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S. HRG. 109–483

INDIAN TRUST REFORM ACT OF 2005, TITLES

II THROUGH VI

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS

UNITED STATES SENATE

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

ON

S. 1439

TO PROVIDE FOR INDIAN TRUST ASSET MANAGEMENT REFORM AND

RESOLUTION OF HISTORICAL ACCOUNTING CLAIMS

MARCH 28, 2006

WASHINGTON, DC

(
COMMITTEE ON INDIAN AFFAIRS

JOHN McCAIN, Arizona, Chairman

BYRON L. DORGAN, North Dakota, Vice Chairman

PETE V. DOMENICI, New Mexico

CRAIG THOMAS, Wyoming

GORDON SMITH, Oregon

LISA MURKOWSKI, Alaska

MICHAEL D. CRAPO, Idaho

RICHARD BURR, North Carolina

TOM COBURN, M.D., Oklahoma

DANIEL K. INOUYE, Hawaii

KENT CONRAD, North Dakota

DANIEL K. AKAKA, Hawaii

TIM JOHNSON, South Dakota

MARIA CANTWELL, Washington

JEANNE BUMPUS, Majority Staff Director

SARA G. GARLAND, Minority Staff Director

(II)
(III)

C O N T E N T S

Page

S. 1439, text of ......................................................................................................... 3

Statements:

Cason, James, associate deputy secretary, Department of the Interior ...... 75

Dorgan, Hon. Byron L., U.S. Senator from North Dakota, vice chairman,

Committee on Indian Affairs ....................................................................... 78

Hall, Tex, chairman, Three Affiliated Tribes Business Council ................... 78

Gray, Jim, chairman, Intertribal Monitoring Association ............................. 80

Marshall, Sr., Clifford Lyle, chairman, Hoopa Valley Tribal Council .......... 83

McCain, Hon. John, U.S. Senator from Arizona, chairman, Committee

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

Nunez, Austin, chair, San Xavier District, Indian Land Working Group ... 85

Russell, Majel, attorney, Elk River Law Office .............................................. 86

Swimmer, Ross, special trustee for American Indians, Department of

the Interior .................................................................................................... 76

APPENDIX

Prepared statements:

Cason, James .................................................................................................... 93

George, Keller, president, United South and Eastern Tribes, Inc. .............. 97

Gray, Jim .......................................................................................................... 108

Hall, Tex ............................................................................................................ 117

Marshall, Sr., Clifford Lyle .............................................................................. 122

Nunez, Austin ................................................................................................... 129

Russell, Majel .................................................................................................... 139

Swimmer, Ross ................................................................................................. 93

(1)

INDIAN TRUST REFORM ACT OF 2005, TITLES

II THROUGH VI

TUESDAY, MARCH 28, 2006

U.S. SENATE, COMMITTEE ON INDIAN AFFAIRS, Washington, DC.

The committee met, pursuant to notice, at 9:30 a.m. in room 485

Senate Russell Office Building, Hon. John McCain (chairman of the

Senate Committee on Indian Affairs) presiding.

Present: Senators McCain and Dorgan.

STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM

ARIZONA, CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

The CHAIRMAN. Good morning.

Senator Dorgan will be joining us shortly, so we will commence

the hearing.

Earlier this month, the committee held a joint hearing with the

House Committee on Resources on the settlement of the Cobell v.

Norton litigation, which is the subject of title I of S. 1439. There

seemed to be a strong consensus among the witnesses that the

Congress should step forward and resolve the Cobell lawsuit.

We also heard from one of the witnesses that we should not resolve the funds mismanagement claims, but leave unresolved the

resource mismanagement claims. I agree with the assessment that

all funds mismanagement claims should be resolved, but I am troubled by the prospect of settling the Cobell case at a cost of billions

of dollars to the taxpayers, while leaving a significant set of claims

intact. Will there be a Cobell II filed on the heels of the settlement,

thereby commencing another ten year run against the Department

of Interior?

I am sure my colleagues in the Senate are going to want to know

whether that can happen before supporting a settlement with a

multibillion dollar price tag.

The hearing today focuses on the remaining five titles of S. 1439.

Although, of course, if any witness has ideas on how to settle the

Cobell matter, we would certainly like to hear from them. These titles deal with various aspects of Indian trust reform, creating a

commission that would review trust practices within the Department of Interior and recommend changes; establish a novel demonstration project allowing greater tribal control and responsibility

over trust asset management; restructuring the BIA and transferring Office of Special Trustee functions under a new Under Secretary for Indian Affairs; providing new mechanisms to deal with
2

the problem of fractionation; and requiring annual GAO audits of

individual Indian and tribal trust funds.

Since the Indian tribes and tribal organizations, as well as individual Indians and organizations that represent trust reform, that

there is interest. There are some differences in opinion in Indian

country about some aspects of trust reform, but based on the comments I have received so far, I would say that there is a widespread view in Indian country that management of Indian trust assets does need to be reformed.

Hopefully, our hearing today will give us further insight on how

S. 1439 should be revised so that we can put it on our markup calendar as soon as possible.

[Text of S. 1439 follows:]
3

1

II

109TH CONGRESS

1ST SESSION S. 1439

To provide for Indian trust asset management reform and resolution of

historical accounting claims, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 20, 2005

Mr. MCCAIN (for himself and Mr. DORGAN) introduced the following bill;

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

A BILL

To provide for Indian trust asset management reform and

resolution of historical accounting claims, 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; TABLE OF CONTENTS.

4 (a) SHORT TITLE.—This Act may be cited as the

5 ‘‘Indian Trust Reform Act of 2005’’.

6 (b) TABLE OF CONTENTS.—The table of contents for

7 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—SETTLEMENT OF LITIGATION CLAIMS

Sec. 101. Findings.

Sec. 102. Definitions.
4

2

•S 1439 IS

Sec. 103. Individual Indian Accounting Claim Settlement Fund.

Sec. 104. General distribution.

Sec. 105. Claims relating to share determination.

Sec. 106. Claims relating to method of valuation.

Sec. 107. Claims relating to constitutionality.

Sec. 108. Attorneys’ fees.

Sec. 109. Waiver and release of claims.

Sec. 110. Effect of title.

TITLE II—INDIAN TRUST ASSET MANAGEMENT POLICY REVIEW

COMMISSION

Sec. 201. Establishment.

Sec. 202. Membership.

Sec. 203. Meetings and procedures.

Sec. 204. Duties.

Sec. 205. Powers.

Sec. 206. Commission personnel matters.

Sec. 207. Exemption from FACA.

Sec. 208. Authorization of appropriations.

Sec. 209. Termination of Commission.

TITLE III—INDIAN TRUST ASSET MANAGEMENT

DEMONSTRATION PROJECT ACT

Sec. 301. Short title.

Sec. 302. Definitions.

Sec. 303. Establishment of demonstration project; selection of participating Indian tribes.

Sec. 304. Indian trust asset management plan.

Sec. 305. Effect of title.

TITLE IV—FRACTIONAL INTEREST PURCHASE AND

CONSOLIDATION PROGRAM

Sec. 401. Fractional interest program.

TITLE V—RESTRUCTURING BUREAU OF INDIAN AFFAIRS AND

OFFICE OF SPECIAL TRUSTEE

Sec. 501. Purpose.

Sec. 502. Definitions.

Sec. 503. Under Secretary for Indian Affairs.

Sec. 504. Transfer of functions of Assistant Secretary for Indian Affairs.

Sec. 505. Office of Special Trustee for American Indians.

Sec. 506. Hiring preference.

Sec. 507. Authorization of appropriations.

TITLE VI—AUDIT OF INDIAN TRUST FUNDS

Sec. 601. Audits and reports.

Sec. 602. Authorization of appropriations.
5

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•S 1439 IS

1 TITLE I—SETTLEMENT OF

2 LITIGATION CLAIMS

3 SEC. 101. FINDINGS.

4 Congress finds that—

5 (1) Congress has appropriated tens of millions

6 of dollars for purposes of providing an historical ac7 counting of funds held in Individual Indian Money

8 accounts;

9 (2) as of the date of enactment of this Act, the

10 efforts of the Federal Government in conducting his11 torical accounting activities have provided informa12 tion regarding the feasibility and cost of providing a

13 complete historical accounting of IIM account funds;

14 (3) in the case of many IIM accounts, a com15 plete historical accounting—

16 (A) may be impossible because necessary

17 records and accounting data are missing or de18 stroyed;

19 (B) may take several years to perform even

20 if necessary records are available;

21 (C) may cost the United States hundreds

22 of millions and possibly several billion dollars;

23 and
6

4

•S 1439 IS

1 (D) may be impossible to complete before

2 the deaths of many elderly IIM account bene3 ficiaries;

4 (4) without a complete historical accounting, it

5 may be difficult or impossible to ascertain the extent

6 of losses in an IIM account as a result of accounting

7 errors or mismanagement of funds, or the correct

8 amount of interest accrued or owned on the IIM ac9 count;

10 (5) the total cost to the United States of pro11 viding a complete historical accounting of an IIM ac12 count may exceed—

13 (A) the current balance of the IIM ac14 count;

15 (B) the total sums of money that have

16 passed through the IIM account; and

17 (C) the enforceable liability of the United

18 States for losses from, and interest in, the IIM

19 account;

20 (6)(A) the delays in obtaining an accounting

21 and in pursuing accounting claims in the case styled

22 Cobell v. Norton, Civil Action No. 96–1285 (RCL)

23 in the United States District Court for the District

24 of Columbia, have created a great hardship on IIM

25 account beneficiaries; and
7

5

•S 1439 IS

1 (B) many beneficiaries and their representatives

2 have indicated that they would rather receive mone3 tary compensation than experience the continued

4 frustration and delay associated with an accounting

5 of transactions and funds in their IIM accounts;

6 (7) it is appropriate for Congress, taking into

7 consideration the findings under paragraphs (1)

8 through (6), to provide benefits that are reasonably

9 calculated to be fair and appropriate in lieu of per10 forming an accounting of an IIM account, or assum11 ing liability for errors in such an accounting, mis12 management of IIM account funds (including unde13 termined amounts of interest in IIM accounts, losses

14 in which may never be discovered or quantified if a

15 complete historical accounting cannot be performed),

16 or breach of fiduciary duties with respect to the ad17 ministration of IIM accounts, in order to transmute

18 claims by the beneficiaries of IIM accounts for unde19 termined or unquantified accounting losses and in20 terest to a fixed amount to be distributed to the

21 beneficiaries of IIM accounts;

22 (8) in determining the amount of the payments

23 to be distributed as described in paragraph (7), Con24 gress should take into consideration, in addition to
8

6

•S 1439 IS

1 the factors described in paragraphs (1) through

2 (6)—

3 (A) the risks and costs to IIM account

4 beneficiaries, as well as any delay, associated

5 with the litigation of claims that will be resolved

6 by this title; and

7 (B) the benefits to IIM account bene8 ficiaries available under this title;

9 (9) the situation of the Osage Nation is unique

10 because, among other things, income from the min11 eral estate of the Osage Nation is distributed to in12 dividuals through headright interests that belong not

13 only to members of the Osage Nation, but also to

14 members of other Indian tribes, and to non-Indians;

15 and

16 (10) due to the unique situation of the Osage

17 Nation, the Osage Nation, on its own behalf, has

18 filed various actions in Federal district court and the

19 United States Court of Federal Claims seeking ac20 countings, money damages, and other legal and equi21 table relief

22 SEC. 102. DEFINITIONS.

23 In this title:

24 (1) ACCOUNTING CLAIM.—The term ‘‘account25 ing claim’’ means any claim for an historical ac-
9

7

•S 1439 IS

1 counting of a claimant against the United States

2 under the Litigation.

3 (2) CLAIMANT.—The term ‘‘claimant’’ means

4 any beneficiary of an IIM account (including an heir

5 of such a beneficiary) that was living on the date of

6 enactment of the American Indian Trust Fund Man7 agement Reform Act of 1994 (25 U.S.C. 4001 et

8 seq.).

9 (3) IIM ACCOUNT.—The term ‘‘IIM account’’

10 means an Individual Indian Money account adminis11 tered by the Bureau of Indian Affairs.

12 (4) LITIGATION.—The term ‘‘Litigation’’ means

13 the case styled Cobell v. Norton, Civil Action No.

14 96–1285 (RCL) in the United States District Court

15 for the District of Columbia.

16 (5) SECRETARY.—The term ‘‘Secretary’’ means

17 the Secretary of the Treasury.

18 (6) SETTLEMENT FUND.—The term ‘‘Settle19 ment Fund’’ means the fund established by section

20 103(a).

21 (7) SPECIAL MASTER.—The term ‘‘Special Mas22 ter’’ means the special master appointed by the Sec23 retary under section 103(b) to administer the Settle24 ment Fund.
10

8

•S 1439 IS

1 SEC. 103. INDIVIDUAL INDIAN ACCOUNTING CLAIM SETTLE2 MENT FUND.

3 (a) ESTABLISHMENT.—

4 (1) IN GENERAL.—There is established in the

5 general fund of the Treasury a fund, to be known

6 as the ‘‘Individual Indian Accounting Claim Settle7 ment Fund’’.

8 (2) INITIAL DEPOSIT.—The Secretary shall de9 posit into the Settlement Fund to carry out this title

10 not less than $ø¿,000,000,000 from funds ap11 propriated under section 1304 of title 31, United

12 States Code.

13 (b) SPECIAL MASTER.—As soon as practicable after

14 the date of enactment of this Act, the Secretary shall ap15 point a Special Master to administer the Settlement Fund

16 in accordance with this title.

17 (c) DISTRIBUTION.—

18 (1) IN GENERAL.—The Special Master shall use

19 not less than 80 percent of amounts in the Settle20 ment Fund to make payments to claimants in ac21 cordance with section 104.

22 (2) METHOD OF VALUATION AND CONSTITU23 TIONAL CLAIMS.—The Special Master may use not

24 to exceed 12 percent of amounts in the Settlement

25 Fund to make payments to claimants described in—

26 (A) section 106; or
11

9

•S 1439 IS

1 (B) section 107.

2 (3) ATTORNEYS’ FEES.—The Special Master

3 may use not to exceed ø¿ percent of amounts

4 in the Settlement Fund to make payments to claim5 ants for attorneys’ fees in accordance with section

6 108.

7 (d) COSTS OF ADMINISTRATION.—The Secretary may

8 use not more than ø¿ percent of amounts in the Set9 tlement Fund to pay the costs of—

10 (1) administering the Settlement Fund; and

11 (2) otherwise carrying out this title.

12 SEC. 104. GENERAL DISTRIBUTION.

13 (a) PAYMENTS TO CLAIMANTS.—

14 (1) IN GENERAL.—Not later than 1 year after

15 the date on which the Secretary publishes in the

16 Federal Register the regulations described in sub17 section (d), the Special Master shall distribute to

18 each claimant from the Settlement Fund an amount

19 equal to the sum of—

20 (A) the per capita share of the claimant of

21 $ø¿,000,000,000 of the amounts described

22 in section 103(c)(1); and

23 (B) of $ø¿,000,000,000 of the

24 amounts described in section 103(c)(1), the ad25 ditional share of the claimant, to be determined
12

10

•S 1439 IS

1 in accordance with a formula established by the

2 Secretary under subsection (d)(1).

3 (2) HEIRS OF CLAIMANTS.—

4 (A) IN GENERAL.—An heir of a claimant

5 shall receive the entire amount distributed to

6 the claimant under paragraphs (1) and (3).

7 (B) MULTIPLE HEIRS.—If a claimant has

8 more than 1 heir, the amount distributed to the

9 claimant under paragraphs (1) and (3) shall be

10 divided equally among the heirs of the claimant.

11 (3) RESIDUAL AMOUNTS.—After making each

12 distribution required under sections 106, 107, and

13 108, the Special Master shall distribute to claimants

14 the remainder of the amounts described in para15 graphs (2) and (3) of section 103(c), in accordance

16 with paragraph (1)(B).

17 (b) REQUIREMENT FOR DISTRIBUTION.—The Special

18 Master shall not make a distribution to a claimant under

19 subsection (a) until the claimant executes a waiver and

20 release of accounting claims against the United States in

21 accordance with section 109.

22 (c) LOCATION OF CLAIMANTS.—

23 (1) RESPONSIBILITY OF SECRETARY OF THE

24 INTERIOR.—The Secretary of the Interior shall pro25 vide to the Special Master any information, includ-
13

11

•S 1439 IS

1 ing IIM account information, that the Special Mas2 ter determines to be necessary to—

3 (A) identify any claimant under this title;

4 or

5 (B) apply a formula established by the

6 Secretary under subsection (d).

7 (2) CLAIMANTS OF UNKNOWN LOCATION.—

8 (A) IN GENERAL.—The Special Master

9 shall deposit in an account, for future distribu10 tion, amounts under this title for each claimant

11 who—

12 (i) is entitled to receive a distribution

13 under this title, as determined by the Spe14 cial Master; and

15 (ii) has not been located by the Spe16 cial Master as of the date on which a dis17 tribution is required under subsection

18 (a)(1).

19 (B) LOCATION OF CLAIMANTS.—

20 (i) RESPONSIBILITY OF SECRETARY

21 OF THE INTERIOR.—The Secretary of the

22 Interior shall provide to the Special Master

23 any information and assistance necessary

24 to locate a claimant described in subpara25 graph (A)(ii).
14

12

•S 1439 IS

1 (ii) CONTRACTS.—The Special Master

2 may enter into contracts with an Indian

3 tribe or an organization representing indi4 vidual Indians in order to locate a claimant

5 described in subparagraph (A)(ii).

6 (d) REGULATIONS.—

7 (1) IN GENERAL.—The Secretary shall promul8 gate any regulations that the Secretary determines

9 to be necessary to carry out this title, including reg10 ulations establishing a formula to determine the

11 share of each claimant of payments under subsection

12 (a)(1).

13 (2) FACTORS FOR CONSIDERATION.—In devel14 oping the formula described in paragraph (1), the

15 Secretary shall take into consideration the amount

16 of funds that have passed through the IIM account

17 of each claimant during the period beginning on

18 January 1, 1980, and ending on December 31,

19 2005, or another period, as the Secretary determines

20 to be appropriate.

21 SEC. 105. CLAIMS RELATING TO SHARE DETERMINATION.

22 (a) IN GENERAL.—Subject to subsection (b), any

23 claimant may seek judicial review of the determination of

24 the Special Master with respect to the amount of a share

25 payment of a claimant under section 104(a)(1).
15

13

•S 1439 IS

1 (b) REQUIREMENTS.—A claimant shall file a claim

2 under subsection (a)—

3 (1) not later than 180 days after the date of re4 ceipt of a notice by the claimant under subsection

5 (c); and

6 (2) in the United States district court for the

7 district in which the claimant resides.

8 (c) NOTICE.—The Secretary shall provide to each

9 claimant a notice of the right of any claimant to seek judi10 cial review of a determination of the Special Master with

11 respect to the amount of the share payment of the claim12 ant under section 105.

13 (d) SUBSEQUENT APPEALS.—A claim relating to a

14 determination of a United States district court relating

15 to an appeal under subsection (a) shall be filed only in

16 the United States Court of Appeals for the District of Co17 lumbia.

18 SEC. 106. CLAIMS RELATING TO METHOD OF VALUATION.

19 (a) IN GENERAL.—Not later than 1 year after the

20 date of enactment of this Act, a claimant may seek judicial

21 review of the method of distribution of a payment to the

22 claimant under section 104(a).

23 (b) REQUIREMENTS.—A claim under subsection

24 (a)—
16

14

•S 1439 IS

1 (1) shall not be filed as part of a class action

2 claim against any party; and

3 (2) shall be filed only in the United States

4 Court of Federal Claims.

5 (c) AVAILABLE AMOUNTS.—

6 (1) IN GENERAL.—The Special Master shall use

7 only amounts described in section 103(c)(2)(A) to

8 satisfy an award under a claim under this section.

9 (2) PAYMENTS TO CLAIMANTS.—A claimant

10 that files a claim under this subsection shall not be

11 eligible to receive a distribution under section

12 104(a).

13 (d) EFFECT OF CLAIM.—The filing of a claim under

14 this section shall be considered to be a waiver by the claim15 ant of any right to an award under section 104.

16 SEC. 107. CLAIMS RELATING TO CONSTITUTIONALITY.

17 (a) IN GENERAL.—Any claimant may seek judicial

18 review in the United States District Court for the District

19 of Columbia of the constitutionality of the application of

20 this title to an individual claimant.

21 (b) PROCEDURE.—

22 (1) JUDICIAL PANEL.—A claim under this sec23 tion shall be determined by a panel of 3 judges, to

24 be appointed by the chief judge of the United States

25 District Court for the District of Columbia.
17

15

•S 1439 IS

1 (2) CONSOLIDATION OF CLAIMS.—

2 (A) IN GENERAL.—The judicial panel may

3 consolidate claims under this section, as the ju4 dicial panel determines to be appropriate.

5 (B) PROHIBITION OF CLASS ACTION

6 CASES.—A claim under this section shall not be

7 filed as part of a class action claim against any

8 party.

9 (3) DETERMINATION.—The judicial panel may

10 award a claimant such relief as the judicial panel de11 termines to be appropriate, including monetary com12 pensation.

13 (c) AVAILABLE AMOUNTS.—

14 (1) IN GENERAL.—The Special Master shall use

15 only amounts described in section 103(c)(2)(B) to

16 satisfy an award under a claim under this section.

17 (2) PAYMENTS TO CLAIMANTS.—A claimant

18 that files a claim under this subsection shall not be

19 eligible to receive a distribution under section

20 104(a).

21 (d) EFFECT OF CLAIM.—The filing of a claim under

22 this section shall be considered to be a waiver by the claim23 ant of any right to an award under section 104.
18

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•S 1439 IS

1 SEC. 108. ATTORNEYS’ FEES.

2 (a) IN GENERAL.—The Special Master may use

3 amounts described in section 103(c)(3) to make payments

4 to claimants for costs and attorneys’ fees incurred under

5 the Litigation before the date of enactment of this Act,

6 or in connection with a claim under section 104, at a rate

7 not to exceed $ø¿ per hour.

8 (b) REQUIREMENTS.—

9 (1) IN GENERAL.—The Special Master may

10 make a payment under subsection (a) only if, as of

11 the date on which the Special Master makes the pay12 ment, the applicable costs and attorneys’ fees have

13 not been paid by the United States pursuant to a

14 court order.

15 (2) ACTION BY ATTORNEYS.—To receive a pay16 ment under subsection (a), an attorney of the claim17 ant shall submit to the Special Master a written

18 claim for costs or fees under the Litigation.

19 SEC. 109. WAIVER AND RELEASE OF CLAIMS.

20 (a) IN GENERAL.—In order to receive an award

21 under this title, a claimant shall execute and submit to

22 the Special Master a waiver and release of claims under

23 this section.

24 (b) CONTENTS.—A waiver and release under sub25 section (a) shall contain a statement that the claimant

26 waives and releases the United States (including any offi-
19

17

•S 1439 IS

1 cer, official, employee, or contractor of the United States)

2 from any legal or equitable claim under Federal, State,

3 or other law (including common law) relating to any ac4 counting of funds in the IIM account of the claimant on

5 or before the date of enactment of this Act.

6 SEC. 110. EFFECT OF TITLE.

7 (a) SUBSTITUTION OF BENEFITS.—

8 (1) IN GENERAL.—The benefits provided under

9 this title shall be considered to be provided in lieu

10 of any claims under Federal, State, or other law

11 originating before the date of enactment of this Act

12 for—

13 (A) losses as a result of accounting errors

14 relating to funds in an IIM account;

15 (B) mismanagement of funds in an IIM

16 account; or

17 (C) interest accrued or owed in connection

18 with funds in an IIM account.

19 (2) LIMITATION OF CLAIMS.—Except as pro20 vided in this title, and notwithstanding any other

21 provision of law, a claimant shall not maintain an

22 action in any Federal, State, or other court for an

23 accounting claim originating before the date of en24 actment of this Act.

25 (3) JURISDICTION OF COURTS.—
20

18

•S 1439 IS

1 (A) IN GENERAL.—Except as otherwise

2 provided in this title, no court shall have juris3 diction over a claim filed by an individual or

4 group for the historical accounting of funds in

5 an IIM account on or before the date of enact6 ment of this Act, including any such claim that

7 is pending on the date of enactment of this Act.

8 (B) LIMITATION.—This paragraph does

9 not prevent a court from ordering an account10 ing in connection with an action relating to the

11 mismanagement of trust resources that are not

12 funds in an IIM account on or before the date

13 of enactment of this Act.

14 (b) ACCEPTANCE AS WAIVER.—The acceptance by a

15 claimant of a benefit under this title shall be considered

16 to be a waiver by the claimant of any accounting claim

17 that the claimant has or may have relating to the IIM

18 account of the claimant.

19 (c) RECEIPT OF PAYMENTS HAVE NO IMPACT ON

20 BENEFITS UNDER OTHER FEDERAL PROGRAMS.—The

21 receipt of a payment by a claimant under this title shall

22 not be—

23 (1) subject to Federal or State income tax; or

24 (2) treated as benefits or otherwise taken into

25 account in determining the eligibility of the claimant
21

19

•S 1439 IS

1 for, or the amount of benefits under, any other Fed2 eral program, including the social security program,

3 the medicare program, the medicaid program, the

4 State children’s health insurance program, the food

5 stamp program, or the Temporary Assistance for

6 Needy Families program.

7 (d) CERTAIN CLAIMS.—Nothing in this title pre8 cludes any court from granting any legal or equitable relief

9 in an action by an Indian tribe or Indian nation against

10 the United States, or an officer of the United States, filed

11 or pending on or before the date of enactment of this Act,

12 seeking an accounting, money damages, or any other relief

13 relating to a tribal trust account or trust asset or resource.

14 TITLE II—INDIAN TRUST ASSET

15 MANAGEMENT POLICY RE16 VIEW COMMISSION

17 SEC. 201. ESTABLISHMENT.

18 There is established a commission, to be known as

19 the ‘‘Indian Trust Asset Management Policy Review Com20 mission,’’ (referred to in this title as the ‘‘Commission’’),

21 for the purposes of—

22 (1) reviewing trust asset management laws (in23 cluding regulations) in existence on the date of en24 actment of this Act governing the management and
22

20

•S 1439 IS

1 administration of individual Indian and Indian tribal

2 trust assets;

3 (2) reviewing the management and administra4 tion practices of the Department of the Interior with

5 respect to individual Indian and Indian tribal trust

6 assets; and

7 (3) making recommendations to the Secretary

8 of the Interior and Congress for improving those

9 laws and practices.

10 SEC. 202. MEMBERSHIP.

11 (a) IN GENERAL.—The Commission shall be com12 posed of 12 members, of whom—

13 (1) 4 shall be appointed by the President;

14 (2) 2 shall be appointed by the Majority Leader

15 of the Senate;

16 (3) 2 shall be appointed by the Minority Leader

17 of the Senate;

18 (4) 2 shall be appointed by the Speaker of the

19 House of Representatives; and

20 (5) 2 shall be appointed by the Minority Leader

21 of the House of Representatives.

22 (b) QUALIFICATIONS.—The membership of the Com23 mission shall include—
23

21

•S 1439 IS

1 (1) at least 6 members who are representatives

2 of federally recognized Indian tribes with reservation

3 land or other trust land that is managed for—

4 (A) grazing;

5 (B) fishing; or

6 (C) crop, timber, mineral, or other re7 source production purposes;

8 (2) at least 1 member (including any member

9 described in paragraph (1)) who is or has been the

10 beneficial owner of an individual Indian monies ac11 count; and

12 (3) at least 4 members who have experience

13 in—

14 (A) Indian trust resource (excluding a fi15 nancial resource) management;

16 (B) fiduciary investment management;

17 (C) financial asset management; and

18 (D) Federal law and policy relating to In19 dians.

20 (c) DATE OF APPOINTMENTS.—

21 (1) IN GENERAL.—The appointment of a mem22 ber of the Commission shall be made not later than

23 90 days after the date of enactment of this Act.

24 (2) FAILURES TO APPOINT.—A failure to make

25 an appointment in accordance with paragraph (1)
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1 shall not affect the powers or duties of the Commis2 sion if sufficient members are appointed to establish

3 a quorum.

4 (d) TERM; VACANCIES.—

5 (1) TERM.—A member shall be appointed for

6 the life of the Commission.

7 (2) VACANCIES.—A vacancy on the

8 Commission—

9 (A) shall not affect the powers or duties of

10 the Commission; and

11 (B) shall be filled in the same manner as

12 the original appointment was made.

13 SEC. 203. MEETINGS AND PROCEDURES.

14 (a) INITIAL MEETING.—Not later than 150 days

15 after the date of enactment of this Act, the Commission

16 shall hold the initial meeting of the Commission to—

17 (1) elect a Chairperson; and

18 (2) establish procedures for the conduct of busi19 ness of the Commission, including public hearings.

20 (b) SUBSEQUENT MEETINGS.—The Commission shall

21 meet at the call of the Chairperson.

22 (c) QUORUM.—7 members of the Commission shall

23 constitute a quorum, but a lesser number of members may

24 hold hearings.
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1 (d) CHAIRPERSON.—The Commission shall elect a

2 Chairperson from among the members of the Commission.

3 SEC. 204. DUTIES.

4 (a) REVIEWS AND ASSESSMENTS.—The Commission

5 shall review and assess—

6 (1) Federal laws (including regulations) appli7 cable or relating to the management and administra8 tion of Indian trust assets; and

9 (2) the practices of the Department of the Inte10 rior relating to the management and administration

11 of Indian trust assets.

12 (b) CONSULTATION.—In conducting the reviews and

13 assessments under subsection (a), the Commission shall

14 consult with—

15 (1) the Secretary of the Interior;

16 (2) federally recognized Indian tribes; and

17 (3) organizations that represent the interests of

18 individual owners of Indian trust assets.

19 (c) RECOMMENDATIONS.—After conducting the re20 views and assessments under subsection (a), the Commis21 sion shall develop recommendations with respect to—

22 (1) changes to Federal law that would improve

23 the management and administration of Indian trust

24 assets by the Secretary of the Interior;
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1 (2) changes to Indian trust asset management

2 and administration practices that would—

3 (A) better protect and conserve Indian

4 trust assets;

5 (B) improve the return on those assets to

6 individual Indian and Indian tribal bene7 ficiaries; or

8 (C) improve the level of security of individ9 ual Indian and Indian tribal money account

10 data and assets; and

11 (3) proposed Indian trust asset management

12 standards that are consistent with any Federal law

13 that is otherwise applicable to the management and

14 administration of the assets.

15 (d) REPORT.—Not later than 2 years after the date

16 on which the Commission holds the initial meeting, the

17 Commission shall submit to the Committee on Indian Af18 fairs of the Senate, the Committee on Resources of the

19 House of Representatives, and the Secretary of the Inte20 rior a report that includes—

21 (1) an overview and the results of the reviews

22 and assessments under subsection (a); and

23 (2) any recommendations of the Commission

24 under subsection (c).
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1 SEC. 205. POWERS.

2 (a) HEARINGS.—The Commission may hold such

3 hearings, meet and act at such times and places, take such

4 testimony, and receive such evidence as the Chairperson

5 determines to be appropriate to carry out this title.

6 (b) INFORMATION FROM FEDERAL AGENCIES.—

7 (1) IN GENERAL.—The Commission may secure

8 directly from a Federal agency such information as

9 the Chairperson determines to be necessary to carry

10 out this title.

11 (2) PROVISION OF INFORMATION.—On request

12 of the Chairperson, the head of a Federal agency

13 shall provide information to the Commission.

14 (c) ACCESS TO PERSONNEL.—For purposes of carry15 ing out this title, the Commission shall have reasonable

16 access to staff responsible for Indian trust asset manage17 ment and administration of—

18 (1) the Department of the Interior;

19 (2) the Department of the Treasury; and

20 (3) the Department of Justice.

21 (d) POSTAL SERVICES.—The Commission may use

22 the United States mail in the same manner and under the

23 same conditions as other Federal agencies.

24 (e) GIFTS.—The Commission may accept, use, and

25 dispose of gifts or donations of services or property to the
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26

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1 same extent and under the same conditions as other Fed2 eral agencies.

3 SEC. 206. COMMISSION PERSONNEL MATTERS.

4 (a) COMPENSATION OF MEMBERS.—

5 (1) NON-FEDERAL EMPLOYEES.—A member of

6 the Commission who is not an officer or employee of

7 the Federal Government shall be compensated at a

8 rate equal to the daily equivalent of the annual rate

9 of basic pay prescribed for level IV of the Executive

10 Schedule under section 5315 of title 5, United

11 States Code, for each day (including travel time)

12 during which the member is engaged in the perform13 ance of the duties of the Commission.

14 (2) FEDERAL EMPLOYEES.—A member of the

15 Commission who is an officer or employee of the

16 Federal Government shall serve without compensa17 tion in addition to the compensation received for the

18 services of the member as an officer or employee of

19 the Federal Government.

20 (b) TRAVEL EXPENSES.—A member of the Commis21 sion shall be allowed travel expenses, including per diem

22 in lieu of subsistence, at rates authorized for an employee

23 of an agency under subchapter I of chapter 57 of title

24 5, United States Code, while away from home or regular
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27

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1 place of business of the member in the performance of the

2 duties of the Commission.

3 (c) STAFF.—

4 (1) IN GENERAL.—The Chairperson may, with5 out regard to the civil services laws (including regu6 lations), appoint and terminate an executive director

7 and such other additional personnel as are necessary

8 to enable the Commission to perform the duties of

9 the Commission.

10 (2) CONFIRMATION OF EXECUTIVE DIREC11 TOR.—The employment of an executive director shall

12 be subject to confirmation by the Commission.

13 (3) COMPENSATION.—

14 (A) IN GENERAL.—Except as provided in

15 subparagraph (B), the Chairperson may fix the

16 compensation of the executive director and

17 other personnel without regard to the provisions

18 of chapter 51 and subchapter III of title 5,

19 United States Code, relating to classification of

20 positions and General Schedule pay rates.

21 (B) MAXIMUM RATE OF PAY.—The rate of

22 pay for the executive director and other person23 nel shall not exceed the rate payable for level V

24 of the Executive Schedule under section 5316

25 of title 5, United States Code.
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1 SEC. 207. EXEMPTION FROM FACA.

2 The Federal Advisory Committee Act (5 U.S.C. App.)

3 shall not apply to the Commission if all hearings of the

4 Commission are held open to the public.

5 SEC. 208. AUTHORIZATION OF APPROPRIATIONS.

6 There are authorized to be appropriated such sums

7 as are necessary to carry out this title.

8 SEC. 209. TERMINATION OF COMMISSION.

9 The Commission and the authority of the Commis10 sion under this title shall terminate on the date that is

11 3 years after the date on which the Commission holds the

12 initial meeting of the Commission.

13 TITLE III—INDIAN TRUST ASSET

14 MANAGEMENT DEMONSTRA15 TION PROJECT ACT

16 SEC. 301. SHORT TITLE.

17 This title may be cited as the ‘‘Indian Trust Asset

18 Management Demonstration Project Act of 2005’’.

19 SEC. 302. DEFINITIONS.

20 In this title:

21 (1) PROJECT.—The term ‘‘Project’’ means the

22 Indian trust asset management demonstration

23 project established under section 303(a).

24 (2) OTHER INDIAN TRIBE.—The term ‘‘other

25 Indian tribe’’ means an Indian tribe that—

26 (A) is federally recognized;
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29

•S 1439 IS

1 (B) is not a section 131 Indian tribe; and

2 (C) submits an application under section

3 303(c).

4 (3) SECRETARY.—The term ‘‘Secretary’’ means

5 the Secretary of the Interior.

6 (4) SECTION 131 INDIAN TRIBE.—The term

7 ‘‘section 131 Indian tribe’’ means any Indian tribe

8 that is participating in the demonstration project

9 under section 131 of title III, division E of the Con10 solidated Appropriations Act, 2005 (Public Law

11 108–447; 118 Stat. 2809).

12 SEC. 303. ESTABLISHMENT OF DEMONSTRATION PROJECT;

13 SELECTION OF PARTICIPATING INDIAN

14 TRIBES.

15 (a) IN GENERAL.—The Secretary shall establish and

16 carry out an Indian trust asset management demonstra17 tion project, in accordance with this title.

18 (b) SELECTION OF PARTICIPATING INDIAN

19 TRIBES.—

20 (1) SECTION 131 INDIAN TRIBES.—A section

21 131 Indian tribe shall be eligible to participate in

22 the Project if the section 131 Indian tribe submits

23 to the Secretary an application under subsection (c).

24 (2) OTHER TRIBES.—
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30

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1 (A) IN GENERAL.—Any other Indian tribe

2 shall be eligible to participate in the Project

3 if—

4 (i) the other Indian tribe submits to

5 the Secretary an application under sub6 section (c); and

7 (ii) the Secretary approves the appli8 cation of the other Indian tribe.

9 (B) LIMITATION.—

10 (i) 30 OR FEWER APPLICANTS.—If 30

11 or fewer other Indian tribes submit appli12 cations under subsection (c), each of the

13 other Indian tribes shall be eligible to par14 ticipate in the Project.

15 (ii) MORE THAN 30 APPLICANTS.—

16 (I) IN GENERAL.—If more than

17 30 other Indian tribes submit applica18 tions under subsection (c), the Sec19 retary shall select 30 other Indian

20 tribes to participate in the Project.

21 (II) PREFERENCE.—In selecting

22 other Indian tribes under subclause

23 (I), the Secretary shall give preference

24 to other Indian tribes the applications
33

31

•S 1439 IS

1 of which were first received by the

2 Secretary.

3 (3) NOTICE.—

4 (A) IN GENERAL.—The Secretary shall

5 provide a written notice to each Indian tribe se6 lected to participate in the Project.

7 (B) CONTENTS.—A notice under subpara8 graph (A) shall include—

9 (i) a statement that the application of

10 the Indian tribe has been approved by the

11 Secretary; and

12 (ii) a requirement that the Indian

13 tribe shall submit to the Secretary a pro14 posed Indian trust asset management plan

15 in accordance with section 304.

16 (c) APPLICATION.—

17 (1) IN GENERAL.—To be eligible to participate

18 in the Project, an Indian tribe shall submit to the

19 Secretary a written application in accordance with

20 paragraph (2).

21 (2) REQUIREMENTS.—The Secretary shall take

22 into consideration an application under this sub23 section only if the application—

24 (A) includes a copy of a resolution or other

25 appropriate action by the governing body of the
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32

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1 Indian tribe, as determined by the Secretary, in

2 support of or authorizing the application;

3 (B) is received by the Secretary by the

4 date that is 180 days after the date of enact5 ment of this Act; and

6 (C) states that the Indian tribe is request7 ing to participate in the Project.

8 (d) DURATION.—The Project shall remain in effect

9 for a period of 8 years after the date of enactment of this

10 Act.

11 SEC. 304. INDIAN TRUST ASSET MANAGEMENT PLAN.

12 (a) PROPOSED PLAN.—

13 (1) SUBMISSION.—

14 (A) IN GENERAL.—Not later than 120

15 days after the date on which an Indian tribe re16 ceives a notice from the Secretary under section

17 303(b)(3), the Indian tribe shall submit to the

18 Secretary a proposed Indian trust asset man19 agement plan in accordance with paragraph (2).

20 (B) TIME LIMITATIONS.—

21 (i) IN GENERAL.—Except as provided

22 in clause (ii), any Indian tribe that fails to

23 submit the Indian trust asset management

24 plan of the Indian tribe by the date speci-
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33

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1 fied in subparagraph (A) shall no longer be

2 eligible to participate in the Project.

3 (ii) EXTENSION.—The Secretary shall

4 grant an extension of not more than 60

5 days to an Indian tribe if the Indian tribe

6 submits a written request for such an ex7 tension before the date described in sub8 paragraph (A).

9 (2) CONTENTS.—A proposed Indian trust asset

10 management plan shall include provisions that—

11 (A) identify the trust assets that will be

12 subject to the plan, including financial and non13 financial trust assets;

14 (B) establish trust asset management ob15 jectives and priorities for Indian trust assets

16 that are located within the reservation, or oth17 erwise subject to the jurisdiction, of the Indian

18 tribe;

19 (C) allocate trust asset management fund20 ing that is available for the Indian trust assets

21 subject to the plan in order to meet the trust

22 asset management objectives and priorities;

23 (D) if the Indian tribe has contracted or

24 compacted functions or activities under the In25 dian Self-Determination and Education Assist-
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34

•S 1439 IS

1 ance Act (25 U.S.C. 450 et seq.) relating to the

2 management of trust assets—

3 (i) identify the functions or activities

4 that are being performed by the Indian

5 tribe under the contracts or compacts; and

6 (ii) describe the proposed manage7 ment systems, practices, and procedures

8 that the Indian tribe will follow; and

9 (E) establish procedures for nonbinding

10 mediation or resolution of any dispute between

11 the Indian tribe and the United States relating

12 to the trust asset management plan.

13 (3) AUTHORITY OF INDIAN TRIBES TO DE14 VELOP SYSTEMS, PRACTICES, AND PROCEDURES.—

15 For purposes of preparing and carrying out a man16 agement plan under this section, an Indian tribe

17 that has compacted or contracted activities or func18 tions under the Indian Self-Determination and Edu19 cation Assistance Act (25 U.S.C. 450 et seq.), for

20 purposes of carrying out the activities or functions,

21 may develop and carry out trust asset management

22 systems, practices, and procedures that differ from

23 any such systems, practices, and procedures used by

24 the Secretary in managing the trust assets if the

25 systems, practices, and procedures of the Indian
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35

•S 1439 IS

1 tribe meet the requirements of the laws, standards,

2 and responsibilities described in subsection (c).

3 (4) TECHNICAL ASSISTANCE AND INFORMA4 TION.—The Secretary shall provide to an Indian

5 tribe any technical assistance and information, in6 cluding budgetary information, that the Indian tribe

7 determines to be necessary for preparation of a pro8 posed plan on receipt of a written request from the

9 Indian tribe.

10 (b) APPROVAL AND DISAPPROVAL OF PROPOSED

11 PLANS.—

12 (1) APPROVAL.—

13 (A) IN GENERAL.—Not later than 120

14 days after the date on which an Indian tribe

15 submits a proposed Indian trust asset manage16 ment plan under subsection (a), Secretary shall

17 approve or disapprove the proposed plan.

18 (B) REQUIREMENTS FOR DISAPPROVAL.—

19 The Secretary shall approve a proposed plan

20 unless the Secretary determines that—

21 (i) the proposed plan fails to address

22 a requirement under subsection (a)(2);

23 (ii) the proposed plan includes 1 or

24 more provisions that are inconsistent with

25 subsection (c); or
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36

•S 1439 IS

1 (iii) the cost of implementing the pro2 posed plan exceeds the amount of funding

3 available for the management of trust as4 sets that would be subject to the proposed

5 plan.

6 (2) ACTION ON DISAPPROVAL.—

7 (A) NOTICE.—If the Secretary disapproves

8 a proposed plan under paragraph (1)(B), the

9 Secretary shall provide to the Indian tribe a

10 written notice of the disapproval, including any

11 reason why the proposed plan was disapproved.

12 (B) ACTION BY TRIBES.—An Indian tribe

13 the proposed plan of which is disapproved

14 under paragraph (1)(B) may resubmit an

15 amended proposed plan not later than 90 days

16 after the date on which the Indian tribe receives

17 the notice under subparagraph (A).

18 (3) FAILURE TO APPROVE OR DISAPPROVE.—If

19 the Secretary fails to approve or disapprove a pro20 posed plan in accordance with paragraph (1), the

21 plan shall be considered to be disapproved under

22 clauses (i) and (ii) of paragraph (1)(B).

23 (4) JUDICIAL REVIEW.—An Indian tribe may

24 seek judicial review of the determination of the Sec25 retary in accordance with subchapter II of chapter
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37

•S 1439 IS

1 5, and chapter 7, of title 5, United States Code

2 (commonly known as the ‘‘Administrative Procedure

3 Act’’) if—

4 (A) the Secretary disapproves the proposed

5 plan of the Indian tribe under paragraph (1) or

6 (3); and

7 (B) the Indian tribe has exhausted any

8 other administrative remedy available to the In9 dian tribe.

10 (c) APPLICABLE LAWS; STANDARDS; TRUST RE11 SPONSIBILITY.—

12 (1) APPLICABLE LAWS.—An Indian trust asset

13 management plan, and any activity carried out

14 under the plan, shall not be approved unless the pro15 posed plan is consistent with—

16 (A) all Federal treaties, statutes, regula17 tions, Executive orders, and court decisions that

18 are applicable to the trust assets, or the man19 agement of the trust assets, identified in the

20 plan; and

21 (B) all tribal laws that are applicable to

22 the trust assets, or the management of trust as23 sets, identified in the plan, except to the extent

24 that the laws are inconsistent with the treaties,
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38

•S 1439 IS

1 statutes, regulations, Executive orders, and

2 court decisions referred to in subparagraph (A).

3 (2) STANDARDS.—Subject to the laws referred

4 to in paragraph (1)(A), an Indian trust asset man5 agement plan shall not be approved unless the Sec6 retary determines that the plan will—

7 (A) protect trust assets from loss, waste,

8 and unlawful alienation;

9 (B) promote the interests of the beneficial

10 owner of the trust asset;

11 (C) conform, to the maximum extent prac12 ticable, to the preferred use of the trust asset

13 by the beneficial owner, unless the use is incon14 sistent with a treaty, statute, regulation, Execu15 tive order, or court decision referred to in para16 graph (1)(A);

17 (D) protect any applicable treaty-based

18 fishing, hunting and gathering, and similar

19 rights relating to the use, access, or enjoyment

20 of a trust asset; and

21 (E) require that any activity carried out

22 under the plan be carried out in good faith and

23 with loyalty to the beneficial owner of the trust

24 asset.
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1 (3) TRUST RESPONSIBILITY.—An Indian trust

2 asset management plan shall not be approved unless

3 the Secretary determines that the plan is consistent

4 with the trust responsibility of the United States to

5 the Indian tribe and individual Indians.

6 (d) TERMINATION OF PLAN.—

7 (1) IN GENERAL.—An Indian tribe may termi8 nate an Indian trust asset management plan on any

9 date after the date on which a proposed Indian trust

10 asset management plan is approved by providing to

11 the Secretary—

12 (A) a notice of the intent of the Indian

13 tribe to terminate the plan; and

14 (B) a resolution of the governing body of

15 the Indian tribe authorizing the termination of

16 the plan.

17 (2) EFFECTIVE DATE.—A termination of an In18 dian trust asset management plan under paragraph

19 (1) takes effect on October 1 of the first fiscal year

20 following the date on which a notice is provided to

21 the Secretary under paragraph (1)(A).

22 SEC. 305. EFFECT OF TITLE.

23 (a) LIABILITY.—Nothing in this title, or a trust asset

24 management plan approved under section 304, shall inde25 pendently diminish, increase, create, or otherwise affect
42

40

•S 1439 IS

1 the liability of the United States or an Indian tribe partici2 pating in the Project for any loss resulting from the man3 agement of an Indian trust asset under an Indian trust

4 asset management plan.

5 (b) EFFECT ON OTHER LAWS.—Nothing in this title

6 amends or otherwise affects the application of any treaty,

7 statute, regulation, Executive order, or court decision that

8 is applicable to Indian trust assets or the management or

9 administration of Indian trust assets, including the Indian

10 Self-Determination and Education Assistance Act (25

11 U.S.C. 450 et seq.).

12 (c) TRUST RESPONSIBILITY.—Nothing in this title

13 diminishes or otherwise affects the trust responsibility of

14 the United States to Indian tribes and individual Indians.

15 TITLE IV—FRACTIONAL INTER16 EST PURCHASE AND CON17 SOLIDATION PROGRAM

18 SEC. 401. FRACTIONAL INTEREST PROGRAM.

19 Section 213 of the Indian Land Consolidation Act

20 (25 U.S.C. 2212) is amended—

21 (1) by redesignating subsection (d) as sub22 section (h); and

23 (2) by inserting after subsection (c) the follow24 ing:
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•S 1439 IS

1 ‘‘(d) PURCHASE OF INTERESTS IN FRACTIONATED

2 INDIAN LAND.—

3 ‘‘(1) INCENTIVES.—In acquiring an interest

4 under this section in any parcel of land that includes

5 undivided trust or restricted interests owned by not

6 less than 20 separate individuals, as determined by

7 the Secretary, the Secretary may include in the of8 fered purchase price for the interest, in addition to

9 fair market value, an amount not less than $100

10 and not to exceed $350, as an incentive for the

11 owner to sell the interest to the Secretary.

12 ‘‘(2) SALE OF ALL TRUST OR RESTRICTED IN13 TERESTS.—If an individual agrees to sell to the Sec14 retary all trust or restricted interests owned by the

15 individual, the Secretary may include in the offered

16 purchase price, in addition to fair market value and

17 the incentive described in paragraph (1), an amount

18 not to exceed $2,000, as the Secretary determines to

19 be appropriate, taking into consideration the avoided

20 costs to the United States of probating the estate of

21 the individual or an heir of the individual.

22 ‘‘(e) CERTAIN PARCELS OF HIGHLY FRACTIONATED

23 INDIAN LAND.—

24 ‘‘(1) DEFINITION OF OFFEREE.—In this sub25 section, the term ‘offeree’ does not include the In-
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42

•S 1439 IS

1 dian tribe that has jurisdiction over a parcel of land

2 for which an offer is made.

3 ‘‘(2) OFFER TO PURCHASE.—

4 ‘‘(A) IN GENERAL.—If the Secretary deter5 mines that a tract of land consists of not less

6 than 200 separate undivided trust or restricted

7 interests, the Secretary may offer to purchase

8 the interests in the tract, in accordance with

9 this subsection, for an amount equal to the sum

10 of—

11 ‘‘(i) the fair market value of the inter12 ests; and

13 ‘‘(ii) an additional amount, to be de14 termined by the Secretary, not less than

15 triple the fair market value of the interest.

16 ‘‘(B) REQUIREMENT.—The Secretary shall

17 make an offer under subparagraph (A) not

18 later than 3 days before the date on which the

19 Secretary mails a notice of the offer to the

20 offeree under paragraph (3).

21 ‘‘(3) NOTICE OF OFFER.—

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

23 provide to an offeree, by certified mail to the

24 last known address of the offeree, a notice of
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43

•S 1439 IS

1 any offer to purchase land under this sub2 section.

3 ‘‘(B) INCLUSIONS.—A notice under sub4 paragraph (A) shall include in plain language,

5 as determined by the Secretary—

6 ‘‘(i) the date on which the offer was

7 made;

8 ‘‘(ii) the name of the offeree;

9 ‘‘(iii) the location of the tract of land

10 containing the interest that is the subject

11 of the offer;

12 ‘‘(iv) the size of the interest of the

13 offeree, expressed in terms of a fraction or

14 a percentage of the tract of land described

15 in clause (iii);

16 ‘‘(v) the fair market value of the tract

17 of land described in clause (iii);

18 ‘‘(vi) the fair market value of the in19 terest of the offeree;

20 ‘‘(vii) the amount offered for the in21 terest in addition to fair market value

22 under paragraph (2)(A)(ii);

23 ‘‘(viii) a statement that the offeree

24 shall be considered to have accepted the

25 offer for the amount stated in the notice
46

44

•S 1439 IS

1 unless a notice of rejection form is depos2 ited in the United States mail not later

3 than 90 days after the date on which the

4 offer is received; and

5 ‘‘(ix) a self-addressed, postage pre6 paid notice of rejection form.

7 ‘‘(4) TREATMENT OF OFFER.—

8 ‘‘(A) IN GENERAL.—An offer made under

9 this subsection shall be considered to be accept10 ed by the offeree if—

11 ‘‘(i) the certified mail receipt for the

12 offer is signed by the offeree; and

13 ‘‘(ii) the notice of rejection form de14 scribed in paragraph (3)(B)(ix) is not de15 posited in the United States mail by the

16 date that is 90 days after the date on

17 which the offer is received.

18 ‘‘(B) REJECTION.—An offer made under

19 this subsection shall be considered to be re20 jected by the offeree if—

21 ‘‘(i) the notice of rejection form de22 scribed in paragraph (3)(B)(ix) is depos23 ited in the United States mail by the date

24 that is 90 days after the date on which the

25 offer is received; or
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•S 1439 IS

1 ‘‘(ii) the certified mail receipt for the

2 offer is returned to the Secretary unsigned

3 by the offeree.

4 ‘‘(5) WITHDRAWAL OF ACCEPTANCE; NOTICE.—

5 ‘‘(A) WITHDRAWAL OF ACCEPTANCE.—A

6 person that is considered to have accepted an

7 offer under paragraph (4)(A) may withdraw the

8 acceptance by depositing in the United States

9 mail a notice of withdrawal of acceptance form

10 by the date that is 30 days after the date of re11 ceipt of the notice under subparagraph (B).

12 ‘‘(B) NOTICE.—The Secretary shall pro13 vide to any person that is considered to have

14 accepted an offer under paragraph (4)(A), by

15 certified mail, restricted delivery, to the last

16 known address of the person, a preaddressed,

17 postage prepaid withdrawal of acceptance form

18 and a notice stating that—

19 ‘‘(i) the offer made to the person is

20 considered to be accepted; and

21 ‘‘(ii) the person has the right to with22 draw the acceptance by depositing in the

23 United States mail the notice of with24 drawal of acceptance form by the date that
48

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•S 1439 IS

1 is 30 days after the date on which the no2 tice was delivered to the person.

3 ‘‘(6) NOTICE OF ACCEPTANCE AND RIGHT TO

4 APPEAL.—The Secretary shall provide to any person

5 that has been served with a notice under paragraph

6 (5)(B) and fails to withdraw the acceptance of the

7 offer in accordance with paragraph (5)(A), by first

8 class mail to the last known address of the person,

9 a notice stating that—

10 ‘‘(A) the offer made to the person is con11 sidered to be accepted and not timely with12 drawn; and

13 ‘‘(B) after exhausting all administrative

14 remedies, the person may appeal any deter15 mination of the Secretary in accordance with

16 paragraph (7).

17 ‘‘(7) JUDICIAL REVIEW.—A person described in

18 paragraph (6) may appeal any determination of the

19 Secretary with respect to—

20 ‘‘(A) the number of owners of undivided

21 interests in a tract of land required under para22 graph (2);

23 ‘‘(B) the fair market value of a tract of

24 land or interest in land;
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47

•S 1439 IS

1 ‘‘(C) the date on which a notice of rejec2 tion form was deposited in the United States

3 mail under paragraph (4)(B)(i); or

4 ‘‘(D) the date on which a notice of with5 drawal of acceptance form was deposited in the

6 United States mail under paragraph (5)(A).

7 ‘‘(f) OFFER TO SETTLE CLAIMS AGAINST THE

8 UNITED STATES.—

9 ‘‘(1) IN GENERAL.—The Secretary may make

10 an offer to any individual owner (not including an

11 Indian tribe) of a trust or restricted interest in a

12 tract of land to settle any claim that the owner may

13 have against the United States relating to the spe14 cific tract of land of which the interest is a part (not

15 including a claim for an accounting described in title

16 I of the Indian Trust Reform Act of 2005).

17 ‘‘(2) REQUIREMENTS.—An offer to settle claims

18 under this subsection shall—

19 ‘‘(A) be in writing;

20 ‘‘(B) be delivered to an individual owner by

21 the Secretary in person or through first class

22 mail; and

23 ‘‘(C) include—

24 ‘‘(i) the name of the individual owner;
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•S 1439 IS

1 ‘‘(ii) a description of the tract of land

2 to which the offer relates;

3 ‘‘(iii) the amount offered to settle a

4 claim of the individual owner;

5 ‘‘(iv) the manner and date by which

6 the individual owner shall accept the offer;

7 ‘‘(v) a statement that the individual

8 owner is under no obligation to accept the

9 offer;

10 ‘‘(vi) a statement that the individual

11 owner has the right to consult an attorney

12 or other advisor before accepting the offer;

13 ‘‘(vii) a statement that acceptance of

14 the offer by the individual owner will result

15 in a full and final settlement of all claims,

16 known and unknown, of the individual

17 owner (including the heirs and assigns of

18 the individual owner) against the United

19 States relating to the tract of land identi20 fied in the offer; and

21 ‘‘(viii) a statement that the settlement

22 proposed by the offer does not cover any

23 claim for an accounting described in title I

24 of the Indian Trust Reform Act of 2005.
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•S 1439 IS

1 ‘‘(3) ACCEPTANCE.—No acceptance of an offer

2 under this subsection shall be valid or binding on the

3 individual owner unless the acceptance—

4 ‘‘(A) is in writing;

5 ‘‘(B) is signed by the individual owner;

6 ‘‘(C) is notarized; and

7 ‘‘(D) is attached to a copy of, or contains

8 all material terms of, the offer to which the ac9 ceptance corresponds.

10 ‘‘(4) LIMITATION.—No offer to purchase an in11 terest under this section or any other provision of

12 law shall be conditioned on the acceptance of an

13 offer to settle a claim under this subsection.

14 ‘‘(5) OTHER LAWS.—The authority of the Sec15 retary to settle claims under this subsection shall be

16 in addition to, and not in lieu of, the authority of

17 the Secretary to settle claims under any other provi18 sion of Federal law.

19 ‘‘(g) BORROWING FROM TREASURY.—

20 ‘‘(1) ISSUANCE OF OBLIGATIONS.—

21 ‘‘(A) IN GENERAL.—To the extent ap22 proved in annual appropriations Acts, the Sec23 retary may issue to the Secretary of the Treas24 ury obligations in such amounts as the Sec25 retary determines to be necessary to acquire in-
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•S 1439 IS

1 terests under this Act, subject to approval of

2 the Secretary of the Treasury, and bearing in3 terest at a rate to be determined by the Sec4 retary of the Treasury, taking into consider5 ation current market yields on outstanding

6 marketable obligations of the United States of

7 comparable maturities to the obligations.

8 ‘‘(B) LIMITATION.—The aggregate amount

9 of obligations under subparagraph (A) out10 standing at any time shall not exceed

11 $ø¿.

12 ‘‘(2) FORMS AND DENOMINATIONS.—The obli13 gations issued under paragraph (1) shall be in such

14 forms and denominations, and subject to such other

15 terms and conditions, as the Secretary of the Treas16 ury may prescribe.

17 ‘‘(3) REPAYMENT.—

18 ‘‘(A) IN GENERAL.—Revenues derived

19 from land restored to the Tribe under this Act

20 shall be used by the Secretary to pay the prin21 cipal and interest on the obligations issued

22 under paragraph (1).

23 ‘‘(B) ASSURANCE OF REPAYMENT.—The

24 Secretary shall ensure, to the maximum extent

25 possible, that the revenues described in sub-
53

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•S 1439 IS

1 paragraph (A) provide reasonable assurance of

2 repayment of the obligations issued under para3 graph (1).

4 ‘‘(4) AUTHORIZATION OF APPROPRIATIONS.—

5 There are authorized to be appropriated to the Sec6 retary for each fiscal year beginning after the date

7 of enactment of this subsection such sums as are

8 necessary to cover any difference between—

9 ‘‘(A) the total amount of repayments of

10 principal and interest on obligations issued to

11 the Secretary of the Treasury under paragraph

12 (1) during the previous fiscal year; and

13 ‘‘(B) the total amount of repayments de14 scribed in subparagraph (A) that were contrac15 tually required to be made to the Secretary of

16 the Treasury during that fiscal year.

17 ‘‘(h) RECEIPT OF PAYMENTS HAVE NO IMPACT ON

18 BENEFITS UNDER OTHER FEDERAL PROGRAMS.—The

19 receipt of a payment by an offeree under this title shall

20 not be—

21 ‘‘(1) subject to Federal or State income tax; or

22 ‘‘(2) treated as benefits or otherwise taken into

23 account in determining the eligibility of the offeree

24 for, or the amount of benefits under, any other Fed25 eral program, including the social security program,
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•S 1439 IS

1 the medicare program, the medicaid program, the

2 State children’s health insurance program, the food

3 stamp program, or the Temporary Assistance for

4 Needy Families program.’’.

5 TITLE V—RESTRUCTURING BU6 REAU OF INDIAN AFFAIRS

7 AND OFFICE OF SPECIAL

8 TRUSTEE

9 SEC. 501. PURPOSE.

10 The purpose of this title is to ensure a more effective

11 and accountable administration of duties of the Secretary

12 of the Interior with respect to providing services and pro13 grams to Indians and Indian tribes, including the manage14 ment of Indian trust resources.

15 SEC. 502. DEFINITIONS.

16 In this title:

17 (1) BUREAU.—The term ‘‘Bureau’’ means the

18 Bureau of Indian Affairs.

19 (2) OFFICE.—The term ‘‘Office’’ means the Of20 fice of Trust Reform Implementation and Oversight

21 referred to in section 503(c).

22 (3) SECRETARY.—The term ‘‘Secretary’’ means

23 the Secretary of the Interior.

24 (4) UNDER SECRETARY.—The term ‘‘Under

25 Secretary’’ means the individual appointed to the po-
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•S 1439 IS

1 sition of Under Secretary for Indian Affairs, estab2 lished by section 503(a).

3 SEC. 503. UNDER SECRETARY FOR INDIAN AFFAIRS.

4 (a) ESTABLISHMENT OF POSITION.—There is estab5 lished in the Department of the Interior the position of

6 Under Secretary for Indian Affairs, who shall report di7 rectly to the Secretary.

8 (b) APPOINTMENT.—

9 (1) IN GENERAL.—Except as provided in para10 graph (2), the Under Secretary shall be appointed

11 by the President, by and with the advice and consent

12 of the Senate.

13 (2) EXCEPTION.—The officer serving as the As14 sistant Secretary for Indian Affairs on the date of

15 enactment of this Act may assume the position of

16 Under Secretary without appointment under para17 graph (1) if—

18 (A) the officer was appointed as Assistant

19 Secretary for Indian Affairs by the President by

20 and with the advice and consent of the Senate;

21 and

22 (B) not later than 180 days after the date

23 of enactment of this Act, the Secretary ap24 proves the assumption.
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54

•S 1439 IS

1 (c) DUTIES.—In addition to the duties transferred to

2 the Under Secretary under sections 504 and 505, the

3 Under Secretary, acting through an Office of Trust Re4 form Implementation and Oversight, shall—

5 (1) carry out any activity relating to trust fund

6 accounts and trust resource management of the Bu7 reau (except any activity carried out under the Of8 fice of the Special Trustee for American Indians be9 fore the date on which the Office of the Special

10 Trustee is abolished), in accordance with the Amer11 ican Indian Trust Fund Management Reform Act of

12 1994 (25 U.S.C. 4001 et seq.);

13 (2) develop and maintain an inventory of Indian

14 trust assets and resources;

15 (3) coordinate with the Special Trustee for

16 American Indians to ensure an orderly transition of

17 the functions of the Special Trustee under section

18 505;

19 (4) supervise any activity carried out by the De20 partment of the Interior, including—

21 (A) to the extent that the activities relate

22 to Indian affairs, activities carried out by—

23 (i) the Commissioner of Reclamation;

24 (ii) the Director of the Bureau of

25 Land Management; and
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•S 1439 IS

1 (iii) the Director of the Minerals Man2 agement Service; and

3 (B) intergovernmental relations between

4 the Bureau and Indian tribal governments;

5 (5) to the maximum extent practicable, coordi6 nate activities and policies of the Bureau with activi7 ties and policies of—

8 (A) the Bureau of Reclamation;

9 (B) the Bureau of Land Management; and

10 (C) the Minerals Management Service;

11 (6) provide for regular consultation with Indi12 ans and Indian tribes that own interests in trust re13 sources and trust fund accounts;

14 (7) manage and administer Indian trust re15 sources in accordance with any applicable Federal

16 law;

17 (8) take steps to protect the security of data re18 lating to individual Indian and Indian tribal trust

19 accounts; and

20 (9) take any other measure the Under Sec21 retary determines to be necessary with respect to In22 dian affairs.
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•S 1439 IS

1 SEC. 504. TRANSFER OF FUNCTIONS OF ASSISTANT SEC2 RETARY FOR INDIAN AFFAIRS.

3 (a) TRANSFER OF FUNCTIONS.—There is transferred

4 to the Under Secretary any function of the Assistant Sec5 retary for Indian Affairs that has not been carried out

6 by the Assistant Secretary as of the date of enactment

7 of this Act.

8 (b) DETERMINATIONS OF CERTAIN FUNCTIONS BY

9 THE OFFICE OF MANAGEMENT AND BUDGET.—If nec10 essary, the Office of Management and Budget shall make

11 any determination relating to the functions transferred

12 under subsection (a).

13 (c) PERSONNEL PROVISIONS.—

14 (1) APPOINTMENTS.—The Under Secretary

15 may appoint and fix the compensation of such offi16 cers and employees as the Under Secretary deter17 mines to be necessary to carry out any function

18 transferred under this section.

19 (2) REQUIREMENTS.—Except as otherwise pro20 vided by law—

21 (A) an officer or employee described in

22 paragraph (1) shall be appointed in accordance

23 with the civil service laws; and

24 (B) the compensation of the officer or em25 ployee shall be fixed in accordance with title 5,

26 United States Code.
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57

•S 1439 IS

1 (d) DELEGATION AND ASSIGNMENT.—

2 (1) IN GENERAL.—Except as otherwise ex3 pressly prohibited by law or otherwise provided by

4 this section, the Under Secretary may—

5 (A) delegate any of the functions trans6 ferred to the Under Secretary by this section

7 and any function transferred or granted to the

8 Under Secretary after the date of enactment of

9 this Act to such officers and employees of the

10 Office as the Under Secretary may designate;

11 and

12 (B) authorize successive redelegations of

13 such functions as the Under Secretary deter14 mines to be necessary or appropriate.

15 (2) DELEGATION.—No delegation of functions

16 by the Under Secretary under this section shall re17 lieve the Under Secretary of responsibility for the

18 administration of the functions.

19 (e) REORGANIZATION.—The Under Secretary may al20 locate or reallocate any function transferred under this

21 section among the officers of the Office, and establish,

22 consolidate, alter, or discontinue such organizational enti23 ties in the Office, as the Under Secretary determines to

24 be necessary or appropriate.
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•S 1439 IS

1 (f) RULES.—The Under Secretary may prescribe, in

2 accordance with the provisions of chapters 5 and 6 of title

3 5, United States Code, such rules and regulations as the

4 Under Secretary determines to be necessary or appro5 priate to administer and manage the functions of the Of6 fice.

7 (g) TRANSFER AND ALLOCATIONS OF APPROPRIA8 TIONS AND PERSONNEL.—

9 (1) IN GENERAL.—Except as otherwise pro10 vided in this section, the personnel employed in con11 nection with, and the assets, liabilities, contracts,

12 property, records, and unexpended balances of ap13 propriations, authorizations, allocations, and other

14 funds employed, used, held, arising from, available

15 to, or to be made available in connection with, the

16 functions transferred by this section, subject to sec17 tion 1531 of title 31, United States Code, shall be

18 transferred to the Office.

19 (2) UNEXPENDED FUNDS.—Unexpended funds

20 transferred pursuant to this subsection shall be used

21 only for the purposes for which the funds were origi22 nally authorized and appropriated.

23 (h) INCIDENTAL TRANSFERS.—

24 (1) IN GENERAL.—The Director of the Office of

25 Management and Budget, at any time the Director
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59

•S 1439 IS

1 may provide, may make such determinations as are

2 necessary with regard to the functions transferred

3 by this section, and make such additional incidental

4 dispositions of personnel, assets, liabilities, grants,

5 contracts, property, records, and unexpended bal6 ances of appropriations, authorizations, allocations,

7 and other funds held, used, arising from, available

8 to, or to be made available in connection with such

9 functions, as are necessary, to carry out this section.

10 (2) TERMINATION OF AFFAIRS.—The Director

11 of the Office of Management and Budget shall pro12 vide for the termination of the affairs of all entities

13 terminated by this section and for any further meas14 ures and dispositions as are necessary to effectuate

15 the purposes of this section.

16 (i) EFFECT ON PERSONNEL.—

17 (1) IN GENERAL.—Except as otherwise pro18 vided by this section, the transfer pursuant to this

19 section of full-time personnel (except special Govern20 ment employees) and part-time personnel holding

21 permanent positions shall not cause any such em22 ployee to be separated or reduced in grade or com23 pensation for a period of at least 1 year after the

24 date of transfer of the employee under this section.
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•S 1439 IS

1 (2) EXECUTIVE SCHEDULE POSITIONS.—Except

2 as otherwise provided in this section, any person

3 who, on the day preceding the date of enactment of

4 this Act, held a position compensated in accordance

5 with the Executive Schedule prescribed in chapter

6 53 of title 5, United States Code, and who, without

7 a break in service, is appointed to a position in the

8 Office having duties comparable to the duties per9 formed immediately preceding such appointment

10 shall continue to be compensated in the new position

11 at not less than the rate provided for the previous

12 position, for the duration of the service of the person

13 in the new position.

14 (3) TERMINATION OF CERTAIN POSITIONS.—

15 Positions whose incumbents are appointed by the

16 President, by and with the advice and consent of the

17 Senate, the functions of which are transferred by

18 this title, shall terminate on the date of enactment

19 of this Act.

20 (j) SEPARABILITY.—If a provision of this section or

21 the application of this section to any person or cir22 cumstance is held invalid, neither the remainder of this

23 section nor the application of the provision to other per24 sons or circumstances shall be affected.

25 (k) TRANSITION.—The Under Secretary may use—
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•S 1439 IS

1 (1) the services of the officers, employees, and

2 other personnel of the Assistant Secretary for Indian

3 Affairs relating to functions transferred to the Office

4 by this section; and

5 (2) funds appropriated to the functions for such

6 period of time as may reasonably be needed to facili7 tate the orderly implementation of this section.

8 (l) REFERENCES.—Any reference in a Federal law,

9 Executive order, rule, regulation, delegation of authority,

10 or document relating to the Assistant Secretary for Indian

11 Affairs, with respect to functions transferred under this

12 section, shall be deemed to be a reference to the Under

13 Secretary.

14 (m) RECOMMENDED LEGISLATION.—Not later than

15 180 days after the effective date of this title, the Under

16 Secretary, in consultation with the appropriate committees

17 of Congress and the Director of the Office of Management

18 and Budget, shall submit to Congress any recommenda19 tions relating to additional technical and conforming

20 amendments to Federal law to reflect the changes made

21 by this section.

22 (n) EFFECT OF SECTION.—

23 (1) CONTINUING EFFECT OF LEGAL DOCU24 MENTS.—Any legal document relating to a function

25 transferred by this section that is in effect on the
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62

•S 1439 IS

1 date of enactment of this Act shall continue in effect

2 in accordance with the terms of the document until

3 the document is modified or terminated by—

4 (A) the President;

5 (B) the Under Secretary;

6 (C) a court of competent jurisdiction; or

7 (D) operation of Federal or State law.

8 (2) PROCEEDINGS NOT AFFECTED.—This sec9 tion shall not affect any proceeding (including a no10 tice of proposed rulemaking, an administrative pro11 ceeding, and an application for a license, permit,

12 certificate, or financial assistance) relating to a

13 function transferred under this section that is pend14 ing before the Assistant Secretary on the date of en15 actment of this Act.

16 SEC. 505. OFFICE OF SPECIAL TRUSTEE FOR AMERICAN IN17 DIANS.

18 (a) TERMINATION.—Notwithstanding sections 302

19 and 303 of the American Indian Trust Fund Management

20 Reform Act of 1994 (25 U.S.C. 4042; 4043), the Office

21 of Special Trustee for American Indians shall terminate

22 on the effective date of this section.

23 (b) TRANSFER OF FUNCTIONS.—There is transferred

24 to the Under Secretary any function of the Special Trustee
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63

•S 1439 IS

1 for American Indians that has not been carried out by

2 the Special Trustee as of the effective date of this section.

3 (c) DETERMINATIONS OF CERTAIN FUNCTIONS BY

4 THE OFFICE OF MANAGEMENT AND BUDGET.—If nec5 essary, the Office of Management and Budget shall make

6 any determination relating to the functions transferred

7 under subsection (b).

8 (d) PERSONNEL PROVISIONS.—

9 (1) APPOINTMENTS.—The Under Secretary

10 may appoint and fix the compensation of such offi11 cers and employees as the Under Secretary deter12 mines to be necessary to carry out any function

13 transferred under this section.

14 (2) REQUIREMENTS.—Except as otherwise pro15 vided by law—

16 (A) any officer or employee described in

17 paragraph (1) shall be appointed in accordance

18 with the civil service laws; and

19 (B) the compensation of such an officer or

20 employee shall be fixed in accordance with title

21 5, United States Code.

22 (e) DELEGATION AND ASSIGNMENT.—

23 (1) IN GENERAL.—Except as otherwise ex24 pressly prohibited by law or otherwise provided by

25 this section, the Under Secretary may—
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64

•S 1439 IS

1 (A) delegate any of the functions trans2 ferred to the Under Secretary under this sec3 tion and any function transferred or granted to

4 the Under Secretary after the effective date of

5 this section to such officers and employees of

6 the Office as the Under Secretary may des7 ignate; and

8 (B) authorize successive redelegations of

9 the functions as are necessary or appropriate.

10 (2) DELEGATION.—No delegation of functions

11 by the Under Secretary under this section shall re12 lieve the Under Secretary of responsibility for the

13 administration of the functions.

14 (f) REORGANIZATION.—The Under Secretary may al15 locate or reallocate any function transferred under sub16 section (b) among the officers of the Office, and establish,

17 consolidate, alter, or discontinue such organizational enti18 ties in the Office as the Under Secretary determines to

19 be necessary or appropriate.

20 (g) RULES.—The Under Secretary may prescribe, in

21 accordance with the provisions of chapters 5 and 6 of title

22 5, United States Code, such rules and regulations as the

23 Under Secretary determines to be necessary or appro24 priate to administer and manage the functions of the Of25 fice.
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•S 1439 IS

1 (h) TRANSFER AND ALLOCATIONS OF APPROPRIA2 TIONS AND PERSONNEL.—

3 (1) IN GENERAL.—Except as otherwise pro4 vided in this section, the personnel employed in con5 nection with, and the assets, liabilities, contracts,

6 property, records, and unexpended balances of ap7 propriations, authorizations, allocations, and other

8 funds employed, used, held, arising from, available

9 to, or to be made available in connection with the

10 functions transferred by this section, subject to sec11 tion 1531 of title 31, United States Code, shall be

12 transferred to the Office.

13 (2) UNEXPENDED FUNDS.—Unexpended funds

14 transferred pursuant to this subsection shall be used

15 only for the purposes for which the funds were origi16 nally authorized and appropriated.

17 (i) INCIDENTAL TRANSFERS.—

18 (1) IN GENERAL.—The Director of the Office of

19 Management and Budget, at any time the Director

20 may provide, may make such determinations as are

21 necessary with regard to the functions transferred

22 by this section, and make such additional incidental

23 dispositions of personnel, assets, liabilities, grants,

24 contracts, property, records, and unexpended bal25 ances of appropriations, authorizations, allocations,
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66

•S 1439 IS

1 and other funds held, used, arising from, available

2 to, or to be made available in connection with such

3 functions, as are necessary, to carry out this section.

4 (2) TERMINATION OF AFFAIRS.—The Director

5 of the Office of Management and Budget shall pro6 vide for the termination of the affairs of all entities

7 terminated by this section and for any further meas8 ures and dispositions as are necessary to effectuate

9 the purposes of this section.

10 (j) EFFECT ON PERSONNEL.—

11 (1) IN GENERAL.—Except as otherwise pro12 vided by this section, the transfer pursuant to this

13 section of full-time personnel (except special Govern14 ment employees) and part-time personnel holding

15 permanent positions shall not cause any such em16 ployee to be separated or reduced in grade or com17 pensation for a period of at least 1 year after the

18 date of transfer of the employee under this section.

19 (2) EXECUTIVE SCHEDULE POSITIONS.—Except

20 as otherwise provided in this section, any person

21 who, on the day preceding the effective date of this

22 section, held a position compensated in accordance

23 with the Executive Schedule prescribed in chapter

24 53 of title 5, United States Code, and who, without

25 a break in service, is appointed to a position in the
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67

•S 1439 IS

1 Office having duties comparable to the duties per2 formed immediately preceding such appointment,

3 shall continue to be compensated in the new position

4 at not less than the rate provided for the previous

5 position, for the duration of the service of the person

6 in the new position.

7 (3) TERMINATION OF CERTAIN POSITIONS.—

8 Positions the incumbents of which are appointed by

9 the President, by and with the advice and consent

10 of the Senate, and the functions of which are trans11 ferred by this title, shall terminate on the effective

12 date of this section.

13 (k) SEPARABILITY.—If a provision of this section or

14 the application of this section to any person or cir15 cumstance is held invalid, neither the remainder of this

16 section nor the application of the provision to other per17 sons or circumstances shall be affected.

18 (l) TRANSITION.—The Under Secretary may use—

19 (1) the services of the officers, employees, and

20 other personnel of the Special Trustee relating to

21 functions transferred to the Office by this section;

22 and

23 (2) funds appropriated to those functions for

24 such period of time as may reasonably be needed to

25 facilitate the orderly implementation of this section.
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68

•S 1439 IS

1 (m) REFERENCES.—Any reference in a Federal law,

2 Executive order, rule, regulation, delegation of authority,

3 or document relating to the Special Trustee, with respect

4 to functions transferred under this section, shall be

5 deemed to be a reference to the Under Secretary.

6 (n) RECOMMENDED LEGISLATION.—Not later than

7 180 days after the effective date of this title, the Under

8 Secretary, in consultation with the appropriate committees

9 of Congress and the Director of the Office of Management

10 and Budget, shall submit to Congress any recommenda11 tions relating to additional technical and conforming

12 amendments to Federal law to reflect the changes made

13 by this section.

14 (o) EFFECT OF SECTION.—

15 (1) CONTINUING EFFECT OF LEGAL DOCU16 MENTS.—Any legal document relating to a function

17 transferred by this section that is in effect on the ef18 fective date of this section shall continue in effect in

19 accordance with the terms of the document until the

20 document is modified or terminated by—

21 (A) the President;

22 (B) the Under Secretary;

23 (C) a court of competent jurisdiction; or

24 (D) operation of Federal or State law.
71

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•S 1439 IS

1 (2) PROCEEDINGS NOT AFFECTED.—This sec2 tion shall not affect any proceeding (including a no3 tice of proposed rulemaking, an administrative pro4 ceeding, and an application for a license, permit,

5 certificate, or financial assistance) relating to a

6 function transferred under this section that is pend7 ing before the Special Trustee on the effective date

8 of this section.

9 (p) EFFECTIVE DATE.—This section shall take effect

10 on December 31, 2008.

11 SEC. 506. HIRING PREFERENCE.

12 In appointing or otherwise hiring any employee to the

13 Office, the Under Secretary shall give preference to Indi14 ans in accordance with section 12 of the Act of June 8,

15 1934 (25 U.S.C. 472).

16 SEC. 507. AUTHORIZATION OF APPROPRIATIONS.

17 There are authorized to be appropriated such sums

18 as are necessary to carry out this title.

19 TITLE VI—AUDIT OF INDIAN

20 TRUST FUNDS

21 SEC. 601. AUDITS AND REPORTS.

22 (a) FINANCIAL STATEMENTS AND INTERNAL CON23 TROL REPORT.—

24 (1) FINANCIAL STATEMENTS.—For each fiscal

25 year beginning after the enactment of this Act, the
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•S 1439 IS

1 Secretary of Interior shall prepare financial state2 ments for individual Indian, Indian tribal, and other

3 Indian trust accounts in accordance with generally

4 accepted accounting principles of the Federal Gov5 ernment.

6 (2) INTERNAL CONTROL REPORT.—Concur7 rently with the financial statements under by para8 graph (1), the Secretary shall prepare an internal

9 control report that—

10 (A) establishes the responsibility of the

11 Secretary for establishing and maintaining an

12 adequate internal control structure and proce13 dures for financial reporting under this Act;

14 and

15 (B) assesses the effectiveness of the inter16 nal control structure and procedures for finan17 cial reporting under subparagraph (A) during

18 the preceding fiscal year.

19 (b) INDEPENDENT EXTERNAL AUDITOR.—

20 (1) IN GENERAL.—The Comptroller General of

21 the United States shall enter into a contract with an

22 independent external auditor to conduct an audit

23 and prepare a report in accordance with this sub24 paragraph.
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•S 1439 IS

1 (2) AUDIT REPORT.—An independent external

2 auditor shall submit to the Committee on Indian Af3 fairs of the Senate, and make available to the public,

4 an audit of the financial statements under sub5 section (a)(1) in accordance with—

6 (A) generally accepted auditing standards

7 of the Federal Government; and

8 (B) the financial audit manual jointly

9 issued by the Government Accountability Office

10 and the Council on Integrity and Efficiency of

11 the President.

12 (3) ATTESTATION AND REPORT.—In conducting

13 the audit under paragraph (2), the independent ex14 ternal auditor shall attest to, and report on, the as15 sessment of internal controls made by the Secretary

16 under subsection (a)(2)(B).

17 (4) PAYMENT FOR AUDIT AND REPORT.—

18 (A) TRANSFER OF FUNDS.—On request of

19 the Comptroller General, the Secretary shall

20 transfer to the Government Accountability Of21 fice from funds made available for administra22 tive expenses of the Department of Interior the

23 amount requested by the Comptroller General

24 to pay for an annual audit and report.

25 (B) CREDIT TO ACCOUNT.—
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•S 1439 IS

1 (i) IN GENERAL.—The Controller

2 General shall credit the amount of any

3 funds transferred under subparagraph (A)

4 to the account established for salaries and

5 expenses of the Government Accountability

6 Office.

7 (ii) AVAILABILITY.—Any amount

8 credited under clause (i) shall be made

9 available on receipt, without fiscal year

10 limitation, to cover the full costs of the

11 audit and report.

12 SEC. 602. AUTHORIZATION OF APPROPRIATIONS.

13 There are authorized to be appropriated such sums

14 as are necessary to carry out this title.

Æ
75

The CHAIRMAN. I welcome our witnesses and look forward to

their testimony. Our first panel is James Cason, who is the associate deputy secretary at the Department of the Interior, and Ross

Swimmer, who is the special trustee for American Indians, on their

200th appearance before this committee. [Laughter.]

Mr. Cason, welcome. Do you want to go first?

Mr. CASON. Sure.

The CHAIRMAN. Thanks.

STATEMENT OF JAMES CASON, ASSOCIATE DEPUTY

SECRETARY, DEPARTMENT OF THE INTERIOR

Mr. CASON. Thanks, Mr. Chairman.

Thank you for the opportunity to come before this committee to

discuss titles II through VI of S. 1439, the Indian Trust Reform Act

of 2005. We appreciate that this committee continues to advance

legislation that attempts to provide a settlement of the Cobell v.

Norton lawsuit, but also intends to address other challenges in

managing the Indian trust.

As we have testified on several prior occasions, the department

supports the efforts of Congress, as the Indian trust settlor, to clarify Indian trust management duties, responsibilities and expectations. Since the passage of the American Indian Trust Fund Management Reform Act of 1994, Interior has made progress in trust

reform. Today, beneficiaries have direct access to staff that is

trained in fiduciary trust matters. New procedures are in place for

the management of account information and the collection and distribution of trust funds. These reforms have been implemented to

provide improved service to beneficiaries.

We appreciate that titles II through VI of S. 1439 focus on other

areas of trust management. However, we believe that it would take

considerable adjustment of these titles to facilitate material improvement in the management reform of the Indian trust.

If a restructuring of the Indian trust is desired, we would also

ask Congress to address some other crucial issues, including the

lack of a clear trust agreement to guide our responsibilities and Indian country expectations; appropriations that do not align with

program trust responsibilities; the lack of an operative cost-benefit

paradigm to guide decisionmaking; the challenges of addressing

Public Law 93–638 contracting and compacting goals; and the impediments associated with Indian preference hiring practices.

These issues have frustrated the department, Indian beneficiaries, administrators and Congress throughout the lifespan of

the trust. We encourage Congress to speak clearly in developing

such language and carefully consider the impacts it will have in allowing us to meet the expectations of our constituency.

The new structures and business practices being put in place at

the department have improved the management of the Indian trust

for future generations. We must be careful to pursue constructive

change and to address the structural problems that are impeding

Interior’s forward motion in trust reform.

We look forward to working with you on meaningful legislation

that addresses both the need to bring closure to this class action

litigation before us, and the need to address some of the fundamental challenges we face.
76

This concludes our statement. We would be happy to answer

questions.

Thank you.

[Prepared statement of Mr. Cason appears in appendix.]

The CHAIRMAN. Thank you.

Mr. Swimmer, welcome.

STATEMENT OF ROSS SWIMMER, SPECIAL TRUSTEE FOR

AMERICAN INDIANS, DEPARTMENT OF THE INTERIOR

Mr. SWIMMER. Thank you, Mr. Chairman.

I appreciate the opportunity to be here as well, and certainly second what Mr. Cason has said.

Just to bring to the committee’s attention a few of the things

that have happened and that are happening. As the committee

knows, a couple of years ago, actually 3 years ago, we started a

process called let’s study the trust and see what is going on with

it, and trying to come up with where we are today in the trust.

This was three years ago, and we did what was called the ‘‘as is’’

study. We went out to Indian country with tribes, with individuals,

with all of the players of the trust, and we put together the way

the trust was operated. From that, we created what we called the

‘‘to be’’ model, eventually becoming the fiduciary trust model.

If you were going to have a model of how the trust could operate,

if you wanted to continue it as is, this would be a way of doing

that. The model has been successful. It has been implemented. It

is being implemented. It has been implemented in some places

now. We have lease collection of funds, the trust funds accounting,

distribution of funds and tracking of title ownership, all being tied

together with conversion to the new software systems and business

practices throughout the Bureau of Indian Affairs and the Special

Trustee’s Office.

We have now beneficiary access to data and professional help

available to Indian beneficiaries for the first time ever in the trust

through the beneficiary call center and through the deployment of

fiduciary trust officers throughout Indian country.

We have included in the fiduciary trust model responsibility of

both Minerals Management Service and the Bureau of Land Management. The Bureau of Land Management is now participating by

having cadastral surveyors located in each of the 12 regional offices

of the Bureau of Indian Affairs to help accelerate the process of

doing surveys in Indian country and getting them correct.

The tribal demonstration project has tremendous value. It is an

extension of the self-determination and self-governance model that

is already in use. I think the department certainly encourages continued management of the trust resources by the tribes that own

those resources. The danger is, of course, that the Government’s

role changed from a trustee role to one of guarantor of tribes’s performance. I think we have to be very careful of that in structuring

how that kind of a situation would work.

If a beneficiary and the trustee basically become one and the

same, there is generally considered a merger of the trust and the

trust goes away. Well, that is not intended to happen here, of

course, but what the role of the Federal Government is going to be
77

subsequent to a tribe assuming full responsibility for the management of its trust assets needs to be addressed.

We have to answer the question of incompatible systems. We

have to answer the question of retrocession if the tribe decides they

don’t want to manage their trust assets. And we also have to know

how, in fact, the issues of conflicts of interest between tribal members and tribes themselves are going to be resolved. It is not unusual at all today, in fact it is more fact than not, that individual

beneficiaries own property on reservations where they are not

members of that particular reservation. In fact, today the average

beneficiary owns about 14 interests in land, oftentimes scattered

among 1 to 14 different reservations.

So there certainly is merit in looking at moving forward on the

trust self-governance concept, on self-determination, but I think we

need to talk about what the role of the Government becomes after

that happens. Certainly, there are a lot of options that should be

satisfactory, both to tribes and to the Government.

As far as the restructure, what I would suggest is that in the last

10 years, most of the reform that we have experienced today and

are experiencing has been the result of the work of the special

trustee in conjunction with the BIA in bringing new systems about;

in doing the cleanup of processes in the BIA; putting trust officers

out in the agencies; making sure that the records management programs is effective which is now, frankly, a state of the art records

program, and listening to the folks from NRA, the National Archives, that manages the storage for us, it is state of the art, and

better than any records management program in the United

States.

These are the kinds of things that the special trustee has

brought about.

The 1994 Act provides for a sunset of the Special Trustee’s Office. I think that is appropriate. The question is when, when we

finish with the complete conversion of systems work, the rest of the

regions in the Bureau of Indian Affairs that need to be converted

to the new systems, and we get the cleanup work done, and all of

the encoding done, and the probate matters caught up, and some

resolution to ILCA.

We need to start looking at perhaps a different paradigm to how

we manage the trust. The only thing I would suggest is that at that

time, it might be appropriate for the Secretary to look at the management structure again, in consultation with tribes and individual

beneficiaries. Determine what that should be and whether the special trustee goes away, gets merged into another structure within

Interior, may be quite different than what we would be looking at

today.

Those are my comments today, Mr. Chairman, Mr. Vice Chairman. I appreciate the opportunity to be here. I believe we submitted our official comments for the record.

[Prepared statement of Mr. Swimmer appears in appendix.]

The CHAIRMAN. Thank you very much. Both of your written

statements will be made a part of the record.

Senator Dorgan.
78

STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM

NORTH DAKOTA, VICE CHAIRMAN, COMMITTEE ON INDIAN

AFFAIRS

Senator DORGAN. Mr. Chairman, first let me apologize for the

delay. I was at a leadership meeting, and I appreciate the testimony. As always, Mr. Cason and Mr. Swimmer, thanks for your

work on these issues. I think both Senator McCain and I believe

that Congress has to find a way to resolve these issues. Going back

for many, many, many years, we have had in some cases a shameful treatment of what should have been a trust responsibility for

American Indians. We are now trying to find a way to respond to

that and resolve it in a manner that is both fair and equitable.

Mr. Chairman, I will defer and send some questions to the witnesses, but we have another panel, I understand, and I want to

hear the second panel.

Again, let me thank both of you. You have been to many of our

hearings and described what you are now doing to try to respond

this and resolve it. It certainly is our interest as well in trying to

get a resolution.

The CHAIRMAN. I thank you, Senator Dorgan.

You have expressed certain reservations about some of the, both

of you, on certain reservations or need for change, may be a better

description, about some of the titles of the bill. What I would like

from you, hopefully within days, are the specific language changes

you would like to see made, and then we will see if we can incorporate those changes, if there is not any great difference. We are

never going to pass this legislation unless we have agreement.

And if we settle on a number as far as the Cobell issue is concerned, unless we have implementing legislation of the other aspects of it, it ain’t going to work either. So I would ask both of you

to submit to us specific language changes you would like to see

made in the various titles of this bill. In that way, we will move

forward with the final drafting language, if that is agreeable, in

consultation with, of course, the witnesses on the next panel.

Okay? Can we do that?

Thanks very much, and thank you for your continued good work.

Mr. CASON. Thank you.

Mr. SWIMMER. Thank you.

The CHAIRMAN. Our next panel is Tex Hall, who is the chairman

of the Three Affiliated Tribes Business Council; Jim Gray, who is

the chairman of the Intertribal Monitoring Association; Clifford

Lyle Marshall, Sr., who is the chairman of the Hoopa Valley Tribal

Council; Austin Nunez, who is the chair of the San Xavier District

in Tucson, AZ; and Majel Russell, who is an attorney, Elk River

Law Office in Billings, MT.

Please come forward.

We will begin with our old friend, and again many time witness

before this committee, Tex Hall. Chairman Hall, welcome back.

STATEMENT OF TEX HALL, CHAIRMAN, THREE AFFILIATED

TRIBES BUSINESS COUNCIL

Mr. HALL. Thank you, Mr. Chairman.

Chairman McCain and Vice Chairman Dorgan, thank you for the

opportunity.
79

As everybody is aware, this is an issue that is 119 years old, 10

years of a lawsuit, and many, many countless hearings and many,

many meetings. It is my hope that in our testimony today that we

can come to some agreement on this issue of the Indian trust.

This is my third time testifying before the committee. As a

former NCAI president, I am here with one of my counterparts

here, Chief Jim Gray. We formed in 2005 a working group, a national working group, bringing together tribes and allotees and

accountholders. We went all over the country and held hearings for

those IIM accountholders to be heard because this trust is really

about the 500,00 allotees, the Indian individual money account

holders.

We did reach agreement on the 50 trust principles which we

have submitted and work with the staff on. Recently, we had a

meeting in Bismarck, ND at United Tribes College, and offered

some specific comments. I won’t get into the specifics, as we have

already put those forward, Mr. Chairman.

I just wanted to give some general overview, and then save my

time for the questions that would come later.

In the Great Plains, we comprise over 70 percent of the accounts,

so we are very familiar with this trust system, the Indian trust system. I am an account holder myself, so clearly understand what

happens in terms of the leasing, the grazing, of course, in our part

of the country, and the distribution of the checks, and the appraisal

of the trust assets, and the fair market value. I am very familiar

with that.

I just wanted to give one example, Mr. Chairman, of what this

means to an individual on a reservation somewhere. The lady that

I am just going to reference has passed on, but she was a diabetic.

This happened a couple of years ago when she needed to get her

IIM account. For many people, this is their 401(k) and this is their

403(b). Otherwise, they don’t have anything.

She was an elder and she had both legs amputated. All she

wanted was a used van that had a hydraulic lift so she could go

and play bingo. So Carol was asking the agency for her check, and

it was about the time that the District Court here in Washington,

DC put an injunction because of the computer system. They were

concerned about firewalls. So there was a freeze on all the distribution of checks.

So normally, the checks come in December or January, and the

checks finally came in May, but she passed away in April. So her

children told me that there was approximately $1,500, and that is

really what she wanted.

So for many members, I use her as an example, for many members that fit into that category, they are waiting for the settlement

of this trust system. They are waiting for those types of a standard

so that way there is timeliness, so when their land is being leased

out, that on such and such a date they get a check based on the

fair market. And all she had was $1,500 and that is what she

wanted.

So we are very concerned about the standards and the timeliness

to make sure that this does not happen again, so that the trust

does not continue to be broken. So to this day, there still needs to
80

be a fix of the trust, let alone the settlement that, of course, Indian

Country can agree with.

And then on the Title III, on the demonstration project, we fully

support the demonstration project in that section. We are just concerned that it needs to have full funding, otherwise there will be

no incentive for tribes to step into the Government’s shoes and actually use the demonstration project where they can manage the

assets themselves.

And then, on the fractionation section, title IV, we are hopeful

that we can get where, if there is an individual family or individuals that have an opportunity to purchase these fractionated lands.

Otherwise, you have a competing interest if the tribe and the individual family has land holdings and the tribe buys it out.

Of course, in our tribal constitutions, an individual cannot buy

tribal land under our constitution. So this is a very important piece

for keeping those family farmers and those family ranchers out on

those school bus routes. So we are hopeful that our recommendation can be incorporated into that section.

And then in regards to just the standards, and I will conclude

with that, Mr. Chairman, is that I cannot emphasize enough the

need to have the specific standards and the specific duties of loyalty and so on and so forth, so the trust responsibility is maintained. Because if we don’t have that, we are going to come back

to this issue again and another 10 years from now we will be going

over this long saga issue again.

In closing, we have submitted our comments, Mr. Chairman and

Mr. Vice Chairman, and we are hopeful that they can be incorporated. We represent the national work group, working with all

of the tribes in all the regions, and we are down to the end of the

hearing process, and we are very hopeful, and appreciate the comments you made about the settlement figure and the reform have

to go hand in hand. I agree with that 100 percent, that we can’t

have one without the other.

I look forward to working with the committee on the markup and

getting this passed in the entire Senate.

Thank you, Mr. Chairman.

[Prepared statement of Mr. Hall appears in appendix.]

The CHAIRMAN. Thank you very much.

Mr. Gray, welcome.

STATEMENT OF JIM GRAY, CHAIRMAN, INTERTRIBAL

MONITORING ASSOCIATION

Mr. GRAY. Yes; Chairman McCain, Vice Chairman Dorgan, members of the committee, thank you for the invitation to be here today

to represent the views of the Intertribal Monitoring Association on

this important legislation.

While I want to go over briefly some of my comments for the

record, Senators, I want to reserve a portion of my time for some

discussion on title I. I would just like to say a few words about

that.

S. 1439 is an important product that reflects many years of our

work to achieve meaningful trust reform. We thank the Senators

for introducing this bill and for working with Indian country to

make sure it meets tribal trust priorities and objectives.
81

We also appreciate working with the committee staff. We remain

committed to developing a strong proposal that can be broadly supported by Indian country.

ITMA strongly supports title IV, which addresses one of the most

critical and plaguing problems in Indian country, of fractionation

of Indian lands. This problem is a direct consequence of the United

States’s destructive policy initiated in the 1890’s to break apart Indian reservations as a way to both assimilate and to gain ownership and control over valuable tribal lands and resources.

This morally corrupt and unjust policy inflicted on American Indians has created a devastating legacy that now poses many modern day problems and challenges, including the Federal Government’s inability to fully and properly manage and account for

fractionated interests.

Fortunately, title IV would establish meaningful incentives for

purchasing and streamlining the process for consolidating fractional interests. We are fully supportive of this approach and make

several recommendations. First, all land a tribe acquires within the

boundaries of its reservation should be taken immediately into

trust.

Second, the automatic acceptance provision for an offer for the

sale of lands with more than 200 owners should be removed. Third,

the application of Federal liens on pre-purchased lands should be

removed because the cost and administrative burdens of these liens

significantly outweigh their value. Instead, the Secretary should be

authorized to make land acquisition grants, given the compelling

congressional policies and goals of eliminating further Indian land

fractionation and consolidating tribal land bases.

ITMA also strongly supports title V, which would consolidate all

Indian Affairs functions under a single line of authority in the department. This is a fundamental component of trust reform we

have advocated for and championed as a priority for many years.

We also believe the creation of an Office of Under Secretary will

elevate all Indian Affairs issues in the department and hopefully

within the Federal Government generally.

Our written statement includes a comprehensive listing of recommendations to strengthen title V, which I will briefly summarize.

First, the Under Secretary’s role as a tribal advocate, both within

the department and when dealing with other departments and

agencies should be clarified and strengthened. Second, the Under

Secretary’s authority to improve the organizational responsiveness

to Indian Affairs and to bring coherence to the department’s approach to developing and implementing strong Indian policy should

be strengthened.

The Under Secretary must be empowered to address budgetary

matters to ensure maximum support for Indian programs. This is

an absolutely critical piece of the restructuring reform. He should

be able to retain counsel, and to defend and uphold the trust duties

and obligations owed to any beneficiaries.

With regard to title VI, ITMA has long advocated for auditing reform as an implementation of trust reform. We strongly support

Title VI, with a couple of recommendations more fully outlined in

our written statement.
82

If I could, and finally with regard to title II, our written statement provides a couple of key recommendations, principally the formation and work of the commission should be triggered in relation

to title V. This approach will ensure the commission considers and

assesses all trust reform undertakings that occur as a result of title

V’s restructuring reforms.

If I could just say a few words about the title I issue. We have

long encouraged a settlement of the Cobell litigation. We work

closely with NCAI, the counsel, the staff of this committee, in developing the 50 principles that were presented to this committee in

anticipation of S. 1439. ITMA has tried to keep its own counsel on

title I, hoping that the parties and the Congress would work out

the details of legislation to settle the 10 year old lawsuit.

When the Government chose to raid our appropriated funds to

pay the costs assessed by the court, however, we concluded we had

not only a right, but a duty, to be heard. The issue that has received the most attention to date has been the size of any settlement fund that might be established by the legislation. The bill as

drafted contemplated the establishment of a fund in the billions of

dollars, a level that has been endorsed by plaintiffs as well as by

disinterested experts invited to testify at this committee’s most recent hearing.

The Government, on the other hand, has insisted that no amount

in the billions of dollars is justified. One expert suggested that a

process could be negotiated that could result in an actual calculation of a number for settlement purposes. ITMA suggests that the

committee make clear in its legislation that all aspects of the

Cobell case are disposed of in any settlement legislation.

If asset mismanagement claims are to be included in settlement,

then ITMA suggests the plaintiffs’s concerns regarding administration of the settlement fund should be overridden and that the legislation provide clear and unequivocal direction to the executive

branch for administering the settlement fund.

ITMA suggests that any legislation provide an opt-out provision

for any class members who choose not to participate in a mass settlement, and that a normal 6 year statute of limitation be included

to accrue on the date of enactment of settlement legislation for any

claims arising prior to that date.

With respect to the size of any settlement fund, ITMA suggests

it is well within the province of Congress to take into consideration

the avoided costs of protracted litigation, as well as the known failures, losses, thefts, previous settlements and dozens of reports by

Congressional committees, GAO and Inspectors General regarding

the administration of the individual Indian trust portfolio, and to

make a generous offer to achieve an honorable settlement with the

hundreds and thousands of members of the Cobell class.

Unless the plaintiffs’s calculations can be demonstrably rebutted,

they should be accepted for settlement purposes. Any doubts regarding the propriety of the number of the billions of dollars should

be resolved in favor of the powerless class members, especially if

their individual claims regarding asset mismanagement are extinguished by opting into a settlement plan.

I thank you for the time to work on this, and I would be happy

to answer questions.
83

[Prepared statement of Mr. Gray appears in appendix.]

The CHAIRMAN. Thank you very much.

Chairman Marshall, welcome.

STATEMENT OF CLIFFORD LYLE MARSHALL, SR., CHAIRMAN,

HOOPA VALLEY TRIBAL COUNCIL

Mr. MARSHALL. Thank you, Mr. Chairman, members of the committee. Thank you for this opportunity to testify before you today

on S. 1439, the Indian Trust Reform Act.

I would first ask that my written testimony be submitted for the

record.

The CHAIRMAN. Without objection.

Mr. MARSHALL. The Hoopa Valley Tribe supports the bill’s intent

and purpose contained in each section of the bill. We also support

many of the recommended modifications of S. 1439 that have been

offered jointly by the Alliance of Tribes of Northwest Indians and

the United Southeastern Tribes, USET.

Let me begin by saying that this piece of legislation is monumental in scope. Its purposes are to right the wrongs of mismanagement of trust funds on Indian lands during the 20th century; to restructure the BIA; to reaffirm the trust relationship between tribes and the United States; and to reaffirm the principles

of self-determination and self-governance for the 21st century. S.

1439 lays the foundation for Indian affairs for the 21st century.

We strongly support the restructuring of the BIA; the establishment of the under secretary for Indian Affairs; the transfer of functions from the assistant secretary; and the termination of the Office

of Special Trustee as set forth in section 5.

The Indian nations of this country never really warmed up to the

Office of Special Trustee. The tribes simply did not trust that the

Office of Special Trustee, as it implemented its program for trust

reform, was actually acting in their best interests. The tribes never

supported its expansion by moving trust functions from the BIA to

itself, or centralization of operations away from their agencies and

regions. This restructuring was perceived as actions taken to protect the interests of the United States from liability, but not in the

best interests of Indian people.

The Hoopa Valley Tribe also strongly endorses the Indian trust

asset management demonstration project contained in section 3.

Section 3 provides in section 131, Indian tribes shall be eligible to

participate in the project. Section 131 was part of last year’s Interior Appropriations Act, which provided that 10 tribes would remain separate and apart from trust reform reorganization because

they had proven to the Secretary that they were managing their

tribal trust resources under the same fiduciary standards to which

the Secretary is held.

Hoopa was even cited as an excellent example of trust administration in furtherance of self-determination. The year prior, these

same tribes were identified in the Appropriations Act in section

139. This year, the same tribes are identified in section 122 of the

Appropriations Act.

The section 131 tribes have longstanding agreements with their

respective agencies and regional offices to manage their own trust

assets, and originally approached Congress in 2003 to protect those
84

agreements from trust reform reorganization. It is our position that

trust reform should preserve what is working and should promote

policies that allow tribes to address their own trust asset management issues.

The Indian trust asset management demonstration project advances the policies of self-determination and self-governance by allowing 30 more tribes to submit proposals to manage their own

trust assets. If the interest is greater than 30 tribes, the legislation

allows an expansion of another 30 tribes.

Section three we also believe is an appropriate way to showcase

successful models of trust management that not only demonstrate

to the United States how trust management can be implemented,

but also encourage tribes to participate in the management of their

resources. Like the section 131 tribes, tribes that participate in the

demonstration project can be an example that local decisionmaking

and combined efforts with the BIA can result in significant trust

management improvements. Tribes can properly implement trust

management even though they may use different practices and

methods than the Department of the Interior.

Section 3 maintains and encourages this concept by preserving

the ability of tribes to, in our case, continue, or in the case of the

30 tribes expected to submit proposals, to begin their own successful trust resource management programs.

I have purposely avoided section 1 and section 4 because I expect

these two sections to be of the greatest concern to those Indian nations with large land bases containing many allotments with

fractionated interests. Let me offer these brief comments.

As we enter the 21st century, this Congress has an opportunity

to right a historical wrong. Title I, in my opinion, is structurally

sound. The only thing missing are the numbers, the actual settlement offer. We supported ATNI’s proposal as an icebreaker to see

if it would begin negotiations for an actual settlement offer. Whatever the number is, it will be a reflection of America’s conscience.

If the number is too low, it will leave Indian people feeling that

they have been robbed again.

I also believe that section 4 is legally and structurally sound, but

the concerns I hear are concerns that Indian people will not have

the legal counsel to help them understand what their responsibilities are to protect their interests. Providing legal advisors from

private nonprofits or Indian law programs may help alleviate these

concerns.

In conclusion, I want to express on behalf of my tribe our appreciation for Chairman McCain’s and Senator Dorgan’s leadership

demonstrated through the introduction of S. 1439. Trust mismanagement problems have afflicted tribes and Indian people for

too long. Allowing these problems to remain unresolved for much

longer will only create more injustices, conflict and delays in the

services the United States is obligated to provide Indian people.

We believe that S. 1439 is a solid foundation for such action, and

we look forward to working with the Senate Committee on Indian

Affairs, the House Resources Committee, and the administration to

move this vitally important legislation through the process as expeditiously as possible.

Thank you.
85

[Prepared statement of Mr. Marshall appear in appendix.]

Senator DORGAN. Chairman Marshall, thank you very much.

Next, we will hear from Austin Nunez, the chair of the San Xavier District Indian Land Working Group, Tucson, AZ.

Mr. Nunez, welcome.

STATEMENT OF AUSTIN NUNEZ, CHAIR, SAN XAVIER

DISTRICT, INDIAN LAND WORKING GROUP

Mr. NUNEZ. Thank you, Mr. Vice Chairman.

I want to express our support and appreciation for your sponsorship of this important legislation. I would like to go directly to my

comments.

Trust reform means eliminating the double standard to which

our lands are used and managed. For example, on the Fort Hall

Reservation, land is leased for $80 an acre, while just off reservation, it goes for $350 to $400 an acre. I would like to offer recommendations to strengthen titles II through VI of the Indian

Trust Reform Act of 2005. We want to assure that the records reflect ownership of our clients and are appraised or valued according

to the federally accepted uniform standards of professional appraisal practices when leased.

First and foremost, we recommend that S. 1439 include the negotiated rulemaking process as provided for in the Negotiated Rulemaking Act of 1990. ILWG believes that recordkeeping is at the

foundational core of trust reform. Currently, the probate backlog is

well beyond 22,000 cases and impacts thousands of Indian heirs.

This is impeding recordkeeping.

Currently, or originally, there were 10 attorney decisionmakers

to be hired. Now, there are only 3. Seven positions are vacant. Recordkeeping is impeded by the 2 percent Youpee interest. Today,

there are varying estimates ranging from 13,000 to 18,000 cases,

which equals to about 40,000.

In March 2006, the acquisition and disposable handbook was released by OST. It advises that land transactions may be implemented without certified title status reports. This is unconscionable

and it is not trust reform. We were recently informed that the title

plan in Albuquerque, NM has 10 vacancies and is due to close in

September of this year, September 2006.

Title II, Indian Trust Asset Management Policy Review Commission. Candidates for this commission should be people who have

knowledge of trust asset management, experience in the private

sector trust departments, title or evaluation experience, persons familiar with mass trust system components that are involved with

asset management, and familiarity with Minerals Management,

BLM, or BIA operations. These type of people should be selected

for this commission.

On title III, Indian Trust Asset Management Demonstration

Project Act, concerns situations where the tribe may find itself in

actual competition with its own members with regard to use and

development of resources. There needs to be some type of recourse

to establish procedures for non-binding mediation or resolution of

any dispute between an Indian tribe and the United States relating

to the trust asset management plan. The ILWG recommends that

individual landowners should be able to access this procedure as a
86

possible means of resolving disputes related to a trust asset management plan.

On title IV, Fractional Interest Purchase and Consolidation Program, the ILWG views title IV as a program that could be expanded to provide additional consolidation opportunities for tribes.

I would now like to comment on the automatic purchase provision

for lands with more than 200 owners. We know how our constituents react to something that they don’t approve of. They do not respond, and continued fractionation occurs, discouraging consolidation within families.

The ILWG proposes that title IV be implemented according to

uniform standard professional appraisal practices standards. We

were informed that the Office of Special Trustee appraisal services

would no longer be doing individual lease appraisals. Market studies would instead be used. Market studies, however, do not take

into account highest and best use for land according to its location.

The only practical legal and cost-effective way to prepare appraisals for the Indian Land Consolidation Act Program is to use

a mass appraisal, which is in compliance with standard six of the

USPAP. Most important [remarks off microphone] by performing

the mass appraisal to USPAP standards? The fiduciary obligations

of the trustee would then be met.

There are some charts that are here for your perusal which I will

not go into.

On title V, and in closing, restructuring of the BIA and Office of

the Special Trustee, the ILWG supports the creation of the under

secretary for Indian affairs within the Department of the Interior

and strongly supports the termination of the Office of Special

Trustee. We consider this restructuring as a step toward improving

the administration of services and programs impacting tribes and

Indian individuals.

Finally, for title VI, Audit of Indian Trust Funds, the ILWG

strongly supports title VI, which requires the Secretary of the Interior to prepare financial statements for individual Indians, tribal

and other Indian trust accounts, as well as prepare an internal

control audit. However, there is no provision for auditing the programs and processes such as leasing, acquisition and disposal, compliance improvements, irrigation title correction, which impacts

trust resources, land, water and minerals.

Thank you. I will entertain any questions.

[Prepared statement of Mr. Nunez appears in appendix.]

Senator DORGAN. Chairman Nunez, thank you very much.

And finally, we will hear from Majel Russell, attorney for the Elk

River Law Office in Billings, MT.

You may proceed.

STATEMENT OF MAJEL RUSSELL, ATTORNEY, ELK RIVER LAW

OFFICE

Ms. RUSSELL. Thank you. Thank you, Vice Chairman Dorgan. My

name is Majel Russell. I am an enrolled member of the Crow Tribe.

I really greatly appreciate the opportunity to be here today.

Trust reform has dominated the list of critical Indian issues for

several years, to the detriment of individual Indian land owners

and others. I commend this committee for taking the sincere effort
87

to resolve trust land and asset management issues and allow Indian country to focus on other critical issues, critical needs of Indian people, including health care, economic development, education and protection of tribal sovereignty.

I am an attorney with the Elk River Law Office. My career has

been spent representing Indian tribes. However, today I am here

as an individual landowner. I own interests in 46 tracts of trust

land. I own land with my mother and my aunt and various other

extended relatives. I own land in accordance with the Crow Competency Act that allows me to manage my own land with my family.

I, like a lot of other Crow people who own land in competency

status, strive to be active landowners. We know where our land is

at. We know what it is worth. We negotiate all our own leases.

There are two services that the BIA provides for us. One is that

they maintain the trust status of the land; and number two is that

they record all of our lease documents.

I guess I am here today because I promote opportunities for Indians to be active landowners. I believe Indian people, given the opportunity, can be the best protectors of their land and assets.

In terms of the policy review and restructuring, I am a strong advocate of tribal government. I believe that this Policy Review Commission needs to maintain the government-to-government relationship that has been established between the United States and

tribes. Recent restructuring has often overlooked tribal government

and has been intended to benefit the individual Indian. I do not believe that restructuring should occur in a way that changes the

standard that we have worked so hard for, which is a governmentto-government relationship.

As an individual Indian, I still believe that the best advocate to

protect my rights and my assets is my strong tribal government.

I believe that it is only through membership in my tribe that I

have the right to own land and the right to administer the assets

that I do.

I am still an old fashioned person that believes in the one stop

shopping concept. When I go to the BIA in Crow Agency, I would

prefer to see one person at the local level who can assist me with

all the land services I need. Over the years, my family and I, my

grandparents before me, we were all served by people right at the

BIA agency, and most of them we were related to and we knew.

I have never believed that those people had any intention to steal

from us, from our family. I believe the problem has always been

there has been a lack of funding, a lack of training. That is the

problem today.

I believe that in order to exercise true trust reform administration in this country, we need to have more money. We need to have

money to train people at the local level who can be responsive to

the Indian people, and for those people who want to manage their

own lands.

In that regard, information access is critical. I do support the national title system. I think that we need to complete that project

so that we can have accurate land ownership records. That will

also allow for the best orderly and expeditious disposition of land,

and to properly distribute revenues.
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The Indian Trust Asset Management Project in title III I believe

is a very progressive and forward-thinking concept. I support that.

I work with the Crow Tribe and we actually have legislation drafted which is similar to this demonstration project in this bill. I believe that a tribe needs to set its own standards on how the trust

lands on its reservation should be managed. The tribe needs to

have that opportunity to undertake management and try to maximize those assets for the benefit of the tribe. I think that the demonstration projects do promote the longstanding policies of self-determination and self-government.

One caveat I would say is that I do not think that there should

be broad discretion in the Secretary to disapprove management

plans that don’t meet certain standards that are not yet developed.

I think that if this demonstration project is going to be real, it

needs to go all the way and let the tribe decide for itself what

should work for the tribe and there shouldn’t be an opportunity to

pull it back.

On land consolidation efforts, the Crow Tribe has been surveyed

three times, once in the 1960’s, again in the mid-1980’s, and finally

in 2003, about their willingness to sell their fractional interest in

land. All three surveys overwhelmingly indicated that the Crow Indians who own small fractional interests preferred to sell their

lands, and some even were willing to donate those lands to the

tribe.

So I believe that the emphasis on land consolidation efforts is appropriate. I would like to see those land consolidation efforts expanded to allow individual Indians like myself to purchase out

other fractional interests that are within the lands that I own, or

even other interests available on the reservation. I also promote

the concept of family trusts as a way to minimize fractionation and

as a way to consolidate land.

In summary, I understand that this is a very tough and difficult

issue, and often I think the people who are out actually living on

the land, working the land, and utilizing the land are overlooked.

There are many of us Indian landowners who are not just owners

of small fractional interests, but who need real services from the

Bureau of Indian Affairs. We need to be able to go into the Bureau

of Indian Affairs and ask about a right of way to get to land that

we are locked out of; to ask about appraisals. Those are the services that will benefit Indian people who are trying very hard to

make the best of the land that they have. I think restructuring

needs to focus on those efforts also.

Thank you.

[Prepared statement of Ms. Russell appears in appendix.]

Senator DORGAN. Ms. Russell, thank you very much.

Let me ask a question about title III, the demonstration project.

Chairman Hall, you indicated that you would like to have that expanded, in your testimony. I assume you support the provision of

the demonstration project.

Mr. HALL. Yes.

Senator DORGAN. Tell me what kind of interest you think will

exist among tribes and the Indian nations for this project?

Mr. HALL. We definitely support the concept of the demonstration project, Senator Dorgan. We are just concerned that there is
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not adequate funding to really have a tribe really step in place of

the Government and manage the trust assets.

For example, in the Fort Berthold agency on our reservation, we

have one lease compliance officer. With the Garrison Dam flooding

and fractionating the reservation, it is over 110 miles from the

southern district to the headquarters up in New Town. There is no

way that one lease compliance officer can fully fund it. So when we

ask about more lease compliance officers, their answers are there

is not enough budget. There is not enough adequate funding. The

budget does not allow for any more lease compliance officers.

And then when we ask about appraisals to get fair market value,

I think it was Chairman Nunez who talked about market studies.

That is what we end up with is market studies versus appraisals.

There are no standards with market studies. They are what they

are. They are a study, not an appraisal, because we have one appraisal officer in the Aberdeen area and Rapid City, SD. What you

end up with is a desktop appraisal, not a reservation, onsite appraisal.

The list goes on and on, Mr. Chairman, about the lack of funding

and the lack of a budget to really have a tribe, if it steps in as a

demonstration project, adequately manage these resources. Otherwise, we are going to end up, if a tribe manages these resources

with limited budget, we will end up like the BIA. Everybody will

say, hey, the tribe is not adequately managing.

Senator DORGAN. So you are saying that if we have a demonstration project and do not provide the resources for the tribe to be able

to have a management project that is credible, it won’t work, just

as you say it doesn’t work now, because you don’t have the resources there that you need from the Federal Government.

Mr. HALL. That is correct.

Senator DORGAN. Ms. Russell, is your property fractionated?

Ms. RUSSELL. At Crow, if you have land with less than five owners, it is owner managed. There is a Federal act from 1948.

Senator DORGAN. Less than five owners?

Ms. RUSSELL. Less than five owners. So the larger landholdings

I have are less than five owners. I have some land, one parcel with

up to 41 other owners. So the largest fractionation in my landownership is with 42 owners total on a parcel of land.

Senator DORGAN. So you are not managing that, are you?

Ms. RUSSELL. No; everything over five owners is managed by the

BIA. However, you do go into the BIA and you ask them if you can

get everyone to agree to pull your land from the advertisement,

and allow you to do some of your own negotiation. That is something that we have done.

Senator DORGAN. But the fractionated nature of much of the

lands, or at least a fair amount, especially in my part of the country, is so dramatic that it would be impossible for someone to come

and sit and testify and say, ‘‘Well, I can easily manage that myself.’’ You can’t do that.

Ms. RUSSELL. No; you can’t do that. That is correct. At Crow, we

are still somewhat salvageable if we can still come up with some

solutions to address the fractionation problem. We are about one

generation behind Fort Berthold in terms of allotment, which is

why we don’t have quite as many owners at Crow.
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Senator DORGAN. Mr. Cason, just briefly, you had at a previous

hearing described, I think you described a parcel on the Wahpeton

Sisseton Reservation and the number of owners, fractionated interests in that parcel. Can you give me that number off the top of

your head?

Mr. CASON. We have parcels that have over 1,000 owners [remarks made off microphone]. And we have on the order of 2,000

plus parcels that have more than 200 owners.

Senator DORGAN. And they don’t necessarily have to be large

parcels to have that kind of fractionated ownership.

And that is why this has become just an impossible situation. It

is why the legislation itself is attempting to see if we can find ways

to deal with that, because if we don’t deal with that, we will never

get all of this straightened out.

Mr. Nunez, you raised the problem with the backlog in the probates of Indian trust estates, in your testimony.

Mr. NUNEZ. Yes, sir.

Senator DORGAN. One of the factors I understand that contributes to that is the fact that many Indians don’t have wills governing how their estate should be distributed. I understand the BIA

is no longer helping Indians draft wills. Is that correct?

Mr. NUNEZ. That is correct, sir.

Senator DORGAN. So what do we do about that? What is your recommendation there? Does the lack of wills, is that part of the contributing problem here?

Mr. NUNEZ. Yes; I believe it is because with the will, it is clear

how the land will be transferred to family members. I believe that

there ought to be some consideration of providing resources to the

tribes to be able to offer the individual Indian allotees the ability

to hire legal counsel to develop their own wills. I know that on our

particular reservation at San Xavier that there have been some

families that have done so. The lawyer that they dealt with did it

on a pro bono basis. I wish there were more lawyers out there to

do that kind of work.

Senator DORGAN. Chairman McCain raised the issue today of

possibly including in the legislation settlement of individual Indian

claims for mismanagement of lands. Let me ask each of you your

thoughts about including land mismanagement claims in this bill.

Let me start with you, Mr. Hall.

Mr. HALL. Senator Dorgan, I guess I am kind of hesitant to include the mismanagement of resources because that is a whole

other issue that would take extensive time to research and to provide an answer based on the resource and based on the fair market

value, based on the money that went through the trust account system. I think that would probably end up delaying this action on S.

1439.

So in the interest of time, I would say unless there are those

kind of answers readily available, that I think for the most part we

would have to say no on it.

Senator DORGAN. Chairman Gray.

Mr. GRAY. Senator Dorgan, I think what we have also heard in

the past is that the Senators had, from Indian Country’s response,

is that we want to put the Cobell settlement to a legislative solution here. We support that effort. But I think the committee must
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first decide what is being resolved by this and other legislation in

the past where plaintiffs have been insistent that they are seeking

only equitable relief in the form of an accounting, and an equitable

decree to restate individual account balances.

In other words, plaintiffs have been very careful not to assert

any claim for damages that might result in transferring the case

to the U.S. Court of Federal Claims.

On the other hand, we note that at least one witness at a recent

hearing was quite insistent that any legislation should include settlement of any asset mismanagement claims that the plaintiff class

might bring. Otherwise, Mr. Eizenstat insisted that there will be

renewed litigation that might well be as seemingly endless as does

the current case.

Senator DORGAN. Other comments?

Mr. NUNEZ. I would just agree with Mr. Hall and Mr. Gray. But

I do believe that it is an item that does need to be addressed at

a later date.

Senator DORGAN. Well, we have introduced this legislation because we believe there needs to be some settlement here. Senator

McCain and I are not unmindful of the century plus years of difficulties and problems, mistakes, mismanagement, incompetence,

among other things.

We also understand that if no one does anything at this moment,

this is in the courts and will likely be there for some long while,

perhaps with or without satisfactory resolution. We don’t have any

idea, but we think that working together to provide a thoughtful

and reasonable settlement and then a process going forward is the

right thing to do.

We especially appreciate, Chairman Hall and Chairman Gray,

the work that you did. We know that you travel all across the country to bring stakeholders together and hold meetings, which I think

is really very important. You did that in consultation with us as

you began that process. That was very helpful to this committee

because it developed a body of knowledge, and also permitted the

development of information going out to folks in Indian country as

well about what this process is and allowed them to have a voice

in this process.

So I want to, on behalf of myself and Senator McCain, thank you

for all the work you have done. I thank all five of you for coming

to the committee today.

The purpose of this, and I think we have accomplished the purpose, is to have you give us your specific thoughts about the six titles of this bill as it is now written; what kinds of adjustments;

what kinds of approaches do you think might be made to better refine or alter if necessary some provisions. I think you have done

that in your testimony.

Senator McCain and I, with our staffs, will work with other

members of the committee to take the best of these recommendations. Of course, at the end of the day, the issue is also a number,

but we recognize that even finding a number will not necessarily

resolve all of these issues if we don’t include with the number that

is agreed upon, if we can find a number that is agreeable, if we

don’t resolve these other issues, all we are doing is postponing the

day of reckoning as well.
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So that is why the bill intends to be a comprehensive bill and one

that is attempting to address a very knotty, difficult, thorny problem that has existed for a long time and really begs to be resolved.

Chairman Hall, your story about the member of your tribe, Carol

Young Bear, I assume that story could be replicated all across this

country many, many, many times, of people who died waiting for

some satisfaction of money that was owed them. And yet, because

all of us understand that, I think we are coming here today and

have done so on a number of other occasions to try to find ways

to solve this problem.

It must be solved, if it is outside of the court system, with legislation. It is not easy to do, but it is not impossible. I think the work

that we are attempting to do with your help can, if all of us work

in good faith, bear fruit.

So on behalf of Senator McCain and myself, I want to thank all

of you for coming to this hearing.

The committee is adjourned.

[Whereupon, at 10:30 a.m., the committee was adjourned, to reconvene at the call of the chair.]
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APPENDIX

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD

PREPARED STATEMENT OF JAMES CASON, ASSOCIATE DEPUTY SECRETARY AND ROSS

SWIMMER, SPECIAL TRUSTEE FOR AMERICAN INDIANS, DEPARTMENT OF THE INTERIOR

Thank you for the opportunity to come before this committee to discuss titles H

through VI of S. 1439, the Indian Trust Reform Act of 2005. We appreciate that this

committee continues to advance legislation that attempts to provide a settlement of

the Cobell v. Norton lawsuit, but also addresses other challenges faced by the Department of the Interior in managing the Indian trust. As we have testified on several prior occasions, the department supports the efforts of Congress, as the Indian

trust settler, to clarify Indian trust management duties, responsibilities, and expectations.

Since the passage of the American Indian Trust Fund Management Reform Act

of 1994, Interior has made great strides in trust reform. Today, beneficiaries have

direct access to staff that is trained in fiduciary trust matters. New procedures are

in place for the management of account information and the collection and distribution of trust funds. These reforms have been implemented to provide the best service to beneficiaries. We appreciate that titles H through VI of S. 1439 focus on other

areas of trust management. However, we believe that it would take considerable adjustment for these titles to facilitate material improvement in the management and

reform of the Indian trust.

Title II-Indian Trust Asset Management Policy Review Commission

Title II of the legislation would establish the ‘‘Indian Trust Asset Management

Policy Review Commission’’ to review existing trust asset management laws, regulations and practices. Within 2 years of its creation, the commission would report to

Congress on its findings and recommendations to improve trust management.

This title raises concerns. For instance, it includes language that would allow the

commission’s authorization to ‘‘secure [information] directly.’’ The department is

concerned with the commission having the power to subpoena the personnel and

documents of the Federal Government.

While the department supports the idea of drawing on the considerable expertise

in Indian country to generate solutions to the longstanding problems associated with

Indian trust management, we must observe that reports similar to those described

in this title have been commissioned or published on numerous occasions both by

external and internal parties. More reports and commissions are not needed at this

time.

As you know, recently the department undertook, and Congress funded, an extensive and expensive effort to examine current fiduciary trust business processes at

all BIA agency and regional offices. This was all done with extensive involvement

from tribes and other Indian representatives. Based on the results of this ‘‘As-Is’’

study, the department developed a model that included recommendations for new

business practices to improve, streamline and add consistency to the performance

of these trust activities nationwide. This new model for trust reform, called the Fiduciary Trust Model [FTM], serves as our roadmap for trust reform today.
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The department is currently implementing the FTM, and developing regulations

to support the new practices. We are uncertain about the benefit of conducting another study that would likely result in the same analysis or point out seemingly intractable issues that have been known long but remain unresolved. Therefore, we

believe it is not in the best interest of taxpayers to finance a commission to develop

another report for future action. I also understand that a commission like this one,

with members appointed by both the legislative and executive branches, raises separation of powers concerns.

Much reform has occurred since ‘‘Misplaced Trust’’ was published in 1992 and the

American Indian Trust Fund Management Reform Act was enacted in 1994. Funds

would be better spent on supporting ongoing activities required to fully implement

the FTM and explore legislative solutions to persistent challenges, such as the administration of small balance accounts, hindrances to leasing trust land and unclaimed property.

Title III-Indian Trust Asset Management Demonstration Project Act

This title would establish a demonstration project to further the authority and

flexibility for tribes to manage their trust assets outside of the department. To participate in the project, tribes would submit to the secretary an Indian trust asset

management plan outlining how they would manage the assets and allocate funding. If approved, Interior would provide funding for the tribe to carry out the plan.

Interior has long supported increased tribal self-governance and self-determination. Today many Indian trust assets are managed by tribes through Public Law

638 contracts and compacts. Self-governance tribes currently have the authority to

implement Federal programs to provide services to their membership based on tribal priorities. Tribes also have the authority to withdraw funds from trust for selfmanagement through the 1994 Reform Act. What this title appears to do differently

is transfer the authority and funding for trust asset self-management, without appropriately transferring the responsibility for results, and liability for mismanagement.

We believe the United States should not remain liable for losses resulting from

a tribe’s mismanagement of an Indian trust asset. The bill would allow tribes to develop and carryout trust asset management systems, practices, and procedures that

are different and potentially incompatible with those used by Interior in managing

trust assets. In considering this provision, we ask you to establish performance expectations that are reasonable, consistent with available resources and designed to

constrain the need for litigation.

Title III also requires further discussion on issues such as how the department

would take back program responsibilities if it were required to re-assume responsibility, or the kind of monitoring that will have to be conducted to ensure the tribe

is adhering to the commitments in its plan.

The department is in the process of implementing new trust IT systems and processes to improve the administration of trust assets. It is our hope that tribes will

seek to utilize these systems and related benefits including access to nationwide

trust data, which will be useful in providing services to tribal members, wherever

they, or their assets, may be located. If tribes develop individual systems, administrative support costs are likely to increase and gaps in the data for both the Federal

and tribal systems could result, and neither entity would be able to serve its beneficiaries in the best way. As well, it is more common than not for individual Indian

beneficiaries to own assets on more than one reservation. Thus, systems that are

used by a single tribe to manage its reservation resources do not work well when

trying to manage individually owned resources of nonmembers who may be located

far away from that reservation. Finally, any incompatibility in systems or practices

would stress our ability to monitor or reassume the management of assets or funds

if a tribe relinquished its self-management role.

While we support the objectives of self-governance and self-determination, the implementation of the objectives runs counter to a traditional trust model. We look forward to discussing this title with the committee as it raises many issues that would

need further discussion.

Title IV-Fractional Interest Purchase and Consolidation Program

Title IV amends the Indian Land Consolidation Act to enhance the ability of the

department to purchase interests of fractionated lands. It provides authority to the

secretary to make available additional monetary incentives to beneficiaries who sell

their interests.

As you know, the problem of fractionation—and its solutions—are not new. In

1938, at a conference on Indian allotted and heirship land problems in Glacier Park,

MT, Commissioner Collier said, ‘‘We have simply gone on, wondering from time to
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time what to do. We have taken occasion before the budget and before appropriations committees to bring up the problem; to show the waste of millions of dollars

a year in these unproductive operations, and the effort taken out of positive human

services; and that this type of expense was bound to increase every year. Another

attendee of the same meeting said, ‘‘I think we all have in mind three objectives

in our discussion of land program: We want to stop the loss of land; we want to

put Indian lands into productive use by Indians; we want to cut down unproductive

expenses in administering Indian lands.’’

That was almost 70 years ago.

The Indian trust is a fractionation engine, churning out more and more

fractionated land interests, of smaller and smaller sizes with each generation, requiring more resources to manage every year. This was not Congress’ original intention in creating the trust, but it is without question what the Indian trust had

evolved into. During a 15-year period, from 1985 to 2000, leasing payments were

divided into approximately 36 million transactions that were posted to Indian accounts; 25 million of those transactions were for less than $1. The department now

finds itself in the absurd position of being responsible for tens of thousands of accounts with $1 or less.

Public Law 108–374, the American Indian Probate Reform Act [AIPRA], which

was signed into law by President Bush on October 28, 2004, has provided new tools

to reduce the rate of fractionation. March 2005 data from the BIA showed that

126,079 tracts of land are owned by 223,245 individual owners, equaling nearly 3.2

million interests on approximately 13 million acres. Based on the information currently available, approximately 85 percent of all interests, roughly 2.7 million, are

less than 5 percent of the undivided ownership. Under the new provisions contained

in AIPRA, unless the interest owner chooses through a will to bequeath their interests to more than one individual, these interests should not continue to fractionate.

The remaining nearly 500,000 interests of more than 5 percent will continue to fractionate.

The 2007 budget requests $59.4 million for Indian land consolidation, an increase

of $25.4 million, or 75 percent, above the 2006 enacted level, which should be sufficient to purchase an estimated 80,000 interests. The estimate of the number of interests to be acquired are based on historical average cost to date, and as acquisition activities continue and additional targeted interests are acquired, the average

cost per acquisition, cost per interest, and amount of interests acquired will likely

change from the experience to date.

The Indian Land Consolidation Office has shown significant progress with its pilot

projects, and recently the department made the decision to focus our land consolidation efforts on the most fractionated tracts in Indian country. As part of this proposal, the Department of the Interior will implement a tiered acquisition strategy,

targeting selected highly fractionated tracts. There are 2,173 fractionated tracts that

have 200 or more interests per tract. A focus on these tracts will begin in 2006 and

target approximately 1,557 of these fractionated interests currently owned by 64,055

individuals who collectively own 520,685 individual interests located in ten geographic locations. In addition, partnership efforts will continue with tribal land consolidation efforts to leverage funding where appropriate.

S. 1439 places a priority on an aggressive program, with incentives, for the purchase of interests in individual Indian land—with the intent of restoring those interests to the tribes. These steps could help; however, care must be taken to ensure

that the language in this title does not work as an inducement for individuals to

fractionate their land, thereby becoming eligible for incentives. As well, we have

concerns about the costs of this title. In addition, some provisions of the bill could

needlessly complicate the process of addressing this difficult problem. We also request clarification regarding the apparent public policy of retaining individual Indian land within Indian country ownership versus the trust responsibility to obtain

fair market value for each interest.

Title V-Restructuring Bureau of Indian Affairs and Office of Special

Trustee

Title V would restructure the Bureau of Indian Affairs [BIA] and the Office of the

Special Trustee for American Indians [OST], and create an under secretary for Indian Affairs within the department.

OST was created because Congress believed that Indian trust management reform

would not happen under the previous structure. In fact, the past decade has seen

effective reforms implemented-under the supervision of OST—including the hiring

of much needed fiduciary trust officers, regional trust administrators, and cadastral

land surveyors across the Nation. We have also seen the opening of a toll-free call

center for all beneficiaries, the purchase and integration of new technology to
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streamline and standardize all title, accounting, and asset management, a recordsmanagement program now considered one of the best in the Nation, and a Fiduciary

Trust Model now being implemented in all BIA regions.

This title includes concepts that have been previously discussed by the Joint Department of the Interior/Tribal Leaders Task Force on Trust Reform in 2002. This

group was formed when Interior was examining ways to restructure trust functions

to provide for greater accountability in response to the trust reform elements of the

Cobell case. The task force ended in an impasse, and was unable to support legislation because of matters that were unrelated to organizational alignment. With no

legislation enacted, Interior implemented an administrative reorganization plan that

accomplished the majority of the task force’s goals.

Interior is receptive to the concepts of establishing an under secretary position

and merging Indian programs under new leadership. We would suggest that rather

than mandating the creation of this position at the department, Congress simply direct the Secretary of the Interior to create an appropriate management structure for

Indian Affairs. This will allow the secretary the independence to establish a management structure that best implements Indian program requirements.

If a restructuring is desired, we would also ask Congress to address some other

crucial issues including: The lack of a clear trust agreement to guide our responsibilities and expectations, appropriations that do not align with all program trust

responsibilities, the lack of an operative cost-benefit paradigm to guide decisionmaking priorities, the challenges of addressing Public Law 93–638 compacting and

contracting goals, and the impediments associated with Indian preference hiring

policies.

These issues have frustrated the department, Indian beneficiaries, administrators,

and Congress throughout the lifespan of this trust. We encourage Congress to speak

clearly in developing such language and carefully consider the impacts it will have

in allowing us to meet the objectives of our constituents.

Title VI-Audit of Indian Trust Funds

The last title of this legislation requires the secretary to prepare financial statements for Indian trust accounts in accordance with generally accepted accounting

principles of the Federal Government. The Comptroller General of the United States

is then required to contract with an independent external auditor to audit the financial statements and provide a public report on the audit.

For the last 10 years, the trust funds have been audited by independent public

accounting firms. For fiscal year 2004 and fiscal year 2005, OST’s Inspector General

contracted with KPMG to audit OST’s financial statements. The contract required

KPMG to ‘‘conduct its audit in accordance with auditing standards generally accepted in the United States of America, and the standards applicable to financial audits

contained in the Government Auditing Standards, issued by the Comptroller General of the United States.’’ The audit also includes an examination of the department’s internal controls over financial reporting, compliance and other matters. The

results of this audit of the tribal and individual Indian moneys trust funds financial

statements are made widely available. In fact, the law requires that an annual letter reporting the results of the audit be sent to each account holder.

All fiduciary trusts are accounted for on a cash basis. The departmental systems

currently in place would not support the preparation of financial statements in accordance with generally accepted accounting practices on an accrual basis, as this

title of the legislation requires. Such statements would be misleading to the reader,

as they would include information about assets that are not currently in a trust account. We prepare financial statements on a cash and modified cash basis, just as

private sector trust companies do. We look forward to working with the committee

to discuss and clarify this requirement.

Conclusion

The new structures and business practices being put in place at the department

have greatly improved the management of the Indian trust for all future generations. We must be careful to pursue constructive change and to address the problems that are impeding Interior’s forward motion in trust reform. We look forward

to working with you on meaningful legislation that addresses the fundamental challenges we face. This concludes our statement. We would be happy to answer any

questions you may have.
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PREPARED STATEMENT OF TEX G. HALL CHAIRMAN, THE MANDAN, HIDATSA &

ARIKARA NATION, COCHAIRMAN, TRIBAL WORKGROUP ON TRUST REFORM

Dosha. Good morning.

This is my third time testifying before you Chairman McCain, Vice Chairman

Dorgan and committee members this Congress on the issue of Trust Reform. I am

glad to say that each time we I have met, we have done so under circumstances

which have brought us all closer to our goal.

I am here not only as chairman of the Mandan, Hidatsa & Arikara Nation, but

also as the cochairman of the National Tribal Work Group on Trust Reform and

Cobell Settlement. On this panel, I am joined by the cochairman of the Work Group,

Chief Jim Gray, of the Osage Nation.

Background

In March 2005, we testified before this committee that we had organized a

workgroup comprised of the largest group of tribes with trust assets, individual

allottees, and individual trust account holders. The purpose of this workgroup was

to bring together Indian tribes, allottees, and account holders and provide Congress

with a clear and concise roadmap to a trust reform that works, and a settlement

that is fair. We did so, and in June 2005, we released the 50 principles for trust

reform and Cobell Settlement.

Those 50 principles remain today as the most definitive statement of the will of

Indian country on this matter.

Eight months ago, we testified before this committee that we were pleased with

the general thrust of the S. 1439, the Indian Trust Reform Act of 2005, and that

many of the bills provisions adhered to the 50 principles.

Later, we hosted further meetings of Indian tribes to review the Indian Trust Reform Act of 2005 and discuss amendments and settlement figures. Earlier this year

in Bismarck, ND, I hosted a regional meeting of Great Plains Tribes with staff from

the Committee on Indian Affairs.

I believe that as we gather again today, many more of the pieces have fallen into

place and we are nearing the finish line. The committee’s hearing earlier this month

shed a great deal of light on reasonableness of picking a settlement number similar

to the way sums were determined in both the Holocaust Survivors’ claims and the

Japanese American Internment claims. In the case of the 120,000 Japanese American Internment victims, Congress passed the Civil Liberties Act of 1998 which provided for an apology and a sum of $20,000 to each surviving Japanese American

victim for reparations, as well as $12,000 to each Alaska Native survivor.

The point is that the United States because of its greatness and because of its

courage, has been strong enough to own up to its mistakes and provide redress compensation when its laws were broken.

This is such a time. This is the time for our country, once again, to demonstrate

its capacity for justice and wisdom. This is our chance to reform the system, once

and for all, so it finally works. This is our chance to provide a historic justice to

those who lost the chance to go to college, to get medical care, to open a store, or

to pay their mortgage simply because the U.S. Government failed to take care of

their money.

We can forge a legacy of justice, or we can leave a legacy of neglect.

The Indian Trust Reform Act of 2005

As I mentioned, I have worked over the years, as chairman of my tribe, as NCAI

president, and as cochairman of the Tribal Trust Reform Workgroup. Together we

worked with tribes from across the country and held consultations in every single

region of the country. And now, with the support of organizations like the InterTribal Monitoring Association and the Council of Large Land Based Tribes, we represent approximately 70 percent of all tribal trust assets and the majority of all tribal trust account holders. As I have mentioned many times—I am one of those trust

account holders.

But more importantly, like most tribal leaders, I have a constituency of thousands

of Indian people who are dependent on their trust account payments coming

through.

I want to take 1 minute to describe what happened to one of my tribal members.

Her name was Carol Young Bear and she had diabetes. She was also an individual

trust account holder. For a long time, her trust account checks never arrived. She

used to come visit me and ask me what was happening with those checks. The reason is that she was in poor health and needed assistance getting around on her

wheelchair. What she really wanted was to use those checks to buy an automated

lift for her van that would allow her to get out of the house and travel around our

beautiful reservation and visit her friends and family. I called and tried to get an
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answer for Carol with our local and regional and finally national BIA officers. By

the time they had gotten back to me with their answer, poor Carol had passed away

from her diabetes.

Every tribal leader here knows tribal members and even family members with

similar stories. People who cannot afford to wait. People who need a system that

they can depend upon. So what I am calling for on behalf of people like Carol and

everyone in Indian country who is or knows someone like them is this—‘‘A Reform

That Works.’’ In other words, I am talking about a reform of the United States trust

system that does not require revisiting every 10 years. I am saying, that in order

for this to work, it has to be done right.

Title II—The Indian Trust Asset Management Policy Review Commission

This section would create a commission to review all Federal laws and regulations

and the practices of the Department of the Interior relating to the administration

of Indian trust assets. The commission would recommend to Congress changes to

Federal law that would improve the management and administration of Indian trust

assets. Importantly, the commission must consult with Indian tribes and organizations representing individual Indian owners of trust assets.

The MHA Nation recommends that the entire, rather than two-thirds, of the commission be appointed by Congress. Instead of four presidential appointments, we

would recommend that the chairman and vice chairman of the Senate Committee

on Indian Affairs make one appointment each, and so should the chairman and

ranking member of the House Committee on Resources.

We also recommend that the commission reflect the importance of trust assets

and management to Indian country by requiring that at least 8 members of the commission be members of an Indian tribe.

Because grazing, timber, fishing, and mineral rights are so important to the continued economic survival and growth of tribes, we strongly recommend that the committee retain the requirement that at least one-half the commission be from tribes

with reservation lands managed for trust assets. At the January Great Plains

roundtable on trust reform, the tribes recommended that at least three tribes be

from large land-based tribes.

The tribes also voiced their strong recommendation that Congress and the administration consult with tribes on the nomination process and that, further, the individuals have experience in trust asset management or ownership.

We also recommend that the committee amend the bill to ensure that the commission is bi-partisan in nature, with six members of each party serving.

Furthermore, we recommend that section 204(a) be amended at the end to include

the authority of the commission to review and assess the responsiveness of the Department of the Interior to the trust needs of Indian tribes and individuals.

We also recommend that the commission review and assess the progress and implementation of the Indian Trust Asset Management Demonstration Project authorized under title III of the bill.

In section 205, we would recommend providing the commission with subpoena

power to obtain documents, records, and information, if necessary.

Finally, we would strongly recommend that the committee add a new section 206

to this title that provides authority for the commission to make specific resourcespecific, generic standards where possible much like the sustained yield requirements for Indian timber provided in the National Indian Forest Resources Management Act. This is in accordance with recommendations 15 and 31 of the 50 principles.

Title III—The Indian Trust Asset Management Demonstration Project

This section creates a demonstration project so that an Indian tribe establish its

own ‘‘trust asset management plan’’ that is unique to the trust assets and situation

of the tribe and its reservation. The plan would identify the trust assets, establish

objectives and priorities, and allocate the available funding.

This section adheres to the goals and visions of the 50 principles and we strongly

support this title.

The MHA Nation, however, strongly recommends that the committee increase the

number of tribes that can participate from 30 to 50. In the Great Plains Region

alone, I believe that all 17 tribes that I believe would be willing and ready to submit

their own trust asset management plans. Furthermore, the demonstration project

should reflect the varied nature of tribes with large trust resources as well as their

varied locations. Thus, the committee may wish to provide that, in addition to timeliness, the secretary may consider tribal size, land base, amount of resources, and

region in selecting participants under section 303(b)(2)(B)(ii)(II).
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The MHA Nation strongly supports the streamlined model for submission and approval of tribal plans under the bill.

The MHA Nation makes the following recommendations that it believes will enable tribes to more fully embrace this opportunity.

First, in the event that the secretary disapproves a trust asset management plan

under section 304(b)(2) then the secretary’s notice should specifically identify and

offer assistance to the tribe to overcome the deficiency, similar to the self-governance and self-determination procedures.

Second, and in keeping with the self-governance and self-determination procedures, the secretary should afford the tribe a hearing on the record to determine

whether or not the tribe’s application should be approved.

Third, and this is critical, if the secretary does not approve or disapprove a tribe’s

application within 120 days, the tribe’s application should be deemed approved, not

disapproved, under section 304(b)(3). This is exactly how self-governance and selfdetermination works and we see no reason to deviate from these processes.

Fourth, under section 304(b)(4), a tribe should have immediate access to judicial

relief and not be forced to exhaust administrative remedies. Thus, this section

should be amended to provide tribes with immediate access to the Federal district

courts which should be authorized to hear disputes arising under this act and be

further authorized to provide all necessary relief.

Fifth, we recommend that the committee provide a burden of proof of ‘‘clear and

convincing evidence’’ on the department the secretary when defending a decision to

reject a tribe’s application.

Sixth, we have performed our own needs assessment on the Fort Berthold Reservation and the results point to a clear need for more natural resource officers. For

instance, we have not had a range assessment since 1982. Providing more local officers would not only assist with the actual trust management responsibility, but it

would also enable the tribe to grow economically faster and more efficiently. But,

as you know, officers cost money and therefore the MHA Nation strongly recommends that Congress specifically authorize a level of funding of at least $20 million annually for tribal assistance and local resource officers under this title.

Seventh, the management plans in section 304(a)(2) should include specific functions such as appraisals.

Eighth, we recommend that all tribes, not just self-governance tribes be allowed

to utilize the redesign provisions of section 304(a)(3) as long as the new elements

meet the trust requirements of section 304(c). As you know, many large land-based

tribes, which control a majority of the trust resources, are not self-governance tribes.

They should not be penalized for their decision to adhere to direct service programs.

Title IV—Fractional Interest and Purchase Consolidation Program

This section would amend the Indian Land Consolidation Act to expand the program for acquisition of fractionated interests. As you know, there are about 4 million owner interests in the 10 million acres of individually owned trust lands. Moreover, there are an estimated 1.4 million fractional interests of 2 percent or less involving 58,000 tracks of individually owned trust and restricted lands. We believe

that an investment in land consolidation is critical to a reform that works.

We strongly support the new incentives for voluntary sales of fractionated interests by allowing the secretary to offer more than fair market value.

We also recommend that the committee consider adding an additional subsection

that authorizes the issuance of guaranteed or low-interest loans to individuals to

purchase fractionated land.

Based on testimony received at the January Great Plains Tribes roundtable, the

MHA Nation further recommends that Indian families should have an opportunity

to purchase lands under this title. We recommend that the committee consider directing the department to establish a national ownership data bank and provide assistance to Indian families who wish to consolidate their land interests.

And that the notice requirements are not sufficient. Section 401 should be amended so that the notice provisions in section 213(e)(3)(B) of the Indian Land Consolidation Act include an express consent form. An offer should not be considered accepted

simply because of the offeree does not sign the rejection notice. Rather the offer

shall be considered rejected under section 213(e)(4)(B) if the offeree does not sign

the consent form included in the notice package.

Finally, the MHA Nation recommends that the title should include a provision

that ensures that the premium price for fractionated land shall not have an effect

on the appraisal value which would otherwise place Indian tribes who want to buy

back land at a disadvantage. The legislation should not unintentionally place tribes

in a weaker position to buy lands than the Federal Government. We believe that
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ultimately, Indian tribes, not the Federal Government, make better landowners out

West.

Title V—Restructuring Bureau of Indian Affairs and Office of Special

Trustee

This title executes most of the actual reform at the Department of the Interior.

This title would create a new under secretary for Indian affairs who would replace

the assistant secretary for Indian affairs. The title would also sunset the Office of

Special Trustee for American Indians at the end of 2008 and transfer the functions

of the special trustee to the under secretary.

This title of the bill meets many of the goals of our 50 trust principles for reorganization, including the creation of a single line of authority and clear responsibility

and accountability.

The MHA Nation has a number of additional recommendations to offer.

First, the MHA Nation supports the creation of the position of under secretary

with the caveat that the under secretary be given clear authority over everyone in

the department except the secretary, and deputy secretary. The under secretary

should not be a glorified assistant secretary. Otherwise, the MHA Nation recommends that this position be created as one of deputy secretary.

Second, we recommend that the under secretary be given authority under section

503 over the U.S. Fish and Wildlife Service, the National Parks Service, the U.S.

Geologic Service, the Office of Surface Mining and the Office of Surface Mining. The

reason is that there are trust assets that are affected by these agencies and there

is often conflict between Indian tribes and these agencies.

Third, we strongly recommend that the under secretary be charged with managing tribal trust assets in accordance with certain common law trust principles. Specifically, we recommend that the committee include a new section in title 5 that sets

the standards for the administration of trust funds.

The importance of the trust responsibility to all Indian tribes cannot be overstated. Almost nothing can be considered more sacred.

In 1985 the U.S. Supreme Court said in the Mitchell case:

‘‘Where the Federal Government takes on or has control or supervision over tribal

moneys or properties, the fiduciary relationship normally exists with respect to such

moneys or properties unless Congress has provided otherwise, even though nothing

is said expressly in the authorizing or underlying statute or the fundamental document.’’

And in the 1942 Seminole case the Supreme Court said that the conduct of the

United States as trustee for the Indians should ‘‘be judged by the most exacting fiduciary standards, not honesty alone, but the punctilio of an honor the most sensitive.’’

Thus, it is clear to me and to all the tribes who created the 50 Trust Principles

that trust standards should apply. We reviewed the Restatement of Trust, case law,

and sought expert advice from academics, litigators, and judges. Based on the advice

we received, we recommended that Congress enact a number of well-known and understood trust standards that govern nearly all trust transactions.

These standards should be added in a new section 503 (10) and include the

following:

• Duty of Loyalty and Candor

• Duty to Keep and Render Accounts

• Duty to Exercise Reasonable Care and Skill

• Duty to Administer the Trust

• Duty not to Delegate (this does not negatively impact compacting or contracting.)

• Duty to Furnish Information

• Duty to Take & Keep Control

• Duty to Preserve the Trust Property

• Duty to Enforce Claims and Defend Actions

• Duty to Keep Trust Property Separate

• Duty with Respect to Bank Deposits

• Duty to Make Trust Property Productive

• Duty to Pay Income to Beneficiaries

• Duty to Deal Impartially with Beneficiaries

• Duty with Respect to Co-Trustees

• Duty with Respect to Persons Holding Power of Control

Fourth, we recommend that the committee provide access to the Federal courts

by authorizing a cause of action in Federal district court for breach of fiduciary duties and granting of equitable and legal relief The importance of this recommenda-
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tion lies in the fact that it provides IIM account holders accountability and redress

for failure. We understand that the department strongly opposes this provision on

the grounds that it could create the ‘‘Son of Cobell’’ and so on. We believe, however,

that liability could be phased in over a period of years, in accordance with the recommendations of the Policy Commission and the independent review agency discussed below. At a minimum, the committee should authorize the Federal courts to

order prospective relief when necessary.

Fifth, we recommend that the committee amend title 5 at the end to provide for

an independent agency or office with the authority to review and report on the department’s administration of its trust management responsibilities.

Such an agency or office could be located an independent agency or could be

housed in an investigative arm of the Justice Department. The important point is

that there is an inherent conflict in self-regulation by the Department of the Interior, no matter how well meaning it may be. Thus, an independent entity with oversight and enforcement authority over the Department of the Interior is needed.

In addition, the 1994 Trust Reform Act provides that the special trustee is to review the Federal budget for trust reform and certify that it is adequate to meet the

needs of trust management. As you know, the special trustee has no independence,

and simply certifies whatever budget is submitted by the administration. It is likely

that the under secretary would simply continue this practice. Thus, we strongly support the need for an independent agency or office vested with the responsibility to

review the Federal budget for trust management and report to Congress on the

budget’s adequacy.

Sixth, we recommend deletion of subsection 503(b)(2) which would allow the new

under secretary to avoid Senate confirmation and public scrutiny. The importance

of this new position is such that all of Indian country must be given an opportunity

to have a voice on his or her appointment.

Seventh, Congress should direct the new under secretary to revise the current

tribal consultation model within 100 days of enactment of the bill by amending section 503(c)(6).

Eighth, Congress should include tribe in a negotiated rulemaking process that

guarantees that Indian tribes have a say in exactly how the under secretary reorganizes under sections 504(e), promulgates rules and regulations under section 504(f),

and recommends new legislation under section 504(m). Congress should also create

a similar rulemaking process for the reorganization of the functions of the Office of

Special Trustee under section 505(f), promulgates rules and regulations under section 505(g), and recommends new legislation under section 505(n).

The message our recommendations send is clear—in order to have a reform that

works, there have to be standards, accountability, and a price for failure to meet

those standards. If our collective experience has taught us anything, it is that the

Federal bureaucracy is not going to reform the system if they don’t have to. That

means, tribes should have access to the courts if necessary to compel compliance

with trust reform and trust standards.

But there is a bigger picture here. This is about justice and treating Indian people

with fairness. Standards go to the very nature of the Trust Responsibility itself.

Standards stand for the fact that Indian treaties are still the law of the land and

that the United States’ promises mean something.

Title VI—Audit of Indian Trust Funds

We support this title and recommend that the committee direct the Comptroller

General to enter into the contract with the independent auditor within 120 days of

passage of the bill.

Conclusion

I am glad to be able to say that I have been privileged to work with the chairman,

vice chairman, members and staff of this committee on this most important of

issues.

This is an issue that has a direct bearing on our tribal resources and assets—

in other words, the bedrock for our future economic growth and opportunity. Today,

we are not simply considering bank statements, checkbooks, and empty BIA desk

drawers. What we are talking about is the chance to restart the economic engine

of Indian country. And what we are also talking about is—at the same time—to

bring justice home to Indian country.

This is the chance to say that, at the crossroads, we were men and women of vision and hope. That we worked together to make Indian country a place of hope

and that we honored the humanity and dignity of our Indian people.

As I have pledged before, I will work with you day and night to ensure that we

get legislation that all of Indian country can support.
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Thank You.
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PREPARED STATEMENT OF MAJEL M. RUSSELL, MEMBER, CROW TRIBES OF INDIANS

AND INDIVIDUAL LANDOWNERS

Greetings, Honorable Chairman McCain, Vice Chairman Dorgan and members of

the committee. My name is Majel Russell. I am an enrolled member of the Crow

Tribe of Indians and own trust lands on the Crow Indian Reservation in Southeastern Montana. I thank you for the invitation to provide testimony today and am honored to participate with the other prestigious members of today’s panels. Trust reform has dominated the list of critical Indian issues for several years to the detriment of individual Indians, landowners and others, who rely on the services of the

Bureau of Indian Affairs [BIA]. I commend Senator McCain and the committee for

this sincere effort to resolve trust land and asset management issues that will allow

Indian country to focus on the many other critical needs of Indian people, including

health care, economic development, education and protection of tribal sovereignty.

I am an attorney and have represented Indian tribes, primarily the Crow Tribe,

for most of my legal career and have been familiar with various efforts over the last

5 years to reform trust administration by the Department of the Interior [DOI].

However, my comments today are from my personal viewpoint as an owner of trust

land within the exterior boundaries of the Crow Indian Reservation. I own interests

in 46 tracts of trust land. Tracts of land that I own with less than four other owners, my mother and aunts, are managed by us as competent landowners in accordance with the Crow Competency Act of 1948. We decide who will utilize our land,

what it will be used for, negotiate leases of our land at rates we determine fair, and

collect payments directly from the lessees. For the lands we self-manage, the BIA

provides two critical services; to insure that the land remains in trust and to record

our leases.

I have interests in other tracts of trust land with varying numbers of owners and

one tract with 41 other owners. All lands with more than five owners are managed

by the Crow Agency BIA, including advertisement of the lands for lease, accepting

bids from lessees, negotiating and approving leases, collecting rental payments, distribution of payments to owners, and recording of lease documents.

With my family members, like many other Crow people who own land in competency status, we strive to be active landowners, to know where our lands are located, what the lands are worth and how best to utilize and protect the lands. I

endorse efforts that will allow other Indian landowners to become active, engaged

landowners as the best means of protecting Indian reservation lands.

Policy Review and Restructuring

Recent restructuring of the Department of the Interior to reform trust administration has been driven by the on-going, contentious Cobell litigation rather than by

Indian tribes and the users of the beneficiary services of the BIA. Thus, the department has been forced to restructure in a manner that is focused on avoiding liability

rather than on a more effective, efficient delivery of services to individual Indians

and tribes. Settlement of Cobell must occur to prevent continued restructuring in

a manner that diminishes the United States’ veil of protection over trust assets.

Further, restructuring of the Department of the Interior for trust administration

must occur in a manner that strengthens the government to government relationship between the United States and tribes. Restructuring should not shift the longstanding, hard fought standard of government to government relationships to a government to individual Indian standard. Although the General Allotment Act and

other allotment acts altered the relationship between tribes and their members,

trust reform efforts should not follow suit.

I believe strong, effective tribal governments will insure that Indian people remain distinct political groups in this country rather than becoming another of the

many racial groups in the United States. Only through my tribal membership do

I have rights as an individual Indian, including the right to own trust land. I believe

that my tribal government is the best advocate to protect my interests as a trust

landowner. Tribe’s must be actively engaged and in the ‘‘driver’s seat’’ on developing

policy and reviewing regulations for trust asset management. The proposed Policy

Review Commission must be formed and focused to insure that tribal desires for reform are paramount.

As an individual utilizing the BIA for land services, I remain interested in the

‘‘one-stop shopping’’ concept. Services to assist landowners with various land transactions must be accessible, streamlined and with one entity at the local level. The

current framework of various entities for different beneficiary services is confusing

and often counterproductive when the roles for the various entities are not clearly

defined. Presently, confusion exists as to the decisionmaking authority of the various entities available to trust beneficiaries. Over the years, my family and I and
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my grandparents before me [who were original allottees] were served at the BIA by

people we knew and were related to. These Crow people had no desire or intent to

steal, lie or cheat to deprive landowners of revenue. Their services were simply subjected to an extreme lack of funding, resources and training. Today, the problem remains the same—the local agency BIA simply needs sufficient funding to best deliver services rather than the creation of new and different entities.

Information access, specifically access to title records is of critical importance both

to tribes and individual Indians. Thus, I support the efforts to improve title records

and believe a national title system must be completed to insure the orderly and expeditious disposition of lands to heirs and devises, to properly distribute revenues

and to access landownership information.

In the last several years, incredible amounts of limited DOI resources have been

spent on trust accounting. While I understand that system flaws must be addressed,

resources must also be applied to services that assist landowners with the beneficial

use of their lands including access to title information, timely processing of land exchanges, partition applications, completion of appraisals, and approvals of rights-ofways. In addition, DOI resources should be available to assist landowners with accessing trust lands and to address trespass issues. Presently, without efforts to improve and streamline these services within the available budget, DOI is proposing

that fees be assessed for many of these services. I support a reprioritization in budgeting that accommodates land related services.

Indian Trust Asset Management Project

The Indian Trust Asset Management Project in S. 1439 will allow a tribe greater

control over the management of trust assets on each particular reservation and facilitate a unified management approach for tribal and individual trust assets. Allowing tribes to establish particularized trust management plans enhances the longstanding policies of self-determination and self-government. However, this effort to

endorse tribal control must be sincere and not derailed by broad discretionary authority of the Secretary of the Interior to disapprove a tribal asset management plan

based upon yet to be developed overall standards. Tribes should be empowered to

develop applicable standards for trust administration on their particular reservations.

Land Consolidation Efforts

Owning fractionated lands defeats the goals of land ownership. Fractionated lands

usually cannot be actively managed or utilized by the owners. The proposed amendment to the Indian Land Consolidation Act to purchase fractionated interests at

more than fair market value would likely be most attractive to owners of fractional

interests. The Crow Tribe has been surveyed three times, once in the 1960’s, again

in the mid-1980’s and finally in 2003 about the willingness of individuals to sell

their fractional interests in land. All three surveys overwhelmingly indicated that

Crow Indians who owned small fractional interests of lands preferred to sell the

lands and in some cases to even donate the interests to the tribe.

As an individual landowner, I propose expanding land consolidation efforts to include financing for individuals to purchase fractionated interests. Developing mechanisms for individuals to consolidate lands, invest capital and practice good stewardship of land would most effectively protect trust land while also benefiting tribes

through stabilizing and protecting the reservation land base. However, to promote

the efforts of individuals, the current DOI proposal to deny fee to trust applications

by individuals must be revisited.

Conclusion

In summary, true reform of trust administration involves the daunting task of

balancing competing interests and will likely be an evolving process. S. 1439 illustrates this committee’s commitment to take on this task and provides a positive

starting point. Thank you.

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