Federal rules may limit off-reservation casinos.

Byline: Winston Ross The Register-Guard

CORRECTION (ran July 3, 2007): The Warm Springs tribe has ancestral ties to the land in Cascade Locks on which the tribe is seeking to build a casino. A story on May 12 incorrectly characterized the tribe's status.

FLORENCE - Oregon Indian tribes are bracing for new rules from the federal government that could severely restrict efforts to place land into a trust and take it off the tax rolls.

James Cason, associate deputy secretary of the Interior, recently wrote to Ron Suppah, chairman of the Confederated Tribes of the Warm Springs Reservation, and dozens of other tribes across the country, warning that the government plans new rules that could affect Suppah's application for a casino in Cascade Locks in the Columbia River Gorge - and for that matter, all "fee-to-trust" applications pending nationwide.

The government has not yet released proposed rules, but Oregon tribes are taking Cason's warning seriously.

The right to put land into tax-exempt trusts is part of what allows tribes to operate casinos, since it exempts the land from rules against gaming. Florence's Three Rivers Casino was built only after a 10-year legal battle over the application by the Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians to place the 100-acre Hatch Tract into trust, which made it suitable for gaming.

Tribes also often apply for trust status on lands they don't ever intend to use for casinos, because it relieves them of property tax requirements and exempts them from many state and federal regulations.

This exemption from regulations and property taxes bothers many nontribal citizens. These critics say it's unfair that tribes - which receive significant money via grants and other programs from the federal government - should be exempt from property taxes.

Douglas County Commissioner Marilyn Kittleman's efforts to limit the number of acres a tribe can move into a trust became an issue last year in an attempt to recall her. Ultimately, she held onto her seat.

The use of trust lands also can lead to "off-reservation" casinos, whereby a tribe buys property away from its ancestral homelands or a reservation and then applies to have it placed in trust to build a casino.

Case in point: Warm Springs, which operates a small, out-of-the-way casino resort called Kah-nee-tah in Central Oregon, proposes to build a casino in Cascade Locks, on property the tribe bought but to which it has no ancestral ties. The idea has sparked a raging controversy, not just with conservationists and anti-casino forces in the scenic and sensitive gorge, but among other tribes who feel such "reservation-shopping" would hurt their own casinos.

Members of the Grand Ronde tribe are particularly concerned. Their Spirit Mountain Casino is the closest to the lucrative and populous Portland and Salem markets. That would change with a casino in the gorge.

For two years, Warm Springs' application has languished, despite Gov. Ted Kulongoski's approval of a contract to build a casino in the gorge. Cason's letter doesn't bode well for that effort, and it worries other tribes that plan to buy more property.

"Please be advised that we share the concerns that many have expressed with off-reservation gaming and so-called `reservation shopping,' ' Cason wrote. "We anticipate changes to the rules that may result in fewer off-reservation properties being accepted into trust."

The current rules simply require a tribe to apply for trust status for land and then ask the Bureau of Indian Affairs for approval.

The changes that Cason writes of could affect not just casinos but any land the tribes decide they may want to take into trust, a prospect that bothers Wayne Shammel, attorney and economic development director for the Cow Creek Band of Umpqua Indians.

Over the past decade, the Cow Creek tribe has moved thousands of acres off the tax rolls and into trust, using gaming profits from the successful Seven Feathers Casino to expand into other ventures. These include a gas station, RV park, advertising agency, a communications company and even local infrastructure projects, providing water and sewer to other Douglas County residents.

The projects are much-needed economic development boosts for the area, Shammel argues.

Cason's letter mentions the possibility of new rules that would make it harder for a tribe to move land into a trust the farther the land is from the established reservation or ancestral homelands. Not all tribes have established reservations, however, and many were kicked off them by the federal government in the 1950s.

The letter also promises more input from local elected officials and community members, and a consideration of broader implications of casinos in communities that don't already have them.

Cason advises Suppah to rethink his Warm Springs tribe's proposal.

"We urge you to become fully aware of the changing environment and to discuss the risks of pursuing an off-reservation gaming application with your tribal council, legal counsel, and business partners," Cason wrote.

Warm Springs tribe attorney Howard Arnett said the letter doesn't give the tribe pause. It was a form letter sent to 27 others, he said, while the Warm Springs application is unique because it involves an agreement with the state not to build on an undesirable property in the gorge.

Cason implied that the government wouldn't even consider the tribe's application until a "thoughtful review" of it takes place - welcome news to the Grand Ronde, which has been lobbying the government for this very approach.

Bob Garcia, the newly elected chairman of the Confederated Tribes of Coos, Lower Umpqua and Siuslaw Indians and the tribe's economic development director, said he didn't think the Cason letter would have much impact on either the Warm Springs application or the Coos Bay tribe's plans. Garcia's tribe is building a 100-room hotel and quadrupling the existing casino's size by the end of this year.

The Warm Springs should be grandfathered from any future changes Interior makes in the fee-to-trust process, Garcia said, and his own tribe's 100-acre tract of land leaves plenty of room for future projects.

"All the folks looking to stop casinos try to say `Yeah, we can slam the door after it happens,' ' Garcia said. "But this isn't going to affect Oregon at all, with the current state government policy of one casino per tribe."

Changes in Indian gaming rules are more likely to come out of Congress, Garcia predicted, where representatives have grown uneasy about the growth of casino gaming and its impact on local property taxes and the environment. Cason alluded to that prospect, as well.

Barb Lindsay is national director of One Nation United, a nonprofit group founded in Washington State that advocates for reform of Indian policy. She said Cason's letter was encouraging.

"It's to everyone's benefit that we have land use planning and predictability," Lindsay said, referring to the challenge local governments face when land is taken off the tax rolls and exempted from local ordinances. "It protects everyone's property values and is very important for the sake of fish and wildlife and other natural resources - especially water."

Lindsay said there are 2,000 pending fee-to-trust applications nationwide.