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BUREAU OF INDIAN AFFAIRS

Midwest Regional Office

5600 West A1J1erican Boulevard, Suite 500

Bloomington, Minnesota 55437

JAN 1 9 2017

In Reply Refer to:

Division of Fee to Trust

Hobart Parcels (Remanded Decision)

NOTICE OF DECISION

BY CERTIFIED MAIL - 9171 9690 0935 0036 0346 94

Honorable Cristina Danforth

Tribal Chairwoman

Oneida Nation

P.O. Box 365

Oneida , Wisconsin 54155

RE:

Decision on Remand from Village of Hobart v. Midwest Regional Director, Bureau of

Indian Affairs. 57 IBIA 4 (2013).

Dear Chairwoman Danforth:

On May 9, 2013, the Interior Board of Indian Appeals (IBIA) affirmed in part, vacated in part, and

remanded, the six Notices of Decisions issued by the Midwest Regional Director to accept eight

properties-consisting of 21 parcels and 499.022 acres-into trust on behalf of the Oneida Tribe

of Indians of Wisconsin (Oneida Nation or Nation). 1 The IBIA affirmed the Regional Director's

decisions as to: (1) her authority to accept land into trust on behalf of the Nation under the Indian

Reorganization Act {IRA) , 25 U .S.C. § 51082 (25 C.F.R. § 151.1 O(a)); (2) her consideration of the

Nation's need for the land (25 C.F.R. § 151.1 O(b)); (3) the Nation's purposes for and uses of the

land (25 C.F.R. § 151.10(c)); and (4) the Bureau of Indian Affairs' (BIA) ability to absorb any

additional responsibilities (25 C.F.R. § 151.10(g)). 3

The IBIA vacated and remanded the Regional Director's decisions as to loss of tax revenue (25

C.F.R. § 151.10(e)) and jurisdictional and land use conflicts (25 C.F.R. § 151.10(f)).4 Additionally,

the Regional Director, on remand , was directed to address the Village's arguments regarding

environmental concerns (25 C.F.R. § 151.10(h)). 5 Finally, the Regional Director was instructed to

The official name of the tribal entity was changed from "Oneida Tribe of Indians of Wisconsin" to "Oneida

Nation." Indian Entities Recognized and Eligible To Receive Services From the United States Bureau of

Indian Affairs , 81 Fed . Reg. 81, 26829 (May 4, 2016).

Formerly codified at 25 U.S.C . § 465.

Village of Hobart v. Midwest Reg'I Dir. , Bureau of Indian Affairs, 57 IBIA 4, 5 (2013).

.!.ct..

consider the Village of Hobart's claim of alleged bias in decision making. 6 This Notice of Decision

specifically addresses the matters vacated or otherwise remanded by the IBIA.

Background

Between January 24, 2007 and September 20, 2007, the Oneida Nation submitted fee-to-trust

applications for eight properties known as the Boyea, Buck, Calaway, Catlin, Cornish, DeRuyter,

Gerbers, and Lahay parcels (Hobart Parcels). We have reviewed the legal description and maps

and determined this acquisition qualifies for processing under the regulations found at 25 CFR §

151.10 for on-reservation acquisitions. The parcels are located in the Village of Hobart, Brown

County, Wisconsin, and are described in Exhibit A (enclosed). 7

In 2010, the Regional Director8 issued six notices of decision of intent to accept into trust the eight

properties, consisting of 21 parcels and 499.022 acres, for the Nation. Subsequently, the Village of

Hobart timely appealed each decision. Through a series of Orders in 2010, the IBIA consolidated

the six appeals, docketed as listed below:

Docket No.

10-091

10-092

10-107

10-131

11-002

11-045

Property Name

Boyea

Cornish

Gerbers

Buck

Catlin

Calaway

DeRuyter

Lahay

Date of Notice of Decision

Mar. 17, 2010

May 5, 2010

July 8, 2010

Aug. 16,2010

Nov. 23, 2010

The IBIA remanded portions of the decisions for reconsideration by the Regional Director. Village

of Hobart v. Acting Midwest Reg'/ Dir. , Bureau of Indian Affairs, 57 IBIA 4, 5 (2013). Upon

remand, additional comments were solicited from interested parties through the issuance of a

supplemental Notice of Application. 9 Our analysis herein includes and considers the comments

from the Village of Hobart contained within its replies to the original Notices of Application, its

filings with the IBIA, and its reply to the supplemental Notice of Application.

Regulatory Authority

The applicable regulations are set forth in 25 C.F.R. Part 151. The regulations specify that it is the

Secretary's policy to accept lands "in trust" for the benefit of Tribes when such acquisition is

authorized by an Act of Congress; and (1) when such lands are within the exterior boundaries of

the Tribe's reservation or adjacent thereto, or within a Tribal consolidation area; or (2) when the

lQ,_

See Letter of Application for the Boyea Parcel from the Oneida Nation, to Terrence Virden, Midwest Reg'I

Dir., Bureau of Indian Affairs (Jan. 24, 2007); Buck Parcel (Sept. 20, 2007); Calaway Parcel (Sept. 20,

2007); Catlin Parcel (Sept. 20, 2007); Comish Parcel (Sept. 20, 2007); DeRuyter Parcel (Sept. 20, 2007);

Gerbers Parcel (Feb. 8, 2007); Lahay Parcel (Sept. 20, 2007) (on file with the Midwest Regional Office).

Some decisions were issued by an "Acting" Regional Director under the Regional Director's authority.

Notice of (Non-Gaming) Land Acquisition Application (Aug. 6, 2013) (on file with the Midwest Regional

Office).

Tribe already owns an interest in the land; or (3) when the Secretary determines that the

acquisition of the land is necessary to facilitate tribal self-determination, economic development, or

Indian housing. 10

The Buck, Gerbers, Lahay, and Cornish acquisitions facilitate Indian housing and

self-determination. The Boyea, Calaway, Catlin, and DeRuyter acquisitions facilitate economic

development and self-determination. Accordingly, these acquisitions fall within the purview of

Department's land acquisition policy. Pursuant to 25 C.F.R. § 151.10, the Secretary is required to

consider the following requirements in evaluating tribal requests for the acquisition of lands in trust

status, when the land is located within or contiguous to the tribe's reservation, and the acquisition

is not mandated:

(a) the existence of statutory authority; (b) need of the tribe for additional land; (c) the purpose for

which the land will be used; (e) impact on the State and its political subdivisions resulting from

removal of the land from the tax rolls; (f) jurisdictional problems and potential conflicts of land use

which may arise; (g) whether the Bureau of Indian Affairs is equipped to discharge the additional

responsibilities resulting from the acquisition of the land in trust status; and (h) compliance with

516 OM 6, Appendix 4, National Environmental Policy Act Revised Implementing Procedures, and

602 OM 2, Land Acquisitions: Hazardous Substances Determinations.

This decision addresses the issues remanded by the IBIA, including the criteria set forth in 25

C.F.R. § 151.10 (e), (f), and (h).

Village of Hobart Comments

In its reply 11 to the Notices of Application and in its Opening Briefs to IBIA, 12 the Village of Hobart

provided information regarding taxes, special assessments, services provided to the parcel,

zoning, and regulatory issues, along with numerous other complaints. Specifically, the Village

provided the following objections:

1) The Village maintains that the Nation must restart the entire fee to trust process

including the submission of a new application because "the decision relating to [these

parcels] was vacated ." 13

2) The Village states that there is a substantial negative impact on the Village resulting

from the removal of the subject properties from the tax rolls. The Village also alleges

numerous fiscal impacts that result from the Nation's trust acquisitions, including lost

development potential at commercial/industrial parks, lack of service agreements, loss

25 C.F.R. § 151.3.

Letter from Paul G. Kent, Attorney for the Viii. of Hobart, to Terrence Virden, Midwest Reg'I Dir. , Bureau

of Indian Affairs (Nov. 6, 2008) (on file with the Midwest Regional Office).

Village of Hobart's Opening Brief, Village of Hobart v. Midwest Reg'I Dir., Bureau of Indian Affairs, 57

IBIA 4 (2013) (Nos. 10-131 and 11-002) (Buck, Catlin, Calaway, DeRuyter); Village of Hobart's Opening

Brief, Hobart, 57 IBIA 4 (Nos. 10-091 and 10-092) (Boyea, Cornish); Village of Hobart's Opening Brief,

Hobart, 57 IBIA 4 (No. 10-107) (Gerbers); Village of Hobart's Opening Brief, Hobart, 57 IBIA 4 (2013) (No.

11-045) (Lahay) (on file with the Midwest Regional Office).

13 Letter from Frank W. Kowalkowski , Attorney for the Viii. of Hobart, to Diane Rosen, Midwest Reg'I Dir.,

Bureau of Indian Affairs (Sept. 5, 2013) (on file with the Midwest Regional Office).

of tax income to school districts, and hypothetical future loss of tax income due to other

trust acquisitions. 14

3) The Village states that it provides numerous services to those residing within the area

to be acquired, including transportation , sewer, water, parkland , firefighting , land use

planning , and economic development which , if the land is taken into trust, it would have

to perform with reduced funding due to removal from property tax rolls. 15

4) The Village states that significant land use conflicts exist and that the BIA failed to

properly identify the proposed uses of the properties. Specifically, the Village argues

that:

a) BIA must consider whether the proposed future uses are consistent with the

Village's Comprehensive Plan. 16

b) The Village's zoning code will be supplanted by the Oneida Nation's land use

regulations if the property is transferred into trust. 17

c) Fourteen parcels within the Village are zoned Limited Industrial by the Village , but

Agricultural by the Nation. 18

d) The Nation has attempted to stymie the Village's land use plans by making land

purchases that interfere with Village development projects. 19

e) Oneida Nation's tribal regulations permit mobile homes, while Village regulations

do not. 20

The Nation has encouraged its members and other entities not to comply with

Village regulations. 21

5) The Village states that non-contiguous trust acquisitions cause checker-boarding of

jurisdiction for zoning and emergency services.22 The Village is specifically concerned

with the potential for confusion and conflict between Village and Oneida Nation tribal

law enforcement. 23

Letter from Paul G. Kent, Attorney for the Viii. of Hobart, to Terrence Virden, Midwest Reg'I Dir., Bureau

of Indian Affairs (Nov. 26, 2008) (on file with the Midwest Regional Office).

15 .IQ,,

Village of Hobart's Opening Brief at 60, Hobart, 57 IBIA 4 (Nos. 10-091 & 10-092) (on file w ith the

Midwest Regional Office).

.IQ,, at 61-68.

18 .IQ,,

.IQ,, at 61-62.

.IQ,, at 61 .

.IQ,, at 63-64.

.IQ,, at 63.

.IQ,, at 67-68.

6) The Village states that the Regional Director did not adequately explain the term

"jurisdictional pattern."24

7) The Village states that the proposed trust acquisition (and trust acquisitions in general)

is detrimental to the Village's stormwater management program due to loss of fees and

duplication of services. 25

8) The Village stated that an Environmental Assessment (EA) or Environmental Impact

Statement (EIS) should have been performed due to the "highly controversial effects"

and "unresolved conflicts" caused by the proposed action, or because BIA failed to

identify a change in land use.26

9) The Village states that the Phase I Environmental Site Assessments performed by BIA

failed to properly categorize nearby hazardous materials and/or environmental

contamination as Recognized Environmental Conditions (RE Cs) for the subject

properties. 27 The Village further argues that the BIA failed to consult adequately with

local government officials when preparing the Phase I ESA. 28

10) The Village also states that the acquisitions did not comply with Environmental

Compliance Memorandum No. ECM 10-2, which it claims is mandatory.29

11) The Village states that the Regional Director is biased, and the BIA is biased at an

administrative level. 30

25 CFR § 151.10 (e)- Impact on the State and its political subdivisions resulting

from the removal of this property from the tax rolls.

The IBIA remanded the Regional Director's previous consideration of 25 C.F.R. § 151.10 (e) ,

regarding tax loss to local governments.

In its combined reply brief,31 the Village states that the Regional Director refused to consider the

cumulative and aggregate impact of the simultaneous trust applications, which affect 133 parcels

for an approximate tax loss of $36,148.88. Likewise , in its September 5, 2013, response to the

supplemental August 6, 2013, Notice of Application, the Village presented recently updated

calculations on the total property tax loss associated with the Nation's trust applications for

approximately 142 parcels of land, totaling 3,156.070 acres located within the Village. Based on

2012 taxes and land values, the Village anticipates its property tax loss for these 142 parcels to be

Village of Hobart's Opening Brief at 65, Village of Hobart v. Midwest Req'I Dir.. Bureau of Indian Affairs ,

57 IBIA 4 (2013) (No.11-045) (on file with the Midwest Regional Office).

Village of Hobart's Opening Br. at 65-66, Hobart, 57 IBIA 4 (Nos. 10-091 & 10-092) (on file with the

Midwest Regional Office).

Village of Hobart's Opening Br. at 81 , Hobart, 57 IBIA 4 (No. 11-045) (on file w ith the Midwest Regional

Office) (citing 516 DM 2, Appendix 2 at 2.3.)

1,Q,, at 84-85.

1,Q,, at 86; Village of Hobart's Opening Brief at 85, 88, Hobart, 57 IBIA 4 (Nos. IBIA 10-131 & 11-002).

29 Letter from Frank W. Kowalkowski, Attorney for the Viii . of Hobart, to Diane Rosen , Midwest Reg'I Dir.,

Bureau of Indian Affairs (Sept. 5, 2013) (on file with the Midwest Regional Office)

(Village's response letter to Supplemental Notice of Application).

30 Village of Hobart's Opening Brief at 42-48, Hobart, 57 IBIA 4 (Nos. 10-091 & 10-092).

Appellant's Combined Reply Brief, Hobart, 57 IBIA 4 (Nos. IBIA 10-131 & 11-002).

approximately $29,317.54. However, in this case, the BIA need only consider the impact on the

tax rolls of a specific proposed acquisition, i.e., the taxes currently assessed. 32

For the eight applications (consisting of 21 parcels) actually under consideration here, 33 the total

tax loss for the Village for 2015 (payable 2016) is an estimated $3,997.90 34 :

Parcel Name

Boyea

Buck

Calaway

Catlin

Cornish

DeRuyter

Gerbers

Lahay

Total

2015 taxes (due 2016)

$ 686.30

$ 179.40

$ 163.30

$ 725.70

$ 638.00

$162.10

$ 932.60

$ 510.50

$3,997.90

The Brown County tax levy for 2015 was $84,432,779.00.35 The Village of Hobart's 2015 property

tax levy was $2 ,770,548.00. 36 The total property tax charged on the property in 2015 was

$17,457.10, of which the Village received $3,997.90.

Village Tax

$3,997.90

Village Levy

$2,770,548.00

Percentage of Levy

0.1443%

Taxes - Unpaid past due assessments and stormwater fees

The 2015 Stormwater Management fees for the subject properties are $1,328.52. 37

In 2008, the Village stated that these proposed trust acquisitions "have an adverse impact on local

revenues because the tribe has not paid over $430,000 in past due assessments and stormwater

fees." On November 2, 2016, updated property tax records were retrieved for each property

subject to this decision; the property tax records (which include payment information) indicate that

there are currently no delinquent past due assessments or stormwater fees. Further, 25 CFR §

151.13 requires the elimination of "liens, encumbrances, or infirmities" if these would "make title to

the land unmarketable." Therefore, any overdue or unpaid assessments on these parcels must be

paid, or otherwise resolved , prior to acceptance into trust.

32 City of Eagle Butte v. Acting Great Plains Reg'I Dir.• Bureau of Indian Affairs , 49 IBIA 75, 81-82 (2009).

The IBIA asked the Regional Director to address whether the Administrative Record omitted the

DeRuyter property tax invoices. After examining the casefile, it appears that the Nation never submitted

those tax invoices. For our review on remand, we requested updated tax invoices for all 21 parcels

including the DeRuyter property. The invoices have been considered in our analysis.

State of Wisconsin Real Estate Property Tax Bills for 2015 (on file with the Midwest Regional Office).

Bureau of Local Gov't Serv., Div. of State and Local Finance, Wis. Dep't of Revenue, Town, Village, and

City Taxes-2015, Taxes Levied 2015 - Collected 2016 5-6 (n.d.).

lct...

State of Wisconsin Real Estate Property Tax Bills for 2015 (on file with the Midwest Regional Office).

Tax loss to school districts

The 2015 School District tax charged for the subject parcels is $8,294.50.38 The 2015 levy for

school districts within the Village of Hobart is $6,034,569.00. 39

School Districts Tax

$8,294.50

School Districts Levy

$6,034,569.00

Percentage of Levy

0.1374497%

The Village stated that "loss of tax revenue [for schools] will not be reflected in additional federal

grants."40 While local school districts will lose revenue as a result of the trust acquisition , Congress

has attempted to mitigate this effect with Impact Aid provided on a per student basis. Importantly,

no school districts submitted comments or objected to the applications, and the Village has not

explained how a loss of revenue to a school district would impact the Village's budget or

operations.

Services provided by Village and Tribe

Brown County and other nearby municipalities have executed service agreements with the Nation

regarding delivery of services to tribal lands within the County. For example, on May 29, 2008

(amended September 16, 2008 and June 29, 2010), the Oneida Nation and Brown County

entered into a service agreement which includes cross-deputation for law enforcement and mutual

aid secondary assistance in emergency services.

The Nation and the Village entered into a Service Agreement, effective November 16, 2004

through November 16, 2007. During the term of the agreement, the Nation compensated the

Village based on a formula accounting for property values (rather than lost property tax) and the

cost of services provided by the Village. The Village has asserted that the Nation has passed a

tribal resolution that prohibits the Tribe from entering into a new agreement with the Village. 41

Contrary to the Village's contention , documents provided by the Oneida Nation show that it has

made clear that it is open to negotiating new service agreements, which may include payments in

lieu of taxes, if the Village were to recognize the Nation as a government pursuant to federal law. 42

However, the parties are not currently negotiating a new agreement, nor is the commencement of

negotiations anticipated in the near future. 43

Direct services provided by the Oneida Nation for tribal members and their families include: waste

and recycling pickup, health care , elderly services, public safety, education and library services,

ill

Bureau of Local Gov't Serv., Div. of State and Local Finance, Wis. Dep't of Revenue, Town, Village, and

City Taxes-2015, Taxes Levied 2015 - Collected 2016 ~ (n.d.).

Village of Hobart's Opening Brief at 56, Village of Hobart v. Midwest Reg'I Dir.• Bureau of Indian Affairs ,

57 IBIA 4 (2013) (Nos. 10-091 &· 10-092).

Letter from Paul G. Kent, Attorney for the Viii . of Hobart, to Terrence Virden , Midwest Reg'I Dir., Bureau

of Indian Affairs (Nov. 26, 2008) (on file with the Midwest Regional Office); See Village of Hobart v.

Midwest Reg'I Dir.• Bureau of Indian Affairs , 57 IBIA 4, 29 (2013).

Oneida Business Committee (BC) Resolution No. 10-12-11-B, Oct. 12, 2011 (on file w ith the Midwest

Regional Office) (rescinding and replacing BC Resolution No. 2-20-08-C regarding government to

government relations with the Village of Hobart).

Oneida Nation, Socioeconomic Conditions within the Reservation of the Oneida Tribe of Indians of

Wisconsin 17 (Mar. 18, 2015) (on file with the Midwest Regional Office) (stating that entering into a future

service agreement is unlikely).

recreation programs, public works, utilities, public transportation, housing, and mortgage loans

and rentals. The Nation also provides many community services to non-tribal residents of the

Oneida reservation. Services provided by the Oneida Police Department include first responders,

traffic violations, criminal arrests, investigations, pick-ups and transportation. The Oneida Nation

does not receive any reimbursement for these services. Fines from traffic tickets issued by the

Nation are given to the county and/or state. The Nation provides utility services (sewer and water)

within the Oneida Sanitary District Parks and recreation areas have been constructed and

maintained by the Nation for the benefit of tribal and non-tribal residents. 44

While the Nation provides all of these services to its membership on the reservation, fire coverage

is handled by the municipalities, in this case the Village of Hobart. Without an intergovernmental

agreement in place there is a possibility that emergency services provided by the Village, including

fire protection, could go uncompensated. However, this is similar to the situation for other

tax-exempt properties within the Village, such as churches and schools. And , although fire

protection is paid through property taxes, the Village has not provided specific information

regarding the cost of fire protection.

In the Village's November 26, 2008 comment letter it raised the issue of the cost of repair for three

roads (St. Josephs St. , Shenandoah St. , and Westfield Rd .) serving "mainly tribal trust or tribal fee

lands" arguing that such repairs exceeded $100 ,000 for 2009. While these three roads service

Oneida Trust land, we note that there are also a significant number of private fee parcels serviced

by these roads. Further, the three roads in question do not directly service any of the proposed

acquisitions currently under consideration, but are only located near the Boyea property. Similar to

the Village, the BIA provides funding for maintenance of roads serving tribal lands. Many of these

roads benefit tribal members and non-tribal members throughout the community. While the three

specific roads are not currently eligible for this funding, several other nearby roadways (e.g .

Seminary Rd, Jason Dr., and Hwy 54) are on the Indian Reservation Road Inventory (IRR), and

are eligible for BIA funding. This program partially offsets the Village's financial burden for road

maintenance.

Speculative Future Losses

The Village has complained that the Nation has made various efforts to thwart the Village'·s

industrial and commercial economic development plans, thus depriving the Village of future tax

revenues. 45 The Village has also expressed concern about its ability to raise ta_xes to offset any

loss caused by fee-to-trust acquisitions, citing a Wisconsin law that it argues prohibits it from

raising taxes above a 2% levy limit. 46 The Village has also provided information regarding the

cumulative tax impact for 142 parcels of land, comprised of both previous and potential future trust

acquisitions. 47

The BIA "has no obligation to consider an appellant's speculation about what might happen in the

future"46 and the Village has not provided sufficient information to properly analyze its concerns.

kl at 2.

Village of Hobart's Opening Brief at 61 , Hobart, 57 IBIA 4 (Nos. 10-091 & 10-092).

Letter from Paul G. Kent, Attorney for the Viii. of Hobart, to Terrence Virden, Midwest Reg'I Dir., Bureau

of Indian Affairs (Nov. 26, 2008) (on file with the Midwest Regional Office).

47 Letter from Frank W. Kowalkowski , Attorney for the Viii. of Hobart, to Diane Rosen, Midwest Reg'I Dir.,

Bureau of Indian Affairs (Sept. 5, 2013) (on file with the Midwest Regional Office).

City of Eagle Butte v. Acting Great Plains Reg'I Dir., Bureau of Indian Affairs, 49 IBIA 75, 82 (2009).

BIA need not consider speculative future tax loss, only the impact on the tax rolls of a particular

proposed acquisition , i.e. , the taxes currently assessed. 49

25 CFR § 151.10 (f) - Jurisdictional and land use conflicts

Regarding land use and jurisdictional issues, IBIA stated the following :

With respect to the Village's concerns about land use and jurisdictional issues (§

151.10(f)), the Regional Director . .. failed to mention, much less discuss, the

Village's land use concerns regarding adjacent fee and trust lands that are subject

to very different uses and zoning (e.g., the Gerbers property will continue to be

used and zoned by the Tribe for agricultural and residential purposes; it is located

within and adjacent to land zoned by the Village for a commercial industrial park)

and the Village's concerns regarding implementation of its storm water

management plan, given the increasing checkerboard geography of fee and trust

land within the Village's boundaries.

In addition, the Village contends that the Region~I Director did not explain what she meant by a

"jurisdictional pattern." The IBIA instructed that should the "Regional Director again decide to

approve these trust acquisitions, she should address [land use and zoning conflict] issues in more

detail to make clear they have been considered and to explain terms that the Village contends it

does not uhderstand."50

Zoning

Of the 21 parcels under consideration here, the Village's zoning classification and the Nation's

zoning classification are in concordance for all but three, listed below. The other 18 parcels are

zoned "A 1 - Agricultural" by both the Village and the Nation.

For the Cornish property, parcel HB-91-1, the Village has zoned the property "R2R - Rural

Residential" while the Nation has zoned the property "A 1 - Agricultural. " There is a low probability

for conflict in land use here. The Village's zoning allows for agriculture and single family housing,

as does the Nation's.

For the Lahay property, parcel HB-520-1, the Village has zoned the property "R2R - Rural

Residential" while the Nation has zoned the property "R1 - Single Family." This situation also

presents a low risk for conflicting land use. Both zoning districts allow low density residential

development.

For the Gerbers property, parcel H B-328, the Village has zoned the property "L 1 - Limited

Industrial" while the Nation has zoned the property "A 1 - Agricultural." The Gerbers property is

located within and adjacent to land zoned by the Village for a commercial industrial park. As the

Village noted in its Opening Brief, 51 there is a potential for land use conflict where industrial

development and agriculture exist side by side. However, the Village failed to provide evidence to

support its contention that "residential and/or agricultural purposes are completely inconsistent

with urban development and light industrial development." Further, this condition is not unique to

the Gerbers property. Contrary to the Village's claim that these "purposes are inconsistent," we

kl at 81-82.

50 Village of Hobart v. Midwest Reg'I Dir., Bureau of Indian Affairs, 57 IBIA 4, 30 (2013).

Village of. Hobart's Opening Brief at 50-52, Hobart, 57 IBIA 4 (No. 10-107).

note on Fernando Drive, just north of the Gerbers parcel, the Village has created the same

situation unilaterally by placing agricultural and industrial zoning districts immediately adjacent to

one another. Further, much of the land surrounding the industrial park (albeit separated by

roadways) has been zoned "A 1 - Agricultural" by the Village. We note that, in this case, the

Nation's zoning designation, A 1 - Agricultural, is more restrictive than the Village's.

The Nation has not proposed a change in use for any of the subject properties, and the Village

has not raised any material conflict between existing land uses and Village zoning.

The Village has indicated a general concern that the Nation's zoning regulations permit mobile

home parks, while the Village's prohibit them .52 However, the Nation has not proposed such a use

for any of the parcels under consideration here.

The Village has stated that BIA should consider whether the proposed uses for the property are

consistent with the future uses identified in the Village's comprehensive plan. 53 The Village did not

provide a specific comparison of the comprehensive plan's future land uses and the Nation 's

proposed uses. The comprehensive plan is available on the Village website 54 including a draft

Future Land Use Map. The relationship between the Nation's proposed uses, the Village's current

zoning, and the Village's draft Future Land Use Map is as follows:

Parcel Name

Proposed use

Village Zoning

(current)

Village draft Future Land Use

Map

Buck

Residential

Agriculture

Mixed Use Commercial and

Residential

Gerbers

Limited Industrial

Mixed Commercial I Industrial

Boyea

Residential and

Agriculture

Catlin

DeRuyter

Agriculture

Calaway

Comish

Lahay

Agriculture

Residential

Agriculture

Residential

Mostly residential, small portion

Mixed Commercial I Industrial

Agriculture / Future Residential

Split between Agriculture /

Future Residential and

Residential

Again, the Oneida Nation has not proposed any change in land use for any of the subject parcels.

The proposed uses qre also generally consistent with the Village's draft future land use map.

Village of Hobart's Opening Brief at 61, Hobart, 57 IBIA 4 (Nos . 10--091 & 10-092).

Chapter 7- Land Use, Village of Hobart Comprehensive Plan,

http://www.hobart-wi.org/vertical/sites/%7B354A483F-042E-454E-A570-720BFEDE46D9%7D/uploads/PreHearing_DRAFT_Ch_7_-_Land_Use.pdf (last visited Jan. 18, 2017).

kl at 59-60.

Jurisdiction - Potential disruption of stormwater management

IBIA has ordered on remand that BIA provide additional consideration of stormwater management

issues that may arise with respect to § 151.1 O(f). The Village, in its response to the Supplemental

Request for Comments dated August 6, 2013, states:

The Village, Tribe, and United States Government are presently parties in a lawsuit

involving storm water fees on trust land which is pending before the 7th Circuit

Court of Appeals. The Village, as an operator of a regulated small MS4, is

mandated by federal law to implement a storm water management program. The

EPA issued draft NPDES permits to the Village , Tribe, and County. The Tribe has

refused to pay storm water fees for trust land , and has claimed that to the extent

the fees are owed, they are owed by the United States Government. Storm water

does not flow according to a checkerboard pattern of trust land. Rather, this is a

serious jurisdictional and land use conflict. 55

In 2007, the Village passed an ordinance assessing stormwater management fees on all parcels

of land located within the village, to include those owned by the Oneida Nation. The assessment

would finance a stormwater management system. The Village stated that although the Nation

"generally paid these assessments in the past," the Nation "may not be paying these fees if the

property is taken into trust." The Village also expressed concern that the properties "will not be

subject to state law" and the Village's "expensive and painstaking efforts to improve surface water

quality may be wasted." Finally, the Village argued that the Nation "should agree to be bound by

the Village's stormwater program."56 When the Nation sought declaratory judgment that the

assessment could not be lawfully imposed on it, the Village filed a third-party complaint against the

United States. In Oneida Tribe of Indians v. Village of Hobart, the district court judge rendered

summary judgment for the Nation and granted the United States' motion to dismiss the third-party

claim, which the Village appealed. 57 The Seventh Circuit affirmed the court's ruling on October 18,

2013, and determined that the assessment is a tax, not a fee , and that the tribe owed no debt to

the Village. 58 The Village pursued the matter by filing a writ of certiorari in the Supreme Court of

the United States, which was denied. 59 Because the Seventh Circuit held in favor of the Oneida

Nation and the Department of the Interior (DOI) on this matter, this issue is resolved.

The Seventh Circuit also stated , "Congress has authorized the EPA to delegate to states the

authority to issue stormwater management permits."60 Wisconsin, however, in applying for

permitting authority, "disclaimed authority to regulate stormwater runoff on Indian Lands."61

Therefore, in Wisconsin, it is Indian governments, as opposed to the state, that may assume

Letter from Frank W. Kowalkowski, Attorney for the Viii. of Hobart, to Diane Rosen, Midwest Reg'I Dir. ,

Bureau of Indian Affairs (Sept. 5, 2013) (on file with the Midwest Regional Office) (Village's response letter

to Supplemental Notice of Application).

56 Letter from Paul Kent, Attorney for Viii. of Hobart, to Terrence Virden , Midwest Reg'I Dir., Bureau of

Indian Affairs (Dec. 2, 2008) (on file with the Midwest Regional Office).

57 Oneida Tribe of Indians v. Village of Hobart, 891 F. Supp. 2d 1058, 1059 (E.D. Wis . 2012).

Oneida Tribe of Indians of Wis. v. Village of Hobart, 732 F.3d 837, 842 (7th Cir. 2013)

59 Village of Hobart v. Oneida Tribe of Indians, 732 F.3d 837, 842 (7th Cir. 2013), cert. denied, 134 S. Ct.

2661 (2014).

60 Oneida Tribe, 732 F.3d at 840.

ill at 841 .

regulatory authority under the Clean Water Act. As a result, the Village and Oneida Nation

implement separate stormwater management programs.

Jurisdiction - VOH Checkerboard Pattern

The Village has expressed concern regarding the potential for jurisdictional confusion in relation to

emergency services. 62 Specifically, it notes that police dispatch calls in the Village may go to both

the Village and Tribal police departments, causing potential confusion and conflict between the

departments, and possibly reducing response time. The Village has also stated that the term

"jurisdictional pattern" is unclear as used in the original Notices of Decision. 63

In the Village of Hobart decision, the Seventh Circuit noted that 17 percent of Hobart's population

is comprised of Indians of the Oneida Nation. The "Indians' homes ... are scattered throughout the

village and as a result the Indian and non-Indian properties form an irregular checkerboard

pattern."64 In fact, "6.6 percent of the village 's total land - is held by the United States in trust for

the Oneida Tribe." The court acknowledged that this checkerboard pattern of jurisdiction is an

"awkward" but "familiar feature of American government." In fact, "federal facilities of all sorts,

ranging from post offices to military bases, are scattered throughout the United States ... a similar

scatter is common in Indian country." 65 The term "jurisdictional pattern" used in our previous

Notices of Decision refers specifically to this checkerboard pattern of jurisdiction.

In our view, the most feasible solution to the "checkerboard" issue is the development of

cooperative service agreements with other government bodies in the area , though such

agreements are not requ ired by the BIA. It is important to note that a service agreement between

the Village and Nation was in place from November 16, 2004 through November 15, 2007. As

previously mentioned, this agreement expired and was not renewed. The Nation has made it clear

that it is open to negotiating service agreements if the Village were to recognize the Nation as a

government pursuant to federal law, with inherent authority to regulate its members and its land

on the Oneida Reservation. 66 The inability of the Village and Nation to execute an

intergovernmental service agreement contributes to the jurisdictional conflict that the Village

complains of.

After examining each parcel's proposed land use, current zoning, and the Village's draft Future

Land Use Map, we recognize that the trust acquisition of these parcels is crucial to the Nation's

ability to govern its own land as a sovereign nation.

151.10 (h)- Environmental Hazards

On remand, IBIA has required BIA to consider the Village's comments with respect to

environmental concerns. The IBIA stated:

Village of Hobart's Opening Brief at 67, Hobart v. Midwest Req'I Dir.• Bureau of Indian Affairs , 57 IBIA 4

(2013) (Nos . 10-091 & 10-092).

Village of Hobart's Opening Brief at 65, Hobart, 57 IBIA 4 (No. 11-045).

Oneida Tribe of Indians of Wis . v. Village of Hobart, 732 F.3d 837, 842 (7th Cir. 2013)

&. at 839.

Oneida Business Committee (BC) Resolution No. 10-12-11-B, Oct. 12, 2011 (on file with the Midwest

Regional Office) (rescinding and replacing BC Resolution N·o. 2-20-08-C regarding government to

government relations with the Village of Hobart).

Finally, and with respect to environmental issues, we note that the environmental

reviews had not been completed at the time that the Village's comments on the

proposed trust acquisitions were due. See, e.g., Environmental Review for Lahay

Property, Aug. 9, 201 O (AR Vol. 1 Tab 18) (finalized almost 2 years after the

Comment Letter was submitted). Therefore, the Village has presented its

comments on the environmental reviews in the first instance to the Board'. In light

of our remand to the Regional Director on other issues, see supra , the Regional

Director should also consider the arguments raised by the Village with respect to

environmental concerns. 67

Environmental Compliance

All fee-to-trust acquisitions require compliance with the National Historic Preservation Act

(NHPA), the Endangered Species Act (ESA), and 25 C.F.R. § 151.10(h), which includes

compliance with 516 DM 6, appendix 4, National Environmental Policy Act Revised Implementing

Procedures, and 602 DM 2, Land Acquisitions: Hazardous Substances Determinations.

National Historic Preservation Act (NHPA) Compliance

No further compliance with NHPA is required. The Bureau of Indian Affairs- Midwest Regional

Office (BIA-MRO) determined that the Hobart Parcels trust acquisitions do not have the potential

to cause effects on historic properties (36 CFR 800.3 (a) (1 )). The BIA-MRO issued

determinations on the following dates:

Boyea

Cornish

Gerbers

Buck

Catlin

Calaway

DeRuyter

Lahay

July 7, 2015

June 29, 2015

July 7, 2015

June 29, 2015

July 7, 2015

July 13, 2015

Endangered Species Act (ESA) Compliance

No further compliance with ESA is required. The Oneida Nation received concurrence from the

U.S. Fish and Wildlife Service (USFWS) for a "No Effect" determination for Threatened and

Endangered Species on March 14, 2016. The "No Effect" determination was based on the intent

of the Nation to maintain current land use. The BIA-MRO issued this determination on the

following dates:

Boyea

Cornish

Gerbers

Buck

Catlin

Calaway

July 7, 2015

June 29, 2015

July 7, 2015

June 29, 2015

July 7, 2015

Village of Hobart v. Midwest Req'I Dir., Bureau of Indian Affairs , 57 IBIA 4, 18 (2013).

DeRuyter

Lahay

July 7, 2015

July 13, 2015

National Environmental Policy Act (NEPA)

No further compliance with NEPA is required . 25 C.F.R. § 151.1 O(h) requires the Secretary to

comply with 516 OM 6, appendix 4, National Environmental Policy Act Revised Implementing

Procedures and 602 OM 2, Land Acquisitions: Hazardous Substances Determinations, the latter

of which is discussed below. 516 OM 6, appendix 4 provides for the BIA Official to determine

whether or not plans for development or physical alteration are established to the point where

NEPA review of the proposed activity should be done in conjunction w ith the land transfer.

Secondly, if a proposed action belongs to a category of actions, as published by the DOI or the

BIA, that have no potential for significant or cumulative environmental effects, it can be

categorically excluded from further analysis and documentation in an environmental assessment

or an environmental impact statement.

The BIA-MRO determined that no change in land use is anticipated ; therefore, the Hobart Parcels

fee-to-trust acquisitions will not have a significant effect on the quality of the human environment

(individually or cumulatively) , and neither an Environmental Assessment (EA) nor an

Environmental Impact Statement (EIS) is required (40 CFR 1508.4; 43 CFR 46.205). Thus, the

parcels can be categorically excluded.

BIA-MRO issued the Categorical Exclusion (CE) on the following dates:

Boyea

Cornish

Gerbers

Buck

Catlin

Calaway

DeRuyter

Lahay

July 7, 2015

June 29, 2015

July 7, 2015

June 29, 2015

July 7, 2015

July 13, 2015

The Village of Hobart's Comments

The Village's environmental concerns are centered on BIA-MR O's perceived failure to comply with

516 OM 6, appendix 4, NEPA Revised Implementing Procedures and 602 OM 2, Land

Acquisitions: Hazardous Substances Determinations.

516 DM 6, appendix 4, NEPA Revised Implementing Procedures

The Village states that the Regional Director failed to comply with the requirements of NEPA as

outlined in 25 C.F.R. § 151.1 O(h). Specifically, the Village claims that the Regional Director failed

to comply with§ 151.1 O(h) by erroneously relying on a categorical exclusion for each of the

properties. 68 The Village states, in a letter dated December 2, 2008, there should be an EIS

Village of Hobart's Opening Brief at 81 , Hobart, 57 IBIA 4 (No. 11-045) (citing 516 OM 2, Appendix 2 at

2.3).

prepared to assess the impact of placing 2,673 acres (133 parcels) into Trust. 69 This Decision

only addresses the 8 remanded decisions comprising 499.022 acres (22 parcels).

At the time of the application, the Oneida Nation proposed to: 1) maintain the existing agricultural

and/or residential use for seven of the eight Hobart properties; and 2) maintain land use on the

Buck property with the possibility of future residential development. However, the Nation later

clarified that no construction is likely on the Buck site in the foreseeable future. Currently, the Buck

property is designated rural vacant and has minimal development. 70 Therefore, all applications for

the Hobart properties contemplate maintaining the current land use and a categorical exclusion is

appropriate, thereby rendering an environmental impact statement unnecessary.

602 DM 2 (Phase I Environmental Site Assessment)

The Village has four claims related to 602 DM 2: (1) The Regional Director failed to comply with

Part 602 of the Interior Department Manual because the DOI did not consult or coordinate with

the Village on any environmentally related concerns, nor did the Department interview local

government officials as part of the Phase I ESA;71 (2) The Phase I ESA's were deficient and did

not satisfy 25 CFR 151.1 O(h) because they identified environmental concerns nearby (e. g. , an

underground storage tank 0.2 miles from the Lahay property), yet no Phase II studies were

completed. 72 (3) the Phase I ESAs were prepared or approved by an employee of the BIA who

receives compensation from the Tribe pursuant to a side agreement between the Tribe and the

BIA; (4) DOI failed to comply with Environmental Compliance Memorandum No. ECM 10-2,

which the Village believes is mandatory. Each of these concerns is addressed below.

602 DM 2 prescribes Departmental policy, responsibilities, and functions regarding required

determinations of the risk of exposing the Department to liability for hazardous substances or

other environmental cleanup costs and damages associated with the acquisition of any real

property by the Department for the United States. It requires the acquiring bureau to ascertain the

nature and extent of any potential liability resulting from hazardous substances or other

environmental problems associated with the subject property. Pre-acquisition Environmental Site

Assessments (P1 ESA) procedures may be developed by the implementing bureau; however,

these procedures must adopt current ASTM standards. P1 ESA(s) are prepared inclusive of four

components: 1) Records review; 2) Site Reconnaissance; 3) Interviews; and 4) Report. It also

requires the acquiring bureau to adopt current ASTM-standards to the implementing bureau's

pre-acquisition environmental site assessment procedures.

The relevant ASTM requirements are as follows:

ASTM E 1527-1373 (Section 11.5.1) states interviews should occur with at least one staff member

of any one of the following types of agencies: 1) state and/or local agency officials; 2) the local fire

Letter from Paul G. Kent, Attorney for the Viii. of Hobart, to Terrenee Virden, Midwest Reg'I Dir. , Bureau

of Indian Affairs (Nov. 26, 2008) (on file with the Midwest Regional Office).

Letter from Fred Muscavitch, Oneida Div. of Land Mgmt. , to Scott Heber, Envtl. Prat. Specialist, Bureau

of Indian Affairs (Mar. 6, 2009) (on file with the Midwest Regional Office).

Village of Hobart's Opening Brief at 86, Hobart, 57 IBIA 4 (No. 11-045); Village of Hobart's Opening Brief

at 85, 88, Hobart, 57 IBIA 4 (Nos . 10-131 & 11-002).

Village of Hobart's Opening Brief at 85, Hobart, 57 IBIA 4 (No. 11-045).

ASTM E1527-05 was effective until superseded by ASTM E1527-13 on November 1, 2013.

department serving the property; 3) state or local agency regulating hazardous waste; or 4) local

agencies regulating' building or groundwater permits.

ASTM E 1527 defines a "recognized environmental condition" as the presence or likely presence

of any hazardous substances or petroleum products in, on, or at a property: 1) due to any release

to the environment; 2) under conditions indicative of a release to the environment; or 3) under

conditions that pose a material threat of a future release to the environment. De minimis

conditions are not recognized environmental conditions. BIA-MRO uses Level I Contaminant

Surveys as a resource to determine the presence or likely presence of an environmental condition

on a given property, as permitted by the ASTM standards.

The ASTM standards also define an Environmental Professional as "a person meeting the

education , training, and experience requirements as set forth in 40 CFR § 312.10(b)." BIA-MRO

hires qualified personnel in accordance with the standardized hiring practices as established and

regulated by the Office of Personnel Management. Environmental professionals performing P1

ESAs are required by ASTM E 1527 to certify that: 1) the professional meets the definition of an

Environmental Professional and; 2) the study was developed and performed in conformance with

the standards and practices set forth in 40 CFR Part 312.

With respect to the Village's first claim, the Oneida Nation has operational divisions tasked with

the delivery of services including environmental monitoring and land management. In this case,

interviews were conducted with Oneida Nation's environmental and land department staff. These

Oneida Nation governmental agencies have intimate knowledge of the properties and are the best

source of information regarding potential contamination on the properties. In combination with

extensive site visits, these interviews serve to meet the requirements of ASTM E1527.

With respect to the Village's second claim - that environmental concerns warranted a level 11 study

- evidence was not found on the Hobart properties that justified the issuance of notice of a

recognized environmental condition as defined by the applicable ASTM standard. The BIA-MRO

complied with 602 OM 2 for the Hobart properties through the development and approval of P1

ESA(s) for the subject properties. None of the P1 ESA(s) identified recognized environmental

conditions in accordance with ASTM E1527. Therefore, no further environmental investigation

was/is required on the subject properties.

Phase 1 Environmental Site Assessment(s) (ESA) were prepared by BIA-MRO on the following

dates:

Boyea

Cornish

Gerbers

Buck

Catlin

Calaway

DeRuyter

Lahay

1) 07/2009; 2) 12/2009; 3) 04/2016; 4) 09/2016

1) 02/2010; 2) 04/2016; 3) 09/2016

1) 01/2010; 2) 04/2010; 3) 04/2016; 4) 09/2016

1) 03/2009; 2) 12/2009; 3) 04/2016; 4) 09/2016

1) 02/2010; 2) 05/2010; 3) 04/2016; 4) 09/2016

1) 02/201 O; 2) 05/201 O; 3) 04/2016; 4) 09/2016

1) 02/2009; 2) 05/2009; 3) 04/2016; 4) 09/2016

1) 08/2010; 2) 02/2016; 3) 09/2016

The Regional Director has approved the NEPA Coordinator Review and Phase I Environmental

Site Assessment Report (Update) for the Hobart Parcels on the dates listed below.

Boyea

Cornish

Gerbers

Buck

Catlin

Calaway

DeRuyter

Lahay

September 19, 2016

September 12, 2016

The Village's third claim , which involves claims of institutional bias, is discussed in the subsequent

section. Finally, with respect to the issue of compliance with ECM 10-2 , compliance is not

mandatory. 602 DM 2.6(a) allows bureaus to establish their own pre-acquisition environmental site

assessment procedures. Interim Guidance issued by the Director of the Bureau of Indian Affairs

on June 27, 2012, specifies that "non-scope considerations" discussed in ECM 10-2 should be

implemented in the same manner as they were prior to April 25, 2009 and need not be analyzed

in the Phase 1. 74

Therefore, the Phase I site assessments for the parcels satisfy the requirements of 602 DM 2, and

we find the Village's concerns to be without merit.

Bias

On remand, the IBIA directed the Regional Director to consider in the first instance the Village's

allegations of institutional bias in the decision making and also to address the following issues: the

·outcome of the investigation by the Inspector General of the Department (IG) referenced in a 2006

Government Accountability Office (GAO) report; the relevance, if any, of that IG investigation to

the Village's allegations; and any corrective actions that may have been taken in response to the

IG investigation prior to the Oneida Notices of Decision (NODs) at issue, if relevant to the Village's

allegations of bias. 75

Village Bias Allegations

The Village of Hobart did not allege actual bias by the Regional Director in issuing the Oneida

NODs or by BIA employees in review ing the Nation's applications or in preparing the records the

Regional Director relied on in issuing the NODs. The Village pointed to no materials in the

administrative record to show actual bias or substantive error, 76 and the Village ultimately stated it

did not claim structural bias against the BIA. 77

The Village instead alleged bias based on a FY2008-FY2010 memorandum of understanding

between the Midwest Region and participating tribes in the Region (the Midwest MOU or MOU),

Memorandum from Dir., Bureau of Indian Affairs to All Reg'I Dirs ."lnterim Guidance - ECM 10-2" (June

27, 2012) (on fi le with the Midwest Regional Office).

75 Village of Hobart v. Midwest Req'I Dir., Bureau of Indian Affairs , 57 IBIA 4, 16 (2013).

76 Fero v. Kerby, 39 F.3d 1462, 1478 (10th Cir. 1994); McQueen v. Acting Northwest Reg'I Dir., 63 IBIA

222, 232 (2016).

Village of Hobart's Combined Reply Brief to Appellee's Brief and Oneida Tribe of Indians ' Brief, Village of

Hobart v. Midwest Regional Director, Dkt. Nos . IBIA 10-107, 10-91 , 10-92 at 28 (Oct. 27, 2010) ("Hobart

Reply") ("The Village's bias argument is not based on structural bias within the BIA").

including the Oneida Nation. 78 The Village asserted that the MOU made "clear" that the Oneida

NODs "were not the product of a neutral, independent decision maker." 79 The Village alleged in

particular that:

•

the MOU lacked statutory authority; 80

the Nation paid the salaries of BIA employees directly;81

BIA employees worked only on fee-to-trust applications submitted by MOU tribes; 82

the MOU governed BIA employees; 83

BIA employees were "members" of a Tribal consortium";84

the Regional Director could not reasonably rely on documents prepared by BIA

employees. 85

Although the Regional Director responded to the Village's claims in briefing before the IBIA, the

IBIA remanded the Village's claims to the Regional Director to consider in the first instance.

Burden of Proof for Bias Claims

The BIA's review of an application to take land into trust is subject to the Due Process clause and

must be fair and unbiased. 86 Because public officers are presumed to discharge their official duties

properly,87 a party challenging an administrative decision for bias bears a heavy burden of

persuasion. 88 A party must ordinarily demonstrate either actual bias by the decision-maker or

circumstances such that an appearance of bias creates a conclusive presumption of actual bias.89

The BIA's policies of self-determination, Indian self-governance, and hiring preference for Indians

are policies established by Congress in the Indian Reorganization Act, 90 ISDEAA and TSGA.

Such policies are reasonable and rationally designed to further Indian self-government and do not

A description of the Midwest MOU is provided below.

Hobart Reply at 30.

Hobart, 57 IBIA at 15, citing Village of Hobart's Opening Brief, 0kt. Nos. IBIA 10-107, 10-91 , 10-92 at

43-44 (July 29, 2010) ("Hobart Op. Br. "); Hobart Reply at 29.

Hobart Op. Br. at 44; Hobart Reply at 28-31 (Tribe pays large sums of money for the salaries of the BIA

employees who process Tribe's fee-to-trust applications).

Hobart Op. Br. at 44.

Id.

84 Id. at 48.

l.Q. at 48.

County of Charles Mix v. U.S. Dep't of the Interior, 799 F.Supp. 2d 1027, 1043 (D .S.D . 2011 ), citing

Withrow v. Larkin, 421 U .S . 35, 46-47 (1975). See also State of South Dakota. et al. v. U.S . Dep't of the

Interior, 401 F. Supp. 2d 1000, 1011 (D .S.D . 2005), aff'd, 475 F.3d 993, opinion replaced 487 F.3d 548 (8th

Cir. 2007) (BIA review of fee-to-trust application subject to due process clause and must be unbiased).

State of South Dakota, 401 F.Supp.2d at 1011 , citing Sokaogon Chippewa Cmty. v. Babbitt, 929 F.Supp.

1165, 1176 (W.D. Wisc. 1996). See also Menard v. FAA, 548 F.3d 353, 361 (5th C ir. 2008) (administrative

officers presumed objective and capable of fairly rendering decision in matter based on its own

circumstances); W ithrow , 421 U.S. at 47 (party alleging administrative bias must overcome presumption of

honesty and integrity in those serving as adjudicators).

State of South Dakota, 401 F.Sup.2d at 1011 (party alleging administrative bias bears "heavy burden" to

show unfairness).

Fero, 39 F.3d at 1478 ("compelling" evidence of actual bias or prejudice required for disqualification). See

also DCP Farms v. Yeutter, 957 F.2d 1183, 1188 (5th C ir. 1992); Menard , 548 F.3d at 360.

State of South Dakota, 401 F.Supp. at 1011 .

violate due process, 91 and following Congress' statutory policies does not establish structural bias

warranting reversal of a BIA official's decision. 92 The federal courts and the IBIA have rejected

claims challenging decisions by BIA officials to acquire land in trust under the IRA based on

structural bias.93 Lacking allegations of actual bias, the Regional Director interprets the Village's

claim of "blatant bias" 94 as alleging the circumstances that create a conclusive presumption of

actual bias95 sufficient to override the presumption of honesty and integrity of BIA employees. 96

The 2006 IG Investigation and Its Relevance

The Village's claims of bias relied on a reference to an investigation by the Department's Inspector

General contained in report of the Government Accountability Office on the processing of

fee-to-trust applications by the BIA. 97 The IG investigation concluded its investigation two months

after publication of the 2006 GAO Report. 98

The IG Report, titled "California Fee to Trust Consortium MOU, " examined a fee-to-trust

memorandum of understanding utilized by the BIA Pacific Region since 2000 (the Pacific MOU).

The purpose of the IG's investigation was to consider whether the use of such MOUs raised

potential conflicts of interest or improperly augmented appropriations. In issuing its Report and

closing its investigation in September 2006, the IG agreed that the MOUs did not violate

government-wide ethics rules, were not inconsistent with ISDEAA, and their use of Tribal Priority

Allocation funds did not constitute an unlawful augmentation of appropriations. The IG found no

instances of a lack of impartiality in the processing of fee-to-trust applications. However the IG

concluded that the terms of the Pacific MOU as written could be interpreted as giving MOU tribes

authority over funding and staffing of the Pacific Region fee-to-trust consortium and thus give rise

South Dakota, 401 F.Supp. at 1011, citing Morton v. Mancari, 417 U.S. 535, 555 (1974).

South Dakota, 401 F.Supp.2d at 1011, citing Brooks v. N.H. Sup. Ct. , 80 F.3d 633, 640 (1st Cir. 1996);

see also Doolin Security Savs. Bank v. FDIC, 53 F.3d 1395, 1407 (4th Cir. 1995), cert. denied, 516 U.S.

973.

See South Dakota v. United States DOI, 775 F.Supp.2d 1129, 1141 (D.S.D. 2011); Roberts County, S.D.

v. Acting Great Plains Reg'I Dir. , 51 IBIA 35, 48 (2009) (argument that structural bias disqualifies BIA as

decision-maker squarely rejected by the courts); Starkey v. Pacific Reg'I Dir., 63 IBIA 254, 270 (2016).

Hobart Op. Br. at 48.

Fero v. Kerby, 39 F.3d 1462, 1478 (10th Cir. 1994) ("compelling" evidence of actual bias or prejudice

required for disqualification). See also DCP Farms v. Yeutter, 957 F.2d 1183, 1188 (5th Cir. 1992); Menard

v. FAA, 548 F.3d 353, 360 (5th Cir. 2008).

Fero, 39 F.3d at 1478. The Village appears to assert that it failed to raise the issue of bias earlier

because it learned of the Midwest MOU after the Regional Director rendered her decisions. Hobart Reply at

28-29.

Hobart Op. Br. at 43-45, citing U.S. Government Accountability Office, GA0-06-781 : BIA's Efforts to

Impose Time Frames and Collect Better Data Should Improve the Processing of Land in Trust Applications

at 20 (July 2006) ("2006 GAO Report"). See also Hobart, 57 IBIA at 15-16.

U.S. Dept. of the Interior, Office of Inspector General, "Report of Investigation: California Fee to Trust

Consortiums MOU ," Case No. PI-Pl-06-0091-1 (Sept. 20, 2006) ("IG Report") (on file at BIA Midwest

Regional Office). When issued, the Office of the Inspector General stated that further disclosure of the IG

Report could only be made with the express written consent of the IG Office of General Counsel. In 2013,

the IG provided a redacted version of the IG Report in response to a request made under the Freedom of

Information Act, 5 U.S.C. § 552. See Appellants No More Slots Opening Brief, Ex. I, Kramer. et al. v.

Pacific Reg'I Dir. (AS-IA) (Dec. 31, 2015). All references to the IG Report herein are to the redacted FOIA

version.

to the appearance of bias, for which reason the IG Report recommended that the MOU as then

structured be discontinued.

The IG Report focused .on the structure and implementation of the Pacific MOU as it then existed.

However it included a brief discussion of the Midwest MOU as it then existed. The IG Report

noted that the Midwest MOU had been reviewed by the Department's Office of the Solicitor prior

to its utilization in 2004. The terms of the Midwest MOU differed the Pacific MOU 's terms,

including, among other things, provisions making clear that BIA staff who processed fee-to-trust

applications pursuant to the Midwest MOUs were federal employees governed by Title 5 of the

United States Code.

I conclude that the 2006 IG investigation has no bearing on the Village's current bias claim. First,

contrary to the Village's claims, the IG investigation found no instances of actual bias in the BIA's

processing of fee-to-trust applications under either the Pacific or Midwest MOU. The IG agreed

that the consortiums did not violate government-wide ethics rules, were not inconsistent with

ISDEAA and that the reprogramming of TPA funds (described below) did not constitute an

unlawful augmentation of appropriations. Second, the IG investigation centered on the terms of

the Pacific MOU then in use, not the Midwest MOU. As both the IG and the 2006 GAO Report

pointed out, the Midwest MOU was implemented in 2004 after review by the Office of the Solicitor.

Finally, the MOUs in effect at the time of the IG investigation have both long since expired and

been replaced by restructured MOUs. The 2004 Midwest MOU was replaced by the

FY2008-FY2010 MOU, which was in effect when the Oneida NODs issued.

Based on these circumstances, we conclude that the IG investigation and its subsequent Report

do not create a conclusive presumption of actual bias 100 sufficient to override the presumption of

honesty and integrity of BIA employees. For the reasons that follow, we conclude that the

FY2008-FY2010 Midwest MOU does not show a conclusive presumption of actual bias sufficient

to override the presumption of honesty and integrity of BIA employees.

The Midwest MOU

As explained in the prior proceedings, 101 authority for the Midwest MOU derives from the Indian

Self-Determination and Education Assistance Act (ISDEAA) 102 and the Tribal Self-Governance

Act of 1994 (TSGA), 1° 3 whose policies of tribal self-determination the Midwest MOU is intended to

further. ISDEAA and TSGA permit tribes to contract with BIA to perform some or all of the realty

functions that BIA would perform, other than those deemed inherently federal. 104 The Midwest

MOU makes clear that the BIA retains control over all inherent federal functions in the trust

acquisition process and that staff of the Midwest Region Division of Fee-to-Trust (described

below) remain BIA employees with rights and obligations governed by Title 5 of the United States

Id. at 11 . See also 2006 GAO Report at 20.

Fero, 39 F.3d at 1478 ("compelling" evidence of actual bias or prejudice required for disqualification). See

also DCP Farms v. Yeutter, 957 F.2d 1183, 1188 (5th Cir. 1992); Menard , 548 F.3d at 360.

101

See Appellee's Brief, Village of Hobart v. Midwest Regional Director, Dkt. No. IBIA No. 10-107, 10-91 ,

10-92 at 29-31 (Sept. 27, 2010) ("RD Resp. Br.").

102

Indian Self-Determination and Education Assistance Act of 1975, Pub. L. 93-638, 88 Stat.2203

(Jan.4, 1975), as amended, codified as 25 U.S.C . § 5301 et seq. (2012), and implementing regulations.

103

Tribal Self-Governance Act of 1994, Pub. L. 103-413, 108 Stat. 4271 (Oct. 25, 1994 ), codified as 25

U.S.C. § 5361 et. seq., and implementing regulations.

104

.!Q.. at 29-30.

100

Code. 105 The Regional Director alone approves all environmental documents and makes all final

decisions with respect to applications submitted pursuant to the Midwest MOU, and her decisions

remain subject to review by the IBIA. 106 As the courts and the IBIA have noted, BIA

decision-making is not institutionally biased when it complies with applicable statutes and

congressional policy toward lndians. 107

Relying on the statutory authority of ISDEAA and the TSGA, the Midwest Region implemented

the Midwest MOU in 2004 to address a growing backlog of fee-to-trust applications caused by

limited BIA funding . Under the Midwest MOU, each participating tribe agrees to the

reprogramming of federal Tribal Priority Allocation {TPA) funds for use by the Midwest Region to

increase the number of BIA employees available to process fee-to-trust application packages.

The use of TPA funding for Midwest Region realty operations is consistent with the congressional

policies and purposes behind ISDEAA. TPA funds are federal appropriations earmarked for use

for tribal government operations and service provision. 108 TPA funds may be allocated among

eight general categories, including Trust Services, a sub-activity that encompasses the processing

of fee-to-trust applications.109 Tribes may access TPA funds directly through contracts to operate

tribal programs, or they may leave TPA funds with BIA for use in BIA-provided services 110 and for

BIA management and administrative costs. 111 A Regional Director has the authority to approve

reprogramming within his or her Region's TPA base. 112 In reprogramming TPA funds, BIA

reallocates funds within the Department of the Interior's Indian Affairs accounting system from one

program class to another. 113 Though reprogrammed for use by the Midwest Region , TPA funds

are and remain federal funds appropriated by Congress for use in delivering tribal programs and

services.

The Village's claims of bias relied in part on a misreading of a 1998 GAO report on TPA funds. 114

The report did not "callO into question" TPA funds, as the County asserted, but raised concerns for

how TPA funds were distributed among tribes. Far from suggesting the Regional Director's

105

Id. at 30.

100 Id.

107

.IQ. at 30-31, citing State of South Dakota, 401 F.Supp.2d at 1011.

108

Harvard Project on American Indian Economic Development, California Fee-to-Trust Consortium at 2

(2010). Available at: http://hpaied.org/sites/default/files/publications/califomia%20fee-to-trust.pdf.

109

U.S. Dept. of Interior, Bureau of Indian Affairs , Report on Tribal Priority Allocations 14 (July 1999) ("DOI

TPA Rpt. ") at 48, 140-42.

110

U.S. Government Accountability Office, GAO/RCED-98-181 : Tribal Priority Allocations Do Not Target

the Neediest Tribes 4 (July 1998) ("GAO 98-181 ") at 3; Samish Indian Nation, 657 at 1336 (Fed. Cir. 2011);