary for Indian Affairs, 
Department of the Interior; Fred Cantu, Chief, Saginaw Chippewa 
Tribe of Michigan; Alicia Walker, Counsel, Sault Ste. Marie 
Chippewa Tribe of Michigan; Kathryn Tierney, Tribal Attorney, 
Bay Mills Indian Community; and Dr. Guy Clark, Chairman, 
National Coalition Against Legalized Gambling.

                        Committee Consideration

    On Wednesday, April 2, 2008, the Committee met in open 
session and ordered the bill H.R. 2176 unfavorably reported, 
without amendment, by a rollcall vote of 29 to 0, a quorum 
being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall vote occurred during the Committee's 
consideration of H.R. 2176:
    1. Reporting the bill unfavorably. Approved 29-0.

                                                 ROLLCALL NO. 1
----------------------------------------------------------------------------------------------------------------
                                                                       Ayes            Nays           Present
----------------------------------------------------------------------------------------------------------------
Mr. Conyers, Jr., Chairman......................................              X
Mr. Berman......................................................              X
Mr. Boucher.....................................................
Mr. Nadler......................................................
Mr. Scott.......................................................              X
Mr. Watt........................................................              X
Ms. Lofgren.....................................................              X
Ms. Jackson Lee.................................................
Ms. Waters......................................................              X
Mr. Delahunt....................................................
Mr. Wexler......................................................              X
Ms. Sanchez.....................................................              X
Mr. Cohen.......................................................              X
Mr. Johnson.....................................................              X
Ms. Sutton......................................................
Mr. Gutierrez...................................................
Mr. Sherman.....................................................
Ms. Baldwin.....................................................
Mr. Weiner......................................................              X
Mr. Schiff......................................................              X
Mr. Davis.......................................................              X
Ms. Wasserman Schultz...........................................
Mr. Ellison.....................................................              X
Mr. Smith (Texas)...............................................              X
Mr. Sensenbrenner, Jr...........................................              X
Mr. Coble.......................................................              X
Mr. Gallegly....................................................              X
Mr. Goodlatte...................................................              X
Mr. Chabot......................................................              X
Mr. Lungren.....................................................
Mr. Cannon......................................................              X
Mr. Keller......................................................              X
Mr. Issa........................................................              X
Mr. Pence.......................................................
Mr. Forbes......................................................              X
Mr. King........................................................              X
Mr. Feeney......................................................              X
Mr. Franks......................................................              X
Mr. Gohmert.....................................................              X
Mr. Jordan......................................................              X
                                                                 -----------------------------------------------
    Total.......................................................             29               0
----------------------------------------------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 2176, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, April 3, 2008.
Hon. John Conyers, Jr., Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2176, a bill to 
provide for and approve the settlement of certain land claims 
of the Bay Mills Indian Community.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Leigh Angres, 
who can be reached at 226-2860.
            Sincerely,
                                           Peter R. Orszag,
                                                  Director.

Enclosure

cc:
        Honorable Lamar S. Smith.
        Ranking Member
H.R. 2176--A bill to provide for and approve the settlement of certain 
        land claims of the Bay Mills Indian Community.
    H.R. 2176 would ratify an agreement between the state of 
Michigan and the Bay Mills Indian Community regarding the 
tribe's claim to land in northern Michigan, known as Charlotte 
Beach. CBO estimates that this bill would have no significant 
effect on the Federal budget.
    H.R. 2176 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The agreement that would be ratified by the bill stipulates 
that the tribe relinquish all claims to the Charlotte Beach 
property and that Michigan give the tribe an alternative parcel 
of land in Port Huron, Michigan. The legislation would require 
the Secretary of the Interior to take that land into trust for 
the tribe and proclaim it to be part of the tribe's 
reservation, provided that certain conditions are met. 
According to information from the Bureau of Indian Affairs and 
the tribe, the lands would primarily be used for gaming 
purposes.
    On March 6, 2008, CBO trasmitted a cost estimate for H.R. 
2176 as ordered reported by the House Committee on Natural 
Resources on February 13, 2008. The two versions of the 
legislation are the same, and our cost estimates are identical.
    The staff contact for this estimate is Leigh Angres, who 
can be reached at 226-2860. The estimate was approved by Peter 
H. Fontaine, Assistant Director for Budget Analysis.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, H.R. 
2176 would preemptively ratify a land claim settlement 
concluded between the Bay Mills Indian Community and Governor 
Jennifer Granholm of Michigan and preemptively deem the newly-
acquired off-reservation land part of the Tribe's reservation 
and eligible for class III casino gaming.

                   Constitutional Authority Statement

    Pursuant to clause 3(d)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee finds the authority for 
this legislation in Article 1, section 8, clause 3 of the 
Constitution.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 2176 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(d), 9(e), or 9(f) of Rule XXI.

                      Section-by-Section Analysis

    Sec. 1. Definitions. This section sets forth the 
definitions of terms used in the bill. ``Alternative Lands,'' 
for example, refers to non-contiguous land in Port Huron, 
Michigan identified in an agreement executed on August 23, 
2002, between the Bay Mills Indian Community and Governor 
Jennifer Granholm of Michigan to be transferred to the Tribe in 
settlement of a claim to the ``Charlotte Beach lands.''
    Sec. 2. Taking Land into Trust; Extinguishment of Claims; 
and Gaming. Section 2(a) of the bill directs the Secretary of 
the Interior to take the alternative lands into trust within 30 
days of receipt of a title insurance policy for said lands 
proving they are not subject to any impairing encumbrances; 
upon attaining trust status, the lands will be deemed part of 
the Tribe's reservation. This would bypass established 
practice, under which Interior conducts an extensive 
environmental review, as required by the National Environmental 
Policy Act, before taking land into trust. The mandatory nature 
of this provision would require the alternative lands to be 
taken into trust even if NEPA liabilities are present, thereby 
subjecting the government to potentially extensive liability.
    Section 2(b) provides that the alternative lands taken into 
trust will be classified as part of a land settlement within 
the meaning of section 20(b)(1)(B)(i) of the Indian Gaming 
Regulatory Act (25 U.S.C. 2719). The land would thereby be made 
automatically eligible for gaming, again bypassing established 
practice, the review by Interior taking into account the 
factors set forth in 25 C.F.R. Part 151--a review that is 
especially important for off-reservation gaming where, the 
farther the economic enterprise is from the reservation, the 
greater the potential for harm to reservation life.
    Section 2(c) states that all land claims concerning the 
Charlotte Beach lands by the Tribe against the U.S., the State 
of Michigan, or any other person will be extinguished upon the 
bill's enactment.
    Sec. 3. Effectuation and Ratification of Agreement. Section 
3(a) mandates the ratification of the August 23, 2002 land 
claim settlement agreement, in disregard of established 
prerequisites and procedures, except the last sentence in 
Section 10 of the agreement related to severability. Section 
3(b) states that this land claim proposal shall not be 
considered precedent for any future agreement between a State 
and an Indian Tribe because of its unique nature. Section 3(c) 
specifies as the court of jurisdiction for the resolution of 
any dispute regarding the land claim the U.S. District Court 
for the Western District of Michigan, where the lands subject 
to the claim are located but not the lands to be transferred in 
settlement.

                            Additional Views

    H.R. 2176, to provide for and approve the settlement of 
certain land claims of the Bay Mills Indian Community
    We oppose H.R. 2176, a bill to provide for and approve the 
settlement of certain land claims of the Bay Mills Indian 
Community. We share the Majority's concerns with this bill, but 
have other concerns as well.
    This bill will authorize a land transfer between the State 
of Michigan and the Bay Mills Indian Community in Michigan's 
Upper Peninsula. The agreement between the State and the Tribe 
allows for Indian gaming casinos to be operated on land that is 
located near the metropolitan area of Detroit, Michigan, 
roughly 350 miles away from the Bay Mills reservation.
    We share the Majority's concern that this land transfer 
circumvents Michigan state laws regulating the establishment 
and expansion of Indian gaming operations. A 2004 amendment to 
the Michigan Constitution requires state-wide voter approval 
for expansion of gambling operations. To date, that voter 
approval has not been given. H.R. 2176 usurps the rights of the 
citizens of Michigan to vote on any proposed expansion of 
gaming within the state.
    We are also concerned that this legislation represents an 
expansion of the Indian Gaming Regulatory Act (IGRA) beyond 
Congress' original intent. IGRA provides that gaming may only 
take place on Indian lands, including lands held in trust. 
Lands acquired in trust after IGRA's enactment are generally 
ineligible for gaming if they are outside of and not contiguous 
to the boundaries of a tribe's reservation. H.R. 2176 takes the 
unprecedented step of authorizing Indian gaming as part of a 
land settlement on lands that are not contiguous to the Bay 
Mills reservation.
    We note that the Department of the Interior opposes this 
legislation as well. The bill preempts the Department's 
procedures for evaluating the subject property to determine 
whether hazardous materials are present. Under a well-
established review process, the Department recommends approval 
for land transfers only after determining the land meets 
applicable environmental standards. This Committee should 
ensure that these procedures are followed in every instance. 
Further, we should not approve any legislation that 
intentionally undermines such a review process.
    Where we perhaps depart from the Majority in our opposition 
is our concern about the link between gambling and crime and 
the impact that these casinos will have on the local 
communities. A 2004 study by the Department of Justice of 
arrestees indicated that more than 30 percent of arrestees 
identified as pathological gamblers committed a robbery within 
a year of their arrest. The study also stated that nearly one-
third of that group admitted they committed the robbery to pay 
for gambling or gambling debts. In addition, the same study 
found that 13 percent of those studied said they had assaulted 
someone to get money. According to the study, 25 percent of 
those assaults were related to gambling.
    In an earlier study undertaken in the neighboring state of 
Minnesota, municipalities surrounding Indian casinos responded 
to questions regarding their perception of changes since the 
introduction of casino gambling. Of the areas questioned, 26.5 
percent of the precincts reported higher crime rates, 36.8 
percent reported increased traffic congestion, and 37.5 percent 
reported an increase in problem gambling.
    Even proponents of Indian gaming acknowledge the limited 
benefits of legalized gambling. The pro-gaming National 
Congress of American Indians states ``even after the advent of 
gaming, Indian reservations continue to have a 31% poverty rate 
and a 46% unemployment rate.'' Similarly, Indian health and 
education statistics are among the worst in the country.
    For these reasons, we join the Majority in reporting H.R. 
2176 adversely to the House.

                                   Lamar Smith.
                                   Steve King.
                                   Jim Jordan.