Cities and tribes navigate new landscape as Indian Country in Alaska slowly grows

A lawsuit over a driveway-sized parcel in Juneau and a sales tax disagreement involving a food truck in Craig both highlight the learning curve facing city, state and tribal officials in Alaska as the federal government slowly accepts tribal lands into trust in the state.

So far, only two tribes in Alaska have placed land into trust, in Craig in 2017 and in Juneau this year, after the federal government in 2014 began reversing a decades-old ban against the practice in the state.

The Alaska Department of Law early this year filed a lawsuit to stop the policy, after the Bureau of Indian Affairs announced in November it would accept the vacant parcel in Juneau into trust for the Central Council of Tlingit and Haida Indian Tribes of Alaska.

The state argues that land in trust threatens its authority. Trust lands, often referred to as Indian Country, are governed by tribes and generally are not subject to state laws, though the state of Alaska maintains criminal jurisdiction and certain civil authority within trust lands.

Tribes say the status gives them more power over their own affairs, such as employing tribal police who can supplement the state’s limited law-enforcement presence in rural areas. It opens the door to federal programs and services, including opportunities to enhance housing aid, energy development and environmental protections.

“It keeps the land in the tribe forever,” Tribal President Clinton Cook Sr. said of the land in Craig. “If the tribe got into business and it went sideways, the land would be never be collateralized. It will forever be our homeland.”

City officials in Juneau and Craig say they’re committed to working with local tribes to address jurisdictional questions on issues such as city taxes and services.

But there are issues to sort out.

The city and tribe in Craig, population 1,000, created an agreement to prevent disputes after the tribe in 2017 placed a roughly one-acre parcel that housed the tribe’s offices into trust.

Soon after that, the Fish & Chicks food truck, which has tribal member ownership, drove onto the newly designated trust land and stopped paying city sales taxes, said city administrator Brian Templin.

The city maintains that the business is not a tribal enterprise and should pay the city sales tax, Templin said.

The Craig Tribal Association says its members don’t have to pay taxes to the city for businesses they operate on trust land, Cook said.

“As long as I’m tribal president, I’ll never give into sales tax on our lands,” Cook said. “We have inherent control of the 1.08 acres. The city doesn’t seem to get that.”

Templin said both sides have an incentive to find a compromise on the issue as the tribe applies to put more land into trust. The tribe needs city services, and the city needs revenues from all its residents to sustain the services.

“It’s been a learning experience,” Templin said. “But the bottom line is the tribe is part of the fabric of the community, so this is not really an ‘us and them’ situation. But there are issues that we will want to see resolved in any future land into trust acquisitions.”

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A legal back-and-forth

The state’s 25-page complaint, filed in U.S. District Court in Alaska, says trust land “jeopardizes the state’s rights to tax and to enforce land use, natural resource management, environmental, and public safety regulations.”

The state says more tribes want to put land into trust. The Tlingit and Haida council has submitted four additional applications to place parcels into trust, totaling more than three acres in downtown Juneau, the complaint says. Tribes in Ninilchik and Fort Yukon have also applied to put land into trust.

The lawsuit asserts the Interior Department action violates the 1971 law that created land-holding Alaska Native corporations. The Alaska Native Claims Settlement Act sought to avoid creating another reservation system like that in the Lower 48.

Richard Peterson, president of the Tlingit and Haida council, signed the deed in January to put the Juneau land in trust.

He called the tribe’s successful application a “benchmark achievement” that would keep the tiny parcel in tribal hands forever. The land is located in a traditional Tlingit village site near the tribe’s headquarters.

Peterson said the state and federal government already lost in federal court on the issue. The state apparently wants a different answer now, he said.

A U.S. district court, in a case brought by the Akiachak Native Community and other Alaska tribes, issued a ruling in 2013 allowing the federal government to take Alaska lands into trust as it does with Indian tribes.

The state, which had intervened, appealed the case. But an appeals court vacated the lower court’s decision in 2016, saying the controversy between the tribes and federal government was moot after the Obama administration created new rules allowing Alaska tribes to apply for land in trust. The administration of former Gov. Bill Walker declined to appeal that decision and said the state would work with the federal government and tribes to resolve differences.

Still, the issue wasn’t decided. The Trump administration reinstated the ban. That was reversed under President Joe Biden, again opening the door to tribes.

The Alaska Department of Law says the question about whether the Interior Department can legally take land into trust in Alaska hasn’t been finalized by an appellate court or the U.S. Supreme Court.

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There “is no valid, binding case law on this,” said Patty Sullivan, a spokesperson with the Department of Law, in an email. The 2013 district court decision was vacated so it has “no precedential value,” contributing to the flip-flopping by administrations, she said in an email.

State officials say they want certainty on the matter.

“The purpose of the case is to receive unambiguous legal clarity for the state, local governments, the tribes and all Alaskans, on the question of placing Native land into federal trust for the tribes,” Gov. Mike Dunleavy said in a statement announcing the lawsuit in January.

Peterson said the state should give up its fight against Alaska’s 229 federally recognized tribes.

“They’re suing the federal government, but this is really over the tribes,” Peterson said. “I’m of the belief that if you have a disagreement, you sit down with a cup of coffee and have a discussion.”

In an email this week, the state law department said, “we don’t believe this is a matter of policy but rather a matter of legal interpretation that must be decided by the courts.”

‘Something to be measured in decades’

Since the Alaska Native Claims Settlement Act granted land to corporations, tribes don’t own much land in Alaska. But that could change, said Eric Fjelstad, a partner with Perkins Coie in Anchorage. The international law firm has no trust-land cases in Alaska, but it represents Lower 48 entities that have conflicts with tribal trust lands there, he said.

It’s not hard to imagine complicated questions arising, Fjelstad said.

The Clean Water Act contemplates treating tribes with trust lands as similar to the state, which could lead to conflicts involving environmental issues, he said. Companies wanting to build a road may one day need to seek permission from a tribe with trust lands, along with local, state and federal agencies, adding complexity to permitting.

“I don’t want to be alarmist,” Fjelstad said. “This will be like watching the grass grow. It’s something to be measured in decades. It starts small, but it gets bigger and it evolves over time. So it has the potential to fundamentally change things with respect to tribes and their regulation of lands.”

Lloyd Benton Miller, an attorney with law firm Sonosky who is advising the Tlingit and Haida council, said the state’s concerns are theoretical in nature. Potential disagreements are being worked out the local level, and if state operations are somehow impacted in the future, it can sue then, he said.

“This is a ridiculous lawsuit,” Miller said.

The City and Borough of Juneau won’t get “in the middle” of litigation, said Rorie Watt, the city manager.

It sees an opportunity to work closely with the Tlingit and Haida council, he said. Issues involving taxes, law enforcement, emergency services and utilities will need to be worked out.

“I think the issues can be resolved,” Watt said. “The federal government is favorable to putting parcels into trust, so we have to find ways to resolve things.”

In Craig, the agreement signed by the city and tribe says the city will provide utilities at standard rates on the land. It says tribal laws apply there, in addition to the state’s criminal laws, while the city police department can provide law enforcement. It lays out a process to resolve disputes.

Cook said the city and tribe don’t always see eye-to-eye, but they find ways to come to agreement. The Craig Tribal Association is a “community tribe,” he said.

Cook said the tribe recently distributed emergency shipments of bottled water to Craig residents after problems with the water treatment facility disrupted water supply.

“We have our differences, and in the end we live in the same city,” he said.