UNITED STATES DISTRICT COURT

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1 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 1 of 16 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF OKLAHOMA (1) THE CHEROKEE NATION, (2) CHEROKEE NATION ENTERTAINMENT, LLC, vs. Plaintiffs) Case No. 12-cv-493-GKF TLW (3) KENNETH L. SALAZAR in his official capacity as Secretary of the Interior U.S. Department of the Interior (4) MICHAEL S. BLACK in his official capacity as Acting Assistant Secretary for Indian Affairs U.S. Department of the Interior Defendanl(s) (5) UNITED KEETOOWAH BAND OF CHEROKEE INDIANS IN OKLAHOMA, Intervenor Defendant. DECLARATION OF TODD HEMBREE IN SUPPORT OF PLAINTIFF'S MOTION FOR INJUNCTIVE RELIEF I, Todd Hembree, declare as follows: 1. I make this declaration based upon my personal knowledge of the matters set forth below. 2. I am Attorney General for the Cherokee Nation and am counsel for the Cherokee Nation in the above-referenced action, 3. Attached hereto as Exhibit A is a true and accurate copy of a September 5, 2012 letter to me from Michael J. Berrigan, Associate Solicitor, EXHIBIT 1

2 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 2 of 16 Division of Indian Affairs, Office of the Solicitor, United States Department of the Interior. 4. Attached hereto as Exhibit B is a true and accurate copy of September 4, 2012 letter from Karen Ketcher, Acting Regional Director, Eastern Oklahoma Region, Bureau of Indian Affairs, responding to the Cherokee Nation's Freedom of Information request for copy of a letter from the Regional Director, regarding the United Keetoowah Bank's land into trust decision, dated April 19, Exhibit B contains a copy of the Regional Director's April 19, 2012 letter. The letter was identified in the Administrative Record filed by Defendants in the abovereferenced at AR but had been redacted. The Defendants subsequently agreed to unredact this letter and make it a part of the Administrative Record, See Federal Defendant's Response and Opposition to Petitioners' Motion to Supplement the Administrative Record, Doc. 53, p. 11. I declare under penalty of perjury that the foregoing is true and correct. Executed this 22 nd day of July, 2013, at Tahlequah, Oklahoma, 2

3 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 3 of 16 Jniteci States Department of the interior OFFICE OF THE SOLICITOR 1849 C STREET N.W., M WASHINGTON, DC Todd Hembree Attorney General '» * Cherokee Nation PO Box 948 Tahlequah, OK Dear Mr. Hembree: I write to acknowledge that the Cherokee Nation has, by action filed in federal district court on August 29, 2012, challenged the decision by the Department of the Interior (Interior) to acquire into trust approximately 2.03 acres of land in Tahlequah, Cherokee County, for the benefit of the United Keetoowah Band of Oklahoma Corporation (UKB), 77 Fed. Reg (August 7, 2012), within the thirty-day window afforded by the applicable federal regulation. 25 C.F.R (b). I also confirm that Interior agrees that it will not act imminently on its decision, and that Interior will deliver to the Cherokee Nation at least thirty (30) days written notice by certified mail, return receipt requested, in advance of taking the land into trust during the pendency of this action before the district court. This decision to self-stay was reached after careful consideration and deliberation, and with the expectation that the parties jointly will agree to an expedited briefing schedule after the filing of the certified administrative record. This decision is made under the particularly unique facts and procedural posture of this matter, and should not be viewed as setting a precedent for Interior with respect to self stays on fee-to-trust decisions generally. While the United States is committed to appropriate judicial review of the Acting Assistant Secretary's decision, it is important to underscore Interior's concern that its forbearance not lie exploited to the detriment of UKB, In this regard, Interior reserves the right to reevaluate its agreement to self-stay the trust acquisition if the Cherokee Nation, or any other challenger, engages in undue delay tactics, or if for any reason Interior believes it is necessary to do so, Any lifting of the self stay by Interior would be preceded by a notice of at least thirty (30) days to the Cherokee Nation as described above. Sincerely, Michael J. Berrigan / Associate Solicitor Division of Indian Affairs Office of the Solicitor

4 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 4 of 16 IN REPLY REFER TO; United States Department of the Interior BUREAU OF INDIAN AFFAIRS Eastern Oklahoma Region Eastern Oklahoma Regional Office P.O. Box 8002 Muskogee, OK $3 - * TAKE PRIDE ^AMERICA September 4, 2012 Cherokee Nation Office of the Attorney General Attn: Christina Carroll P.O. Box 948 Tahlequah, OK Dear Ms. Carroll: This correspondence is in response to the Freedom of Information Act (FOIA) requests, referenced as BIA , dated August 15, 2012 requesting the following: 1. Can I please get a copy of a letter from the Regional Director, regarding the United Keetoowah Band's land into trust decision, dated April 19, The letter is a recommendation by the EOR that the land be placed into trust for the benefit of the tribe. A complete and thorough review of the records of the Bureau of Indian Affairs, Eastern Oklahoma Region has been conducted and the responsive record to the request is enclosed. The financial data was redacted under Exemption 4 - Trade Secrets, Commercial or Financial Information (Confidential Business Information.) A total of 11 pages are transmitted herewith. Pursuant to 43 C.F.R. 2.18(a), no fee will be charged for processing this FOIA request. You may appeal this partial denial to the FOIA Appeals Officer. The FOIA Appeals Officer must receive your FOIA appeal no later than 30 workdays from the date of this final letter responding to your FOIA request. Appeals arriving or delivered after 5 p.m. E.S.T., Monday through Friday, will be deemed received on the next workday. Your appeal must be in writing and addressed to: Freedom of Information Act Appeals Officer Department of the Interior Office of the Solicitor 1849 C Street, NW, MS 6556 Washington, DC You must include with your appeal copies of all correspondence between you and the Bureau concerning your FOIA request, including a copy of your original FOIA request and this denial letter.

5 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 5 of 16 Failure to include this documentation with your appeal will result in the Department s rejection of your appeal. The appeal should be marked, both on the envelope and the face of the letter, with the legend, "FREEDOM OF INFORMATION APPEAL." Your letter should include in as much detail as possible any reason(s) why you believe the Bureau's response is in error. The officials responsible for this response are Jessie Durham, Office of the Field Solicitor, Letha Wilson, FOIA Coordinator and Karen Ketcher, Acting Regional Director. Should you have any questions, please contact this office at (918) Respectfully, Acting Regional Director Enclosure

6 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 6 of 16 IN REPLY REFER TO: Real Estate Services United States Department of the Interior BUREAU OF INDIAN AFFAIRS Eastern Oklahoma Region Eastern Oklahoma Regional Office P.O. Box 8002 Muskogee, OK TAKE PRIDE* IN\MERICA Memorandum APR To: From: Subject; Director, Bureau of Indian Affairs Deputy Bureau Director, Field Operations Director, Office of Indian Gaming Management Acting Regional Director, Eastern Oklahoma Region Proposed fee-to-trust acquisition, United Keetoowah Band of Cherokee Indians of Oklahoma Attached for review is a fee-to-trust Application (Application) for gaming purposes submitted by the United Keetoowah Band of Cherokee Indian of Oklahoma (UKB) involving 2.03 acres in the S'/J NE!4 SEV4 SWA and part of the N54 SEV4 SE!4 SW!4 of Section 4, Township 16 North, Range 22 East, Cherokee County, Oklahoma, (see attached Exhibit A for a full legal description of the property). It also includes the Proposed Findings of Fact and Conclusions of the Acting Regional Director, Eastern Oklahoma Region, ensuring that the application was made in accordance with the requirements set forth at 25 C.F.R, 151, the National Environmental Policy Act (NEPA) and other applicable Federal laws, regulations and Executive Orders. It is hereby recommended that the property be taken by the United States in Trust for the UKB Corporation; subject to a determination by the Office of Indian Gaming that the property may be acquired in trust for gaming purposes. Proposed Findings of Fact 1. The "Casino Property" is located in the City of Tahlequah, Cherokee County, Oklahoma. 2. The "Casino Property" is located within the last treaty boundaries of the Cherokee Nation as defined by the terms of the Treaty of New Echota, 7 Stat. 478 (December 29, 1835), and the 1866 treaty between the Cherokee Nation and the United States, 14 Stat. 799 (July 19, 1866) in an area identified as the former, historic reservation of the Cherokee Nation 1. 1 We make no finding as to whether the former reservation of the Cherokee Nation is also the former reservation of the UKB for purposes of 25 U.S.C. 2719(a)(2)(A)(i). We leave that issue to OIG in accordance with the Bureau's Handbook for Gaming Acquisitions, issued July 13, 2011.

7 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 7 of Land acquisition policy. Land may be acquired in trust by the United States for Indians and Tribes only when there is statutory authority to do so. Tide 25, Code of Federal Regulations, Part 151.3(a) states that land may be acquired in trust for a tribe when (1) the land is located within the exterior boundaries of the Tribe's reservation or adjacent thereto, or within a Tribal consolidation area; or (2) when the 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. On August 15, 2011, the UKB submitted an amended application, requesting the parcel be taken into trust for the United Keetoowah Band of Cherokee Indians, a federally chartered corporation under Section 3 of the Oklahoma Indian Welfare Act of June 26, 1936 (OIWA), 25 U.S.C. 503, rather than for the UKB under Section 5 of the Indian Reorganization Act of June 18, 1934 (IRA), 25 U.S.C The UKB Corporation is a federal corporation chartered under the Act of June 26, 1936 (49 Stat. 1967) and the Act of August 10, 1946 (60 Stat. 976), ratified on October 3, 1950 by the members of the UKB. The UKB Tribal Government is a federally recognized Band organized under The Constitution and By-Laws of the United Keetoowah Band of Cherokee Indians in Oklahoma that was ratified by the UKB members on October 3, 1950, The "Casino Property" is owned in fee by the UKB. Neither the UKB nor the UKB Corporation own any trust land, The property involved is located in Cherokee County, Oklahoma, and within the treaty boundaries of the Cherokee Nation as defined by the terms of the Treaty of New Echota, entered into on December 29, 1835 (7 Stat. 478), and the 1866 treaty between the Cherokee Nation and the United States, 14 Stat. 799 (July 19, 1866). The subject property consists of 2.03 acres with a physical address described as 2540 S. Muskogee Avenue, Tahlequah, Oklahoma. The UKB headquarters are near the property with administrative offices being located adjacent to the subject property. The UKB, a federally recognized Indian Tribe, holds fee simple title to the subject property pursuant to a General Warranty Deed conveying the property from Lakeway Building Supply, Inc. to the UKB filed on January 2, 1991, in Cherokee County, Oklahoma. The acquisition of this land into trust for the UKB Corporation will facilitate tribal self-determination for the UKB. The UKB's stated need for the fee-to-trust request is for economic development, specifically the operation of an existing gaming facility. The Assistant Secretary previously concluded in a September 10, 2010 Decision involving a UKB application to place 76 acres in Cherokee County, Oklahoma (Community Services Parcel) in trust, as clarified by the January 21, 2011 letter to the UKB, that Section 3 of the Oklahoma Indian Welfare Act (OIWA), 25 U.S.C. 503, implicitly authorizes the Secretary to take land into trust for the UKB Corporation. Pursuant to Article V, Section 1 of the UKB Constitution, Governing Body, - The supreme governing body of the Band is the Council of the UKB. Pursuant to Article III, Section 1, of the Constitution and By Laws of the UKB, the objective of the Band is to secure for it members the benefits, rights, privileges and powers as provided for under the Act of Congress approved June 26, 1936 (40 Stat. 1967), known as the Oklahoma Indian Welfare Act, and the Act of Congress approved June 18, 1934 (48 Stat. 984), known as the Indian Reorganization Act, so far as the same has been made applicable to Oklahoma Indians.

8 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 8 of 16 Pursuant to Article III, Section 2. of the Constitution and By-Laws of the UKB, the Band shall secure the benefits, rights, privileges and powers as provided for by any laws of the United States now existing or that may hereafter be enacted for the benefit of Indians or other citizens of the United States and administered by various government agencies, such as relief, conservation, rehabilitation, resettlement, welfare, education, health and other programs. Paragraph 1 of the Corporate Charter of the UKB (approved by the Commissioner of Indian Affairs and the Assistant Secretary of the Interior) states, in part, that the corporate purpose of the UKB is to advance the standard of living by the Band through the development of its resources, the acquisition of land, the preservation of existing landholdings, the better utilization of land and the development of a credit program for the Band. Based on the review and analysis of the Constitution and Corporate Charter of the UKB, it is our conclusion that the Band has exercised its lawful authority in taking action to request the property known as the "UKB Casino 2.03 Acres" taken -in trust for the UKB Corporation pursuant to the passage of UKB Resolution Number 00-UKB-81, dated July 8, 2000, Resolution Number 06-UKB-46, dated April 1, 2006, and Resolution Number 1 l-ukb-42, dated August 6, Subsequent to the application for the acquisition of the property, for purposes of economic development, the UKB opened the United Keetoowah Band of Cherokee Indians Casino, Tahlequah, Oklahoma. Gaming operations have continued to take place on the property since that time. In accordance with the foregoing, the Region finds there is statutory and regulatory authority to take the Casino Property into trust for the UKB Corporation Acquisitions in Trust of Lands Owned in Fee by an Indian. The proposed acquisition is for property owned by the UKB, The Acting Regional Director finds that this section does not apply to this request Trust acquisitions in Oklahoma under Section 5 of the I.R.A. As previously concluded in the Assistant Secretary's 2010 Decision the authority exists for the Secretary to take land in trust for the UKB Corporation under Section 3 of the OIWA. Therefore, the Region finds that this section of the regulations is not applicable to this request Exchanges. The UKB is the sole owner of the property proposed to be acquired in trust. Accordingly, the Acting Regional Director finds that this section is not applicable to this request Acquisitions of fractional interests. The UKB is the sole owner of the property proposed to be acquired in trust. Accordingly, the Acting Regional Director finds that this section is not applicable to this request.

9 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 9 of Tribal consent for non-member acquisitions. This section provides that an Indian Tribe "may acquire land in trust status on a reservation other than its own only when the governing body of the tribe having jurisdiction over such reservation consents in writing to the acquisition." 25 C.F.R The regulations define a reservation in Oklahoma as "that are of land constituting the former reservation of the tribe as defined by the Secretary." 25 C.F.R (f). The Department has consistently found the former treaty lands of the Five Civilized Tribes to be "former reservation." The UKB property is located within the last treaty boundaries of the Cherokee Nation as defined by the terms of the Treaty of New Echota, 7 Stat. 478 (December 29, 1835), and the 1866 treaty between the Cherokee Nation and the United States, 14 Stat. 799 (July 19, 1866), in an area identified and the former historic reservation of the Cherokee Nation. The Assistant Secretary previously concluded in a June 24, 2009 Decision as clarified by a July 30, 2009 Decision, that the Congress overrode 25 GFR with respect to lands within the boundaries of the former Cherokee reservation by including in the Interior and Related Agencies Appropriations Act of 1999 the following language: "until such time as legislation is enacted to the contrary, no funds shall be used to take land into trust within the boundaries of the original Cherokee Territory in Oklahoma without consultation with the Cherokee'Nation." 112 Stat, Thereafter, the Assistant Secretary specifically concluded that the Cherokee Nation (CN) does not need to consent to the acquisition in trust of the UKB's land. It is only necessary that the Department consult with the CN. The Region satisfied this requirement when it solicited comments from the CN. The CN argued that the proposed acquisition is located in the area identified as the former reservation of the CN and consent from the CN is required pursuant to 25 CFR The CN stated that the Assistant Secretary erred in a June 24, 2009 Decision when he concluded that CN's consent was not required, based upon a provision contained in the Interior Appropriations Act for FY 1999, Omnibus Consolidated and Emergency Supplemental Appropriations Act of 1999 Pub. L. No , (1998). The CN argument states the Appropriations Act for FY 1999, merely imposed a "consultation" condition upon the use of federal funds and it did not affect the separate regulatory requirement for the CN to consent to UKB proposed fee-totrust applications. Additionally, the CN argued that apart from the consent requirement contained in the Department's regulations, the CN has an independent and enforceable right to approve or disapprove UKB's fee-to-trust application under 1) Section 15 of the Cherokee Nation Treaty of July 19, 1866, (14 Stat. 799), which allowed the United States to settle Indians, friendly with the Cherokees, within the CN, on unsurveyed lands east of 96E, on such terms as may be agreed upon by any such tribe and the Cherokees, subject to the approval of the President of the United States and 2) Section 26 of the 1866 Treaty which provided the people of the CN the quiet and peaceable possession of their country and protection against domestic feuds and insurrections, and against hostilities of other tribes. The CN argues that consent is required for any other Tribe's proposal to acquire land in trust within the CN by BIA regulations, Treaty and federal law.

10 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 10 of 16 The Region finds the requirement for consultation with the CN was met when the Region solicited comments from the CN on November 4, 2011, in connection with the UKB's amended application for the acquisition in trust for the UKB Corporation Request for approval of acquisitions. By correspondence dated April 12, 2006, the UKB submitted an application and accompanying documentation for an acquisition of land to be held in trust by the United States for the benefit of the UKB, a federally recognized Band. The property consists of 2.03 acres located in Tahlequah, Cherokee County, Oklahoma. Subsequently, on August 15, 2011, the UKB submitted an amended application requesting the property be accepted in trust for the UKB, a federallychartered corporation, under Section 3 of the Oklahoma Indian Welfare Act of June 26, 1936, 25 U.S.C. 503, rather than for the UKB under Section 5 of the Indian Reorganization Act of June 18, 1934, 25 U.S.C. 465, The proposed property is currently owned in fee by the UKB, a federally recognized Band and the request states that the proposed site is currently utilized as a gaming facility ,10 - On-reservation acquisitions. The proposed acquisition is located in Cherokee County, Oklahoma, in an area identified as the former historic reservation of the Cherokee Nation, The UKB submitted the request for review under the regulations governing on-reservation acquisitions, 25 C.F.R , The CN argues that the courts have previously held that the CN has exclusive sovereign authority within the area identified as the former historic reservation and states the request should be considered under the regulations governing off-reservation acquisition, 25 C.F.R The following criteria must be considered in evaluating both on and off reservation acquisitions: (a) The existence of statutory authority for the acquisition and any limitations contained in such authority. The Assistant Secretary's 2010 Decision which was clarified by the Assistant Secretary in a January 21, 2011 letter to the UKB, concluded that Section 3 of the OIWA, 25 U.S.C. 503, implicitly authorizes the Secretary to take land into trust for the UKB Corporation. The Cherokee Nation argues that since the UKB has no current or former reservation, the application should be evaluated under the regulations in 25 C.F.R Off -Reservation Acquisitions, The Assistant Secretary has previously decided that Section 3 of the OIWA, 25 U.S.C. 503 provides the Secretary with the authority to acquire the parcel in trust for the UKB Corporation. (b) The need of the Tribe for additional land. Neither the UKB nor the UKB Corporation currently have any lands held in trust by the United States. The proposed site is currently utilized as a gaming facility which is vital to the Tribe's economic self-determination and self-sufficiency. The proposed site is owned in fee simple status and the UKB states the need for the fee-to-trust request is for economic development. The site is currently utilized for a gaming facility for the benefit of the UKB and members of the

11 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 11 of 16 UKB. The UKB Casino is the UKB's only gaming facility. The UKB has received a determination by the National Indian Gaming Commission that the facility is not located on Indian lands under federal law; the UKB now has an urgent need to have the property placed in trust. The UKB may suffer substantial financial loss if the property is not placed in trust. In 2010, the UKB utilized flhbb of the gaming revenue for Tribal programs including Human Services, Emergency Funds, Housing Rehabilitation, Family Services, Education, Clothing Voucher and Elder Assistance which benefited the UKB Tribal members. Additional economic development wiil allow the UKB to support governmental functions, which should decrease dependence upon limited Federal and State funds. In order for the UKB to continue to sustain its programs and operations as a means to providing needed services and assistance to its members, the acquisition of the property into trust would allow the UKB to continue to focus on the unmet needs of the UKB and its people without interruption. By its application, the Acting Regional Director concludes that the UKB has sufficiently justified the need for this additional land. (c) The purposes for which the land will be used. The application states that the UKB intends to continue utilizing the property for economic development for the benefit of the UKB and its members and the site will be utilized for gaming purposes. The Acting Regional Director finds that this request adequately describes the purpose for which the land will be used. (d) The amount of trust land owned by an individual Indian and the need for assistance in handling his affairs, The Acting Regional Director finds this section is not applicable, (e) If the land to be acquired is in unrestricted fee status, the impact on the state and its political subdivision resulting from the removal of the land from the tax rolls. The UKB currently owns this land in fee simple status. Comments on the potential impacts of the proposed acquisition on regulatory jurisdiction, real property taxes and special assessments were solicited from the state and local political subdivisions. By correspondence dated November 4, 2011, comments regarding the proposed acquisition were invited from applicable State, County and City Officials. The following Political Subdivisions were notified: Governor of Oklahoma, Oklahoma Tax Commission, Cherokee County Commissioners, Cherokee County Assessor, Cherokee County Treasurer, Sheriff of Cherokee County, Mayor of Tahlequah, Chief of Police of Tahlequah, and the Principal Chief of the Cherokee Nation. Real property in Oklahoma is subject to state ad valorem taxes, which is collected by the respective counties to fund a variety of countywide services; the largest share of these taxes goes to the local school districts. The subject property is currently carried on the Cherokee County Assessor's rolls as taxable. By letter dated November 10, 2011, the Cherokee County Assessor provided a copy of a Real Property Assessment Record to the Region which stated the taxes on the proposed site is assessed at $1, There are no special assessments or outstanding tax assessments. Fire, water, ambulance and sanitation services for the property are currently provided by the city of Tahlequah. By letter dated November 8, 2011, the Cherokee County Treasurer provided the

12 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 12 of tax information which reflects $1, has been paid for 2010 taxes, The Region finds that the impact on the state and local governments resulting from the removal of the subject property from the tax rolls will be insignificant. (f) Jurisdictional problems and potential conflicts of land use which may arise. If the subject property is taken in trust, it will become Indian country. The Supreme Court has found that lands held in trust by the Federal Government for the benefit of a tribe are validly set apart for the use of the Indians under the superintendence of the Federal Government and, as such, constitute Indian country. Oklahoma Tax Commission v. Citizen Band Potawatomi, 498 U.S. 505, 511 (1991); see also, United States v. Roberts, 185 F.3d 1125, 1131 (10 th Cir. 1999), cert, den'd Roberts v. United States, 529 U.S (2000). A tribe's territorial sovereignty extends to those areas recognized as being within the tribe's Indian country. Alaska v. Native Village ofvenetie Tribal Government, 522 U.S. 520, 527 n, 1 (1998). "Generally speaking, primary jurisdiction over land that is Indian country rests with the Federal Government and the Indian tribe inhabiting it, and not with the States." Id. The subject property is located within Cherokee County, Oklahoma within the treaty boundaries of the Cherokee Nation (CN) as defined by the terms of the Treaty of New Echota, entered into on December 29, 1835 (7 Stat. 478). The 1835 Treaty provided that the CN relinquish all land east of the Mississippi River in exchange for land in Oklahoma and Kansas. By the terms of the Treaty of July 19, 1866 (14 Stat. 799), all land in Kansas and 6 tracts in Oklahoma were sold. Since the cessions of 1866, the CN boundaries set by the 1835 Treaty, which comprise all or a portion of 14 counties in eastern Oklahoma, have not changed. The Bureau has consistently recognized this area as the "former reservation" of the CN. The interest of the CN in its former reservation is well established. In United Keetoowah Band v. Secretary, No 90-C-608-B (N.D. Okla. Order May 31, 1991), the court stated "the Secretary of the Interior, or his designee, has determined that the subject lands of the old Cherokee Reservation are under the jurisdiction of the new CN, not the UKB." In Buzzard v. Oklahoma Tax Commission, No. 90-C-848-B, (N.D. Okla. Feb. 24, 1992), affd 992 F.2d 1073, 1075 n. 5 (10 th Cir. 1993), cert, den'd sub nom United Keetoowah Band of Cherokee Indians v. Oklahoma Tax Commission, 510 U.S. 994 (1993), the court held that the UKB had "failed to show any treaty or Congressional act establishing UKB's inherited right or claim to reservation land within the boundaries of the old Cherokee Indian Reservation." In United Keetoowah Band v. Mankiller, No 92-C-585-B (N.D. Okla, Order January 27, 1993), affd 2 F,3d 1161 (10 th Cir. 1993), the court stated "this court has previously decided that the CN is the only tribal entity with jurisdictional authority in Indian Country within the CN." The CN has enacted laws to regulate the activities of Indians occurring on Indian country within the jurisdiction of the Tribe. These laws include, but are not limited to, gaming, tobacco and taxation laws and regulations. The Region consulted with the CN as part of its notice to political subdivisions and interested parties and pursuant to Section 101(e) of the Interior and Related Agencies Appropriations Act, 1999, P.L Both the UKB Corporation and the CN intend to assert jurisdiction over the subject property if it is taken in trust. The CN has enacted laws to regulate the activities of Indians occurring on Indian country within the CN Reservation. These include, for example, the Cherokee Nation's Gaming Ordinance, Tobacco License and Tobacco

13 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 13 of 16 Tax Law, Motor Vehicle and Boat Licensing Act, and other civil and criminal laws. The CN argues that in the past the "UKB has refused to comply with CN laws and most certainly will continue refusing to comply with CN law if this land is placed into trust." The CN states that if the property is accepted in trust, an immediate and continuing jurisdictional tension, and litigation, will result. The Region is also aware that it is very likely that jurisdictional conflicts between the CN and the UKB Corporation will exist over the assertion of jurisdictional authority by UKB over any trust land it is granted within the Cherokee Nation. The Assistant Secretary concluded in his 2009 Decision, as modified by his 2010 Decision, involving 76 acres in Cherokee County, Oklahoma, that the CN does not have exclusive jurisdiction within the former Cherokee reservation, and that the UKB would have exclusive jurisdiction over land that the United States holds in trust for the UKB. The Assistant Secretary has previously stated that 25 U.S.C. 476(f) mandates that the "department or agencies of the United States shall not...make any decision or determination pursuant to the IRA, or any other Act of Congress, with respect to a federally recognized Indian tribe that classifies, enhances, or diminishes the privileges and immunities available to the Indian tribe relative to other federally recognized tribes by virtue of their status as Indian tribes." The Assistant Secretary found that this section of the IRA "prohibits the Department from finding that the UKB lacks territorial jurisdiction while other tribes have territorial jurisdiction," and "the UKB, like CN, possesses the authority to exercise territorial jurisdiction over its tribal lands." As the Bureau office closest to tribal affairs in northeastern Oklahoma, the Eastern Oklahoma Region remains concerned that jurisdictional conflicts will arise between the UKB and the CN if property is placed into trust for the UKB within the former reservation boundaries of the CN. In addition, by correspondence dated November 4, 2011, the Bureau contacted state and local political subdivisions for comments on the proposed acquisition. The following Political Subdivisions were notified: Governor of Oklahoma, Oklahoma Tax Commission, Cherokee County Commissioners, Cherokee County Assessor, Cherokee County Treasurer, Cherokee County Sheriff, Mayor of Tahlequah, Chief of Police of Tahlequah, and the Principal Chief of the Cherokee Nation. The subject property is located in the City of Tahlequah, Cherokee County, Oklahoma. Law enforcement services for the property are currently provided by an informal agreement with the City of Tahlequah and Cherokee County law enforcement agencies whereby the Keetoowah Lighthorse, the UKB's security force, monitors tribally-owned land and reports any suspicious activities immediately to the City and County law enforcement agencies so that those entities can respond accordingly. The CN submitted concerns that if the property is placed in trust for the UKB, the UKB could seek additional funds from the BIA, IHS, Department of Justice and other federal agencies to provide services to Indian people who are eligible for services from the Cherokee Nation, resulting in unnecessary and duplicative costs to the Indian people. The Region finds that the Assistant Secretary previously determined in connection with the Community Services Parcel, that similar concerns did not justify disapproval of the application. In addition to the foregoing, the Region identified a potential jurisdictional issue on a survey of the Casino Property. Specifically, a portion of the casino building encroaches onto a separate

14 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 14 of 16 tract of property owned in fee by the UKB ("parking lot tract"). While the UKB's ownership of the parking lot tract satisfies the Region that no legal liabilities will arise as a result of the encroachment, the Region recognizes the potential for jurisdictional issues given that a portion of the casino building would be subject to state jurisdiction. To address the Region's concern, the UKB provided Tribal Resolution No. 12-UKB-33, stating that the UKB intends to make application to place the parking lot tract in trust in the near future and that, in the meantime, the UKB will not conduct gaming activities on the portion of the property that lies outside of the Casino Property tract. The Acting Regional Director finds that it is likely that jurisdictional issues and potential conflicts of land use will arise as a result of taking the property in trust for the UKB Corporation. (g) If the land to be acquired is in fee status, whether the Bureau of Indian Affairs is equipped to discharge the additional responsibilities resulting from the acquisition of the land in trust status. The land proposed for trust acquisition is within the jurisdictional boundaries of the Bureau's Eastern Oklahoma Region, The Secretary has determined that the lands within the former treaty boundaries of the CN are the CN's service area for purposes of administering Bureau programs under Indian Self-Determination and Education Assistance Act, P.L, , as amended. The CN administers the program functions associated with the management of trust lands formerly provided by the Bureau's Tahlequah Agency and Eastern Oklahoma Regional Office through a Self-Governance Compact pursuant to 25 U.S.C. 458aa, et seq. These programs include, but are not limited to, real estate services and tribal court services, as well as law enforcement services, As a result of the Bureau's Self-Governance Compact with the CN, the Bureau agency with jurisdiction over Bureau programs within the treaty boundaries of the former CN the Tahlequah Agency was closed and the funds used to operate that agency, along with Regional Office funds utilized for direct services to the CN and all Indians within that area (regardless of tribal affiliation), were transferred to the Cherokee Nation Compact. There are no remaining direct service funds in the Region that have not been previously provided to the Cherokee Nation in its Self-Governance Compact. Although the CN has numerous full time employees available to provide Bureau services, the UKB would likely reject the authority of the Cherokee Nation employees and insist that the Region provide Bureau direct services as it has done in the past with respect to other Bureau services, e.g., processing of fee-to-trust acquisitions. The Region finds that the additional duties may be a hardship on the Region unless additional appropriations or budget allocations are obtained to off-set the additional direct services to be provided by the Region. However, the Region is, nevertheless, capable of providing these services. (h) The extent to which the applicant has provided information that allows the Secretary to comply with 516 DM 6, Appendix 4, National Environmental Policy Act Revised Implementing Procedures, and 602 DM2, Land Acquisitions: Hazardous Substances Determinations. By memorandum dated October 6, 2011, the Division Chief, Division of Environmental Safety and Cultural Resources Management (DESCRM), Eastern Oklahoma Region, determined the revised Phase I ESA was prepared in accordance with the American Society for Testing and

15 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 15 of 16 Materials (ASTM) Standard for ESA's, ASTM Standard E Pursuant to the review by the DESCRM, the ESA was found to be in compliance with the ASTM Standard E The Categorical Exclusion (CE) was reviewed to ensure that is was prepared in accordance with both NEPA and 59 I AM 3-H, the BIA NEPA Handbook. The CE cites 516 DM 10, Section , Land Conveyances and Other Transfers. Pursuant to the review performed by the DESCRM, the CE was found to be correct for the proposed action and the document in compliance with both NEPA and 59 IAM 3-H Off-Reservation Acquisitions For purposes of trust acquisitions in Oklahoma, Indian Reservation is defined as that area of land constituting the former reservation of the tribe as defined by the Secretary, 25 C.F.R (f). The subject property is located in the City of Tahlequah, Cherokee County, Oklahoma, within the former reservation of the CN. The Acting Regional Director has considered both the onreservation and off-reservation factors for this request. The UKB has no land in trust and no reservation other than the interest that it claims in the "historic CN," Therefore, the Region finds that 25 C.F.R (b) is inapplicable to this acquisition. Section (c) is applicable since the subject property is being acquired for the continued operations of a gaming facility, The UKB submitted Financial Statements and Audits for fiscal years ending September 30, , which identified the economic benefits from the UKB gaming operations. The UKB operates numerous programs and include: aid to tribal government, Indian child welfare, childcare program, education program, elder nutrition program, human services program, tribal roads, building and construction program, environmental program, tribal justice system, domestic violence program, and victim assistance program. The Region complied with the requirements of 25 C.F.R (d) by soliciting comments from the state and local governments by correspondence dated November 4, The Office of the Governor, State of Oklahoma requested a 30-day extension for comments. The Bureau granted the extension, however, the Office of the Governor did not return comments. The jurisdictional issues raised by the CN have been addressed in paragraph 8(f) above. As previously discussed herein regulatory and statutory authority for the acquisition of the property in trust for a tribal corporation exists in 25 C.F.R (a)(2) and (3) and Section 3 of the Oklahoma Indian Welfare Act of June 26, 1936, 25 U.S.C Action on Requests For purposes of making an informed decision on this request, all supporting documents and correspondence utilized in making the recommendation are attached for reference Title Examination An updated commitment for title insurance policy dated November 30, 2011, was provided by the UKB. A preliminary title opinion has been issued by the Tulsa Field Solicitor's Office dated February 13, In his opinion, the Field Solicitor noted The Summary Appraisal Report

16 Case 4:12-cv GKF-TLW Document 78-1 Filed in USDC ND/OK on 07/23/13 Page 16 of 16 H dated January 9, 2012, states that the value of this property isflhhhb However, the appraisal bases this value on the cost to reconstruct the casino on the property, The Summary Appraisal Report states that the value of the property itself,.based on a comparison of sales of similar properties in the area is flhhb Th e Bureau believes this "comparable sales value" of this property is the most accurate value to consider for purposes of determining the amount of title insurance to require under the peculiar circumstances of this case. Title Commitment No. T , issued^by the Old Republic National Title Insurance Company, reflects a policy amount of MHHB which is the minimum amount of title insurance required under the DOJ Title Standards. Should there be any questions, please contact Mrs. Karen Ketcher, Acting Regional Director, Eastern Oklahoma Region, at (918) Attachment(s)