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87–046 PDF 2003

S. HRG. 108–81

INDIAN LAND CONSOLIDATION ACT

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

ON

S. 550

TO AMEND INDIAN LAND CONSOLIDATION ACT TO IMPROVE

PROVISIONS RELATING TO PROBATE OF TRUST AND RESTRICTED LAND

MAY 7, 2003

WASHINGTON, DC

(
COMMITTEE ON INDIAN AFFAIRS

BEN NIGHTHORSE CAMPBELL, Colorado, Chairman

DANIEL K. INOUYE, Hawaii, Vice Chairman

JOHN McCAIN, Arizona,

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

ORRIN G. HATCH, Utah

JAMES M. INHOFE, Oklahoma

GORDON SMITH, Oregon

LISA MURKOWSKI, Alaska

KENT CONRAD, North Dakota

HARRY REID, Nevada

DANIEL K. AKAKA, Hawaii

BYRON L. DORGAN, North Dakota

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

PAUL MOOREHEAD, Majority Staff Director/Chief Counsel

PATRICIA M. ZELL, Minority Staff Director/Chief Counsel

(II)
(III)

C O N T E N T S

Page

S. 550, text of ........................................................................................................... 2

Statements:

Berrey, John, chairman, Quapaw Tribal Business Committee, Quapaw,

OK .................................................................................................................. 68

Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado, chairman,

Committee on Indian Affairs ....................................................................... 1

Harris, Robert, Eastern Shoshone Tribe, Fort Washakie, WY ..................... 72

Lords, D. Jeff, acting deputy special trustee, Trust Accountability, Office

of the Special Trustee, Department of the Interior, Washington, DC ...... 59

Nordwall, Wayne, director, Bureau of Indian Affairs Western Region,

Department of the Interior, Washington, DC ............................................. 59

O’Neal, Ben, tribal council member, Eastern Shoshone Tribe, Fort

Washakie, WY ............................................................................................... 72

Stainbrook, Cris, executive director, Indian Land Tenure Foundation,

Little Canada, MN ........................................................................................ 74

Thomas, Hon. Craig, U.S. Senator from Wyoming ........................................ 59

Willit, Judge Sally, Indian Land Working Group, Albuquerque, NM .......... 77

APPENDIX

Prepared statements:

Berrey, John ...................................................................................................... 89

InterTribal Monitoring Association ................................................................. 93

Nordwall, Wayne .............................................................................................. 87

Nunez, Austin, chairman, Indian Land Working Group (with attachments) ............................................................................................................ 105

O’Neal, Ben ....................................................................................................... 91

Stainbrook, Cris (with attachments) ............................................................... 95

(1)

INDIAN LAND CONSOLIDATION ACT

WEDNESDAY, MAY 7, 2003

U.S. SENATE,

COMMITTEE ON INDIAN AFFAIRS,

Washington, DC.

The committee met, pursuant to notice, at 10:03 a.m. in room

485, Russell Senate Building, the Hon. Ben Nighthorse Campbell

(chairman of the committee) presiding.

Present: Senators Campbell, Inouye, Thomas, and Craig.

STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM COLORADO, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

The CHAIRMAN. The Committee on Indian Affairs will be in session.

Welcome to the committee’s hearing on the American Indian Probate Reform Act of 2003. I reintroduced the bill in March, joined

by my colleague and friend, Senator Inouye.

For 200 years, the pendulum of Indian policy has swung from

one extreme to another. Even today, one of the most damaging legacies of the Allotment Era of the 1800’s is the continued fractionation of Indian lands. The allotment policy was designed to break

up the tribal land mass and turn Indians into farmers. It resulted

in millions of acres of Indian land lost to their Indian owners.

By virtue of Indian probate rules and the steady march of time,

millions of more acres have passed from the original Indian

allottees to thousands of descendants with undivided and economically useless interests in the land. The fractionation problem is at

the heart of the ongoing trust reform efforts.

There are bright spots, however. The Department’s land consolidation pilot has resulted in thousands of small parcels being returned to tribal ownership through a voluntary purchase program.

I want all the people concerned to know that this committee will

work on this measure for as long as it takes to get it right. In fact,

that original pilot program was authorized by this committee. I believe the core concepts are solid. Hopefully the witnesses will offer

some suggestions of how to make a bill that I think is a good bill,

a better bill.

[Text of S. 550 follows:]
2

1

II

108TH CONGRESS

1ST SESSION S. 550

To amend the Indian Land Consolidation Act to improve provisions relating

to probate of trust and restricted land, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MARCH 6, 2003

Mr. CAMPBELL (for himself, Mr. INOUYE, and Mr. THOMAS) introduced the

following bill; which was read twice and referred to the Committee on Indian Affairs

A BILL

To amend the Indian Land Consolidation Act to improve

provisions relating to probate of trust and restricted

land, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘American Indian Pro5 bate Reform Act of 2003’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—

8 (1) the Act of February 8, 1887 (commonly

9 known as the ‘‘Indian General Allotment Act’’) (25
3

2

•S 550 IS

1 U.S.C. 331 et seq.), which authorized the allotment

2 of Indian reservations, did not permit Indian allot3 ment owners to provide for the testamentary disposi4 tion of the land that was allotted to them;

5 (2) that Act provided that allotments would de6 scend according to State law of intestate succession

7 based on the location of the allotment;

8 (3) the reliance of the Federal Government on

9 the State law of intestate succession with respect to

10 the descent of allotments has resulted in numerous

11 problems affecting Indian tribes, members of Indian

12 tribes, and the Federal Government, including—

13 (A) the increasingly fractionated ownership

14 of trust and restricted land as that land is in15 herited by successive generations of owners as

16 tenants in common;

17 (B) the application of different rules of in18 testate succession to each interest of a decedent

19 in or to trust or restricted land if that land is

20 located within the boundaries of more than 1

21 State, which application—

22 (i) makes probate planning unneces23 sarily difficult; and

24 (ii) impedes efforts to provide probate

25 planning assistance or advice;
4

3

•S 550 IS

1 (C) the absence of a uniform general pro2 bate code for trust and restricted land, which

3 makes it difficult for Indian tribes to work co4 operatively to develop tribal probate codes; and

5 (D) the failure of Federal law to address

6 or provide for many of the essential elements of

7 general probate law, either directly or by ref8 erence, which—

9 (i) is unfair to the owners of trust and

10 restricted land (and heirs and devisees of

11 owners); and

12 (ii) makes probate planning more dif13 ficult; and

14 (4) a uniform Federal probate code would

15 likely—

16 (A) reduce the number of fractionated in17 terests in trust or restricted land;

18 (B) facilitate efforts to provide probate

19 planning assistance and advice;

20 (C) facilitate intertribal efforts to produce

21 tribal probate codes in accordance with section

22 206 of the Indian Land Consolidation Act (25

23 U.S.C. 2205); and

24 (D) provide essential elements of general

25 probate law that are not applicable on the date
5

4

•S 550 IS

1 of enactment of this Act to interests in trust or

2 restricted land.

3 SEC. 3. INDIAN PROBATE REFORM.

4 (a) TESTAMENTARY DISPOSITION.—Section 207 of

5 the Indian Land Consolidation Act (25 U.S.C. 2206) is

6 amended by striking subsection (a) and inserting the fol7 lowing:

8 ‘‘(a) TESTAMENTARY DISPOSITION.—

9 ‘‘(1) GENERAL DEVISE OF AN INTEREST IN

10 TRUST OR RESTRICTED LAND.—

11 ‘‘(A) IN GENERAL.—Subject to any appli12 cable Federal law relating to the devise or de13 scent of trust or restricted land, or a tribal pro14 bate code enacted in accordance with section

15 206, the owner of an interest in trust or re16 stricted land may devise such an interest to—

17 ‘‘(i) an Indian tribe with jurisdiction

18 over the land; or

19 ‘‘(ii) any Indian in trust or restricted

20 status (or as a passive trust interest as

21 provided for in section 207A).

22 ‘‘(B) STATUS.—The devise of an interest

23 in trust or restricted land to an Indian under

24 subparagraph (A)(ii) shall not alter the status

25 of such an interest as a trust or restricted in-
6

5

•S 550 IS

1 terest unless the testator provides that the in2 terest is to be held as a passive trust interest.

3 ‘‘(2) DEVISE OF TRUST OR RESTRICTED LAND

4 IN PASSIVE TRUST OR FEE.—

5 ‘‘(A) IN GENERAL.—Except as provided

6 under any applicable Federal law, any interest

7 in trust or restricted land that is not devised in

8 accordance with paragraph (1) may be devised

9 only—

10 ‘‘(i) as a life estate to any non-Indian

11 person, with the remainder being devised

12 only in accordance with clause (ii), sub13 paragraph (C), or paragraph (1)(A);

14 ‘‘(ii) to the lineal descendant or heir

15 of the first or second degree of the testator

16 or, if the testator does not have an heir of

17 the first or second degree or a lineal de18 scendant, to any lineal descendant of an

19 Indian grandparent of the testator, as a

20 passive trust interest (referred to in this

21 section as an ‘eligible passive trust devi22 see’); or

23 ‘‘(iii) in fee in accordance with sub24 paragraph (C).
7

6

•S 550 IS

1 ‘‘(B) PRESUMED DEVISE OF PASSIVE

2 TRUST INTEREST.—Any devise to an eligible

3 passive trust devisee, or any devise of a remain4 der interest from the devise of a life estate

5 under subparagraph (A)(ii), that does not indi6 cate whether the interest is devised as a passive

7 trust interest or a fee interest shall be consid8 ered to devise a passive trust interest.

9 ‘‘(C) DEVISE OF A FEE INTEREST.—Sub10 ject to subparagraph (D), any interest in trust

11 or restricted land that is not devised in accord12 ance with paragraph (1), or devised to an eligi13 ble passive trust devisee in accordance with sub14 paragraph (A), may be devised to a non-Indian

15 in fee.

16 ‘‘(D) LIMITATION.—Any interest in trust

17 or restricted land that is subject to section 4 of

18 the Act of June 18, 1934 (25 U.S.C. 464), may

19 be devised only in accordance with—

20 ‘‘(i) that section;

21 ‘‘(ii) subparagraph (A); or

22 ‘‘(iii) paragraph (1).

23 ‘‘(3) DEVISE OF A PASSIVE TRUST INTEREST.—

24 ‘‘(A) IN GENERAL.—The holder of an in25 terest in trust or restricted land that is held as
8

7

•S 550 IS

1 a passive trust interest may devise the interest

2 as a passive trust interest only to—

3 ‘‘(i)(I) any Indian; or

4 ‘‘(II) the Indian tribe that exercises

5 jurisdiction over the interest;

6 ‘‘(ii) the lineal descendants, or heirs

7 of the first or second degree, of the holder;

8 ‘‘(iii) any living descendant of the de9 cedent from whom the holder acquired the

10 interest by devise or descent; or

11 ‘‘(iv) any person that owns a preexist12 ing interest or a passive trust interest in

13 the same parcel of land, if the preexisting

14 interest is held in trust or restricted status

15 or in passive trust status.

16 ‘‘(B) INELIGIBLE DEVISEES AND INTES17 TATE SUCCESSION.—A passive trust interest

18 that is devised to a person that is not eligible

19 under subparagraph (A) or that is not disposed

20 of by a valid will shall pass in accordance with

21 the applicable law of intestate succession as

22 provided for in subsection (b).’’.

23 (b) NONTESTAMENTARY DISPOSITION.—Section 207

24 of the Indian Land Consolidation Act (25 U.S.C. 2206)
9

8

•S 550 IS

1 is amended by striking subsection (b) and inserting the

2 following:

3 ‘‘(b) NONTESTAMENTARY DISPOSITION.—

4 ‘‘(1) RULES OF DESCENT.—Subject to any ap5 plicable Federal law relating to the devise or descent

6 of trust or restricted property, any interest in trust

7 or restricted land that is not disposed of by a valid

8 will—

9 ‘‘(A) shall descend according to a tribal

10 probate code that is approved in accordance

11 with section 206; or

12 ‘‘(B) in the case of an interest in trust or

13 restricted land to which such a code does not

14 apply, shall descend in accordance with—

15 ‘‘(i) paragraphs (2) through (7);

16 ‘‘(ii) section 207A; and

17 ‘‘(iii) other applicable Federal law.

18 ‘‘(2) NO APPLICABLE CODE.—An intestate in19 terest to which a code described in paragraph (1)

20 does not apply—

21 ‘‘(A) shall include—

22 ‘‘(i) an interest acquired by a dece23 dent through devise or inheritance (re24 ferred to in this subsection as a ‘devise or

25 inheritance interest’); or
10

9

•S 550 IS

1 ‘‘(ii) an interest acquired by a dece2 dent by any means other than devise or in3 heritance (referred to in this subsection as

4 an ‘acquired interest’), if—

5 ‘‘(I) the decedent—

6 ‘‘(aa) acquired additional

7 undivided interest in the same

8 parcel in which the interest is

9 held, by a means other than de10 vise or inheritance; or

11 ‘‘(bb) acquired land adjoin12 ing the parcel of land in which

13 the interest is held; or

14 ‘‘(II) the parcel of land in which

15 the interest is held includes the resi16 dence of the spouse of the decedent;

17 and

18 ‘‘(B) shall descend as follows:

19 ‘‘(i) SURVIVING INDIAN SPOUSE.—

20 ‘‘(I) IN GENERAL.—If a decedent

21 is survived by an Indian spouse, and

22 the estate of the decedent includes 1

23 or more acquired interests, the spouse

24 of the decedent shall receive all of the

25 acquired interests.
11

10

•S 550 IS

1 ‘‘(II) DEVISE OR INHERITANCE

2 INTERESTS.—If a decedent is survived

3 by an Indian spouse, and the estate of

4 the decedent includes 1 or more devise

5 or inheritance interests—

6 ‘‘(aa) if the decedent is not

7 survived by an Indian heir of the

8 first or second degree, the spouse

9 of the decedent shall receive all

10 of the devise or inheritance inter11 ests; and

12 ‘‘(bb) if the decedent is sur13 vived by an Indian heir of the

14 first or second degree, the devise

15 or inheritance interest of the de16 cedent shall descend in accord17 ance with paragraph (3)(A).

18 ‘‘(ii) SURVIVING NON-INDIAN

19 SPOUSE.—

20 ‘‘(I) IN GENERAL.—If a decedent

21 is survived by a non-Indian spouse,

22 and the estate of the decedent in23 cludes 1 or more acquired interests—
12

11

•S 550 IS

1 ‘‘(aa) the spouse of the dece2 dent shall receive a life estate in

3 each acquired interest; and

4 ‘‘(bb)(AA) if the decedent is

5 survived by an Indian heir of the

6 first or second degree, the re7 mainder interests shall descend

8 in accordance with paragraph

9 (3)(A); and

10 ‘‘(BB) if the decedent is not

11 survived by an Indian heir of the

12 first or second degree, the re13 mainder interest shall descend in

14 accordance with paragraph

15 (3)(C).

16 ‘‘(II) DEVISE OR INHERITANCE

17 INTERESTS.—If the estate of a dece18 dent described in subclause (I) in19 cludes 1 or more devise or inheritance

20 interests—

21 ‘‘(aa) if the decedent is sur22 vived by an Indian heir of the

23 first or second degree, the devise

24 or inheritance interests shall de-
13

12

•S 550 IS

1 scend in accordance with para2 graph (3)(A); and

3 ‘‘(bb) if the decedent is not

4 survived by an Indian heir of the

5 first or second degree, the devise

6 or inheritance interests shall de7 scend in accordance with para8 graph (3)(C).

9 ‘‘(iii) NO SURVIVING SPOUSE.—If a

10 decedent is not survived by a spouse, and

11 the estate of the decedent includes 1 or

12 more acquired interests or 1 or more de13 vise or inheritance interests—

14 ‘‘(I) if the decedent is survived by

15 an Indian heir of the first or second

16 degree, the acquired interests or de17 vise or inheritance interests shall de18 scend in accordance with paragraph

19 (3)(A); and

20 ‘‘(II) if the decedent is not sur21 vived by an Indian heir of the first or

22 second degree, the acquired interests

23 or devise or inheritance interests shall

24 descend in accordance with paragraph

25 (3)(C).
14

13

•S 550 IS

1 ‘‘(3) RULES GOVERNING DESCENT OF ES2 TATE.—

3 ‘‘(A) INDIAN HEIRS.—For the purpose of

4 this section, an Indian heir of the first or sec5 ond degree shall inherit in the following order:

6 ‘‘(i) To the Indian children of the de7 cedent (or if 1 or more of those Indian

8 children do not survive the decedent, the

9 Indian children of the deceased child of the

10 decedent, by right of representation) shall

11 inherit in equal shares.

12 ‘‘(ii) If the decedent has no Indian

13 children (or grandchildren that inherit by

14 right of representation under clause (i)), to

15 the Indian brothers and sisters of the dece16 dent, in equal shares.

17 ‘‘(iii) If the decedent has no Indian

18 brothers or sisters, to the Indian parent or

19 parents of the decedent.

20 ‘‘(B) RIGHT OF REPRESENTATION.—In

21 any case involving the determination of a right

22 of representation—

23 ‘‘(i) each interest in trust land shall

24 be equally divided into a number of shares

25 that equals the sum obtained by adding—
15

14

•S 550 IS

1 ‘‘(I) the number of surviving

2 heirs in the nearest degree of kinship;

3 and

4 ‘‘(II) the number of deceased in5 dividuals in that same degree, if any,

6 who left issue who survive the dece7 dent;

8 ‘‘(ii) each surviving heir described in

9 clause (i)(I) shall receive 1 share; and

10 ‘‘(iii)(I) each deceased individual de11 scribed in clause (i)(II) shall receive 1

12 share; and

13 ‘‘(II) that share shall be divided

14 equally among the surviving issue of the

15 deceased person.

16 ‘‘(C) NO INDIAN HEIRS.—

17 ‘‘(i) DEFINITION OF COLLATERAL

18 HEIR.—In this subparagraph, the term

19 ‘collateral heir’ means an aunt, uncle,

20 niece, nephew, or first cousin of a dece21 dent.

22 ‘‘(ii) NO HEIRS.—If a decedent does

23 not have an Indian heir of the first or sec24 ond degree, an interest shall descend to

25 any Indian collateral heir who is a co-
16

15

•S 550 IS

1 owner of an interest owned by the dece2 dent.

3 ‘‘(iii) MULTIPLE COLLATERAL

4 HEIRS.—If—

5 ‘‘(I) an Indian collateral heir

6 owns an interest to which clause (ii)

7 applies that is larger than the interest

8 held by any other such collateral heir,

9 the interest shall descend to the col10 lateral heir that owns the largest un11 divided interest in the parcel; or

12 ‘‘(II) 2 or more collateral heirs

13 own equal shares in an interest to

14 which clause (ii) applies, the interest

15 shall be divided equally among those

16 collateral heirs.

17 ‘‘(iv) NO OWNERSHIP.—If none of the

18 Indian collateral heirs of a decedent owns

19 an interest to which clause (ii) applies,

20 subject to clause (v), the interest shall de21 scend to the Indian tribe that exercises ju22 risdiction over the parcel of trust or re23 stricted land involved.

24 ‘‘(v) ACQUISITION OF INTEREST.—
17

16

•S 550 IS

1 ‘‘(I) IN GENERAL.—Notwith2 standing clause (iv), an Indian co3 owner of a parcel of trust or restricted

4 land may acquire an interest that

5 would otherwise descend under that

6 clause by paying into the estate of the

7 decedent, before the close of the pro8 bate of the estate, the fair market

9 value of the interest in or to the land.

10 ‘‘(II) MULTIPLE CO-OWNERS.—If

11 more than 1 Indian co-owner (includ12 ing the Indian tribe referred to in

13 clause (iv)) offers to pay for an inter14 est described in subclause (I), the

15 highest bidder shall acquire the inter16 est.

17 ‘‘(4) SPECIAL RULE RELATING TO SURVIVAL.—

18 In the case of intestate succession under this sec19 tion, if an individual who fails to survive a decedent

20 by at least 120 hours, as established by clear and

21 convincing evidence—

22 ‘‘(A) the individual shall be deemed to have

23 predeceased the decedent for the purpose of in24 testate succession; and
18

17

•S 550 IS

1 ‘‘(B) the heirs of the decedent shall be de2 termined in accordance with this section.

3 ‘‘(5) PRETERMITTED SPOUSES AND CHIL4 DREN.—

5 ‘‘(A) SPOUSES.—

6 ‘‘(i) IN GENERAL.—Except as pro7 vided in clause (ii), if the surviving spouse

8 of a testator married the testator after the

9 testator executed the will of the testator,

10 the surviving spouse shall receive the intes11 tate share in trust or restricted land that

12 the spouse would have received if the tes13 tator had died intestate.

14 ‘‘(ii) EXCEPTION.—Clause (i) shall

15 not apply to an interest in trust or re16 stricted land in a case in which—

17 ‘‘(I) the will of a testator is exe18 cuted before the date of enactment of

19 this subparagraph;

20 ‘‘(II)(aa) the spouse of a testator

21 is a non-Indian; and

22 ‘‘(bb) the testator devised the in23 terests in trust or restricted land of

24 the testator to 1 or more Indians;
19

18

•S 550 IS

1 ‘‘(III) it appears, based on an ex2 amination of the will or other evi3 dence, that the will was made in con4 templation of the marriage of the tes5 tator to the surviving spouse;

6 ‘‘(IV) the will expresses the in7 tention that the will is to be effective

8 notwithstanding any subsequent mar9 riage; or

10 ‘‘(V)(aa) the testator provided for

11 the spouse by a transfer of funds or

12 property outside the will; and

13 ‘‘(bb) an intent that the transfer

14 be in lieu of a testamentary provision

15 is demonstrated by statements of the

16 testator or through a reasonable infer17 ence based on the amount of the

18 transfer or other evidence.

19 ‘‘(B) CHILDREN.—

20 ‘‘(i) IN GENERAL.—If a testator exe21 cuted the will of the testator before the

22 birth or adoption of 1 or more children of

23 the testator, and the omission of the chil24 dren from the will is a product of inadvert25 ence rather than an intentional omission,
20

19

•S 550 IS

1 the children shall share in the intestate in2 terests of the decedent in trust or re3 stricted land as if the decedent had died

4 intestate.

5 ‘‘(ii) ADOPTED HEIRS.—Any person

6 recognized as an heir by virtue of adoption

7 under the Act of July 8, 1940 (25 U.S.C.

8 372a), shall be treated as the child of a de9 cedent under this subsection.

10 ‘‘(6) DIVORCE.—

11 ‘‘(A) SURVIVING SPOUSE.—

12 ‘‘(i) IN GENERAL.—An individual who

13 is divorced from a decedent, or whose mar14 riage to the decedent has been annulled,

15 shall not be considered to be a surviving

16 spouse unless, by virtue of a subsequent

17 marriage, the individual is married to the

18 decedent at the time of death of the dece19 dent.

20 ‘‘(ii) SEPARATION.—A decree of sepa21 ration that does not dissolve a marriage,

22 and terminate the status of husband and

23 wife, shall not be considered a divorce for

24 the purpose of this subsection.
21

20

•S 550 IS

1 ‘‘(iii) NO EFFECT ON ADJUDICA2 TIONS.—Nothing in clause (i) prevents an

3 entity responsible for adjudicating an in4 terest in trust or restricted land from giv5 ing effect to a property right settlement if

6 1 of the parties to the settlement dies be7 fore the issuance of a final decree dissolv8 ing the marriage of the parties to the prop9 erty settlement.

10 ‘‘(B) EFFECT OF SUBSEQUENT DIVORCE

11 ON A WILL OR DEVISE.—

12 ‘‘(i) IN GENERAL.—If, after executing

13 a will, a testator is divorced or the mar14 riage of the testator is annulled, on the ef15 fective date of the divorce or annulment,

16 any disposition of interests in trust or re17 stricted land made by the will to the

18 former spouse of the testator shall be con19 sidered to be revoked unless the will ex20 pressly provides otherwise.

21 ‘‘(ii) PROPERTY.—Property that is

22 prevented from passing to a former spouse

23 of a decedent under clause (i) shall pass as

24 if the former spouse failed to survive the

25 decedent.
22

21

•S 550 IS

1 ‘‘(iii) PROVISIONS OF WILLS.—Any

2 provision of a will that is considered to be

3 revoked solely by operation of this sub4 paragraph shall be revived by the remar5 riage of a testator to the former spouse of

6 the testator.

7 ‘‘(7) NOTICE.—

8 ‘‘(A) IN GENERAL.—To the maximum ex9 tent practicable, the Secretary shall notify each

10 owner of trust and restricted land of the provi11 sions of this Act.

12 ‘‘(B) COMBINED NOTICES.—The notice

13 under subparagraph (A) may, at the discretion

14 of the Secretary, be provided with the notice re15 quired under section 207(g).’’.

16 (c) RULE OF CONSTRUCTION.—Section 207 of the

17 Indian Land Consolidation Act (25 U.S.C. 2206) is

18 amended by adding at the end the following:

19 ‘‘(h) APPLICABLE FEDERAL LAW.—

20 ‘‘(1) IN GENERAL.—For purpose of subsections

21 (a) and (b), any reference to applicable Federal law

22 includes—

23 ‘‘(A) Public Law 91–627 (84 Stat. 1874);

24 ‘‘(B) Public Law 92–377 (86 Stat. 530);

25 ‘‘(C) Public Law 92–443 (86 Stat. 744);
23

22

•S 550 IS

1 ‘‘(D) Public Law 96–274 (94 Stat. 537);

2 and

3 ‘‘(E) Public Law 98–513 (98 Stat. 2411).

4 ‘‘(2) NO EFFECT ON LAWS.—Nothing in this

5 section amends or otherwise affects any law de6 scribed in paragraph (1), or any other Federal law,

7 that provides for the devise and descent of any trust

8 or restricted land located on a specific Indian res9 ervation.’’.

10 (d) PASSIVE TRUST INTEREST STATUS FOR TRUST

11 OR RESTRICTED LAND.—The Indian Land Consolidation

12 Act is amended by inserting after section 207 (25 U.S.C.

13 2206) the following:

14 ‘‘SEC. 207A. PASSIVE TRUST INTEREST STATUS FOR TRUST

15 OR RESTRICTED LAND.

16 ‘‘(a) PASSIVE TRUST INTEREST STATUS.—

17 ‘‘(1) IN GENERAL.—The owner of an interest in

18 trust or restricted land may submit to the Secretary

19 an application requesting that the interest be held in

20 passive trust interest status.

21 ‘‘(2) AUTHORITY.—An application under para22 graph (1) may authorize the Secretary to amend any

23 existing lease or agreement with respect to the inter24 est that is the subject of the application.
24

23

•S 550 IS

1 ‘‘(b) APPROVAL.—On the approval of an application

2 by the Secretary under subsection (a), an interest in trust

3 or restricted land covered by the application shall be held

4 as a passive trust interest in accordance with this section.

5 ‘‘(c) REQUIREMENTS.—Except as provided in this

6 section, an interest in trust or restricted land that is held

7 as a passive trust interest under this section—

8 ‘‘(1) shall continue to be covered under any ap9 plicable tax-exempt status, and continue to be sub10 ject to any restrictions on alienation, until the inter11 est is patented in fee;

12 ‘‘(2) may, without the approval of the Sec13 retary, be—

14 ‘‘(A) leased for a period of not to exceed

15 25 years;

16 ‘‘(B) mortgaged in accordance with the Act

17 of March 29, 1956 (25 U.S.C. 483a); or

18 ‘‘(C) sold or conveyed to—

19 ‘‘(i) an Indian;

20 ‘‘(ii) the Indian tribe that exercises

21 jurisdiction over the interest; or

22 ‘‘(iii) a co-owner of an interest in the

23 parcel of land in which the interest is held,

24 if the co-owner owns a pre-existing trust,
25

24

•S 550 IS

1 restricted interest, or a passive trust inter2 est in the parcel; and

3 ‘‘(3) may be subject to an ordinance or resolu4 tion enacted under subsection (d).

5 ‘‘(d) ORDINANCE OR RESOLUTION FOR REMOVAL OF

6 STATUS.—

7 ‘‘(1) IN GENERAL.—The governing body of the

8 Indian tribe that exercises jurisdiction over an inter9 est in trust or restricted land that is held as a pas10 sive trust interest in accordance with this section

11 may enact an ordinance or resolution to permit the

12 owner of the interest to apply to the Secretary for

13 the removal of the trust or restricted status of any

14 portion of the land that is subject to the jurisdiction

15 of the Indian tribe.

16 ‘‘(2) REVIEW BY SECRETARY.—The Secretary

17 shall review, and may approve, an ordinance or reso18 lution enacted by an Indian tribe in accordance with

19 paragraph (1) if the Secretary determines that the

20 ordinance or resolution—

21 ‘‘(A) is consistent with this Act; and

22 ‘‘(B) would not increase fractionated own23 ership of Indian land.

24 ‘‘(e) REVENUES OR ROYALTIES.—
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25

•S 550 IS

1 ‘‘(1) IN GENERAL.—Except as provided in para2 graph (2), the Secretary shall not be responsible for

3 the collection of or accounting for any lease revenues

4 or royalties accruing to an interest held as a passive

5 trust interest by any person under this section.

6 ‘‘(2) EXCEPTION.—Paragraph (1) shall not

7 apply to an interest described in that paragraph if

8 the Secretary approves an application to take the in9 terest into active trust status on behalf of an Indian

10 or an Indian tribe in accordance with regulations

11 promulgated by the Secretary.

12 ‘‘(3) AUTHORITY OF SECRETARY.—Nothing in

13 this subsection alters any authority or responsibility

14 of the Secretary with respect to an interest in trust

15 or restricted land held in active trust status (includ16 ing an undivided interest included in the same parcel

17 of land as an undivided passive trust interest).

18 ‘‘(f) JURISDICTION OVER PASSIVE TRUST INTER19 EST.—With respect to an interest in trust or restricted

20 land that is devised or held as a passive trust interest

21 under this section—

22 ‘‘(1) an Indian tribe that exercises jurisdiction

23 over such an interest shall continue to exercise juris24 diction over the land that is held as a passive trust

25 interest; and
27

26

•S 550 IS

1 ‘‘(2) any person holding, leasing, or otherwise

2 using the land shall be considered to consent to the

3 jurisdiction of the Indian tribe with respect to the

4 use of the land (including any effects associated with

5 any use of the land).

6 ‘‘(g) PROBATE OF PASSIVE TRUST INTERESTS.—

7 ‘‘(1) IN GENERAL.—An interest in trust or re8 stricted land that is held as a passive trust interest

9 under this section shall be subject to—

10 ‘‘(A) probate by the Secretary in accord11 ance with this Act; and

12 ‘‘(B) all other laws applicable to the pro13 bate of trust or restricted land.

14 ‘‘(2) COMMENCEMENT OF PROBATE.—Any in15 terested party may file an application to commence

16 the probate of an interest in trust or restricted land

17 held as a passive trust interest.

18 ‘‘(h) REGULATIONS.—The Secretary shall promul19 gate such regulations as are necessary to carry out this

20 section.’’.

21 SEC. 4. PARTITION OF INDIAN LAND.

22 Section 205 of the Indian Land Consolidation Act

23 (25 U.S.C. 2204) is amended by adding at the end the

24 following:

25 ‘‘(c) PARTITION.—
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27

•S 550 IS

1 ‘‘(1) DEFINITIONS.—In this subsection:

2 ‘‘(A) ELIGIBLE INDIAN TRIBE.—The term

3 ‘eligible Indian tribe’ means an Indian tribe

4 that—

5 ‘‘(i) owns eligible land; and

6 ‘‘(ii) consents to partition of the eligi7 ble land.

8 ‘‘(B) ELIGIBLE LAND.—The term ‘eligible

9 land’ means an undivided parcel of land that—

10 ‘‘(i) is located within the reservation

11 of an Indian tribe; or

12 ‘‘(ii) is otherwise under the jurisdic13 tion of an Indian tribe.

14 ‘‘(2) REQUIREMENTS.—Notwithstanding any

15 other provision of law, in accordance with this sub16 section and subject to paragraphs (3), (4), and

17 (5)—

18 ‘‘(A) an eligible Indian tribe may apply to

19 the Secretary for the partition of a parcel of eli20 gible land; and

21 ‘‘(B) the Secretary may commence a proc22 ess for partitioning the eligible land under this

23 subsection if—

24 ‘‘(i) the eligible Indian tribe meets the

25 applicable ownership requirement under
29

28

•S 550 IS

1 subparagraph (A) or (B) of paragraph (3);

2 or

3 ‘‘(ii) the Secretary determines that it

4 is reasonable to believe that the partition

5 of the eligible land owned would be in ac6 cordance with paragraph (3)(C).

7 ‘‘(3) TRIBAL OWNERSHIP.—A parcel of eligible

8 land may be partitioned under this subsection if,

9 with respect to the eligible Indian tribe involved—

10 ‘‘(A) the eligible Indian tribe owns 50 per11 cent or more of the undivided interest in the

12 parcel;

13 ‘‘(B) the eligible Indian tribe is the owner

14 of the largest quantity of undivided interest in

15 the parcel; or

16 ‘‘(C) the owners of undivided interests

17 equal to at least 50 percent of the undivided in18 terest in the parcel (including any undivided in19 terest owned by the eligible Indian tribe) con20 sent or do not object to the partition.

21 ‘‘(4) TRIBAL CONSENT.—A parcel of land that

22 is located within the reservation of an Indian tribe

23 or otherwise under the jurisdiction of an Indian tribe

24 shall be partitioned under this subsection only if the

25 Indian tribe does not object to the partition.
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29

•S 550 IS

1 ‘‘(5) APPLICABILITY.—This subsection shall not

2 apply to any parcel of land that is the bona fide resi3 dence of any person unless the person consents to

4 the partition in writing.

5 ‘‘(6) PARTITION IN KIND.—

6 ‘‘(A) IN GENERAL.—The Secretary shall

7 commence the partition process described in

8 subparagraph (B) if—

9 ‘‘(i) an eligible Indian tribe applies to

10 partition eligible land under this para11 graph; and

12 ‘‘(ii)(I) the Secretary determines that

13 the eligible Indian tribe meets the applica14 ble ownership requirements of subpara15 graph (A) or (B) of paragraph (3); or

16 ‘‘(II) the Secretary determines that it

17 is reasonable to believe that the partition

18 would be in accordance with paragraph

19 (3)(C).

20 ‘‘(B) PARTITION PROCESS.—In carrying

21 out any partition under this paragraph, the

22 Secretary shall—

23 ‘‘(i) provide, to each owner of any un24 divided interest in eligible land to be parti25 tioned, through publication or other appro-
31

30

•S 550 IS

1 priate means, notice of the proposed parti2 tion;

3 ‘‘(ii) make available to any interested

4 party a copy of any proposed partition

5 plan submitted by an eligible Indian tribe

6 or proposed by the Secretary; and

7 ‘‘(iii) review—

8 ‘‘(I) any proposed partition plan

9 submitted by any owner of an undi10 vided interest in the eligible land; and

11 ‘‘(II) any comments or objections

12 concerning a partition, or any pro13 posed plan of partition, submitted by

14 any owner or any other interested

15 party.

16 ‘‘(C) DETERMINATION NOT TO PARTI17 TION.—If the Secretary determines that a par18 cel of eligible land cannot be partitioned in a

19 manner that is fair and equitable to the owners

20 of the eligible land, the Secretary shall inform

21 each owner of the eligible land of—

22 ‘‘(i) the determination of the Sec23 retary; and

24 ‘‘(ii) the right of the owner to appeal

25 the determination.
32

31

•S 550 IS

1 ‘‘(D) PARTITION WITH CONSENT OF ELIGI2 BLE INDIAN TRIBE.—If the Secretary deter3 mines that a parcel of eligible land may be par4 titioned in a manner that is fair and equitable

5 to the owners of the eligible land, and the appli6 cable eligible Indian tribe meets the applicable

7 ownership requirements under subparagraph

8 (A) or (B) of paragraph (3), the Secretary

9 shall—

10 ‘‘(i) approve a plan of partition;

11 ‘‘(ii) provide notice to the owners of

12 the eligible land of the determination of

13 the Secretary;

14 ‘‘(iii) make a copy of the plan of par15 tition available to each owner of the eligi16 ble land; and

17 ‘‘(iv) inform each owner of the right

18 to appeal the determination of the Sec19 retary to partition the eligible land in ac20 cordance with the plan.

21 ‘‘(E) PARTITION WITH CONSENT; IMPLIED

22 CONSENT.—If the Secretary determines that a

23 parcel of eligible land may be partitioned in a

24 manner that is fair and equitable to the owners

25 of the eligible land, but the eligible Indian tribe
33

32

•S 550 IS

1 involved does not meet the applicable ownership

2 requirements under subparagraph (A) or (B) of

3 paragraph (3), the Secretary shall—

4 ‘‘(i)(I) make a plan of partition avail5 able to the owners of the parcel; and

6 ‘‘(II) inform the owners that the eligi7 ble land will be partitioned in accordance

8 with the plan if the owners of 50 percent

9 or more of undivided ownership interest in

10 the eligible land—

11 ‘‘(aa) consent to the partition; or

12 ‘‘(bb) do not object to the parti13 tion by such date as may be estab14 lished by the Secretary; and

15 ‘‘(ii)(I) if the owners of 50 percent or

16 more of undivided ownership interest in

17 the eligible land consent to the partition or

18 do not object by a date established by the

19 Secretary under clause (i)(II)(bb), inform

20 the owners of the eligible land that—

21 ‘‘(aa) the plan for partition is

22 final; and

23 ‘‘(bb) the owners have the right

24 to appeal the determination of the
34

33

•S 550 IS

1 Secretary to partition the eligible

2 land; or

3 ‘‘(II) if the owners of 50 percent or

4 more of the undivided ownership interest

5 in the eligible land object to the partition,

6 inform the eligible Indian tribe of the ob7 jection.

8 ‘‘(F) SUCCESSIVE PARTITION PLANS.—In

9 carrying out subparagraph (E) in accordance

10 with paragraph (3)(C), the Secretary may, in

11 accordance with subparagraph (E)—

12 ‘‘(i) approve 1 or more successive

13 plans of partition; and

14 ‘‘(ii) make those plans available to the

15 owners of the eligible land to be parti16 tioned.

17 ‘‘(G) PLAN OF PARTITION.—A plan of par18 tition approved by the Secretary in accordance

19 with subparagraph (D) or (E)—

20 ‘‘(i) may determine that 1 or more of

21 the undivided interests in a parcel of eligi22 ble land are not susceptible to a partition

23 in kind;

24 ‘‘(ii) may provide for the sale or ex25 change of those undivided interests to—
35

34

•S 550 IS

1 ‘‘(I) 1 or more of the owners of

2 undivided interests in the eligible

3 land; or

4 ‘‘(II) the Secretary in accordance

5 with section 213; and

6 ‘‘(iii) shall provide that the sale of any

7 undivided interest referred to in clause (ii)

8 shall be for not less than the fair market

9 value of the interest.

10 ‘‘(7) PARTITION BY SALE.—

11 ‘‘(A) IN GENERAL.—The Secretary shall

12 commence the partition process described in

13 subparagraph (B) if—

14 ‘‘(i) an eligible Indian tribe applies to

15 partition a parcel of eligible land under

16 this subsection; and

17 ‘‘(ii)(I) the Secretary determines that

18 the Indian tribe meets the applicable own19 ership requirements of subparagraph (A)

20 or (B) of paragraph (3); or

21 ‘‘(II) the Secretary determines that it

22 is reasonable to believe that the partition

23 would be in accordance with paragraph

24 (3)(C).
36

35

•S 550 IS

1 ‘‘(B) PARTITION PROCESS.—In carrying

2 out any partition of eligible land under this

3 paragraph, the Secretary—

4 ‘‘(i) shall conduct a preliminary ap5 praisal of the eligible land;

6 ‘‘(ii) shall provide to the owners of the

7 eligible land, through publication or other

8 appropriate means—

9 ‘‘(I) notice of the application of

10 the eligible Indian tribe to partition

11 the eligible land; and

12 ‘‘(II) access to the preliminary

13 appraisal conducted in accordance

14 with clause (i);

15 ‘‘(iii) shall inform each owner of the

16 eligible land of the right to submit to the

17 Secretary comments relating to the pre18 liminary appraisal;

19 ‘‘(iv) may, based on comments re20 ceived under clause (iii), modify the pre21 liminary appraisal or provide for the con22 duct of a new appraisal; and

23 ‘‘(v) shall—

24 ‘‘(I) issue a final appraisal for

25 the eligible land;
37

36

•S 550 IS

1 ‘‘(II) provide to the owners of the

2 eligible land and the appropriate In3 dian tribes access to the final ap4 praisal; and

5 ‘‘(III) inform the Indian tribes of

6 the right to appeal the final appraisal.

7 ‘‘(C) PURCHASE BY ELIGIBLE INDIAN

8 TRIBE.—If an eligible Indian tribe enters into

9 an agreement with the Secretary to pay fair

10 market value for eligible land partitioned under

11 this subsection, as determined by the final ap12 praisal of the eligible land issued under sub13 paragraph (B)(v)(I) (including any appraisal

14 issued by the Secretary after an appeal by the

15 Indian tribe under subparagraph (B)(v)(III)),

16 and the eligible Indian tribe meets the applica17 ble ownership requirements of subparagraph

18 (A) or (B) of paragraph (3), the Secretary

19 shall—

20 ‘‘(i) provide to each owner of the eligi21 ble land notice of the agreement; and

22 ‘‘(ii) inform the owners of the right to

23 appeal the decision of the Secretary to

24 enter into the agreement (including the

25 right to appeal any final appraisal of the
38

37

•S 550 IS

1 parcel referred to in subparagraph

2 (B)(v)(III)).

3 ‘‘(D) PARTITION WITH CONSENT; IMPLIED

4 CONSENT.—

5 ‘‘(i) IN GENERAL.—If an eligible In6 dian tribe agrees to pay fair market value

7 for eligible land partitioned under this sub8 section, as determined by the final ap9 praisal of the eligible land issued under

10 subparagraph (B)(v)(I) (including any ap11 praisal issued by the Secretary after an ap12 peal by the Indian tribe under subpara13 graph (B)(v)(III)), but does not meet the

14 applicable ownership requirements of sub15 paragraph (A) or (B) of paragraph (3), the

16 Secretary shall—

17 ‘‘(I) provide to each owner of the

18 undivided interest in the eligible land

19 notice that the Indian tribe did not

20 meet the requirements; and

21 ‘‘(II) inform the owners that the

22 eligible land will be partitioned by sale

23 unless the partition is opposed by the

24 owners of 50 percent or more of the
39

38

•S 550 IS

1 undivided ownership interest in the el2 igible land.

3 ‘‘(ii) FAILURE TO OBJECT TO PARTI4 TION.—If the owners of 50 percent or

5 more of undivided ownership interest in or

6 to a parcel of eligible land consent to the

7 partition of the eligible land, or do not ob8 ject to the partition by such date as may

9 be established by the Secretary, the Sec10 retary shall inform the owners of the eligi11 ble land of the right to appeal the deter12 mination of the Secretary to partition the

13 eligible land (including the results of the

14 final appraisal issued under subparagraph

15 (B)(v)(I)).

16 ‘‘(iii) OBJECTION TO PARTITION.—If

17 the owners of 50 percent or more of the

18 undivided ownership interest in a parcel of

19 eligible land object to the partition of the

20 eligible land—

21 ‘‘(I) the Secretary shall notify the

22 eligible Indian tribe of the objection;

23 and

24 ‘‘(II) the eligible Indian tribe and

25 the Secretary may agree to increase
40

39

•S 550 IS

1 the amount offered to purchase the

2 undivided ownership interests in the

3 eligible land.

4 ‘‘(8) ENFORCEMENT.—

5 ‘‘(A) IN GENERAL.—If, with respect to a

6 parcel of eligible land, a partition in kind is ap7 proved under subparagraph (D) or (E) of para8 graph (6), or a partition by sale is approved

9 under paragraph (7)(C), and the owner of an

10 interest in or to the eligible land fails to convey

11 the interest to the Indian tribe, the Indian tribe

12 or the United States may—

13 ‘‘(i) bring a civil action in the United

14 States district court for the district in

15 which the eligible land is located; and

16 ‘‘(ii) request the court to issue an ap17 propriate order for the partition in kind, or

18 partition by sale to the Indian tribe, of the

19 eligible land.

20 ‘‘(B) FEDERAL ROLE.—With respect to

21 any civil action brought under subparagraph

22 (A)—

23 ‘‘(i) the United States—

24 ‘‘(I) shall receive notice of the

25 civil action; and
41

40

•S 550 IS

1 ‘‘(II) may be a party to the civil

2 action; and

3 ‘‘(ii) the civil action shall not be dis4 missed, and no relief requested shall be de5 nied, on the ground that the civil action is

6 against the United States or that the

7 United States is an indispensable party.’’.

8 SEC. 5. ADDITIONAL AMENDMENTS.

9 (a) IN GENERAL.—The Indian Land Consolidation

10 Act (25 U.S.C. 2201 et seq.) is amended—

11 (1) in the second sentence of section 205(a) (25

12 U.S.C. 2204(a)), by striking ‘‘over 50 per centum of

13 the undivided interests’’ and inserting ‘‘undivided in14 terests equal to at least 50 percent of the undivided

15 interest’’;

16 (2) in section 206 (25 U.S.C. 2205)—

17 (A) in subsection (a), by striking para18 graph (3) and inserting the following:

19 ‘‘(3) TRIBAL PROBATE CODES.—Except as pro20 vided in any applicable Federal law, the Secretary

21 shall not approve a tribal probate code, or an

22 amendment to such a code, that prevents the devise

23 of an interest in trust or restricted land to—

24 ‘‘(A) an Indian lineal descendant of the

25 original allottee; or
42

41

•S 550 IS

1 ‘‘(B) an Indian who is not a member of the

2 Indian tribe that exercises jurisdiction over

3 such an interest, unless the code provides for—

4 ‘‘(i) the renouncing of interests to eli5 gible devisees in accordance with the code;

6 ‘‘(ii) the opportunity for a devisee who

7 is the spouse or lineal descendant of a tes8 tator to reserve a life estate; and

9 ‘‘(iii) payment of fair market value in

10 the manner prescribed under subsection

11 (c)(2).’’; and

12 (B) in subsection (c)—

13 (i) in paragraph (1)—

14 (I) by striking the paragraph

15 heading and inserting the following:

16 ‘‘(1) AUTHORITY.—

17 ‘‘(A) IN GENERAL.—’’;

18 (II) in the first sentence of sub19 paragraph (A) (as designated by

20 clause (i)), by striking ‘‘section

21 207(a)(6)(A) of this title’’ and insert22 ing ‘‘section 207(a)(2)(A)(ii),

23 207(a)(2)(C), or 207(a)(3)’’; and

24 (III) by striking the last sentence

25 and inserting the following:
43

42

•S 550 IS

1 ‘‘(B) TRANSFER.—The Secretary shall

2 transfer payments received under subparagraph

3 (A) to any person or persons who would have

4 received an interest in land if the interest had

5 not been acquired by the Indian tribe in accord6 ance with this paragraph.’’; and

7 (ii) in paragraph (2)—

8 (I) in subparagraph (A)—

9 (aa) by striking the subpara10 graph heading and all that fol11 lows through ‘‘Paragraph (1)

12 shall apply’’ and inserting the

13 following:

14 ‘‘(A) NONAPPLICABILITY TO CERTAIN IN15 TERESTS.—

16 ‘‘(i) IN GENERAL.—Paragraph (1)

17 shall not apply’’;

18 (bb) in clause (i) (as des19 ignated by item (a)), by striking

20 ‘‘if, while’’ and inserting the fol21 lowing: ‘‘if—

22 ‘‘(I) while’’;

23 (cc) by striking the period at

24 the end and inserting ‘‘; or’’; and
44

43

•S 550 IS

1 (dd) by adding at the end

2 the following:

3 ‘‘(II)(aa) the interest is part of a

4 family farm that is devised to a mem5 ber of the family of the decedent; and

6 ‘‘(bb) the devisee agrees that the

7 Indian tribe that exercises jurisdiction

8 over the land will have the oppor9 tunity to acquire the interest for fair

10 market value if the interest is offered

11 for sale to an entity that is not a

12 member of the family of the owner of

13 the land.

14 ‘‘(ii) RECORDING OF INTEREST.—On

15 request by an Indian tribe described in

16 clause (i)(II)(bb), a restriction relating to

17 the acquisition by the Indian tribe of an

18 interest in a family farm involved shall be

19 recorded as part of the deed relating to the

20 interest involved.

21 ‘‘(iii) MORTGAGE AND FORE22 CLOSURE.—Nothing in clause (i)(II) pre23 vents or limits the ability of an owner of

24 land to which that clause applies to mort25 gage the land or limit the right of the en-
45

44

•S 550 IS

1 tity holding such a mortgage to foreclose

2 or otherwise enforce such a mortgage

3 agreement in accordance with applicable

4 law.

5 ‘‘(iv) DEFINITION OF MEMBER OF

6 THE FAMILY.—In this paragraph, the term

7 ‘member of the family’, with respect to a

8 decedent or landowner, means—

9 ‘‘(I) a lineal descendant of a de10 cedent or landowner;

11 ‘‘(II) a lineal descendant of the

12 grandparent of a decedent or land13 owner;

14 ‘‘(III) the spouse of a descendant

15 or landowner described in subclause

16 (I) or (II); and

17 ‘‘(IV) the spouse of a decedent or

18 landowner.’’; and

19 (II) in subparagraph (B), by

20 striking ‘‘subparagraph (A)’’ and all

21 that follows through ‘‘207(a)(6)(B) of

22 this title’’ and inserting ‘‘paragraph

23 (1)’’;

24 (3) in section 207 (25 U.S.C. 2206)—

25 (A) in subsection (c)—
46

45

•S 550 IS

1 (i) by redesignating paragraph (3) as

2 paragraph (4); and

3 (ii) by inserting after paragraph (2)

4 the following:

5 ‘‘(3) ALIENATION OF JOINT TENANCY INTER6 ESTS.—

7 ‘‘(A) IN GENERAL.—With respect to any

8 interest held in joint tenancy in accordance with

9 this subsection—

10 ‘‘(i) nothing in this subsection alters

11 the ability of an owner of such an interest

12 to convey a life estate in the undivided

13 joint tenancy interest of the owner; and

14 ‘‘(ii) only the last remaining owner of

15 such an interest may devise or convey

16 more than a life estate in the interest.

17 ‘‘(B) APPLICATION OF PROVISION.—This

18 paragraph shall not apply—

19 ‘‘(i) to any conveyance, sale, or trans20 fer that is part of an agreement referred to

21 in subsection (e); or

22 ‘‘(ii) to a co-owner of a joint tenancy

23 interest.’’; and
47

46

•S 550 IS

1 (B) in subsection (g)(5), by striking ‘‘this

2 section’’ and inserting ‘‘subsections (a) and

3 (b)’’;

4 (4) in section 213 (25 U.S.C. 2212)—

5 (A) in subsection (a)(2), by striking ‘‘(A)

6 IN GENERAL.—’’ and all that follows through

7 ‘‘the Secretary shall submit’’ and inserting

8 ‘‘The Secretary shall submit’’;

9 (B) in subsection (b), by striking para10 graph (4) and inserting the following:

11 ‘‘(4) shall minimize the administrative costs as12 sociated with the land acquisition program through

13 the use of policies and procedures designed to ac14 commodate the voluntary sale of interests under the

15 pilot program under this section, notwithstanding

16 the existence of any otherwise applicable policy, pro17 cedure, or regulation, through the elimination of

18 duplicate—

19 ‘‘(A) conveyance documents;

20 ‘‘(B) administrative proceedings; and

21 ‘‘(C) transactions.’’; and

22 (C) in subsection (c)—

23 (i) in paragraph (1)—

24 (I) in subparagraph (A), by strik25 ing ‘‘landowner upon payment’’ and
48

47

•S 550 IS

1 all that follows and inserting the fol2 lowing: ‘‘landowner—

3 ‘‘(i) on payment by the Indian land4 owner of the amount paid for the interest

5 by the Secretary; or

6 ‘‘(ii) if—

7 ‘‘(I) the Indian referred to in this

8 subparagraph provides assurances

9 that the purchase price will be paid by

10 pledging revenue from any source, in11 cluding trust resources; and

12 ‘‘(II) the Secretary determines

13 that the purchase price will be paid in

14 a timely and efficient manner.’’; and

15 (II) in subparagraph (B), by in16 serting before the period at the end

17 the following: ‘‘unless the interest is

18 subject to a foreclosure of a mortgage

19 in accordance with the Act of March

20 29, 1956 (25 U.S.C. 483a)’’; and

21 (ii) in paragraph (3), by striking ‘‘10

22 percent of more of the undivided interests’’

23 and inserting ‘‘an undivided interest’’;

24 (5) in section 214 (25 U.S.C. 2213), by striking

25 subsection (b) and inserting the following:
49

48

•S 550 IS

1 ‘‘(b) APPLICATION OF REVENUE FROM ACQUIRED

2 INTERESTS TO LAND CONSOLIDATION PILOT PRO3 GRAM.—

4 ‘‘(1) IN GENERAL.—The Secretary shall have a

5 lien on any revenue accruing to an interest described

6 in subsection (a) until the Secretary provides for the

7 removal of the lien under paragraph (3) or (4).

8 ‘‘(2) REQUIREMENTS.—

9 ‘‘(A) IN GENERAL.—Until the Secretary

10 removes a lien from an interest in land under

11 paragraph (1)—

12 ‘‘(i) any lease, resource sale contract,

13 right-of-way, or other document evidencing

14 a transaction affecting the interest shall

15 contain a clause providing that all revenue

16 derived from the interest shall be paid to

17 the Secretary; and

18 ‘‘(ii) any revenue derived from any in19 terest acquired by the Secretary in accord20 ance with section 213 shall be deposited in

21 the fund created under section 216.

22 ‘‘(B) APPROVAL OF TRANSACTIONS.—Not23 withstanding section 16 of the Act of June 18,

24 1934 (commonly known as the ‘Indian Reorga25 nization Act’) (25 U.S.C. 476), or any other
50

49

•S 550 IS

1 provision of law, until the Secretary removes a

2 lien from an interest in land under paragraph

3 (1), the Secretary may approve a transaction

4 covered under this section on behalf of an In5 dian tribe.

6 ‘‘(3) REMOVAL OF LIEN AFTER FINDINGS.—

7 The Secretary may remove a lien referred to in

8 paragraph (1) if the Secretary makes a finding

9 that—

10 ‘‘(A) the costs of administering the interest

11 from which revenue accrues under the lien will

12 equal or exceed the projected revenues for the

13 parcel of land involved;

14 ‘‘(B) in the discretion of the Secretary, it

15 will take an unreasonable period of time for the

16 parcel of land to generate revenue that equals

17 the purchase price paid for the interest; or

18 ‘‘(C) a subsequent decrease in the value of

19 land or commodities associated with the parcel

20 of land make it likely that the interest will be

21 unable to generate revenue that equals the pur22 chase price paid for the interest in a reasonable

23 time.

24 ‘‘(4) OTHER REMOVAL OF LIEN.—In accord25 ance with regulations to be promulgated by the Sec-
51

50

•S 550 IS

1 retary, and in consultation with tribal governments

2 and other entities described in section 213(b)(3), the

3 Secretary shall periodically remove liens referred to

4 in paragraph (1) from interests in land acquired by

5 the Secretary.’’;

6 (6) in section 216 (25 U.S.C. 2215)—

7 (A) in subsection (a), by striking para8 graph (2) and inserting the following:

9 ‘‘(2) collect all revenues received from the lease,

10 permit, or sale of resources from interests acquired

11 under section 213 or paid by Indian landowners

12 under section 213.’’; and

13 (B) in subsection (b)—

14 (i) in paragraph (1)—

15 (I) in the matter preceding sub16 paragraph (A), by striking ‘‘Subject

17 to paragraph (2), all’’ and inserting

18 ‘‘All’’;

19 (II) in subparagraph (A), by

20 striking ‘‘and’’ at the end;

21 (III) in subparagraph (B), by

22 striking the period at the end and in23 serting ‘‘; and’’; and

24 (IV) by adding at the end the fol25 lowing:
52

51

•S 550 IS

1 ‘‘(C) be used to acquire undivided interests

2 on the reservation from which the income was

3 derived.’’; and

4 (ii) by striking paragraph (2) and in5 serting the following:

6 ‘‘(2) USE OF FUNDS.—The Secretary may use

7 the revenue deposited in the Acquisition Fund under

8 paragraph (1) to acquire some or all of the undi9 vided interests in any parcels of land in accordance

10 with section 205.’’;

11 (7) in section 217 (25 U.S.C. 2216)—

12 (A) in subsection (e)(3), by striking ‘‘pro13 spective applicants for the leasing, use, or con14 solidation of’’ and insert ‘‘any person that is

15 leasing, using, or consolidating, or is applying

16 to lease, use, or consolidate,’’; and

17 (B) by striking subsection (f) and inserting

18 the following:

19 ‘‘(f) PURCHASE OF LAND BY INDIAN TRIBE.—

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), before the Secretary approves an applica22 tion to terminate the trust status or remove the re23 strictions on alienation from a parcel of trust or re24 stricted land, the Indian tribe that exercises jurisdic25 tion over the parcel shall have the opportunity—
53

52

•S 550 IS

1 ‘‘(A) to match any offer contained in the

2 application; or

3 ‘‘(B) in a case in which there is no pur4 chase price offered, to acquire the interest in

5 the parcel by paying the fair market value of

6 the interest.

7 ‘‘(2) EXCEPTION FOR FAMILY FARMS.—

8 ‘‘(A) IN GENERAL.—Paragraph (1) shall

9 not apply to a parcel of trust or restricted land

10 that is part of a family farm that is conveyed

11 to a member of the family of a landowner (as

12 defined in section 206(c)(2)(A)(iv)) if—

13 ‘‘(i) the interest is offered for sale to

14 an entity that is not a member of the fam15 ily of the landowner; and

16 ‘‘(ii) the Indian tribe that exercises

17 jurisdiction over the land is afforded the

18 opportunity to purchase the interest.

19 ‘‘(B) APPLICABILITY.—Section

20 206(c)(2)(A) shall apply with respect to the re21 cording and mortgaging of any trust or re22 stricted land referred to in subparagraph (A).’’;

23 and
54

53

•S 550 IS

1 (8) in section 219(b)(1)(A) (25 U.S.C.

2 2218(b)(1)(A)), by striking ‘‘100’’ and inserting

3 ‘‘90’’.

4 (b) DEFINITION.—

5 (1) IN GENERAL.—Section 202 of the Indian

6 Land Consolidation Act (25 U.S.C. 2201) is amend7 ed by striking paragraph (2) and inserting the fol8 lowing:

9 ‘‘(2) INDIAN.—

10 ‘‘(A) IN GENERAL.—The term ‘Indian’

11 means—

12 ‘‘(i) any person that is a member of

13 any Indian tribe or is eligible to become a

14 member of any Indian tribe;

15 ‘‘(ii) subject to subparagraph (B), any

16 person that has been found to meet the

17 definition of ‘Indian’ under any Federal

18 law; and

19 ‘‘(iii) with respect to the ownership,

20 devise, or descent of trust or restricted

21 land in the State of California, any person

22 that meets the definition of ‘Indians of

23 California’ contained in the first section of

24 the Act of May 18, 1928 (25 U.S.C. 651),

25 until otherwise provided by Congress in ac-
55

55

•S 550 IS

1 (2) APPLICABILITY.—Any exclusion referred to

2 in the amendment made by paragraph (1) shall

3 apply only to a decedent who dies after the date on

4 which the Secretary of the Interior promulgates a

5 regulation providing for the exclusion.

6 (c) MORTGAGES AND DEEDS OF TRUST.—The Act

7 of March 29, 1956 (25 U.S.C. 483a), is amended in the

8 first sentence of subsection (a) by inserting after ‘‘any

9 land’’ the following: ‘‘(including land owned by any person

10 in passive trust status in accordance with section 207A

11 of the Indian Land Consolidation Act)’’.

12 (d) ISSUANCE OF PATENTS.—Section 5 of the Act of

13 February 8, 1887 (25 U.S.C. 348), is amended by striking

14 the second proviso and inserting the following: ‘‘Provided,

15 That the rules of intestate succession under the Indian

16 Land Consolidation Act (25 U.S.C. 2201 et seq.) (includ17 ing a tribal probate code approved under that Act or regu18 lations promulgated under that Act) shall apply to that

19 land for which patents have been executed and delivered:’’.

20 (e) TRANSFERS OF RESTRICTED INDIAN LAND.—

21 Section 4 of the Act of June 18, 1934 (25 U.S.C. 464),

22 is amended in the first proviso by striking ‘‘, in accordance

23 with’’ and all that follows through the colon and inserting

24 ‘‘in accordance with the Indian Land Consolidation Act

25 (25 U.S.C. 2201 et seq.) (including a tribal probate code
56

56

•S 550 IS

1 approved under that Act or regulations promulgated under

2 that Act):’’.

3 SEC. 6. INHERITANCE OF CERTAIN TRUST OR RESTRICTED

4 LAND.

5 (a) IN GENERAL.—Section 5 of Public Law 98–513

6 (98 Stat. 2413) is amended to read as follows:

7 ‘‘SEC. 5. INHERITANCE OF CERTAIN TRUST OR RESTRICTED

8 LAND.

9 ‘‘(a) IN GENERAL.—Notwithstanding any other pro10 vision of this Act—

11 ‘‘(1) the owner of an interest in trust or re12 stricted land within the reservation may not devise

13 an interest (including a life estate under section 4)

14 in the land that is less than 2.5 acres to more than

15 1 tribal member unless each tribal member already

16 holds an interest in that land; and

17 ‘‘(2) any interest in trust or restricted land

18 within the reservation that is less than 2.5 acres

19 that would otherwise pass by intestate succession

20 (including a life estate in the land under section 4),

21 or that is devised to more than 1 tribal member that

22 is not described in paragraph (1), shall revert to the

23 Indian tribe, to be held in the name of the United

24 States in trust for the Indian tribe.

25 ‘‘(b) NOTICE.—
57

57

•S 550 IS

1 ‘‘(1) IN GENERAL.—Not later than 180 days

2 after the date of enactment of the Indian Probate

3 Reform Act of 2003, the Secretary shall provide no4 tice to owners of trust or restricted land within the

5 Lake Traverse Reservation of the provisions of this

6 section by—

7 ‘‘(A) direct mail;

8 ‘‘(B) publication in the Federal Register;

9 or

10 ‘‘(C) publication in local newspapers.

11 ‘‘(2) CERTIFICATION.—After providing notice

12 under paragraph (1), the Secretary shall—

13 ‘‘(A) certify that the requirements of this

14 subsection have been met; and

15 ‘‘(B) shall publish notice of that certifi16 cation in the Federal Register.’’.

17 (b) APPLICABILITY.—This section and the amend18 ment made by this section shall not apply with respect

19 to the estate of any person who dies before the date that

20 is 1 year after the date on which the Secretary makes the

21 required certification under section 5(b) of Public Law

22 98–513 (98 Stat. 2413) (as amended by subsection (a)).
58

58

•S 550 IS

1 SEC. 7. EFFECTIVE DATE.

2 The amendments made by this Act shall not apply

3 to the estate of an individual who dies before the later

4 of—

5 (1) the date that is 1 year after the date of en6 actment of this Act; or

7 (2) the date specified in section 207(g)(5) of

8 the Indian Land Consolidation Act (25 U.S.C.

9 2206(g)(5)).

Æ
59

The CHAIRMAN. Senator Thomas, did you have an opening statement?

STATEMENT OF HON. CRAIG THOMAS, U.S. SENATOR FROM

WYOMING

Senator THOMAS. Thank you, Mr. Chairman. I want to thank you

for holding this hearing. Certainly it is one of the most important

things to us in Wyoming. Last year, the Eastern Shoshone General

Council created a working group. Ben O’Neal was a part of that

group and was elected to the Council. He is here to testify. We are

very pleased about that.

Obviously it is important for us to deal with this issue. Individual land owners in Wyoming are concerned about the future and

how they are going to go with their families. Without doing something, it is very limited in what we can do with the States.

I know you have worked long and hard on this, Mr. Chairman.

I want to join with you in seeking to find a solution. We did not

get it done last year. We need to work on it this year.

Thank you.

The CHAIRMAN. Thank you. With that, we will go ahead and

start with our first witness, Wayne Nordwall. He will be accompanied by D. Jeff Lords.

Mr. Nordwall, let me ask you. Are you related to the Nordwalls

around Reno somewhere? Adam Nordwall and that family?

Mr. NORDWALL. Yes, Mr. Chairman; he is my uncle.

The CHAIRMAN. He is a good friend of mine. I have not seen him

for years. We used to pow wow together a long time ago, 25 or 30

years ago.

Go ahead, Mr. Nordwall.

STATEMENT OF WAYNE NORDWALL, DIRECTOR FOR THE BUREAU OF INDIAN AFFAIRS WESTERN REGION, DEPARTMENT

OF THE INTERIOR, WASHINGTON, DC, ACCOMPANIED BY D.

JEFF LORDS, ACTING DEPUTY SPECIAL TRUSTEE, TRUST

ACCOUNTABILITY, OFFICE OF THE SPECIAL TRUSTEE

Mr. NORDWALL. Thank you, Mr. Chairman.

I would like to submit our testimony for the record.

The CHAIRMAN. Without objection, all written testimony will be

included. You can divert from that if you would like.

[Prepared statement of Wayne Nordwall appears in appendix.]

Mr. NORDWALL. Rather than read from that or deal with it, I

made some notes last night to talk about some of the general issues

that you just discussed.

The CHAIRMAN. That will be fine.

Mr. NORDWALL. Probably one of the single most important measures pending in the Department of the Interior right now is trust

reform. A key to getting trust reform accomplished is resolving this

fractionated heirship issue.

Without some sort of a resolution, any system that we could create in order to deal with these issues in the short term probably

will not last very long because fractionation would rapidly outpace

almost anything we could put in place.

We support generally the concepts that are in S. 550. However,

after having reviewed the latest draft, and having more experience
60

on the ground in dealing with the Indian Land Consolidation Act

[ILCA] amendments of 2000, we believe that the existing version

is overly complex. We would like to work with the committee in

order to make a bill that is a little more understandable and will

be capable of being implemented in the field.

At this point you have already gone over some of the history of

the allotment process so I will not go over that again other than

to say that the direct result of the allotment process was a loss of

over 100 million acres of trust land. It is the side effects that we

are concerned about at this hearing; principally, the fractionation

itself and the problems we have in probating all these numerous

estates.

I was just looking in the room and I see many of the people that

we worked with back in the 1970’s that are still here and still trying to resolve this issue. I met with an old BIA realty officer. He

said:

You know, if we cannot solve this problem relatively soon, within a generation or

two or three, all the land in Indian country will be so fractionated that it will become almost de facto communal land. Nobody will know who owns it. It will just

be there and it will be a resource that nobody will really be able to administer.

So we began reviewing the past history of this thing. It has been

well documented since at least the 1920’s. The first big detailed report was the Miriam Report in 1928 which outlined all the problems with fractionation, with the allotment policy, and was a very

detailed analysis of all the problems created. That was the foundation for the Indian Reorganization Act in 1934.

Two of the cornerstones of the original Indian Reorganization Act

were a title that dealt specifically with fractionation, and a complete separate title that dealt with probate. Like many things that

have happened over the years, by the time it went through the legislative process, the two titles had been dwindled down to one or

two paragraphs that were simply inadequate to address all of the

problems.

Had the original provisions been enacted, this problem may have

been solved in the 1930’s. That is past history. All through the

1950’s and 1960’s there were additional efforts to get a legislative

solution to this problem. All of those efforts for various reasons

failed. Either the allottees opposed it, or the tribes opposed it, or

the Administration opposed it. There was never a solution worked

out.

We began working on this issue again in the early 1980s. At that

point we were working primarily with the old House Interior and

Insular Affairs Committee because they had Indian expertise over

there. That expertise is now in this committee.

We prepared the original draft of what became ILCA, the Indian

Land Consolidation Act. Our original thought was that we would

vest most of the authority to deal with this issue in the tribes by

authorizing them to create tribal probate codes. In a sort of catchall, fall-back position in order to try to slow fractionation, the escheat provision was put in there that for the tiny fractional interests that were continuing to pass until the tribes enacted their

codes, they would escheat to the tribes. As this committee is well

aware, the act was amended in 1984. There were two versions of
61

ILCA, both of which have subsequently been struck down by the

Supreme Court as unconstitutional.

We started looking at the problem again in 1993. We revised

ILCA substantially. Irvin had been decided. Youpee was pending.

We essentially removed the escheat provision altogether. We tried

to come up with a uniform probate code. Again, as is typical of the

way these things work, by the time it went through the process,

certain provisions were put in there that either do not directly address the problem sufficiently in order to resolve it, or they are so

confusing that it literally cannot be implemented.

We have a team that has been put together that consist of administrative law judges, members of the solicitors office, and tribal

attorneys that have sat around trying to analyze how the probate

provisions of the existing ILCA are supposed to work. They cannot

agree on what exactly they say.

Our employees in the BIA are supposed to go out and explain

this to Indian country. We issued a notice to over 200,000 people,

as the act requires, to try to advise them of the terms. All this created was confusion and fear in Indian country because the provisions are basically unintelligible.

So we started working with the committee starting almost immediately after the 2000 amendments were passed on what became

S. 1340. Initially S. 1340 was a relatively simple bill that addressed only certain key probate issues. But it morphed into something that is a little more complicated in the existing version which

has now been reintroduced as S. 550.

It is far more complex than the original version. At this point the

Administration just believes that it will not work again because it

is simply too complex. It has this passive trust, active purchases,

and inactive purchases. It has a variety of things in there that we

cannot interpret and we know we cannot explain it to Indian country.

Last year the Department held a 2-day conference where we invited members of Indian country. We also had the Secretary’s office

represented. Deputy Secretary Griles was there, as well as Jim

Cason and Ross Swimmer. We invited members of the committee

and they were present.

The conference was to brainstorm some ideas on how to finally

resolve this fractionated heirship problem and how to address probate. A lot of ideas were floated on the table. For those of us who

have been working on this for a long time, it was old history because all the new people arrive at the table and think they have

new ideas. They have actually been discussed many times before.

One of the things that I did was ask the Deputy Secretary and

other people from Interior to read a 1938 report that was drafted

at the end of a meeting that was held in Glacier Park, MT. The

people who ran this meeting were Felix Cohen and John Collier,

who basically are the people who created the cornerstone of modern

Federal law and modern Indian policy.

I told them to think about the discussion that they had that day

and to read this report. They would be shocked when they read this

report. They came back the next day. I was surprised that they had

actually read it.
62

If you tear off the cover of this report and take away the date,

and read the text, the ideas, the suggestions, and the problems

that were facing the Department of the Interior and Indian country

in 1938, they are exactly the same problems we are talking about

now.

If the committee does not have a copy, I will leave a couple here

so that the staff can look at it. I urge them to look at this report.

It is really something that is just truly amazing when you review

this. Felix Cohen and John Collier are, of course, the fathers of

modern Indian law.

At any rate, where are we right now? We have S. 550 which we

greatly appreciate the Committee introducing and to the extent we

can, we will work with the committee in order to try to revise and

create a better bill.

The Department also has a work group in place right now that

is working on a plan to expand the pilot project nationwide in order

to begin acquiring fractionalized interests. A Federal Register Notice was published a couple of weeks ago inviting tribal leaders to

participate on that in order to determine which tribes should be selected next in the process and how the process should actually be

implemented out in Indian country.

When we get to the end of this, we still believe that the most viable solution to most of these problems is to reconsolidate these fractional interests and invest them in the tribe. Then the tribe will

be allowed to issue land assignments or deal with land issues

under traditional tribal law.

We also have in place a to-be initiative we are going through and

trying to re-engineer all the Department’s trust processes. One of

the processes that is being re-engineered is probate. Again, we

would like to point out that even though we are looking at this tobe process, that only addresses process, it does not address substance. That is what S. 550 addresses and that is what we need

to work with. We need a substantive change in the law because no

matter how we streamline the process this problem is just going to

overwhelm anything we can put in place.

Finally, we do have an informal meeting process. We have not

become part of the formal group. The NCAI, the Indian Land

Working Group, and others have been meeting periodically to discuss S. 550 and ways to correct ILCA. We have had members of

our staff participating either in person, at the meetings, or on the

telephone. We are trying to solicit ideas in order to collectively

come up with better ideas.

Why do we need this? We need this because we are literally at

the point within another generation or two where this land is going

to be so fractionated that we are not going to be able to know who

owns it. We are not going to be able to account for income that

comes in from it. It will become essentially almost worthless.

We have situations in Arizona where we have 10-acre allotments.

Many of the allotments in Arizona were made late in the allotment

period and since they are irrigated they are quite small. We have

some with over 500 owners.

When we started the pilot project we selected that because one

of the allotments there had over 1,000 owners which was the most

in the country. We now have several allotments with over 1,000
63

owners. When we started the pilot project that particular reservation had 87,000 fractional interests. We have acquired 40,000 and

yet we still have 87,000 fractional interests. It has grown by that

much. If we had not purchased those interests, we would probably

have 200,000 or 300,000 because a lot of those 40,000 would have

had to be in re-probate.

In 1992, the General Accounting Office [GAO] did a report trying

to assess the significance of fractionation. They went out and

looked at the 12 worst reservations that probably account for 75 or

80 percent of the total fractionation problem, although the problem

is on multiple reservations around the country.

We are attempting right now to generate an update to this report

to show how much fractionation has grown. Because of the injunction from the Cobell Court, we do not have data after 2001 because

our computer systems are still behind. But in the 9 years, from

1992 to the end of 2001, on these 12 reservations the number of

fractional interests went up by 35 percent.

This problem is serious. It is something that needs to be addressed. One of the things that is required by the existing act and

also contemplated by S. 550, and one of the things that the Supreme Court found to be deficient in the original two versions of

ILCA, was that we have to provide notice to Indian country about

what these provisions mean. We have to assist them in drafting

wills or doing estate planning.

We have gone through and issued many of the things that are

required for the Secretary of the Interior to issue that certification.

One year after the Secretary certifies it, then the existing probate

provisions become effective. S. 550 has a similar provision.

Because the act has so many confusing and ambiguous sections

in it, the committee asked us last year not to certify the bill. We

did not certify that so that we could work with the committee on

S. 1340. We are still in that same position. There are provisions of

ILCA that are useful that we need to implement but we have not,

as yet, certified the statute.

We are hoping to work with the committee on S. 550, to create

a bill that is understandable, comprehensive, and deals with this

issue once and for all so we can go through a new round of notices.

Anything that we do as far as an amendment will require more notices. We only want to do that one or two more times. The last time

we did a mail out, there were a total of 210,000 notices issued.

Again we are waiting to certify. But if we cannot get movement

on S. 550 then the Secretary will probably have to certify the bill.

There are other provisions in there that we do need in order to try

to address other issues.

Mr. Chairman, that is basically where the Department is right

now. If you have any questions, I will be glad to answer them. Mr.

Lords is here to talk about anything that OST is doing regarding

the to-be process.

The CHAIRMAN. Thank you.

My morning started out pretty good until I came in here. [Laughter.]

Let me ask you a couple of questions. I appreciate your working

with the committee to try to find some solutions to a very com-
64

plicated problem. You gave a very concise description of how complicated it is.

When we talk about total funding, what amount of funding

would be required, do you think, to undertake an aggressive national campaign to buy back all fractionated land? Do you even

have a ball park figure? It must be in the billions.

Mr. NORDWALL. Well, we are doing a preliminary analysis right

now. We have met with the Office of Management and Budget

[OMB]. The Department has been discussing something on the

order of $2 billion.

What we are looking at on a per-project basis is that right now

given our existing systems and what we can reasonably purchase

using Land Records Information System [LRIS] and our existing

computer systems, we can spend on a pilot $1 million a month, in

other words, roughly $12 million a year.

If we just address the 12 reservations in this report, that would take $144 million per year times however many years it takes in

order to ultimately resolve this.

The CHAIRMAN. We have already spent a lot of money on Cobellrelated historical accounting exercises, as you probably know. What

kind of a dent would $350 million make in buying back

fractionated land?

Mr. NORDWALL. When we did the original projections in 1992, we estimated that with $300 million, spread out over 6 years, we could

acquire virtually all of the land that I think was less than 10 percent in size. That would be all the 2 percent interests, up to 10 percent.

That constitutes over 80 percent of the record keeping. Once we

have addressed that, at that point I think viable consideration, either in families or the tribes or in something else, can take place.

But with that amount of money, we could probably purchase the

majority of the 2 percent, and maybe up to 10 percent interest.

The CHAIRMAN. Your testimony is that an aggressive approach to

fractionation needs to be taken and that the 4 million interests are

going to be grown to 11 million by 2030. Given these figures, what

do you call an aggressive approach?

Mr. NORDWALL. First we need to address the basic probate problems which is primarily what S. 550 was intended to do. We need

to come up with a uniform probate code or something that is understandable by the majority of the people and that addresses the

majority of the problem.

We realize, given the last 75 years of history, that while everybody philosophically agrees there is a problem, there is always a

disagreement as to the solution. At some point we are going to

have to make some hard decisions about what exactly we are going

to do. There will not always be 100 percent support for this, obviously, on any piece of legislation.

We need to fix the probate process. Then we need to expand the

pilot project and target particular reservations that have the most

severe fractionation problems and the heaviest burden on the Department of the Interior and the number of the allottees as far as

the number of Individual Indians Moneys [IIM] accounts.

We have situations right now, particularly in the Great Plains,

where virtually all the leasing is done under 25 U.S.C. §380. Most
65

of the leasing statutes provide that the allottee can come in and

lease their property subject to approval of the Secretary. But where

the heirs are too numerous or they are undetermined under certain

circumstances, the Secretary can issue a lease on their behalf in

order to generate income and then try to distribute that.

We are in a situation in the Great Plains and in the Billings area

where 90 percent of the leasing is done under §380. Basically we

pass on land owner base. They all own very tiny fractional interests. It costs the Administration $200, $300, or $400 to collect $10

or $20 in income. It is counter productive.

The CHAIRMAN. You mentioned a group that you met with perhaps several times with tribal members and people of the Administration. You said someone of the committee was also there. Is that

their view, too, that the most important problems are probate problems?

Mr. NORDWALL. I am sure there are many here who have their

own perspectives, but I think the majority of the allottees in our

region that we deal with are all concerned about this. A probate

gets filed. Sometimes it takes 2, 3, or 4 years in order for it to be

probated. There are a variety of reasons for that.

There are problems getting deaths reported, and getting the information that we need from the allottees. Once we receive the information then it has to go to the Office of Hearings and Appeals.

We have tried to create a streamlined process now, where, if it is

a money estate only, we have created these attorney decisionmakers where they can adjudicate the small estates.

One of the things perhaps we can examine as part of this probate

reform initiative is the way that we conduct the appraisals. How

formal does it have to be? How much of a record has to be created,

depending on the value of the estate? Perhaps these are some of

the things we can talk about with the administrative law judges,

with some of the tribal attorneys, and with the allottees in order

to speed up that process.

The CHAIRMAN. According to your testimony, it costs about

$1,400 on average to probate an Indian estate and that there are

about 1,500 estates with a combined total value of $7,200. What

ways do you propose to process or clear the books of these little

tiny dollar estates ina way that does not violate the Constitution?

Mr. NORDWALL. That is the attorney decision-maker process that

we came up with. For low dollar estates, it is an informal process.

The way they deal with due process issues is that at any point during the process, if an allottee or an heir is concerned about the

process, they can request a full blown hearing before an administrative law judge. For many of these small dollar estates, though,

it has not been an issue. We have adjudicated several of those.

We are also in the process right now of trying again to update

our information, and get a better idea of the total number of pending probates. The number is far larger than I had thought it was.

We are probably looking at probably about 18,000 probates that are

presently backlogged or pending.

The CHAIRMAN. You spoke of this working group of tribal leaders,

departments, and so on. Is it the Department’s position that we

should wait here at the committee level until they reach some kind

of a consensus?
66

Mr. NORDWALL. I think most of them agree the existing bill

needs to be refined. I think the committee should wait until the

Department has had an opportunity to prepare a bill. We will work

with these groups as best we can. I think the idea that we will

have a consensus is one of the reasons why we have never had reform. It seems like in the non-Indian world if you get 51 percent

of the vote it is a landslide, but in Indian country you have to have

a consensus. In other words, everybody has to agree. You will never

get everybody to agree.

At a certain point we are going to have to work with the Committee. Some decisions will have to be made on how to address

this.

The CHAIRMAN. If we expand the buy-back alone without changes

in the probate law, will that accomplish anything?

Mr. NORDWALL. The way we have always looked at this is this.

This is a two-part scenario. We have to consolidate the existing

fractions. We have to slow or stop further fractionation. Somehow

if we could get far out in front of this problem to buy the

fractionated interests back quick enough, it might give us enough

time to try to resolve the probate issues. They really need to go together.

It is a pilot project. The problem that we have had is that we

have bought over 40,000 interests, but we are exactly where we

started three years ago. We still have 87,000 outstanding interests.

So if we could jump far enough in front with a large enough program, we might be able to put enough of a delaying action in there

to address these other issues. If we can consolidate enough of these

things into the tribe, it might do it. We always looked at this as

being a two-pronged approach.

The CHAIRMAN. Thank you.

Senator Thomas, did you have some questions?

Senator THOMAS. As I listened to your describing the history of

this, I think you almost indicated that this bill is no different than

what was talked about in the 1930’s. Is there is a clear remedy

that is different than what you talked about in the last 30 years?

Mr. NORDWALL. No; I think that is why I suggested that this

memo is surprising. Virtually every single issue that we have

talked about is in there. I do not know that anybody has a magic

bullet. Nobody has come up with that. That is part of the problem

that we have. Everybody says, ‘‘Gee, there must be a simple solution to this.’’ The solutions are all complex.

Had we done this in the 1930’s, it probably would have cost us

$800 or $900 million to resolve this problem in 1930 dollars. Now

it is going to cost us $2 or $3 billion to solve this problem. If we

do not address it in the next 5 or 10 years, it is liable to cost us

$10 or $20 billion, plus the exposure to the United States on additional Cobell-type litigation. It is just going to expand as rapidly as

the fractionation.

Having dealt with this for years and met with lots of people,

there are no magic bullets. I do not know of anybody that has

thought of a solution that will address this problem cheaply, quickly, and without a lot of manpower involved. It just is not an easy

thing to deal with.
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Senator THOMAS. How do you divide the issue of resolving the operations in the future as opposed to settling the differences in the

past? Which of those is most important?

Mr. NORDWALL. Do you mean as far as the Cobell litigation, the

issues that are involved in that?

Senator THOMAS. Just the differences that are involved in the

issue? If you took the money that I guess you and Griles are talking about and spending it here, would that solve the problem in

terms of process in the future?

Mr. NORDWALL. There are some lands that are still in sole ownership. Some of the lands, such as the ones at Palm Springs have

high value. Some of them have producing oil and gas wells. The

families, in those cases have tended to not allow the fractionation

to occur at quite the level that we have.

Up at Crow there is a competent leasing statute where as long

as the family keeps the number of owners at five or less, they can

lease their property without the approval of the Secretary of the Interior. In those circumstances where they have done that, the Department would not initially be interested or target acquiring

those.

The other interests where there are thousands of owners in single tracks, we think the only long-term solution is to acquire them

and turn them over to the tribes. At that point they cannot fractionate after the tribes own them. At that point, the tribes would

issue land assignments or traditional use areas like they did under

tribal law before the allotments were issued in the first place.

Senator THOMAS. What is going to be the benefit to 1,000 owners

over a relatively small and productive piece of land?

Mr. NORDWALL. What we have found is that these 1,000 owners

own interest in more than one allotment. When we go out and we

do the evaluation for the price, we find that they own multiple interests. We create an inventory that shows the value of each interest. While each interest may only generate a few cents, the value

is a little higher. Usually it is a 10-to-1 rule. If the property generates $1 in income, it is usually worth $10.

It usually adds up to a fairly significant amount of money, several hundred dollars and in some cases several thousand dollars.

They get a direct benefit from this acquisition program that they

would not get by getting one or two cents a year off the leasing income. They can use that for other useful purposes.

Again, hopefully once this land is revested in the tribes, then as

members of the tribe they will have a right to go to the tribe in

order to seek a land assignment or some use right on that property.

Senator THOMAS. I understand. It just seems like it is a waste

of effort to go out and spend a lot of money and spend a lot of time

where each individual gets a few dollars. It is hardly worth it.

Mr. NORDWALL. That is one of the issues that we have talked

about, too. In those circumstances where the inventory is small, if

somebody only has $2 worth of land, they are not even going to

drive to town in order to fill in the paperwork to sell the property.

Senator THOMAS. Or in your time dealing with them?

Mr. NORDWALL. Right. And whether or not we should offer a

minimum price on some of these things. That is another issue.
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Senator THOMAS. Just because issues are difficult does not mean

that they can be prolonged forever. Someone has to step up and do

something. The Department has not done a lot, it seems to me.

Thank you.

The CHAIRMAN. We appreciate your being here. We look forward

to working with you on some amendments to the bill to try to make

it understandable and acceptable to everybody.

Thank you for being here, Mr. Nordwall.

Mr. NORDWALL. I will leave a couple of copies of the 1938 report

here. If the staff has time to look at it, I think they will find it very

interesting.

The CHAIRMAN. Good. Thank you.

Panel two will be John Berrey, chairman, Quapaw Tribal Business Committee, Quapaw, OK; Ben O’Neal, tribal council member,

Eastern Shoshsone Tribe, Fort Washakie, WY; Cris Stainbrook, executive director, Indian Land Tenure Foundation, Canada, MN;

and Judge Sally Willit, Indian Land Working Group, Albuquerque,

NM.

All of your written testimony will be included in the record. As

with the first panel, if you would like to abbreviate or divert from

your written statement, that would be fine.

We will start with Mr. Berrey first. Welcome.

STATEMENT OF JOHN BERREY, CHAIRMAN, QUAPAW TRIBAL

BUSINESS COMMITTEE, QUAPAW, OK

Mr. BERREY. Good morning, Mr. Chairman. Thank you for inviting me. Senator Thomas, I am very honored to be here to speak

here.

I am here to give you and little idea of what probate looks like

today and how the current problems regarding probate are not just

probate-only problems. I will give a description of the complex

interrelationships involved in the cash, the land, and the resource

management processes that are currently administered by the Department of the Interior.

Last year I was a member of the non-defunct Trust Reform Task

Force. As part of that Task Force I was really fortunate to have

a great opportunity to work on what is called the ‘‘As-Is’’ project.

I spent over 204 days away from my family and tribe, traveling

across the United States, interviewing nearly 1,000 people that

work in the Department of the Interior or for tribal governments

in all 12 regions.

We made a detailed and intricate study of how they actually do

their processes. The processes that we analyzed were accounting,

which is the co-actions and the management of that money, and

the distribution of that money. We talked with everyone from superintendents to MMS people. We did a detailed study. We put it

all down and we have a really good picture of how this works

throughout the country and how there are different nuances, the

way tribal laws work, tribal State laws, State regulations, and how

they affect all these processes.

We also looked at appraisal. We looked at what happens when

someone wants an appraisal. Who do they ask? How do they get

the appraisal started? Who does the appraisal? How is it reported?

How is that information managed?
69

We looked at what is called beneficiary services which is the contact between either a tribal member, a beneficiary, or the tribal

government itself, and there interrelationship, whether it is OTFM,

whether it is MMS, or BLM. How do they interrelate? How do they

interact? How is that tracked?

In some locations, particularly at my agency, you used to go to

the superintendent and they would give you nothing. They would

just blow you off. There are some agencies and some processes out

there that really try hard to track that contact and follow it

through all the way to where the answer the questions. Where is

my check? What is going on with the enforcement on my lease?

We also looked at the Cadastral Survey Services which is the

identification of the true boundaries of any allotment or any piece

of land that is managed by the Department of the Interior, of how

that is ordered, how that is recorded, and how that information is

managed.

We looked at probate. We looked at it in detail. We looked at the

three segments of probate. There are three distinct sections that

you need to understand. That is where a lot of inherent problems

in probate are. There is the case preparation, which is where all

the documents are gathered for the adjudicator to clearly understand the cash ownership and the land ownership of the deceased

person. They are able to come up with the people that are inheriting that land through that process. There is such a tremendous

backlog in these records. That is where a lot of the problem is

today: In probate.

There is the adjudication process. There are three different adjudicating groups. There are the ADMs as Mr. Nordwall discussed,

the ALJs, and the IPJs. We interviewed all those people. We talked

with them from the very beginning from the moment a person

passes away to the time the accounts closed and we documented

every step of the way—what rules and regulations they follow, and

the intricate processes they follow.

We also looked at surface and subsurface management. We wanted to understand in detail how a lease is developed. If someone

wants to look for oil and gas on a particular piece of property, how

does that relationship work when that person goes to the superintendent? They talk about what they want to do, and how they go

through the process of creating the lease. They talk about the compliance and enforcement of the lease. They go all the way to the

point of when they release the bonds, reclamation is done and all

the cash is distributed from that lease.

We did it for timber, for agriculture, whether it was for crops or

grazing. We did for the commercial businesses. We did it for surface minerals such as gravel and sand. We did it for subsurface

which is oil, gas, and mining.

Finally, we looked at the title. Typically in the non-Indian world

you think of title of the plat book down at the county courthouse

where everything is laid out, any liens and encumbrances upon

that property. But under the Department of the Interior, their title

system is a lot more broad. Because of fractionalization, it is a

huge problem. That where we see a lot of the problems today. The

management of probate circles around the title which is the ownership information related to a particular piece of property.
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There is a piece of land in the Great Plains that is 80 acres. It has over 3,000 owners. It generates $100 of income a year. It is a

huge problem just to manage those names and addresses, who they

are and where they are from.

We traveled all across the country. We had some people from the

Department of the Interior and we had people from a group called

EDS, our contract facilitators. We talked with people from BIA,

MMS, BLM, OTFM, and OHA. Anybody that touched trust we

interviewed them and we documented what they do. We went

through 638 contracts, self-governance tribes, and direct service

tribes. We went to all 12 regions. We talked with clerks, line officers, and managers. We interviewed everyone in the system if they

were available. But we got to every position that was in the system.

The beauty of this whole project is that for the first time in the

history of the United States, we established a comprehensive understanding of the current trust business operations. We documented these variances—the difference between how it is done in

Nashville versus how it is done in Anchorage or how it is done in

Phoenix versus how it is done in the Great Plains.

We have a detailed understanding of the differences between

tribal laws, local laws, and State laws. We documented the way the

people read the CFRs differently. We also identified all the opportunities for the re-engineering process. What does this have to do

with probate? Over the years, Indian country has seen reform

issues, reorganizations, plans, meetings, summits, work groups,

task forces. All of these have been quick fixes, but none of it has

really worked because they have never attacked the core problem,

which is this fractionalization problem.

The fractionalization is making it impossible to manage this information. The General Allotment Act of 1887 was designed to destroy tribal governments. I think it is time now that we reverse

that and try to give the land back to the tribes to increase their

land base in their jurisdiction.

The DOI is pretty much a land management entity. If you look

at their systems of record, in order for a probate package to be created, they have about 67 different title systems that they currently

use. There is TAAMS, LRIS, MADS, GLADS, and TFAS. There are

spreadsheets. There are different agencies. There are different software systems that agencies have developed.

But the sad part is that 30 percent of the agencies today still use

handwritten A&E cards. That is a huge problem. At my agency, in

particular the Miami Agency in the Eastern Oklahoma region, they

update title once a year. Once a year they update these 3x5 cards.

They order pizzas. They bring everybody into this room and they

all sit around and they fill out these little cards. Every evening this

little old lady carries the box of cards back to the closet and if she

drops it, our records are going to shoot across the room.

There is a lot of overlapping and inconsistent information. Most

of these systems are stand-alones. It creates a huge problem for

probate. I have an analogy I like to use. I call it the Haskell effect.

If you have a Navajo man to go to Haskell Indian School. He

marries an Osage woman. They move to Minneapolis. They adopt

a couple of kids from Northern Cheyenne. They die in a car wreck.
71

The tragedy is not only the death, but the real problem is that the

Department of the Interior has no way to identify that they have

land in holdings in three jurisdictions. Because of the stand-alone

systems, it is very difficult for them just to get the packet prepared

in order for the adjudicator to make his decision.

There is a bright light here in all this. The second phase is the

re-engineering. It is the ‘‘to be’’ process. We are taking the information we found. I brought you copies of the CD version and one

bound version of our ‘‘As-Is’’ report. There are ways to clean up this

ownership information. There are ways to clean up these systems.

It is a process that evolves through neglect, poor management, and

all these other problems.

But I believe that the Secretary and the Deputy Secretary are

really dedicated to trying to fix these processes so you can do your

job by helping us with a uniform probate code that will solve the

fractionalization problem and help them get a handle on this huge

title ownership problem.

There are a few recommendations that I would like to put forward. We, from the Indian side, have gone from our work with the

As–Is process. We have to respect the property rights of the individual owners. But within the framework we have to do everything

possible to encourage consolidation of Indian land.

That should be the single guiding light in any probate reform.

Does it help consolidate the land? Does it help reduce

fractionalization? Does it strengthen the tribe’s land base and their

sovereignty?

The tribes are making big efforts in this process. My tribe, for

instance, are trying to buy individual undivided interests in allotments with money that we receive through our economic development. It is a voluntary program. We just ask tribal members if

they are interested in selling their land. We try to get a fair market for it and cut a deal with them. A lot of tribes are trying to

work through those kind of ideas.

We also understand that Indian land owners have the right to

devise their land to whomever them want, but they must be compensated. That is where I think the key is, in making sure there

is due process of compensation for these small fractional interests.

This could be a giant step forward in this process. But we believe

that they need to limit the testate provisions to the immediate family who are members of the tribe. If there are no such members,

the land needs to revert back to the tribe itself.

We need to promote estate planning; 95 percent of the Indians

do not have wills. It is difficult for the average population to talk

about their demise and to plan for it. Many of them do not even

know where their land is. It makes it hard for them to divide it

up. We need to work on some of those things and reduce fractionation. That would help.

We believe adjudication should be put under one roof. The ADMs

and the IPJs intimately know Indian law. They know the land.

They know the people. They know the fractionalization problems.

We think those should be the people that are doing the adjudication. It is difficult for young Indian attorneys or people who are interested in Indian country to be part of that process. We would like
72

to see getting away from using the ALJs and going more to the

IPJs and to the ADMs.

Perhaps most importantly, like you talked about, you need to

beef up this land consolidation pilot project. We totally support

that. We think it is a great idea. It has to be pushed harder. It has

to be funded better. But it has to be managed better by both the

DOI and the tribes that are involved.

In closing, I would like to pledge my assistance to any member

of your staff or any members of this committee whenever you have

issues related to the complex management of the Indian trust and

Indian country, I would be more than happy to help you.

When it comes to fractionalization problems, settlement of historical claims, or any of the historical accounting problems, I have

spent the last year of my life buried in trust management issues.

I love it. It is crazy work. But I really think I could bring some

clarity to it.

If you have any questions, I would be more than happy to answer

them. I would like to submit our testimony for the record.

The CHAIRMAN. Without objection, your testimony will be placed

in the record in its entirety.

[Prepared statement of John Berrey appears in appendix.]

The CHAIRMAN. We will finish with the whole panel before we

ask questions.

We will now go to Ben O’Neal.

STATEMENT OF BEN O’NEAL, TRIBAL COUNCIL MEMBER,

EASTERN SHOSHONE TRIBE, FORT WASHAKIE, WY, ACCOMPANIED BY ROBERT HARRIS

Mr. O’NEAL. Mr. Chairman, Senator Thomas, and members of

the committee.

My name is Ben O’Neal and I am a member of the Business

Council of the Eastern Shoshone Tribe of the Wind River Reservation. I am joined by Robert Harris, also from the Eastern Shoshone

Tribe. It is with great pleasure that I present this testimony today

on behalf of the Eastern Shoshone Tribe. Chairman Vernon Hill regrets that he could not be here today, but pressing issues kept him

at home.

The Eastern Shoshone Tribe of in Wind River Reservation is a

federally-recognized Indian tribe with approximately 3,500 members. The Wind River Reservation is located in Central Wyoming

and is the home of two tribes—the Eastern Shoshone and the

Northern Band of Arapaho. There are also approximately 25,000

non-Indians living within the exterior boundary of the reservation.

Many members of the Eastern Shoshone Tribe are deeply concerned with the fact that they may not be able to leave their land

to their heirs. Provisions within S. 550 address this problem, and

it is for this reason that we strongly support its passage.

Title to land within our Reservation is held in various ways, including in trust, in fee patent, as tribal land,or as land held jointly

in trust by the Eastern Shoshone and the Northern Arapaho

Tribes. Our primary concern today is with property held in trust

for individuals Indians. I would like to use myself as an example

of one way in which S. 550 would bring relief.
73

In 1955, I married my wife who is non-Indian. We were both

from ranching families,, and in 1972, we started acquiring land and

building our own ranch. The first 200 acres we purchased is held

in fee patent. It is located on the Wind River Reservation and contains the home site where my family and I have lived for more

than 30 years. We also lease several allotments adjoining this property, allowing us to run enough cattle and operate a ranch in such

a way we have derived our living solely as ranchers.

In 1989 we purchased an 80-acre track of trust land from an individual Indian. We paid fair market value for this land. The track

adjoins our patent fee ground and adds significantly to our ranch.

In 1994, my wife and I purchased 240 acres of patent fee land from

my neighbors to allow for expansion and our son and daughter expressed an interest in being part of the ranching operation.

At the same time we also purchased 200 acres of adjoining Indian trust land from multiple Indian heirs. These lands are all contiguous and even contain a creek that runs right through the middle adding further value to our property.

Through additional acquisition, I currently own 1,200 acres of

property within the Wind River Reservation. One-half of this property is held in trust. The other one-half is held in fee. I paid fair

market value for all of it. Under current law, as a member of the

Eastern Shoshone Tribe, and as a landowner, I can only will my

trust property to an Indian or to my tribe; but I would like to leave

to my family.

I am not alone in the fact that my wife and my children are not

members of the Eastern Shoshone Tribe. Despite the fact that they

have stood by me over the years and have helped our ranch become

a success, current law only permits me to leave my trust property

to them as a life estate. I find this unacceptable.

My only option is to remove the property from trust status and

place it in fee, something I do not wish to do. Individual Indian

land owners, such as myself, should have other options. We should

be able to determine to whom we leave our land. Indian land owners should have the same rights as others within our country to

keep property within our families for as long as we choose to do

so.

This right should not be based upon race or political distinction,

just as it should not be based upon religion or other similar factor.

I support the passive trust provisions within S. 550 because they

allow me, and all others like me, to ensure that property stays

within our families for the duration of our choosing.

Let me be sure to point out that the Eastern Shoshone Tribe is

not seeking to impose this option on everyone. If an Indian landowner wants to give their trust property to the tribe, they should

be able to do so. Our position simply is that there should be an option added to those that current exist; that we should be able to

choose who gets our land.

In the future, if my descendants determine that it is time in

their best interest to sell this property, the tribe should be given

a period of time in which to exercise a first right of refusal. They

should, however, be required to pay fair market value for it, just

as I did.
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This raises another concern we have with existing law. Currently, there is little incentive for the tribe to pay anything of value

for trust property. The tribe realizes that for individuals such as

myself, who are restricted to leaving trust property to heirs as a

life estate. It is only a matter of time before the tribe comes into

possession of the property with no payment at all.

This eventual outcome serves also to discourage use and improvement of the land. Why would I invest hundreds, even thousands, of dollars to improve the land when I know, in the end, I

will not be compensated for my investment. Again, I find this unacceptable, and am pleased that S. 550 works to resolve this issue as

well.

As an aside, I find it important to mention our concern with the

tribe’s ability to purchase trust property, even if they wish to do

so. While purchases on a limited basis would be feasible, financial

assistance would be necessary for the tribe to make larger purchases. We encourage the Congress to ensure funds are available

for this purpose.

I also support the idea that should the tribe not wish to pay fair

market value for trust property, the option should be available to

sell it to someone who is. It is important to note that this should

not be viewed as a reduction of tribal lands. Many people hear the

term ‘‘trust property’’ and they think of ‘‘tribal property.’’ This,

however, is not the case.

My property is trust property. It is held in trust for me, Ben

O’Neal. It is not tribal property. I have spent my entire life working and saving to buy what I have; to make a life for me and for

my family. I should have the right to determine to whom this property is left. My descendants and I should have the right to be dealt

with fairly.

On behalf of the Eastern Shoshone Tribe, I again thank you for

the opportunity to present testimony today. I encourage passage of

S. 550.

Mr. Harris and I are happy to answer any questions you may

have.

I would like to submit our testimony for the record.

The CHAIRMAN. Without objection, your testimony will be placed

in the record in its entirety.

[Prepared statement of Ben O’Neal appears in appendx.]

The CHAIRMAN. Is Mr. Harris your attorney?

Mr. O’NEAL. He is a member of the Shoshone Tribe. He is on the

Land Committee for our tribe.

The CHAIRMAN. Thank you.

We will now go to Mr. Stainbrook.

STATEMENT OF CRIS STAINBROOK, EXECUTIVE DIRECTOR,

INDIAN LAND TENURE FOUNDATION, LITTLE CANADA, MN

Mr. STAINBROOK. Chairman Campbell, thank you for extending

the invitation to provide some testimony on S. 550. I would appreciate it, and my family would certainly appreciate it, if these hearings could be spread out over some time as I was here last week.

The commute from here to Minnesota is getting a little strenuous.

The CHAIRMAN. Try it every week from Colorado or Wyoming.

[Laughter.]
75

Mr. STAINBROOK. There you go.

As you will recall from last week’s testimony, the Indian Land

Tenure Foundation is a fairly new institution. We were created by

Indian people from throughout the community that had an interest

in land issues and land tenure issues throughout Indian country.

We basically function as a community foundation within the Indian community, and received our initial capital of $20 million

from the Northwest Area Foundation which has now become essentially our corpus. The function and the focus of our work is in resolving land issues in a manner that really creates and maintains

a higher level of self-determination in Indian country by Indian

people and the tribes.

One of the basic premises of that, of course, that Indian people

need to be involved in designing and carrying out effective solutions. In fact, that is what led to the creation of the Indian Land

Tenure Foundation. I believe over the long haul this will lead to

an effective resolution of the fractionated ownership that we are

talking about today.

Last week in my testimony on S. 519, we talked some about the

problems of the fractionated land base on the future economic development of Indian country. As you pointed out again this morning, it is a fundamental core piece and needs to be resolved.

Let me assure you that Indian people understand that connection. They also understand the connection between other aspects of

the fractionated land base such as the limitation of their own use

of the land for situations like affordable housing or even a homesite

at all. There is also the basic threat to sovereignty that exists by

having this fractionated land base. They want effective solutions.

The 2000 amendments to the Indian Land Consolidation Act,

while they are essentially on hold at this point, they have really

created a large amount of concern throughout Indian country and

near panic in some situations, particularly with some of the older

interest holders.

People have begun to pull their land out of trust, fearing in fact

that if they do not do that shortly, they will not be able to direct

where those assets are going, and especially to their relatives that

are not eligible for enrollment with the tribe.

While this may reduce Federal management costs, it certainly

does put Indian land in jeopardy of passing out of Indian ownership. The S. 550 amendments that are proposed here are an improvement on the 2000 amendments, we still believe that they contain some provisions that limit self determination and threatens

the Indian land base.

Two of those provisions in particular are the joint tenancy and

the passive trust provisions. They both contain substantial legal

issues that will probably be challenged. That, of course, causes concern.

As was pointed out earlier, the provisions coming out of the Indian Land Consolidation Act, essentially through Indian country,

have provided several years of discord within Indian country. When

it comes to the data processing and the application of probate, you

end up with considerable problems and backlog. In fact, that backlog, once the constitutionality of that provision was declared illegal,
76

it left Indian country with about 13,000 interests that still need to

be re-probated.

Indian country basically cannot afford a repeat of that. We believe that the joint tenancy and the passive trust components have

that potential.

What we would offer instead is a different route to the committee. We would certainly invite the Committee to join the Indian

Land Tenure Foundation in engaging the community in the

crafting of some solutions.

One of those solutions that we discussed last week with the committee was the Indian Land Capital Fund. This is a fund that we

have been working to put together. It is basically designed to take

the pilot project to a different scale where it can, in fact, begin to

have an impact that changes the dynamic from marking time and

not really getting ahead of the fractionated problems, but gets it up

to a scale where, in fact, the number of ownership interests are reduced. I think Mr. Nordwall covered a fair bit of problems around

that and how they continue to grow.

The fund itself has two major components, one being a very large

private capital investment pool that would serve us nationally. And

are a number of affiliated local land consolidation acquisition programs with the tribes. This is based largely on the Rosebud Sioux

Tribes Tribal Land Enterprise program.

This is a corporate model, essentially, that has been operating on

the Rosebud Sioux Reservation for approximately 50 years. It buys

undivided interests from tribal members as well as alienated lands.

It uses their management capability to increase the amount of leasing coming in off that property. It then uses the income from the

property to make more purchases. It has grown substantially.

Tribal members, of course, maintain their interests through class

A shares and others through class B shares. They are held essentially as stock in the enterprise. The shares can also be traded,

bought, and used to ascertain surface use assignments from the

program.

We think it has a number of advantages. One, it reduces fractionation overall and, therefore, the cost of the Federal administration. It secures the tribal land base and, in fact, even expands it

through its acquisition of some of the alienated properties.

It maintains the asset and value for individuals. Indeed, we

think it creates added value in that these shares are much easier

to trade than if you were to do gift deeds or other pieces related

specifically to land title. Therefore, consolidation becomes much

easier over the long haul.

The other pieces that would apply at local levels would be some

variation on the model that Rosebud uses and also an adaptation

to their own local tribal planning. Probably most significant at all,

with enough capitalization, these programs can, in fact, become self

sufficient over the long haul.

This morning we have heard a number of people asking about

the $2 billion. I was interested in that. As you will recall, last week

we provided testimony where our estimate was $1.25 billion to resolve the fractionated interest. I was interested to hear that the

Bureau of Indian Affairs has a little higher number.
77

The CHAIRMAN. That is how fast the problem is growing. [Laughter.]

Mr. STAINBROOK. Very good.

I think probably it is worth noting that in fact many resources

can be brought to bear from throughout Indian country. The Federal Government does not necessarily bear the brunt of the full $2

billion. As Chairman Berrey was pointing out, their tribe, in fact,

has a program of buying undivided interests.

Individual Indian people want to consolidate their land. The fact

that they will be bringing their resources to bear to consolidate

that land will also help offset some of that $2 billion if, in fact,

there is a mechanism there that allows that.

Will the model that we have described work if S. 550 passes? We

think it will, but if it passes as it is, I think there are a couple of

things that will happen. One, the demand for the services of the

model will go up because people will remain scared of the process

and will be looking for alternatives to it.

As Mr. Nordwall pointed out, the Bureau staff simply do not understand this and the process will slow completely. That will create

a problem for going forward with the model that we proposed and

will be carrying out. We need those title processes to work, and

work efficiently.

As just a couple of final comments, we would advocate eliminating all the joint tenancy and passive trust provisions that are in

place. We would advocate adopting a uniform probate code that is

attached and accompanies the Indian Land Working Group testimony.

Finally, in any piece of legislation that goes forward, we would

encourage the Committee to make any action by the Secretary

based on an affirmative action of 50 percent of the interest holders

for any allotment as opposed to a lack of objection. This is the

standard that has been applied for Indian people and the tribes in

managing this land. We think the Secretary should also be held to

that standard.

Thank you, Senator Campbell, for allowing me to provide some

testimony. I would like to submit our testimony for the record.

The CHAIRMAN. Without objection, your testimony will be placed

in the record in its entirety.

[Prepared statement of Cris Stainbrook appears in appendix.]

The CHAIRMAN. Thank you.

Ms. Willit, I understand you will be speaking for Chairman

Nunez; is that correct? Go ahead and proceed.

STATEMENT OF JUDGE SALLY WILLETT, INDIAN LAND

WORKING GROUP, ALBUQUERQUE, NM

Ms. WILLETT. Thank you. I am Judge Sally Willett. I am going

to borrow a phrase from one of our Working Group members. I am

older than dirt. I have been doing this forever.

I would like, if at all possible, to hand charts to you that I think

that will address the substantive probate code and core issues that

people have referred to. I would like to give you and Senator Craig

a copy, on behalf of the Indian Land Working Group, the Indian

veterans calendar. I have copies for everyone on the dais.
78

The CHAIRMAN. Thank you. That has a solution to this complicated problem in very simple language; is that correct?

Ms. WILLETT. It has a picture. This can be as deep or as superficial as we would like.

I am going to introduce myself briefly and then I am going to

make the two comments that I need to make that I have been

asked to give. Then, I am going to get into the nuts of bolts of what

we need to do.

I am a member of the Cherokee Tribe. I entered the threshold

of Indian law 32 years ago. All but 4 of those years have been involved in Indian probate, Indian estate planning, anti-fractionation

measures, and educating individual Indians. I have structured a

non-fractionating estate plan within my own family that walks the

fine line of benefiting heirs who are non-Indian and benefiting

those who are.

I have conducted thousands of Indian probate proceedings and in

each and every one of them I explained Indian land ownership and

I explained how to estate plan to each and every one of the people

present using charts. We cannot give information to people who

have an average sixth to eight grade education in high-minded language that nobody understands.

The CHAIRMAN. Let me interrupt you for 1 moment.

Is this a descendency and ascendancy chart of a real person?

Ms. WILLETT. That is how you determine degrees of relationship.

The CHAIRMAN. Do you know anybody that fits into that category?

Ms. WILLETT. Yes; we are not going that far.

I did what Mr. Berrey did in 1999 for the Department of the Interior. I would say that many of Interior’s wounds are self-inflicted.

What I would like to say at this point is that progress is being

made.

I listened to Wayne Nordwall whom I have known for more than

30 years. I listened to Mr. O’Neal, Mr. Stainbrook, and Chairman

Berrey. It seems to me that we are all on the same sheet of music.

If things were understood properly, we can get there faster.

We oppose intestate joint tenancy. We oppose passive trust interest. We oppose the confusing language of both ILCA 2000 and S.

550. People have already commented about the meat of my presentation.

I am going to restrict my comments to two areas. First, the definition of Indian and second, how to fix the problem. It requires

that we stop fractionation in the future by limiting inheritance and

that we acquire a Fifth Amendment protected property rights with

compensation. We work from both ends toward the middle in reducting the problem.

The Indian Land Working Group, the Department of the Interior,

the National Congress of American Indians, California Legal Services, and I believe the Indian Land Tenure Foundation are all

working very heavily and making progress on many of these issues.

We would like for you to encourage the Department of the Interior

to join in this effort.

We would also like for you to ensure that they do not certify the

ILCA amendments 2000 until this mixed effort has had a fair op-
79

portunity to reach some of the more distracting issues that are involved.

I am going to basically go to the definition of Indian and point

out what Mr. O’Neal has described as Interior’s influence into the

ILCA Amendment 2000. It accomplished shooting the wrong horse.

Anti-fractionation addresses how you approach the land. When you

cut out legitimate heirs, the lineal descendants which account for

65 percent of all inheritance, you are unfairly impacting a particular population.

Probate laws are founded upon the common human experience

and that is people look down to dependents. [Pointing to chart]. If

none, they go up to ascendants and, then, they go to collaterals, to

the side.

Lineal descendancy inheritance accounts for approximately 65

percent of all inheritance. All human beings have this expectation

and rightfully so. When you make that heir pool non-Indian by giving a political definition to who is Indian, you are wiping out the

legitimate heir pool for most human beings.

There are four points I wanted to make to this in this regard.

A membership definition: ‘‘orphans’’ millions of people. There is an

out-marriage rate in Indian country of 75 percent. You have most

tribes pegging their membership to a blood quantum. Blessedly my

tribe does not. It recognizes its people.

In 1980, 40 percent of all tribes had no approved organizational.

I do not know what it is now. But there will be large numbers of

tribes that do not enroll. You are orphaning them. According to the

GAO report of 1992, just the northern tier, the most fractionated

region, one-seventh of that population ok unenrolled land owners.

ILCA orphans them. You now have non-Indians owning trust

lands. There is another problem. You have—idiosyncratically, the

membership definition hurts people of high blood quantum of multiple tribes more than people of low quantum who are mixed with

white or non-Indian blood.

For example, it takes three generations to get to a quarter-blood

which is the most common blood quantum. If you, as in my case,

have grandmother, full-blood; mother, half-blood; and me, quarterblood. Let us say you have a Pima/Shoshone, Paiute/Sioux, they

were half-bloods of each tribe, the two parents. Your first generation is quarter-blood. So people who are higher blood quantums

suffer under that definition.

The more people you make non-Indian, the more jurisdictional

problems you have. The more non-Indians, the more this aggressively hostile Supreme Court will apply its unusual new wave of

law that has existed since Oliphant and United States v. Montana.

We are begging you. There is panic in Indian country. What Mr.

O’Neal describes is absolutely true. They tried to reduce fractionation by eliminating who can inherit. They are taking away, in

many instances—because of the high out-marriage rate—the people’s right to leave property to their children.

This is not right. If you will look at the ascendancy/descendancy

chart that you have in front of you, I would like for you to go to

the middle where you see the term ‘‘decedent.’’ I would like for you

to count down to two and three. Then, go up one. Next go out to
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two. I am sorry. I had thought the chart was with our presentation.

I apologize to those in attendance.

One through three accounts for 65 percent of all inheritance. My

experience in Indian probate explaining to non–Indian spouses

what their inheritance meant produced 100 percent disclaimer

rate, in many instances with a retention of a life estate. The life

estate is inappropriate as applied to real people of real Indian

blood. The problem with ILCA 2000 was the alteration of the ethnicity of real people of Indian blood, not with the life estate.

I covered Palm Springs. My territory was the Southwest. I covered the big ticket property. Do not imagine that the big ticket

property was just Palm Springs. At San Xavier District of which

Mr. Nunez is the District Chairman, the largest estate I ever probated had $80,000 in the IIAM account just from fractional interests in copper. It is a boom or bust proposition. Copper is hot or

it is not. It was all fractionated interests.

Essentially, what I want you to know, and bring it down to a

very small picture, is that we need a code that legitimately recognizes the right of people—and Indians specifically who are very lineal-descent focused—to benefit their own progeny. We think that

you can go to the collateral second degree. Beyond that is where

explosive fractionation kicks in. It goes wild after that point.

Look what you are cutting out on this picture. If you go through

one through three, down, and go to two, out, you have cut out all

of the fat, all the difficult to find and manage interests. You are

very basically restricting it to a fair opportunity for ordinary

human beings—and in case Indian human beings—to benefit people who legitimately have an expectancy to receive.

We have a code submitted that addresses all of these issues. The

addressing fractionation chart is the next I want to refer you to.

I was sitting around talking to myself, as I am inclined to do at

times, and said, ‘‘Willett put up or shut up. You are always talking

about not fractionating. How would you do it?’’ I sat down and said the first thing I would do is that I would

de-politicize it. I was in the Office of the Secretary. We were the

cash cow. Indian probate did not fail. It was pushed to failure.

The next is to provide adequate resources. On the reinvention

task force that I was on we provided for that. In implementation,

it went nuts.

Provide cultural sensitivity. Interior got rid of all of its Indianknowledgeable people and, now, wonders why it has problems.

Provide maximum adjudicative protections. This is where Chairman Berrey and I would disagree. I do not think holders of interest

in public lands should have greater adjudicative rights than people

to whom a trust responsibility is owed. That situation exists now.

The Uniform Probate Code. Under 25 U.S.C. Section 348 which

was part of the General Allotment Act, they thought Indians were

going to be gone and assimilated in 25 years and that the States

were going to take over. That is why 50 State laws were applied.

We need to get rid of that and make it simple.

Limit inheritance. I have already described that. Give people a

fair opportunity for their real family to take. Do not change the

ethnicity of people as an anti-fractionation device. It is inappropriate. That is what I call shooting the wrong horse.
81

Limit non-Indian inheritance. With an out-marriage rate of 75

percent, your herd is thinning; 100 percent of the spouses I dealt

with were horrified when they realized that if they took their interest, it collapsed the trust and that it would not be restored automatically. They could not disclaim fast enough. I had to convince

them to take life estates.

Maximize knowledge. I believe that I may have been the only

person who ever consistently did Indian estate planning and fractionation education as a part of the probate process as an integrated system. But there were many non-Indians who did it with

me. My wave was the group that did it.

Tribes need to know about it. They were not allowed to tamper

with allotted land issues for a long time, especially the IRA tribes.

Land owners simply have never been given information even about

the 1984 amendments to ILCA.

Dollars for consolidation. If we limit fairly to the second degree

at the collateral level, and we start buying up the small stuff—I

was thrilled to hear Wayne Nordwall say that. Then, you can get

to the point of real consolidation.

There is a lot of commonality here. I think we need to approach

those things about which we have common ground. We need to quit

coming up with exotica. There is no more room for exotica. A lot

of money has been burned off that could have applied to good hard

acquisition. There is no room for any more exotic experiments.

Stick with meat and potatoes.

The CHAIRMAN. I appreciate your testimony, but we are going to

run out of time in just 1 minute or 2.

Ms. WILLETT. I am done. I would like to submit our testimony

for the record.

The CHAIRMAN. Without objection, your testimony will be placed

in the record in its entirety.

[Prepared statement of Ms. Willit on behalf of Chairman Nunez

appears in appendix.]

The CHAIRMAN. Thank you.

I am going to submit a number of questions in writing to you,

if you can answer those in writing.

Let me ask you a few questions to start with. I will also ask Senator Craig if he also has questions.

Let me just start with John Berrey. Thank you for being here.

Your testimony sounds like you are a no-nonsense kind of person.

You said you did over 1,000 interviews, as I remember your testimony. If we are going to try to get away from the exotica, as Sally

had mentioned, what would you say we can do to stop the hemorrhaging? What do we have to do as the central focal point to try

to resolve the problem?

Mr. BERREY. I think I agree with Sally that it has to be a multipronged approach. I think the Uniform Probate Code is big first

step. A simple, clear, unified probate code. Second, I think the resources on the Interior side need to be targeted and focused on title

ownership, record cleanup, maintenance, and systems integration.

The CHAIRMAN. As I understand your testimony, you would limit

heirship to tribal members?
82

Mr. BERREY. You have to understand that I come from a tribe

that does not have a blood quantum. It is lineal descendancy. I am

in agreement with Sally in that regard.

The CHAIRMAN. The Census Bureau last time estimated over 4.4

million Americans claim to be of Indian ancestry. The Bureau says

that is 2.2 million. There is a big disparity of about 2 million people

out there who say they are Indian.

About 15 or 18 years ago Senator Kyl and I revised the Indians

Arts and Crafts Act. We were on the House side. He was from Arizona. We did some hearings on that to try to define who should be

legally Indian from the standpoint of being able to market their

arts and crafts as legitimately Indian rather than imported from

Taiwan.

We had one man that was 100 percent Indian. He was eighteighths. Every single one of the eights was of a tribe that required

that you had to be 25 percent or more. You had to have one grandfather and grandmother as a full-blood to be included in the roll.

Here was a guy that was 100 percent Indian. He could not get

on anybody’s roll. I just mention that to emphasize how complicated the whole roll system is. We know for a fact that there are

other people on rolls, because they were put on rolls during a time

when there was not very much detail given to authenticating.

There are people on the rolls now who are not Indian at all. But

legally they are Indian, as you probably know.

I do not know how to fix that. It is a very big complicated problem that we are having with Interior now. In fact, in the last Administration, they wanted to put a moratorium on any more tribes

being enrolled until they found a better way of determining who is

and who is not Indian. I do not know if anybody knows since each

tribe determines their own membership.

This is something with fractionated land the Cobell case and so

on that is going to get worse. With the advent of so much casino

money, we are getting more people that want to be enrolled as

tribes, as you probably know. Sometimes there are only two or

three people and they want to have their own tribe. That is really

not uncommon now.

We had a disagreement between some family members here in

front of the committee about 6 months ago. After 1 hour of listening to the attorneys on both sides, and the people on both sides,

I asked them how many members there were in the tribe and they

said ‘‘12.’’ Just recently one member was found in California who

did not know she was Indian. She was the only one left of her tribe

who is going to be included in the new millionaire list since she has

already signed a deal with some casino development company to

build a casino for them, but she will be the front, so to speak.

The advent of all the money that is now out there floating

around in casino businesses, certainly complicated how we look at

enrollment. Believe me, I do not have the answer and I do not

think anybody else does either, that is fair and impartial and gives

those people who are really Indian an opportunity to be reinstated

if they want to and still have a system by which the people who

want to be Indian because it is convenient or lucrative, making

sure that they do not. We know the answer to that.
83

John, do you favor a system that relies on purchase of the shares

by either the tribe or the government for tribal members only?

Mr. BERREY. In Oklahoma there is a lot of undivided interest

owned by non-Indians that is interrelated and restricted fee with

fee-simple land. I think those people should have the opportunity

as well to have their land purchased by the tribe.

The CHAIRMAN. Was it your testimony that mentioned 3,000

members in an 80-acre piece of ground?

Mr. BERREY. Yes, sir.

The CHAIRMAN. That sounds like something out of control by ‘‘pi

squared’’. I do not know how in the world we ever get to a point

to resolve it. It sounds to me like it is getting almost too big to do

anything about. If we wait another generation or two, it might be

so out of control that we might not be able to do anything about

it. Would you like to comment on that?

Mr. BERREY. There are two ways to look at it. It is either your

cup is one-half full or one-half empty. I think if you sat down and

really looked at that piece of property, a lot of those people, like

Mr. Nordwall said, have multiple fractionated interests and multiple allotments. Many of them do not really care about it. They do

not get much income. It is more of paying for them.

I think if someone would actually sit down and go through the

work and the process to contact them and give them the fair market value and assured them that it is helping protect the land base

of the tribe, that their families are members of or once were members of, then it is not as big a problem as it really sounds. I think

money talks. If it is targeted right, it will work.

The CHAIRMAN. I have one last question. You probably know

from hearing me speak in the committee before that I am on record

as favoring some kind of a voluntary buy-back program or an optout program. The Cobell case and the fractionated lands are certainly related. Do you support that concept?

Mr. BERREY. I do support any concept that tries to bring some

closure to Cobell. My tribe, for instance, is suffering worse from

Cobell than probably anybody that is working at the DOI or any

members of the attorneys for the plaintiffs’ class.

Last quarter, 80 percent of the FTEs in realty were spent on document production for litigation. That means that 80 percent of the

money that my tribe relies on for realty functions, like economic development, getting land put into trust, acquisitions—all that is not

happening.

The two parties that are there say they represent me. Stephen

Griles gets his paycheck every week or every 2 weeks. I think Dennis Jengold has been getting his check. The people that both of

them represent are not getting anything. I think this era of throwing rocks at the Department of the Interior needs to come to an

end. We need to try to resolve this using an open mind. I think

that the plaintiffs’ counsel need to have full input in any kind of

solution. I just do not see them coming to the table right now. It

is very frustrating.

The CHAIRMAN. I tend to agree with you. I do not think it is in

their best financial interests to come to the table. I have been criticized a couple of times for saying that. We have Indian people out

there who are dying, waiting for fairness and waiting for the
84

money the Federal Government owes them. We do not have it to

them yet because of all this ongoing litigation.

Senator Inouye and I and Mr. Griles met the other day. I think

we are going to frame up a bill that does let people opt out of that

Cobell decision.

Mr. BERREY. My tribe currently has a huge piece of litigation in

the Northern District of Oklahoma. Our land once had the largest

mining operations in the United States. It is now the home of the

largest superfund site in the United States.

Even though we are in litigation, we have stayed our lawsuit. We

have actively pursued alternative dispute resolution with the Department of the Interior and the Department of Justice.

We believe that because of Cobell, there are better ways to solve

these problems than just burning down the house. We are willing

to do everything that we can to be open-minded and work with the

Department of the Interior and the Department of Justice. Stephen

Griles has been very impactful on our attempt. We are the only

tribe in the United States currently involved in a formal alternative dispute resolution process.

The CHAIRMAN. Thank you.

Mr. O’Neal, as I understand your testimony, your children are

not eligible to enroll. Under the 2000 ILCA amendments, you can

only leave them a life estate in the trust land portion of your land.

You could put that land in fee status; is that correct?

Mr. O’NEAL. That is right.

The CHAIRMAN. Why would you oppose to be putting it in fee status as opposed to trust status? Is it because of jurisdictional problems, or taxes, or something else?

Mr. O’NEAL. Yes; taxes on our land. I do not pay them now. I

want that to continue as my land base on my ranch. The kids

ought to have that.

The CHAIRMAN. Is that a common situation on your reservation?

Mr. O’NEAL. Yes; it is.

The CHAIRMAN. What would you guess is the number of people

who are in the same position that you are at Wind River?

Mr. O’NEAL. At Wind River right now, I think there were 105

who filed for fee patents right away.

The CHAIRMAN. How many?

Mr. O’NEAL. I think 110, or somewhere around in there, that

filed automatically. Those are just families that I know of.

The CHAIRMAN. Well, if changes are not made in the ILCA

amendments, and if they go into effect, have you thought about

what you are going to do so that your children can inherit your

whole ranch?

Mr. O’NEAL. That is what I am saying.

The CHAIRMAN. Are you familiar with a man named Abraham

Spotted Elk up there?

Mr. O’NEAL. No.

The CHAIRMAN. Mr. Stainbrook, you talked about a private fund.

We visited with it a little bit about it the last time you were here.

Is this in some way going to rely on Federal funds, a private fund?

You mentioned a land capital fund?

Mr. STAINBROOK. I think there is the potential that Federal

funds will be needed to at least subsidize those deals that won’t
85

cash flow immediately. On the other hand, once the initial capitalization was put in place at Rosebud, that was all that was really

needed to kick it off.

One of the drawbacks in not having some Federal dollars, at

least in the initial capitalization to cover those subsidies, is that

the pool grows much slower. As you have pointed out, all of the discussion today has been that if something does not happen on a

scale now, this thing is over.

The CHAIRMAN. Your testimony mentioned the Native American

Bank as perhaps becoming involved someday in land reconsolidation. Have they been involved in it at all yet?

Mr. STAINBROOK. We have been working with the Native American Bank, CDC, the Community Development Corporation. If you

will look on the back of the written testimony, there is a rough

schematic there of bringing in the CDFI to help with affordable

housing financing. That is the role that CDC will be playing.

The CHAIRMAN. All right. I will look at that.

You also mentioned $1.25 billion perhaps to purchase all fractionation lands. Who did that analysis for you or for your committee?

Mr. STAINBROOK. Our consultant, Gerald Sherman, did that for

us.

The CHAIRMAN. Do you have a map for that?

Mr. STAINBROOK. I could probably get you one of those.

The CHAIRMAN. I would appreciate it if you would.

Sally, you gave me so much extensive testimony between your

written comments and the little scribblings I have made. I am not

quite sure where to start. You are certainly a wealth of information.

Have you worked with other groups or organizations that have

been working on these same problems that we are discussing?

Ms. WILLETT. Yes.

The CHAIRMAN. Did you reach any kind of a consensus with

those other groups?

Ms. WILLETT. Yes; that a uniform probate code is essential. It

has to be simple and usable. It has to be fair.

The CHAIRMAN. Have you reached any accord with tribal organizations?

Ms. WILLETT. We are doing that now with NCAI and individual

tribes who have members attend. There is a larger working group

that is a consolidated group of multiple interests.

The CHAIRMAN. I understand from your testimony that you think

that S. 550 is too complicated and might be difficult to understand

by the average person; is that correct?

Ms. WILLETT. It is too difficult to understand by the average lawyer who specializes in the subject matter.

The CHAIRMAN. Okay. Then hopefully you will offer some suggestions. I know you did in your testimony. You will continue to work

with us to try to make it a little easier to understand.

Your organization advocates the right of lineal descendants to inherit land in trust status even if the descendants are not members

or even eligible for membership in an Indian tribe.
86

Under new Federal law, that would deem them to be Indians for

the purpose and require the Secretary to manage the land. Does

that create jurisdictional problems?

Ms. WILLETT. No, sir; it did not. From 1887 to 1934, there had

never been a membership requirement. Then, from 1934 to 1980,

membership was only for IRA tribes as to Indian wills.

These jurisdictional issues that we are seeing are coming from

the aberrant strain of Indian law that is being crafted by the Supreme Court. We are in free-fall now. Essentially, part of our proposal is having the Congress declare fractionation a preempted

subject matter. When you balance State and tribal interests, tribes

lose. We want consolidation declared a preempted subject matter so

that we can keep all the inappropriate interests out. I agree that

consolidation has to include the interest of non-Indians. Otherwise,

it is incomplete.

The CHAIRMAN. Your organization is on record as stating that the

pilot program being carried out by the Department, ‘‘Provides for

random purchase of fractionated lands from willing sellers.’’

How should the program work if it is not based on willing seller

provisions?

Ms. WILLETT. I was speaking with Gila River about this. It is not

the willing seller side of it. It is the random selection. The ILCA

Act of January 12, 1983, provides for land consolidation plans.

Tribes today have not really become heavily involved in true ILCA

consolidation plan planning. They need to.

Then, what they would do is possibly target zoned areas of importance rather than willy-nilly buying little tiny interests everywhere that might not produce a return that would help them pay

it off.

What we are saying is do consolidation planning as provided by

ILCA and make it real. Right now the pilot project is focused on

particular areas, which I agree is appropriate. But acquisition is

random. We think that people need to look at it as a genuine exercise.

The CHAIRMAN. Okay. Thank you. I appreciate it. I have no further questions, but I may submit some in writing as others may,

too. If you could answer them, we would appreciate it.

We will keep the record open for 2 weeks. If anybody in the audience would like to provide comments in writing, if you will submit

that to the committee, we will also review that and include that.

The CHAIRMAN. With that, thank you once again. This hearing

is adjourned.

[Whereupon, at 11:41 a.m., the committee was adjourned, to reconvene at the call of the Chair.]
(87)

APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF WAYNE NORDWALL, DIRECTOR, WESTERN REGION, BUREAU

OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR, WASHINGTON, DC

Mr. Chairman, Mr. Vice Chairman and Members of the Committee, I am pleased

to be here today to provide the Administration’s views on S. 550, a bill to amend

the Indian Land Consolidation Act to improve provisions relating to probate of trust

and restricted land. The Department commends the efforts of this Committee in the

work that you and your staff have done over the years concerning the trust reform

activities. We appreciate the support you have provided us. However, much work

remains to be done.

While we support many of the concepts embodied in S. 550, specifically the creation of a uniform probate code, we would like to work with you to further refine

the bill. In particular, we believe more work must be done on the bill to ensure that

the probate provisions of ILCA are clear, concise, predictable and comprehensive.

The history of fractionation legislation has been that key provisions are deleted because of minority opposition. Hard decisions must be made that will benefit the majority of Indian country.

Addressing the many problems associated with fractionated lands is a high priority within this Administration. We must find better ways to consolidate Indian land

ownership in order to restore full economic viability to Indian landowners of their

assets, and to reduce the tremendous administrative burden for the management of

these assets. In fact, the President’s fiscal year 2004 budget proposal includes a re- quest for $21 million for Indian land consolidation, an increase of $13 million.

We welcome the opportunity to work closely with the Committee to craft legislation that would better meet the dual goals of probate reform and the consolidation

of fractionated land.

The Department has responsibility for the management of 100,000 leases for individual Indians and tribes on trust land that encompasses approximately 56 million

acres. Leasing, use permits, sale revenues, and interest of approximately $226 million per year are collected for approximately 230,000 individual Indian money accounts, and about $530 million per year are collected for approximately 1,400 tribal

accounts. In addition, the trust manages approximately $2.8 billion in tribal funds

and $400 million in individual Indian funds.

There are approximately 230,000 open individual Indian money accounts, the ma- jority of which have balances under $100 and annual transactions of less than

$1,000. Interior maintains thousands of accounts that contain less than $1, and has

a responsibility to provide an accounting to all account holders. Unlike most private

trusts, the Federal Government bears the entire cost of administering the Indian

trust. As a result, the usual incentives found in the commercial sector for reducing

the number of accounts do not apply to the Indian trust.

Over time, the system of allotments established by the General Allotment Act

(GAA) of 1887 has resulted in the fractionation of ownership of Indian land. As

original allottees died, their heirs received an equal, undivided interest in the

allottee’s lands. In successive generations, smaller undivided interests descended to
88

the next generation. Fractionated interests in individual Indian allotted land continue to expand exponentially with each new generation. Today, there are approximately four million owner interests in the 10 million acres of individually owned

trust lands, a situation the magnitude of which makes management of trust assets

extremely difficult and costly. These 4 million interests could expand to 11 million

interests by the year 2030 unless an aggressive approach to fractionation is taken.

There are now single pieces of property with ownership interests that are less than

0.000002 percent of the whole interest.

In 1983 and 1984, Congress attempted to address the fractionation problem with

the passage of the Indian Land Consolidation Act (ILCA). The Act authorized the

buying, selling and trading of fractional interests and for the escheat to the tribes

of land ownership interests of less than 2 percent. The United States Supreme

Court held the escheat provision contained in ILCA as unconstitutional. See Hodel

v. Irving (481 U.S. 704 (1987)) and Babbitt v. Youpee (519 U.S. 234 (1997)). As a

result, Committee staff, the Department, tribal leaders, and representatives of

allottees worked together to craft new ILCA legislation. This cooperation led to enactment of the Indian Land Consolidation Act Amendments of 2000.

The 2000 amendments established uniform rules for the descent and distribution

of interests in allotted lands. The amendments contained provisions preventing

lands from being taken out of trust when inherited by non-Indians by creating a

life estate for those beneficiaries with a remainder in interests going to close Indian

family heirs (with conditions depending on the percentage of interest) or, if none

exist, the tribe having jurisdiction over the parcel. The legislation also contained

provisions for the consolidation of fractional interests. Tribes and individual allotment owners can consolidate their interests as well as purchase, sell, or exchange

them. The legislation also enhanced opportunities for economic development by laying out a formula specifying the percentage of owners of fractional interests that

must consent to leasing agreements. Finally, the amendments extended the Secretary’s authority to acquire fractional interests through the Indian land acquisition

pilot program, establishment of an Acquisition Fund, and the authorization of annual appropriations to help fund the acquisitions. Under ILCA, the Secretary is required to certify that she has provided certain notices about the probate provisions

of the 2000 amendments before they become effective.

There is a clear need for probate reform. As it currently stands, the Department

applies 33 different State laws when probating individual trust estates. By using 33

separate State laws, there is a lack of consistency and predictability in administering probates in Indian country. In addition, we must probate for all interests regardless of the size of the account. For example, we have to probate a decedent’s estate

(at an average cost of $1,400 a probate) and identify and locate all heirs regardless

of the value of the estate. As of December 31, 2002 there were 1,522 open estate

accounts where the funds derive only from per capita or judgment payments (and

not income from land interests) with a combined, total value of $7,194. This averages out to under $5 per account.

Last Congress, former Assistant Secretary Neal McCaleb testified in support of

the enactment of a uniform intestate code for trust and restricted estates. However,

because of the complexity that S. 550 would build into the proposed uniform code,

we would like to work with the Committee to try to simplify these provisions. The

Department’s employees are expected to administer the provisions of ILCA and to

encourage tribal members to draft wills, and eventually to probate those wills and

estates. Therefore, the provisions must be clear.

The benefit to the heirs of a uniform probate code for trust and restricted estates

is that the same law will be applied to all the trust and restricted estates of the

decedent no matter where the real property is located. A uniform intestate probate

code will allow the entire estate to be probated under one set of laws, and those

laws will be the same throughout the United States. The Indian tribes and individuals holding interests in allotted lands in the 33 States will benefit from the clarity,

consistency and predictability of using a uniform probate code. A uniform probate

code, built upon current State probate practices and the Model Uniform Probate

Code, will help the Department decide cases and issue orders in a more timely manner, resulting in fewer appeals. If a uniform probate code is enacted, the Department will no longer need to research the laws and legal decisions of 33 individual

States. It will therefore take less time to issue an order determining heirs. Finally,

a uniform probate code will serve as a model for tribes to develop their own tribal

probate codes.

The Indian Land Consolidation Pilot Program is a high priority for this Administration. The President’s 2004 Budget requests $20.98 million for Indian land consolidation through the acquisition of fractionated ownership interests. This $13.1 mil-
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lion increase will support our plans to expand the program to new Indian reservations.

The BIA has been conducting the pilot program since fiscal year 1999 in the Midwest region. These pilot projects have successfully demonstrated that large numbers

of owners are willing to sell fractionated ownership interests, and that a purchase

program can be administered at a reasonable cost. When the projects started, there

were approximately 87,000 interests on three reservations. To date, we have purchased over 40,000 interests on those three reservations. However, because of the

runaway growth of fractionation we still have the same number of outstanding interests as when the projects began. Without this pilot program, the number would

be far higher than 127,000 since the interests purchased would have further

fractionated. As reflected in the Administration’s Program Assessment Rating Tool

(PART) review, the pilot program has taught valuable lessons about the need to target purchases to maximize the return of the land to productive use and to reduce

the number of Individual Indian Money (IIM) accounts.

This year, the Department is developing a strategic plan to guide program expansion, target purchases to reduce future costs of trust administration, and enhance

tribal economic development opportunities. A national program office has been established to coordinate and oversee the program expansion and standardize business practices, which may use contractual arrangements with Tribes or private entities to purchase individual interests on behalf of the Department. The fiscal year

2003 budget, together with carry-over balances, will provide approximately $20 million for the BIA to put in place the necessary infrastructure and contractual arrangements to support our planned expansion in fiscal year 2004. Our strategic

plan, including legislative proposals, will be provided to the Committee later this

summer.

Last year, the Department held a 2-day meeting of a subgroup of the DOI/Tribal

Task Force on Trust Reform to address the Indian Land Consolidation Act and to

encourage a dialog on potential solutions to the fractionation issue. Participants

were encouraged to develop creative ideas, and a number of possible legislative and

administrative solutions were discussed. Many of the ideas developed merit further,

serious consideration by the stakeholders.

To provide a forum to continue this dialog, the Department published a notice in

the Federal Register on April 22, 2003 requesting nominations for Tribal officials

to participate in a Working Group on Land Consolidation (Working Group). We are

seeking participation by Tribal officials from tribes with highly fractionated lands

or those who have a strong interest in resolving the problem of fractionated lands

to discuss the problems caused by fractionation and to examine the universe of possible solutions. This Working Group will meet throughout the summer. We anticipate that the Working Group will provide important input on recommendations for

legislative action to address solutions to fractionation.

Thank you, Mr. Chairman, Mr. Vice Chairman and Members, for taking the lead

on these important issues for Indian people and the trust reform. This concludes my

statement. I will be happy to answer any questions you may have.

PREPARED STATEMENT OF JOHN BERREY, CHAIRMAN, QUAPAW TRIBE

Mr. Chairman and distinguished members of the committee thank you for the invitation to speak to you today on such a critical problem in Indian country. My

name is John Berrey, I am the Chairman if the Quapaw Tribe of Oklahoma and

Vice Chairman of The Inter-Tribal Monitoring Association. I have been asked to describe the current problems regarding Indian probate and the complex interrelationships involved in the cash, land and resource management processes administered

by the Department of the Interior.

I have had the great opportunity to be part of a historic project, under the direction and guidance of Secretary, The ‘‘As Is’’ Business model now complete, identified

in detail the current DOI Trust Business Processes. The processes that are the subject of this scientific analysis are:

• Accounting (collections, management and distribution of cash)

• Appraisals (ordering, practice, reporting)

• Beneficiary Service (Tribal and Individual contact with DOI)

• Cadastral Survey Services (identification, recording and management of land

boundary information)

• Probate (case preparation, adjudication, case closing)

• Surface Asset Management (lease development, compliance, enforcement) Timber, agriculture, commercial businesses, surface minerals
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• Subsurface Management (lease development, compliance, enforcement) Oil, gas,

mining

• Title (acquisitions & disposals, rights of ways, title management)

‘‘As Is’’ Overview. I was the leader of the five Tribal Representatives selected by

last years Tribal Task Force working with a project team with DOI process experts

and contract facilitators from EDS. I traveled over 200 days last year crossing the

country interviewing nearly 1,000 individuals involved in all the activity that is Indian Trust business management and documenting in detail the work that is performed at every level, every day. We interviewed employees from BIA, MMS, BLM,

OTFM, OHA, Direct Service Tribes and tribes with 638 contracts, and Self-governance tribes.

We interviewed every level of staff from all 12 BIA Regions, numerous BIA agencies and several Tribal Reservations. We talked to clerks, line officers, managers

and directors, if an office had any activity regarding Indian Trust Management we

studied it in some form. This intense project has had the following benefits:

• Established a comprehensive understanding of current Trust business operations

• Documented variances among geographic regions, and their causes (e.g., due to

Federal, tribal, state or local laws, treaties, court rulings, local practices)

• Identified current issues and opportunities for improvement so as to provide a

basis for a ‘‘To-Be’’ process reengineering of the Indian Trust.

Over the decades Indian tribes have witnessed a multitude of trust reform initiatives, reorganizations, plans, meetings, summits, work groups, task forces, computer

systems, software, out sourcing contracts, and other efforts to fix the problems with

management of Indian trust funds. To date, none of these efforts have proven successful. The reason, we believe, is that we have been seeking quick fixes rather than

focusing on the root of the problem. And the root of the problem is: The fractionation

of title ownership is making the system impossible to manage. The General Allotment Act of 1887 was designed to destroy tribal governments, that did not work and

it is time we reverse the act and protect and restore tribal land bases and jurisdiction.

The DOI is pretty much a land management entity and any land title and ownership information system is the most fundamental aspect of the trust system. DOI

cannot accurately collect and distribute trust funds if it does not have correct information about the beneficial owners of the trust assets. This is the starting point for

any effort to fix the trust system. Currently, the BIA is using as many as 67 different ownership title systems in the various Land Title Record Offices, regional offices, agencies and tribal locations around the country, both manual and electronic.

There is TAAMS, LRIS, MADS, GLADS, TFAS and several individualized spreadsheets and other software systems, the sad thing is over 30 percent of all agencies,

still use the old paper 3X5 A&E cards.

At my agency, The Miami Agency in Miami, Oklahoma they update Title once a

year. They order Pizza and the whole gang sits around and updates these little

cards. Each night a little old lady carries the records back to the closet, God forbid

she drops the box and our records shoot across the floor.

These systems contain overlapping and inconsistent information. The systems are

largely ‘‘stand alone’’ in that they do not automatically reconcile the ownership information in the agency offices, in tribal records, or in the lease distribution records

that are used for daily operations. Because records management standards and

quality control procedures are lacking, there is no assurance that title records are

accurate. These inaccuracies result in incorrect distribution of proceeds from trust

resources, questions regarding the validity of trust resource transactions, and the

necessity to repeatedly perform administrative procedures such as probate. Consequently, a large backlog of corrections has developed in many of the title offices,

and this has compounded the delays in probate, leasing, mortgages, and other trust

transactions that rely on title and ownership information. In turn, each of these

delays compounds the errors in the distribution of trust funds.

What does this mean? I like to describe what I call the Haskell effect. If a Navajo

man goes away to Haskell Indian School and meets a Woman from Osage, they

marry and move to Minneapolis where they adopt a couple of young children from

Northern Cheyenne and they all get killed in a car wreck. Besides the obvious tragedy the added problem is the DOI has no way to know that there is land in three

separate regions managed with systems that do not communicate. It creates a nearly impossible Probate case preparation nightmare.

Cleaning up the ownership information and implementing an effective title system that is integrated with the leasing and accounting systems is a primary need
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for the Indian trust system. However, the BIA will never be able to complete this

task if Congress does not address the fractionation problem. In 1998, just 5 years

ago, the BIA reported that it was managing just over I million fractionated ownership interests on trust lands in Indian country. Just last month, the BIA reported

that it is now managing over 4 million ownership interests. This explosion in the

number of ownership interests comes when the land passes from one generation to

the next generation of children by the automatic operation of state intestacy laws.

The fractionation problem has already grown wildly out of control. But if Congress

fails to act now to address it, it will continue to compound.

Even if we built a wonderful computerized system to keep track of all the millions

of ownership interests, we would soon have to scrap it and build a newer, bigger

one. In a couple of generations we could have billions of interests. How many people,

how much time would it take to keep track of all of those interests?

The As-Is Study and its findings show that we need to focus our trust reform efforts on the title system. That means that Congress needs to focus on reducing fractionation, as the single most important thing in order to address trust reform:

My recommendations would be:

No. 1. We have to respect the property rights of the individual owners. But within

this framework, we have to do everything possible to encourage the consolidation

of Indian land. That should be the single guiding principle for judging each and

every provision in S. 550. Does it help us consolidate land and reduce fractionation?

No. 2. The tribes are making huge efforts on consolidation. This bill needs to

make sure that tribes have the tools to write their own probate codes.

No. 3. Indian landowners must have the right to devise their land to whomever

they want, or they must be compensated if they are not able to. The Uniform Federal In testate Code that is proposed in S. 550 could be a giant step forward to reduce fractionation but it needs focus. I would like to see us limit the in testate provisions to immediate family who are members of the tribe, and if there are no such

members, then it should pass to the tribe itself.

No. 4. Promote Estate Planning; provide adequate funding and training to get individuals to write wills. 95 percent of Indians die without a will.

No. 5. Put adjudication under one roof. Create an Office of Indian Probate made

up of Indian Probate Judges (IPJ’s) and Attorney Decision Makers (ADM’s) removing the Administrative Law Judges (ALJ’S)

No. 6. Finally, and perhaps most importantly, Congress should beef up the Indian

Land Consolidation Pilot Project and make it permanent.

In closing, I would like to pledge my assistance to the Indian Affairs Committee

and its members in any issues related to the complex management of the Indian

Trust, if it is fractionalization, settlement of mismanagement claims, or historical

accounting, I can provide an clear science-based description and understanding of

the multi-agency cash and resource management provided to Native people by the

United States.

Thank you

PREPARED STATEMENT OF BEN O’NEAL, MEMBER, SHOSHONE BUSINESS COUNCIL,

EASTERN SHOSHONE TRIBE

Mr. Chairman members of the committee. My name is Ben O’Neal and I am a

member of the Business Council of the Eastern Shoshone Tribe of the Wind River

Reservation. It is with great pleasure that I present this testimony today on behalf

of the Eastern Shoshone Tribe. Chairman Vernon Hill regrets that he could not be

here today, but pressing issues kept him at home.

The Eastern Shoshone Tribe of the Wind River Reservation is a federally recognized Indian tribe with approximately 3,500 members. The Wind River Reservation

is located in central Wyoming, and is home to two tribes, the Eastern Shoshone and

the Northern Band of the Arapaho. There are also approximately 25,000 non-Indians living within the exterior boundary of the Reservation.

Many members of the Eastern Shoshone Tribe are deeply concerned with the fact

that they may not able to leave their land to their heirs. Provisions within S. 550

address this problem, and it is for this reason that we strongly support its passage.

Title to land within our Reservation is held in various ways, including in trust,

in fee patent, as tribal land, or as land held jointly by the Eastern Shoshone and

the Northern Arapaho Tribes. Our primary concern today is with property held in

trust for individual Indians, and I would like to use myself as an example of one

way in which S. 550 would bring relief.

In 1966, I married my wife, who is non-Indian. We were both from ranching families, and in 1972, we started acquiring land and building our own ranch. The first
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200 acres we purchased is held in fee patent. It is located on the Wind River Reservation and contains the home site where my family and I have lived for more than

30 years. We also lease several allotments adjoining this property, allowing us to

run enough cattle and operate a ranch in such a way as to have derived our living

solely as ranchers.

In 1989, we purchased an 80 acre tract of trust land from an individual Indian.

We paid fair market value for this property. This tract adjoins our patent fee ground

and added significantly to our ranch. In 1994, my wife and I purchased 240 acres

of patent fee land from our neighbors to allow for expansion as our son and daughter expressed an interest in being a part of the ranch operations. At the same time,

we also purchased 200 acres of adjoining Indian trust lands from multiple Indian

heirs. These lands are all contiguous, and even contain a creek that runs year

round, adding further to the value of our property.

Through additional acquisitions, I currently own 1,200 acres of property within

the Wind River Reservation. Half of this property is held in trust; the other half

is held in fee. I paid fair market value for all of it. Under current law, as a member

of the Eastern Shoshone Tribe, and as a landowner, I can only will my trust property to an Indian or to my Tribe; but I would like to leave it to my family.

I am not alone in the fact that my wife and my children are not members of the

Eastern Shoshone Tribe. Despite the fact that they have stood by me over the years,

and have helped our ranch become a success, current law only permits me to leave

my trust property to them as a life estate. I find this unacceptable. My only other

option is to remove the property from trust status and place it into fee; something

that I do not wish to do.

Individual Indian landowners, such as myself, should have another option. We

should be able to determine to whom we leave our land. Indian landowners should

have the same right as others within our country to keep property within our families for as long as we choose to do so. This right should not be based upon race or

political distinction, just as it should not be based upon religion, or any other similar factor. I support the passive trust provisions within S. 550 because they allow

me, and all others like me, to ensure that property stays within our families for a

duration of our choosing.

Let me be sure to point out that the Eastern Shoshone Tribe is not seeking to

impose this option on everyone. If an Indian landowner wants to give their trust

property to the Tribe, they should be able to do so. Our position simply is that there

should be an option added to those that currently exist; that we should be able to

choose who gets our land.

In the future, if my descendants determine that it is in their best interest to sell

this property, the Tribe should be given a period of time in which to exercise a first

right of refusal. They should, however, be required to pay fair market value for it,

just as I did.

This raises another concern we have with existing law. Currently, there is little

incentive for the Tribe to pay anything of value for trust property. The Tribe realizes that for individuals such as myself, who are restricted to leaving trust property

to heirs as a life estate, it is only a matter of time before the Tribe comes into possession of the property, with no payment at all. This eventual outcome serves also

to discourage use and improvement of the land. Why would I invest hundreds, even

thousands, of dollars to improve the land when I know, in the end, I will not be

compensated for my investment. Again, I find this unacceptable, and am pleased

that S. 550 works to resolve this issue as well.

As an aside, I find it important to mention our concern with the Tribe’s ability

to purchase trust property, even if they wish to do so. While purchases on a limited

basis would be feasible, financial assistance would be necessary for the Tribe to

make larger purchases. We encourage the Congress to ensure funds are available

for this purpose.

I also support the idea that should the Tribe not wish to pay fair market value

for trust property, the option should be available to sell it to someone who is. It is

important to note that this should not be viewed as a reduction of Tribal lands.

Many people hear the term ‘‘trust property’’ and they think of ‘‘tribal property.’’

This, however, is not the case. My property is trust property. It is held in trust for

me, Ben O’Neal. It is not Tribal property. I have spent my entire life working and

saving to buy what I have; to make a life for myself and for my family. I should

have the right to determine to whom this property is left. My descendants and I

should have the right to be dealt with fairly.

On behalf of the Eastern Shoshone Tribe, I again thank you for the opportunity

to present testimony today and I encourage passage of S. 550.
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PREPARED STATEMENT OF THE INTERTRIBAL MONITORING ASSOCIATION

Good Morning, Mr. Chairman, Vice Chairman and honorable members of the

Committee. I am honored to be here on behalf of the 54 federally recognized Tribes

that comprise the InterTribal Monitoring Association (ITMA). ITMA was established

in 1990 to monitor the trust reform efforts of the United States Department of Interior. In the last year and a half, ITMA has been actively involved in the Tribal/DOI

Task Force, has drafted trust reform legislation in coordination with NCAI and has

entered into a dialog with DOI to develop a settlement process for Indian Tribes

who have claims against DOI for trust fund and asset mismanagement. ITMA has

been actively monitoring S. 550 as the organization believes that trust reform cannot effectively occur without addressing tribal land issues including fractionated

ownership and consolidation of tribal and individual lands. Further, the continued

diminishment of tribal lands results in the continual diminishment of tribal governance authority.

The vast array of problems created by fractionated land ownership, as a result

of the General Allotment Act of 1887 and individual Tribal Allotment Acts, for

Tribes, individuals and the DOI have been well-documented. The Indian Land Consolidation Act (ILCA), attempting to curtail the devastation of the allotment era,

was amended in 2000 to address the significant amount of Indian land passing out

of trust during the probate process. The 2000 amendments to the ILCA limited nonIndian heirs and beneficiaries to life-estates only. However, this limitation resulted

in an unexpected backlash of individuals converting trust lands to fee lands in order

to devise more than life-estates to non-Indian spouses and children.

S. 550 attempts to further amend the Indian Land Consolidation Act to allow

trust landowners to devise more than life-estates to non-Indian heirs and devisees

through the creation of a ‘‘passive trust’’. A passive trust is a new form of land ownership, a creative remedy to the life-estate restriction. The passive trust provision

would allow land to remain in trust, free from state tax liability, remain within tribal jurisdiction and remain within the BIA probate system. A holder of a passive

trust would be able to lease the land without BIA approval, would be able to mortgage land without BIA approval, could devise the land to the Tribe or to Indians

or other eligible descendants of the original holder of the land. In essence, the intent

of the passive trust is to retain the land in trust yet allow the holder to manage

the land as if it were fee. The passive trust is proposed as an alternative to trust

landowners converting trust lands to fee. For Tribes, the passive trust would prevent a diminishment of landbase acreage totals.

However, numerous unanswered questions arise about the passive trust concept.

First, the passive trust is a newly created form of land ownership, no precedent for

such a form of long-term ownership exists. Thus, no data regarding passive trusts

exists to allow a knowledgeable assessment of problems that may occur. Second, serious questions arise about tribal jurisdiction over the non-Indian holders of a passive trust. Although the land is to remain within tribal jurisdiction, the Tribe’s jurisdiction over the non-Indian holder of the passive trust is questionable. Third, the

BIA currently has welldocumented problems tracking current owners of trust land

including joint tenants of land, restricted fee holders, and other forms of ownership.

A question arises regarding how the BIA will track non-Indian holders of passive

trusts to keep the land within the BIA probate system. Although the BIA would not

have approval obligations for passive trust uses, it would have to record them to

effectively probate the land. The general complexity and costs of recording holders

of passive trusts, including the encumbrances of the land and disposition, render the

passive trust a questionable alternative. Further, no guarantee exists that states

will give non-Indian holders of passive trusts a tax exemption. Finally, a concern

exists that the passive trust may devalue Indian land since no investigation has occurred regarding whether a title company would issue title insurance if a passive

trust was in the chain of title. Similarly, any taxation issues that are litigated for

any length of time may result in a devaluation of Indian land .

Although the passive trust concept appears a creative remedy to the problem of

land passing out of trust status at probate when the spouse and children of the Indian land owner are non-Indian, many questions exist about its viability. Until more

of the questions raised above can be answered, ITMA cannot support the passive

trust concept. ITMA has been focused on the improvement of DOI land title and recordation systems as a starting point for effective trust reform. A new form of land

ownership that would complicate the recordation process further causes concern for

ITMA.

S. 550 promotes the development of a uniform probate code for use in Indian

country. The concern has been the application of state laws to Indian probates and

with different states, different laws apply, resulting in no uniformity throughout In-
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dian country. However, the reality is that most states have adopted the Uniform

Probate Code, thereby probating cases uniformly from State to State. The real problem appears to be that the application of the State adopted Uniform Probate Code

does not protect Tribal land bases when an Indian dies intestate and when no restrictions exist as to disposition of land by will. Therefore, the application of the

State laws result in further fractionation and land passing out of trust either by intestacy or by will. A uniform probate code for Indian country will protect Tribal land

bases only if it adopts the above questionable passive trust concept or limits the

devisees and heirs to enrolled Indians. Frankly, since the passage of ILCA, few

tribes have developed probate codes with disposition and intestacy restrictions that

would protect Tribal land bases. If Indian country accepts the passive trust concept

or is willing to limit heirs and devisees to enrolled Indians, then a uniform probate

code for Indian country would be viable.

S. 550 provides a mechanism to partition undivided fee interests for purchase by

Tribes. Currently, no process exists for a Tribe to request that the BIA partition out

undivided fee interests since the BIA has no responsibility to manage fee interests.

The undivided fee interests limit Tribes from encumbering the land and selling or

purchasing other undivided:interests. The provision in S. 550 would allow the fee

interest to be partitioned out from the other undivided trust interests promoting a

purchase of the fee interest. Further, partitioning the fee interest would allow the

Tribe or individuals to encumber, sale or purchase the remaining trust interests.

The proposed language in S. 550 is necessary to promote land consolidation via tribal or tribal member purchase of fee interests.

In conclusion, ITMA believes that tribal land consolidation is critical to trust reform. ITMA is unable to support the complex passive trust concept and believes that

Tribes must respond to heir and devisee limitations before a uniform probate code

for Indian country will be viable. ITMA does support the language in S. 550 for partitioning undivided fee interests as a necessary step to land consolidation. Finally,

ITMA believes the most viable solution to land consolidation is sufficient funding

for Tribes to purchase the fractionated interests. In addition to the allotment of Indian lands, Indians were not allowed to devise lands through wills until 1910, thereby creating the framework for the fractionation problem. Sufficient funding should

be available for Tribes to purchase undivided interests at fair market value. The

current BIA budget falls short of a realistic attempt to address the fractionation

problem. More funds for this purpose are critical for land consolidation and true

trust reform.

Thank you.
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