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[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 1340 Engrossed in Senate (ES)]

  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
107th CONGRESS
  2d Session
                                S. 1340

_______________________________________________________________________

                                 AN ACT

 
   To amend the Indian Land Consolidation Act to provide for probate 
           reform with respect to trust or restricted lands.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Indian Probate Reform Act of 2002''.

SEC. 2. FINDINGS.

    Congress makes the following findings:
            (1) The General Allotment Act of 1887 (commonly known as 
        the `Dawes Act'), which authorized the allotment of Indian 
        reservations, did not allow Indian allotment owners to provide 
        for the testamentary disposition of the land that was allotted 
        to those owners.
            (2) The Dawes Act provided that allotments would descend 
        according to State law of intestate succession based on the 
        location of the allotment.
            (3) The Federal Government's reliance on the State law of 
        intestate succession with respect to the descendency of 
        allotments has resulted in numerous problems affecting Indian 
        tribes, their members, and the Federal Government. Those 
        problems include--
                    (A) the increasing fractionated ownership of trust 
                and restricted land as that land is inherited by 
                successive generations of owners as tenants in common;
                    (B) the application of different rules of intestate 
                succession to each of a decedent's interests in trust 
                and restricted land if that land is located within the 
                boundaries of more than 1 State, which application 
                makes probate planning unnecessarily difficult and 
                impedes efforts to provide probate planning assistance 
                or advice;
                    (C) the absence of a uniform general probate code 
                for trust and restricted land which makes it difficult 
                for Indian tribes to work cooperatively to develop 
                tribal probate codes; and
                    (D) the failure of Federal law to address or 
                provide for many of the essential elements of general 
                probate law, either directly or by reference, which is 
                unfair to the owners of trust and restricted land and 
                their heirs and devisees and which makes probate 
                planning more difficult.
            (4) Based on the problems identified in paragraph (3), a 
        uniform Federal probate code would likely--
                    (A) reduce the number of unnecessary fractionated 
                interests in trust or restricted land;
                    (B) facilitate efforts to provide probate planning 
                assistance and advice;
                    (C) facilitate inter-tribal efforts to produce 
                tribal probate codes pursuant to section 206 of the 
                Indian Land Consolidation Act (25 U.S.C. 2205); and
                    (D) provide essential elements of general probate 
                law that are not applicable on the date of enactment of 
                this subtitle to interests in trust or restricted land.

SEC. 3. INDIAN PROBATE REFORM.

    (a) Testamentary Disposition.--Subsection (a) of section 207 of the 
Indian Land Consolidation Act (25 U.S.C. 2206(a)) is amended to read as 
follows:
    ``(a) Testamentary Disposition.--
            ``(1) General devise of an interest in trust or restricted 
        land.--
                    ``(A) In general.--Subject to any applicable 
                Federal law relating to the devise or descent of trust 
                or restricted property, or a tribal probate code 
                enacted pursuant to section 206, the owner of an 
                interest in trust or restricted land may devise such an 
                interest to the Indian tribe with jurisdiction over the 
                land so devised, or to any Indian in trust or 
                restricted status or as a passive trust interest (as 
                provided for in section 207A).
                    ``(B) Status.--The devise of an interest in trust 
                or restricted land to an Indian under subparagraph (A) 
                shall not alter the status of such an interest as a 
                trust or restricted interest unless the testator 
                provides that the interest is to be held as a passive 
                trust interest.
            ``(2) Devise of trust or restricted land in passive trust 
        or fee status.--
                    ``(A) In general.--Any interest in trust or 
                restricted land that is not devised pursuant to 
                paragraph (1) may only be devised--
                            ``(i) as a life estate to any non-Indian 
                        person (the remainder interest may only be 
                        devised pursuant to clause (ii), subparagraph 
                        (C), or paragraph (1)(A));
                            ``(ii)(I) to the testator's lineal 
                        descendant or heir of the 1st or 2nd degree as 
                        a passive trust interest (to be known as an 
                        `eligible passive trust devisee'); or
                            ``(II) if the testator does not have an 
                        heir of the 1st or 2nd degree or a lineal 
                        descendant, to any lineal descendant of a 
                        testator's grandparent as a passive trust 
                        interest (to be known as an `eligible passive 
                        trust devisee'); or
                            ``(iii) in fee status as provided for in 
                        subparagraph (C).
                    ``(B) Presumed devise of passive trust interest.--
                Any devise to an eligible passive trust devisee, 
                including the devise of a remainder interest from the 
                devise of a life estate under subparagraph (A)(ii), 
                that does not indicate whether the interest is devised 
                as a passive trust interest or a fee interest shall be 
                construed to devise a passive trust interest.
                    ``(C) Devise of a fee interest.--Subject to 
                subparagraph (D), any interest in trust or restricted 
                land that is not devised pursuant to paragraph (1), or 
                devised to an eligible passive trust devisee pursuant 
                to subparagraph (A), may be devised to a non-Indian in 
                fee status.
                    ``(D) Limitation.--Any interest in trust or 
                restricted land that is subject to section 4 of the Act 
                of June 18, 1934 (25 U.S.C. 464) may only be devised 
                pursuant to such section 4, subparagraph (A) of this 
                paragraph, or paragraph (1) of this subsection.
            ``(3) Devise of a passive trust interest.--
                    ``(A) In general.--The holder of an interest in 
                trust or restricted land that is held as a passive 
                trust interest may devise the interest as a passive 
                trust interest only to--
                            ``(i) any Indian or the Indian tribe that 
                        exercises jurisdiction over the interest;
                            ``(ii) the holder's lineal descendants or 
                        heirs of the first or second degree;
                            ``(iii) any living descendant of the 
                        decedent from whom the holder acquired the 
                        interest by devise or descent; and
                            ``(iv) any person who owns a pre-existing 
                        interest or a passive trust interest in the 
                        same parcel of land if the pre-existing 
                        interest is held in trust or restricted status 
                        or in passive trust status.
                    ``(B) Ineligible devisees and intestate 
                succession.--A passive trust interest that is devised 
                to a person who is not eligible under subparagraph (A) 
                or that is not disposed of by a valid will shall pass 
                pursuant to the applicable law of intestate succession 
                as provided for in subsection (b).''.
    (b) Intestate Succession.--Subsection (b) of section 207 of the 
Indian Land Consolidation Act (25 U.S.C. 2206(b)) is amended to read as 
follows:
    ``(b) Intestate Succession.--
            ``(1) Rules of descent.--
                    ``(A) In general.--Subject to any applicable 
                Federal law relating to the devise or descent of trust 
                or restricted property, any interest in trust or 
                restricted land that is not disposed of by a valid will 
                shall--
                            ``(i) descend according to a tribal probate 
                        code that is approved pursuant to section 206; 
                        or
                            ``(ii) in the case of an interest in trust 
                        or restricted land to which such a code does 
                        not apply, be considered an `intestate 
                        interest' and descend pursuant to paragraph 
                        (2), this Act, and other applicable Federal 
                        law.
                    ``(B) Classifications.--For purposes of applying 
                this subsection, intestate interests referred to in 
                subparagraph (A)(ii) shall be classified as either--
                            ``(i) a devise or inheritance interest (an 
                        interest acquired by a decedent through devise 
                        or inheritance); or
                            ``(ii) an acquired interest (an interest 
                        acquired by a decedent by any means other than 
                        devise or inheritance and an interest acquired 
                        by a decedent through devise or inheritance)--
                                    ``(I) if the decedent--
                                            ``(aa) acquired additional 
                                        undivided interests in the same 
                                        parcel as the interest, by a 
                                        means other than devise or 
                                        inheritance; or
                                            ``(bb) acquired land 
                                        adjoining the parcel of land 
                                        that includes the interest; or
                                    ``(II) if the parcel of land that 
                                includes the interest includes the 
                                decedent's spouse's residence.
            ``(2) Intestate succession.--An interest in trust or 
        restricted land described in paragraph (1)(A)(ii) (an intestate 
        interest) shall descend as provided for in this paragraph:
                    ``(A) Surviving indian spouse.--If a decedent is 
                survived by an Indian spouse and the decedent's estate 
                includes--
                            ``(i) one or more acquired interests, the 
                        decedent's spouse shall receive all such 
                        acquired interests;
                            ``(ii) one or more devise or inheritance 
                        Interests, and--
                                    ``(I) the decedent is not survived 
                                by an Indian heir of the first or 
                                second degree, the decedent's spouse 
                                shall receive all such devise or 
                                inheritance interests; or
                                    ``(II) the decedent is survived by 
                                an Indian heir of the first or second 
                                degree, the decedent's devise or 
                                inheritance interest shall descend 
                                pursuant to paragraph (3)(A).
                    ``(B) Surviving non-indian spouse.--If a decedent 
                is survived by a non-Indian spouse and the decedent's 
                estate includes--
                            ``(i) one or more acquired interests, the 
                        decedent's spouse shall receive a life estate 
                        in such acquired interest, and if the decedent 
                        is--
                                    ``(I) survived by an Indian heir of 
                                the 1st or 2nd degree, the remainder 
                                interests shall descend pursuant to 
                                paragraph (3)(A); or
                                    ``(II) not survived by an Indian 
                                heir of the 1st or 2nd degree, the 
                                remainder interest shall descend 
                                pursuant to paragraph (3)(C); or
                            ``(ii) one or more devise or inheritance 
                        interests, and the decedent is--
                                    ``(I) survived by an Indian heir of 
                                the 1st or 2nd degree, such devise or 
                                inheritance interests shall descend 
                                pursuant to paragraph (3)(A); or
                                    ``(II) not survived by an Indian 
                                heir of the 1st or 2nd degree, such 
                                devise or inheritance interest shall 
                                descend pursuant to paragraph (3)(C).
                    ``(C) No surviving spouse.--If the decedent is not 
                survived by a spouse, and the decedent's estate 
                includes one or more acquired interests or one or more 
                devise or inheritance interests and the decedent is--
                            ``(i) survived by an Indian heir of the 1st 
                        or 2nd degree, the acquired interests or devise 
                        or inheritance interests shall descend pursuant 
                        to paragraph (3)(A);
                            ``(ii) not survived by an Indian heir of 
                        the 1st or 2nd degree, the acquired interests 
                        or devise or inheritance interests shall 
                        descend pursuant to paragraph (3)(C).
            ``(3) Rules applicable to intestate succession.--
                    ``(A) Indian heirs.--For purposes of this 
                subsection, Indian heirs of the 1st or 2nd degree shall 
                inherit in the following order:
                            ``(i) The Indian children of the decedent, 
                        in equal shares, or if one or more of those 
                        Indian children do not survive the decedent, 
                        such Indian children of the decedent's deceased 
                        child shall inherit by right of representation;
                            ``(ii) If the decedent has no Indian 
                        children or grandchildren (that take by 
                        representation under clause (i)), to the 
                        decedent's Indian brothers and sisters in equal 
                        shares.
                            ``(iii) If the decedent has no Indian 
                        brothers or sisters, to the decedent's Indian 
                        parent or parents.
                    ``(B) Right of representation.--For purpose of this 
                subsection, in any case involving the determination of 
                a right of representation--
                            ``(i) each interest in trust land shall be 
                        equally divided into a number of shares that 
                        equals the sum of--
                                    ``(I) the number of surviving heirs 
                                in the nearest degree of kinship; and
                                    ``(II) the number of deceased 
                                persons in that same degree, if any, 
                                who left issue who survive the 
                                decedent;
                            ``(ii) each surviving heir described in 
                        clause (i)(I) shall receive 1 share; and
                            ``(iii)(I) each deceased person described 
                        in clause (i)(II) shall receive 1 share; and
                            ``(II) that share shall be divided equally 
                        among the surviving issue of the deceased 
                        person.
                    ``(C) No indian heirs.--
                            ``(i) In general.--For purposes of this 
                        subsection, if a decedent does not have an 
                        Indian heir of the 1st or 2nd degree, an 
                        interest shall descend to an Indian collateral 
                        heir who is a co-owner of an interest owned by 
                        the decedent if any.
                            ``(ii) Multiple collateral heirs.--If--
                                    ``(I) more than one Indian 
                                collateral heir owns an interest in an 
                                interest referred to in clause (i), the 
                                interest shall descend to the 
                                collateral heir that owns the largest 
                                undivided interest in the parcel; or
                                    ``(II) two or more collateral heirs 
                                own equal shares in an interest 
                                referred to in clause (i), the interest 
                                passing pursuant to this subsection 
                                shall be divided equally between those 
                                collateral heirs that own equal shares.
                            ``(iii) No ownership.--If none of the 
                        decedent's collateral heirs own an interest in 
                        the interest referred to in clause (i), the 
                        interest shall descend to the Indian tribe that 
                        exercises jurisdiction over the parcel of trust 
                        or restricted lands involved, subject to clause 
                        (iv).
                            ``(iv) Acquisition of interest.--
                        Notwithstanding clause (iii), an Indian co-
                        owner of a parcel of trust or restricted land 
                        may acquire an interest subject to such clause 
                        by paying into the decedent's estate, before 
                        the close of the probate of the decedent's 
                        estate, the fair market value of the interest 
                        in such land. If more than 1 Indian co-owner 
                        (including the Indian tribe referred to in 
                        clause (iii)) offers to pay for such an 
                        interest, the highest bidder shall acquire the 
                        interest.
                            ``(v) Definition.--In this subparagraph, 
                        the term `collateral heir' means the decedent's 
                        aunt, uncle, niece, nephew, and first cousin.
            ``(4) Special rule relating to survival.--For purposes of 
        this section, an individual who fails to survive a decedent by 
        at least 120 hours is deemed to have predeceased the decedent 
        for the purposes of intestate succession, and the heirs of the 
        decedent shall be determined accordingly. If it is not 
        established by clear and convincing evidence that an individual 
        who would otherwise be an heir survived the decedent by at 
        least 120 hours, the individual shall be deemed to have failed 
        to survive for the required time-period for the purposes of the 
        preceding sentence.
            ``(5) Pretermitted spouses and children.--
                    ``(A) Spouses.--For the purposes of this section, 
                if the surviving spouse of a testator married the 
                testator after the testator executed his or her will, 
                the surviving spouse shall receive the intestate share 
                in trust or restricted land that the spouse would have 
                otherwise received if the testator had died intestate. 
                The preceding sentence shall not apply to an interest 
                in trust or restricted land where--
                            ``(i) the will is executed before the date 
                        of enactment of this subsection;
                            ``(ii) the testator's spouse is a non-
                        Indian and the testator has devised his or her 
                        interests in trust or restricted land to an 
                        Indian or Indians;
                            ``(iii) it appears from the will or other 
                        evidence that the will was made in 
                        contemplation of the testator's marriage to the 
                        surviving spouse;
                            ``(iv) the will expresses the intention 
                        that it is to be effective notwithstanding any 
                        subsequent marriage; or
                            ``(v) the testator provided for the spouse 
                        by a transfer of funds or property outside of 
                        the will and an intent that the transfer be in 
                        lieu of a testamentary provision is 
                        demonstrated by the testator's statements or is 
                        reasonably inferred from the amount of the 
                        transfer or other evidence.
                    ``(B) Children.--For the purposes of this section, 
                if a testator executed his or her will prior to the 
                birth or adoption of 1 or more children of the testator 
                and the omission is the product of inadvertence rather 
                than an intentional omission, those children shall 
                share in the decedent's intestate interests in trust or 
                restricted land as if the decedent had died intestate. 
                Any person recognized as an heir by virtue of adoption 
                under the Act of July 8, 1940 (54 Stat 746), shall be 
                treated as a decedent's child under this section.
            ``(6) Divorce.--
                    ``(A) Surviving spouse.--
                            ``(i) In general.--For the purposes of this 
                        section, an individual who is divorced from the 
                        decedent, or whose marriage to the decedent has 
                        been annulled, shall not be considered to be a 
                        surviving spouse unless, by virtue of a 
                        subsequent marriage, the individual is married 
                        to the decedent at the time of death. A decree 
                        of separation that does not terminate the 
                        status of husband and wife shall not be 
                        considered a divorce for the purposes of this 
                        subsection.
                            ``(ii) Rule of construction.--Nothing in 
                        clause (i) shall be construed to prevent an 
                        entity responsible for adjudicating interests 
                        in trust or restricted land from giving force 
                        and effect to a property right settlement if 
                        one of the parties to the settlement dies 
                        before the issuance of a final decree 
                        dissolving the marriage of the parties to the 
                        property settlement.
                    ``(B) Effect of subsequent divorce on a will or 
                devise.--If after executing a will the testator is 
                divorced or the marriage of the testator is annulled, 
                upon the effective date of the divorce or annulment any 
                disposition of interests in trust or restricted land 
                made by the will to the former spouse shall be deemed 
                to be revoked unless the will expressly provides 
                otherwise. Property that is prevented from passing to a 
                former spouse based on the preceding sentence shall 
                pass as if the former spouse failed to survive the 
                decedent. Any provision of a will that is revoked 
                solely by operation of this paragraph shall be revived 
                by the testator's remarriage to the former spouse.
            ``(7) Notice.--To the extent practicable, the Secretary 
        shall notify the owners of trust and restricted land of the 
        provisions of this Act. The notice may, at the discretion of 
        the Secretary, be provided together with the notice required 
        under section 207(g).''.
    (c) Rule of Construction.--Section 207 of the Indian Land 
Consolidation Act (25 U.S.C. 2206) is amended by adding at the end the 
following:
    ``(h) Rule of Construction.--For purposes of subsections (a) and 
(b), any reference to `applicable Federal law' shall be construed to 
include Public Law 91-627 (84 Stat. 1874, amending section 7 of the Act 
of August 9, 1946), Public Law 92-377 (86 Stat. 530), and Public Law 
92-443 (86 Stat. 744). Nothing in this section shall be construed to 
amend or alter such Public Laws or any other Federal law that provides 
for the devise and descent of any trust or restricted lands located on 
a specific Indian reservation.''.
    (d) Passive Trust Status for Trust or Restricted Land.--The Indian 
Land Consolidation Act is amended by inserting after section 207 (25 
U.S.C. 2206) the following:

``SEC. 207A. PASSIVE TRUST STATUS FOR TRUST OR RESTRICTED LAND.

    ``(a) Passive Trust.--The owner of an interest in trust or 
restricted land may submit an application to the Secretary requesting 
that such interest be held in passive trust interest status. Such 
application may authorize the Secretary to amend or alter any existing 
lease or agreement with respect to the interest that is the subject of 
the application.
    ``(b) Approval.--Upon the approval of an application by the 
Secretary under subsection (a), an interest in trust or restricted land 
shall be held as a passive trust interest in accordance with this 
section.
    ``(c) Requirements.--Except as provided in this section, an 
interest in trust or restricted land that is held as a passive trust 
interest under this section--
            ``(1) shall continue to be covered under any applicable 
        tax-exempt status and continue to be subject to any 
        restrictions on alienation until such interest is patented in 
        fee status;
            ``(2) may, without the approval of the Secretary, be--
                    ``(A) leased;
                    ``(B) mortgaged pursuant to the Act of March 29, 
                1956 (25 U.S.C. 483a); or
                    ``(C) sold or conveyed to an Indian, the Indian 
                tribe that exercises jurisdiction over the interest, or 
                a co-owner of an interest in the same parcel of land if 
                the co-owner owns a pre-existing trust, restricted 
                interest, or a passive trust interest in the parcel; 
                and
            ``(3) may be subject to an ordinance or resolution enacted 
        under subsection (d).
    ``(d) Ordinance or Resolution for Removal of Status.--
            ``(1) In general.--The governing body of the Indian tribe 
        that exercises jurisdiction over an interest in trust or 
        restricted land that is held as a passive trust interest in 
        accordance with this section may enact an ordinance or 
        resolution to allow the owner of such an interest to apply to 
        the Secretary for the removal of the trust or restricted status 
        of such portion of such lands that are subject to the tribe's 
        jurisdiction.
            ``(2) Review by secretary.--The Secretary shall review and 
        may approve an ordinance or resolution enacted by an Indian 
        tribe pursuant to paragraph (1) if the Secretary determines 
        that the ordinance or resolution is consistent with this Act 
        and will not increase fractionated ownership of Indian land.
    ``(e) Revenues or Royalties.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        Secretary shall not be responsible for the collection of or 
        accounting for any lease revenues or royalties accruing to an 
        interest held as a passive trust interest by any person under 
        this section.
            ``(2) Exception.--Paragraph (1) shall not apply to an 
        interest described in such paragraph if the Secretary approves 
        an application to have such interest be taken into active trust 
        status on behalf of an Indian or an Indian tribe pursuant to 
        regulations enacted by the Secretary.
            ``(3) Rule of construction.--Nothing in this subsection 
        shall be construed to alter the authority or responsibility of 
        the Secretary, if any, with respect to an interest in trust or 
        restricted land held in active trust status, including an 
        undivided interest within the same parcel of land as an 
        undivided passive trust interest.
    ``(f) Jurisdiction over Passive Trust Interest.--An Indian tribe 
that exercises jurisdiction over an interest in trust or restricted 
land that is devised or held as a passive trust interest under this 
section shall continue to exercise jurisdiction over the land that is 
held as a passive trust interest and any person holding, leasing, or 
otherwise using such land shall be deemed to have consented to the 
jurisdiction of such a tribe with respect to the use of such land, 
including any impacts associated with any use of such lands.
    ``(g) Probate of Passive Trust Interests.--An interest in trust or 
restricted land that is held as a passive trust interest under this 
section shall be subject to probate by the Secretary pursuant to this 
Act and other laws applicable to the probate of trust or restricted 
land. Any interested party may file an application to commence the 
probate of an interest in trust or restricted land held as a passive 
trust interest.
    ``(h) Regulations.--The Secretary shall promulgate regulations to 
implement this section.''.
    (e) Partition.--Section 205 of the Indian Land Consolidation Act 
(25 U.S.C. 2204) is amended by adding at the end the following:
    ``(c) Partition.--
            ``(1) In general.--Notwithstanding any other provision of 
        law, in accordance with this subsection and subject to 
        paragraphs (2), (3), and (4)--
                    ``(A) an Indian tribe may apply to the Secretary 
                for the partition of a parcel of land that is--
                            ``(i) located within the reservation of the 
                        Indian tribe; or
                            ``(ii) otherwise under the jurisdiction of 
                        the Indian tribe; and
                    ``(B) the Secretary may commence a process for 
                partitioning a parcel of land as provided for in 
                paragraphs (2)(B) and (6)(B), if--
                            ``(i) an Indian tribe owns an undivided 
                        interest in the parcel of land and such tribe 
                        consents to the partition;
                            ``(ii)(I) the tribe referred to in clause 
                        (i) meets the ownership requirement of clauses 
                        (i) or (ii) of paragraph (2)(B); or
                            ``(II) the Secretary determines that it is 
                        reasonable to believe that the partition would 
                        be in accordance with paragraph (2)(B)(iii); 
                        and
                            ``(iii) the tribe referred to in paragraph 
                        (3), if any, consents to the partition.
        For purposes of this subsection, the term `eligible Indian 
        tribe' means an Indian tribe described in subparagraph (A) and 
        (B)(i).
            ``(2) Tribal ownership.--A parcel of land may be 
        partitioned under this subsection if, with respect to the 
        eligible Indian tribe involved--
                    ``(A) the tribe owns an undivided interest in the 
                parcel of land; and
                    ``(B)(i) the tribe owns 50 percent or more of the 
                undivided interest in the parcel;
                    ``(ii) the tribe is the owner of the largest 
                quantity of undivided interest in the parcel; or
                    ``(iii) the owners of undivided interests equal to 
                at least 50 percent of the undivided interests in the 
                parcel (including any undivided interest owned by the 
                tribe) consent or do not object to the partition.
            ``(3) Tribal consent.--A parcel of land that is located 
        within the reservation of an Indian tribe or otherwise under 
        the jurisdiction of an Indian tribe shall be partitioned under 
        this subsection only if the Indian tribe does not object to the 
        partition.
            ``(4) Applicability.--This subsection shall not apply to 
        any parcel of land that is the bona fide residence of any 
        person unless the person consents to the partition in writing.
            ``(5) Partition in kind.--
                    ``(A) In general.--The Secretary shall commence the 
                partition process described in subparagraph (B) if--
                            ``(i) an eligible Indian tribe applies to 
                        partition a parcel of land under this 
                        paragraph; and
                            ``(ii)(I) the Secretary determines that the 
                        Indian tribe meets the applicable ownership 
                        requirements of clause (i) or (ii) of paragraph 
                        (2)(B); or
                            ``(II) the Secretary determines that it is 
                        reasonable to believe that the partition would 
                        be in accordance with paragraph (2)(B)(iii).
                    ``(B) Partition process.--In carrying out any 
                partition, the Secretary shall--
                            ``(i) provide, to each owner of any 
                        undivided interest in the parcel to be 
                        partitioned, through publication or other 
                        appropriate means, notice of the proposed 
                        partition;
                            ``(ii) make available to any interested 
                        party a copy of any proposed partition plan 
                        submitted by an Indian tribe or proposed by the 
                        Secretary; and
                            ``(iii) review--
                                    ``(I) any proposed partition plan 
                                submitted by any owner of an undivided 
                                interest in the parcel; and
                                    ``(II) any comments or objections 
                                concerning a partition, or any proposed 
                                plan of partition, submitted by any 
                                owner or any other interested party.
                    ``(C) Determination not to partition.--If the 
                Secretary determines that a parcel of land cannot be 
                partitioned in a manner that is fair and equitable to 
                the owners of the parcel, the Secretary shall inform 
                each owner of the parcel of--
                            ``(i) the determination of the Secretary; 
                        and
                            ``(ii) the right of the owner to appeal the 
                        determination.
                    ``(D) Partition with consent of qualified indian 
                tribe.--If the Secretary determines that a parcel of 
                land may be partitioned in a manner that is fair and 
                equitable to the owners of the parcel, and the Indian 
                tribe meets the applicable ownership requirements under 
                clause (i) or (ii) of paragraph (2)(B), the Secretary 
                shall--
                            ``(i) approve a plan of partition;
                            ``(ii) provide notice to the owners of the 
                        parcel of the determination of the Secretary;
                            ``(iii) make a copy of the plan of 
                        partition available to each owner of the 
                        parcel; and
                            ``(iv) inform each owner of the right to 
                        appeal the determination of the Secretary to 
                        partition the parcel in accordance with the 
                        plan.
                    ``(E) Partition with consent; implied consent.--If 
                the Secretary determines that a parcel may be 
                partitioned in a manner that is fair and equitable to 
                the owners of the parcel, but the Indian tribe involved 
                does not meet the applicable ownership requirements 
                under clause (i) or (ii) of paragraph (2)(B), the 
                Secretary shall--
                            ``(i)(I) make a plan of partition available 
                        to the owners of the parcel; and
                            ``(II) inform the owners that the parcel 
                        will be partitioned in accordance with the plan 
                        if the owners of 50 percent or more of 
                        undivided ownership interest in the parcel 
                        either--
                                    ``(aa) consent to the partition; or
                                    ``(bb) do not object to the 
                                partition by such deadline as may be 
                                established by the Secretary;
                            ``(ii) if the owners of 50 percent or more 
                        of undivided ownership interest in the parcel 
                        consent to the partition or do not object by a 
                        deadline established by the Secretary under 
                        clause (i)(II)(bb), inform the owners of the 
                        parcel that--
                                    ``(I) the plan for partition is 
                                final; and
                                    ``(II) the owners have the right to 
                                appeal the determination of the 
                                Secretary to partition the parcel; and
                            ``(iii) if the owners of 50 percent or more 
                        of the undivided ownership interest in the 
                        parcel object to the partition, inform the 
                        Indian tribe of the objection.
                    ``(F) Successive partition plans.--In carrying out 
                subparagraph (E) in accordance with paragraph 
                (2)(B)(iii), the Secretary may, in accordance with 
                subparagraph (E)--
                            ``(i) approve 1 or more successive plans of 
                        partition; and
                            ``(ii) make those plans available to the 
                        owners of the parcel.
                    ``(G) Plan of partition--A plan of partition 
                approved by the Secretary in accordance with 
                subparagraph (D) or (E)--
                            ``(i) may determine that 1 or more of the 
                        undivided interests in a parcel are not 
                        susceptible to a partition in kind;
                            ``(ii) may provide for the sale or exchange 
                        of those undivided interests to--
                                    ``(I) 1 or more of the owners of 
                                undivided interests in the parcel; or
                                    ``(II) the Secretary in accordance 
                                with section 213; and
                            ``(iii) shall provide that the sale of any 
                        undivided interest referred to in clause (ii) 
                        shall be for not less than the fair market 
                        value of the interest.
            ``(6) Partition by sale.--
                    ``(A) In general.--The Secretary shall commence the 
                partition process described in subparagraph (B) if--
                            ``(i) an eligible Indian tribe applies to 
                        partition a parcel of land under this 
                        subsection; and
                            ``(ii)(I) the Secretary determines that the 
                        Indian tribe meets the applicable ownership 
                        requirements of clause (i) or (ii) of paragraph 
                        (2)(B); or
                            ``(II) the Secretary determines that it is 
                        reasonable to believe that the partition would 
                        be in accordance with paragraph (2)(B)(iii).
                    ``(B) Partition process.--In carrying out any 
                partition of a parcel, the Secretary--
                            ``(i) shall conduct a preliminary appraisal 
                        of the parcel;
                            ``(ii) shall provide, to the owners of the 
                        parcel, through publication or other 
                        appropriate means--
                                    ``(I) notice of the application of 
                                the Indian tribe to partition the 
                                parcel; and
                                    ``(II) access to the preliminary 
                                appraisal conducted in accordance with 
                                clause (i);
                            ``(iii) shall inform each owner of the 
                        parcel of the right to submit to the Secretary 
                        comments relating to the preliminary appraisal;
                            ``(iv) may, based on comments received 
                        under clause (iii), modify the preliminary 
                        appraisal or provide for the conduct of a new 
                        appraisal; and
                            ``(v) shall--
                                    ``(I) issue a final appraisal for 
                                the parcel;
                                    ``(II) provide to the owners of the 
                                parcel and the appropriate Indian 
                                tribes access to the final appraisal; 
                                and
                                    ``(III) inform the Indian tribes of 
                                the right to appeal the final 
                                appraisal.
                    ``(C) Purchase by qualified indian tribe.--If an 
                eligible Indian tribe agrees to pay fair market value 
                for a partitioned parcel, as determined by the final 
                appraisal of the parcel issued under subparagraph 
                (B)(v)(I) (including any appraisal issued by the 
                Secretary after an appeal by the Indian tribe under 
                subparagraph (B)(v)(III)), and the Indian tribe meets 
                the applicable ownership requirements of clause (i) or 
                (ii) of paragraph (2)(B), the Secretary shall--
                            ``(i) provide to each owner of the parcel 
                        notice of the decision of the Indian tribe; and
                            ``(ii) inform the owners of the right to 
                        appeal the decision (including the right to 
                        appeal any final appraisal of the parcel 
                        referred to in subparagraph (B)(v)(III)).
                    ``(D) Partition with consent; implied consent.--
                            ``(i) In general.--If an eligible Indian 
                        tribe agrees to pay fair market value for a 
                        partitioned parcel, as determined by the final 
                        appraisal of the parcel issued under 
                        subparagraph (B)(v)(I) (including any appraisal 
                        issued by the Secretary after an appeal by the 
                        Indian tribe under subparagraph (B)(v)(III)), 
                        but does not meet the applicable ownership 
                        requirements of clause (i) or (ii) of paragraph 
                        (2)(B), the Secretary shall--
                                    ``(I) provide notice to the owners 
                                of the undivided interest in the 
                                parcel; and
                                    ``(II) inform the owners that the 
                                parcel will be partitioned by sale 
                                unless the partition is opposed by the 
                                owners of 50 percent or more of the 
                                undivided ownership interest in the 
                                parcel.
                            ``(ii) Failure to object to partition.--If 
                        the owners of 50 percent or more of undivided 
                        ownership interest in or to a parcel consent to 
                        the partition or the parcel, or do not object 
                        to the partition by such deadline as may be 
                        established by the Secretary, the Secretary 
                        shall inform the owners of the parcel of the 
                        right to appeal the determination of the 
                        Secretary (including the results of the final 
                        appraisal issued under subparagraph (B)(v)(I)).
                            ``(iii) Objection to partition.--If the 
                        owners of 50 percent or more of the undivided 
                        ownership interest in a parcel object to the 
                        partition of the parcel--
                                    ``(I) the Secretary shall notify 
                                the Indian tribe of the objection; and
                                    ``(II) the Indian tribe and the 
                                Secretary may agree to increase the 
                                amount offered to purchase the 
                                undivided ownership interests in the 
                                parcel.
            ``(7) Enforcement.--
                    ``(A) In general.--If, with respect to a parcel, a 
                partition in kind is approved under subparagraph (D) or 
                (E) of paragraph (5), or a partition by sale is 
                approved under paragraph (6)(C), and the owner of an 
                interest in or to the parcel fails or refuses to convey 
                the interest to the Indian tribe, the Indian tribe or 
                the United States may--
                            ``(i) bring a civil action in the United 
                        States district court for the district in which 
                        the parcel is located; and
                            ``(ii) request the court to issue an 
                        appropriate order for the partition in kind, or 
                        partition by sale to the Indian tribe, of the 
                        parcel.
                    ``(B) Federal role.--With respect to any civil 
                action brought under subparagraph (A)--
                            ``(i) the United States--
                                    ``(I) shall receive notice of the 
                                civil action; and
                                    ``(II) may be a party to the civil 
                                action; and
                            ``(ii) no civil action brought under this 
                        section shall be dismissed, and no relief 
                        requested shall be denied, on the ground that 
                        the civil action is against the United States 
                        or that the United States is an indispensable 
                        party.''.

SEC. 4. OTHER AMENDMENTS.

    (a) Other Amendments.--The Indian Land Consolidation Act (25 U.S.C. 
2201 et seq.) is amended--
            (1) in section 205(a) (25 U.S.C. 2204(a)), by striking 
        ``over 50 per centum of the undivided interests'' and inserting 
        ``undivided interests equal to at least 50 percent of the 
        undivided interest'';
            (2) in section 206 (25 U.S.C. 2205)--
                    (A) in subsection (a), by striking paragraph (3) 
                and inserting the following:
            ``(3) Tribal probate codes.--The Secretary shall not 
        approve a tribal probate code, or an amendment to such a code, 
        that prevents the devise of an interest in trust or restricted 
        land to--
                    ``(A) an Indian lineal descendant of the original 
                allottee; or
                    ``(B) to an Indian who is not a member of the tribe 
                that exercises jurisdiction over such an interest;
        unless the code provides for the renouncing of interests (to 
        eligible devisees pursuant to such a code), the opportunity for 
        a devisee who is the testator's spouse or lineal descendant to 
        reserve a life estate, and payment of fair market value in the 
        manner prescribed under subsection (c)(2).'';
                    (B) in subsection (c)(1)--
                            (i) by striking ``section 207(a)(6)(A)'' 
                        and inserting ``sections 207(a)(2)(A)(ii), 
                        207(a)(2)(C), and 207(a)(3)''; and
                            (ii) by striking the last sentence and 
                        inserting ``The Secretary shall transfer such 
                        payments to any person or persons who would 
                        have received an interest in land if the 
                        interest had not been acquired by the tribe 
                        pursuant to this paragraph.''; and
                    (C) in subsection (c)(2)--
                            (i) in subparagraph (A)--
                                    (I) by striking ``(A) In general.--
                                Paragraph'' and inserting the 
                                following:
                    ``(A) Nonapplicability to certain interests.--
                            ``(i) In general.--Paragraph'';
                                    (II) by striking ``if, while'' and 
                                inserting the following: ``if--
                                    ``(I) while'';
                                    (III) by striking the period and 
                                inserting ``; or''; and
                                    (IV) by adding at the end the 
                                following:
                                    ``(II) the interest is part of a 
                                family farm that is devised to a member 
                                of the decedent's family if the devisee 
                                agrees that the Indian tribe that 
                                exercises jurisdiction over the land 
                                will have the opportunity to acquire 
                                the interest for fair market value if 
                                the interest is offered for sale to an 
                                entity that is not a member of the 
                                family of the owner of the land.
                            ``(ii) Recording of interest.--Upon the 
                        request of an Indian tribe described in clause 
                        (i)(II), a restriction relating to the 
                        acquisition by such tribe of an interest in the 
                        family farm involved shall be recorded as part 
                        of the deed relating to the interest involved.
                            ``(iii) Rule of construction.--Nothing in 
                        clause (i)(II) shall be construed to prevent or 
                        limit the ability of an owner of land to which 
                        that clause applies to mortgage the land or to 
                        limit the right of the entity holding such a 
                        mortgage to foreclose or otherwise enforce such 
                        a mortgage agreement pursuant to applicable 
                        law.
                            ``(iv) Definition.--In this paragraph, the 
                        term `member of the decedent's family' means 
                        the decedent's lineal descendant, a lineal 
                        descendant of the grandparent of the decedent, 
                        the spouse of any such descendant, or the 
                        decedent's spouse.''; and
                            (ii) in subparagraph (B), by striking 
                        ``subparagraph (A)'' and all that follows 
                        through ``207(a)(6)(B)'' and inserting 
                        ``paragraph (1)''; and
            (3) in section 207 (25 U.S.C. 2206)--
                    (A) in subsection (c)--
                            (i) by redesignating paragraph (3) as 
                        paragraph (4); and
                            (ii) by inserting after paragraph (2) the 
                        following:
            ``(3) Alienation of joint tenancy interests.--
                    ``(A) In general.--With respect to any interest 
                held as a joint tenancy pursuant to this subsection--
                            ``(i) nothing in this subsection shall be 
                        construed to alter the ability of the owner of 
                        such an interest to convey a life estate in the 
                        owner's undivided joint tenancy interest; and
                            ``(ii) only the last remaining owner of 
                        such an interest may devise or convey more than 
                        a life estate in such an interest.
                    ``(B) Application of provision.--This paragraph 
                shall not apply to any conveyance, sale, or transfer 
                that is part of an agreement referred to in subsection 
                (e) or to a co-owner of a joint tenancy interest.''; 
                and
                    (B) in subsection (g)(5), by striking ``this 
                section'' and inserting ``subsections (a) and (b)'';
            (4) in section 213 (25 U.S.C. 2212)--
                    (A) in subsection (a)(2), by striking ``(A) In 
                general.--'' and all that follows through 
                ``subparagraph (A), the Secretary'' and inserting ``The 
                Secretary'';
                    (B) in subsection (b)(4), by inserting before the 
                period the following: ``through the use of policies and 
                procedures designed to accommodate the voluntary sale 
                of interests under the pilot program (established by 
                this Act) though the elimination of duplicate 
                conveyance documents, administrative proceedings, and 
                transactions, notwithstanding the existence of any 
                otherwise applicable policy, procedure, or 
                regulation''; and
                    (C) in subsection (c)--
                            (i) in paragraph (1)(A), by striking 
                        ``landowner upon payment'' and all that follows 
                        through the period and inserting the following: 
                        ``landowner--
                            ``(i) upon payment by the Indian landowner 
                        of the amount paid for the interest by the 
                        Secretary; or
                            ``(ii) if the Indian referred to in this 
                        subparagraph provides assurance that the 
                        purchase price will be paid by pledging revenue 
                        from any source, including trust resources, and 
                        the Secretary determines that the purchase 
                        price will be paid in a timely and efficient 
                        manner.'';
                            (ii) in paragraph (1)(B), by inserting 
                        ``unless the interest is subject to a 
                        foreclosure of a mortgage pursuant to the Act 
                        of March 29, 1956 (25 U.S.C. 483a)'' before the 
                        period; and
                            (iii) in paragraph (3), by striking ``10 
                        percent of more of the undivided interests'' 
                        and inserting ``an undivided interest'';
            (5) in section 214 (25 U.S.C. 2213), by striking subsection 
        (b) and inserting the following:
    ``(b) Application of Revenue from Acquired Interests to Land 
Consolidation Pilot Program.--
            ``(1) In general.--The Secretary shall have a lien on any 
        revenue accruing to an interest described under subsection (a) 
        until the Secretary provides for the removal of the lien under 
        paragraph (3) or (4).
            ``(2) Requirements.--Until Secretary removes the lien from 
        an interest of land as provided for in paragraph (1)--
                    ``(A) any lease, resource sale contract, right-of-
                way, or other document evidencing a transaction 
                affecting the interest shall contain a clause providing 
                that all revenue derived from the interest shall be 
                paid to the Secretary;
                    ``(B) any revenue derived from any interest 
                acquired by the Secretary pursuant to section 213 shall 
                be paid into the fund created under section 216; and
                    ``(C) the Secretary may approve a transaction 
                covered under this section on behalf of a tribe 
                notwithstanding any other provision of law, including 
                section 16 of the Act of June 18, 1934 (commonly 
                referred to as the Indian Reorganization Act, (25 
                U.S.C. 476)).
            ``(3) Findings by secretary.--The Secretary may remove a 
        lien referred to in (1) if the Secretary makes a finding that--
                    ``(A) the costs of administering the interest will 
                equal or exceed the projected revenues for the parcel 
                of land involved;
                    ``(B) in the discretion of the Secretary, it will 
                take an unreasonable period of time for the parcel of 
                land to generate revenue that equals the purchase price 
                paid for the interest; or
                    ``(C) a subsequent decrease in the value of land or 
                commodities associated with the parcel of land make it 
                likely that the interest will be unable to generate 
                revenue that equals the purchase price paid for the 
                interest in a reasonable time.
            ``(4) Removal of lien.--Pursuant to the consultations 
        referred to in section 213(b)(3), the Secretary shall 
        periodically remove the lien referred to in paragraph (1) from 
        interests in land acquired by the Secretary.'';
            (6) in section 216 (25 U.S.C. 2215)--
                    (A) in subsection (a), strike paragraph (2) and 
                insert the following:
            ``(2) collect all revenues received from the lease, permit, 
        or sale of resources from interests acquired under section 213 
        or paid by Indian landowners under section 213.''; and
                    (B) in subsection (b)--
                            (i) in paragraph (1)--
                                    (I) in the matter preceding 
                                subparagraph (A), by striking ``Subject 
                                to paragraph (2), all'' and inserting 
                                ``All'';
                                    (II) in subparagraph (A), by 
                                striking ``and'' at the end;
                                    (III) in subparagraph (B), by 
                                striking the period and inserting ``; 
                                and''; and
                                    (IV) by adding at the end the 
                                following:
                    ``(C) be used to acquire undivided interests on the 
                reservation where the income was derived.''; and
                            (ii) by striking paragraph (2) and 
                        inserting the following:
            ``(2) Use of funds.--The Secretary may utilize the revenue 
        deposited in the Acquisition Fund under paragraph (1) to 
        acquire some or all of the undivided interests in any parcels 
        of land pursuant to section 205.'';
            (7) in section 217 (25 U.S.C. 2216)--
                    (A) in subsection (e)(3), by striking ``prospective 
                applicants for the leasing, use, or consolidation of'' 
                and insert ``any person that is leasing, using or 
                consolidating, or is applying to, lease, use, or 
                consolidate,''; and
                    (B) by striking subsection (f) and inserting the 
                following:
    ``(f) Purchase of Land by Tribe.--
            ``(1) In general.--Before the Secretary approves an 
        application to terminate the trust status or remove the 
        restrictions on alienation from a parcel of trust or restricted 
        land, the Indian tribe that exercises jurisdiction over such a 
        parcel shall have the opportunity to match any offer contained 
        in such application, or where there is no purchase price 
        offered, to acquire the interest in such land by paying the 
        fair market value of such interest.
            ``(2) Exception for family farms.--Paragraph (1) shall not 
        apply to a parcel of trust or restricted land that is part of a 
        family farm that is conveyed to a member of the landowner's 
        family (as defined in section 206(c)(2)(A)(iv)) if the tribe 
        that exercises jurisdiction over the land is afforded the 
        opportunity to purchase the interest if the interest is offered 
        for sale to an entity that is not a member of the family of the 
        owner of the land. Section 206(c)(2)(A) shall apply with 
        respect to the recording and mortgaging of the trust or 
        restricted land referred to in the preceding sentence.''; and
            (8) in section 219(b)(1)(A) (25 U.S.C. 2219(b)(1)(A)), by 
        striking ``100'' and inserting ``90''.
    (b) Definition.--
            (1) In general.--Section 202(2) of the Indian Land 
        Consolidation Act (25 U.S.C. 2201(2)) is amended--
                    (A) by striking ``means any'' and inserting the 
                following: ``means--
                    ``(A) any'';
                    (B) by striking ``or any person who has been found 
                to meet'' and inserting the following: ``or
                    ``(B) any person who meets''; and
                    (C) by striking ``if the Secretary'' and all that 
                follows through the semicolon and inserting ``, except 
                that the Secretary may promulgate regulations to 
                exclude any definition if the Secretary determines that 
                the definition is not consistent with the purposes of 
                this Act, or
                    ``(C) with respect to the ownership, devise, or 
                descent of trust or restricted land in the State of 
                California, any person who meets the definition of 
                Indians of California as contained in section 1 of the 
                Act of May 18, 1928 (25 U.S.C. 651), until otherwise 
                provided by Congress pursuant to section 809(b) of 
                Public Law 94-437 (25 U.S.C. 1679(b));''.
            (2) Effective date.--Any exclusion referred to in the 
        amendment made by paragraph (1)(C) shall apply only to those 
        decedents who die after the Secretary of the Interior 
        promulgates the regulation providing for such exclusion.
    (c) Mortgages and Deeds of Trust.--The Act of March 29, 1956 (25 
U.S.C. 483a) is amended in the first sentence of subsection (a) by 
inserting ``(including land owned by any person in passive trust status 
pursuant to section 207A of the Indian Land Consolidation Act)'' after 
``land'' the first place that such appears.
    (d) Issuance of Patents.--Section 5 of the Act of February 8, 1887 
(25 U.S.C. 348) is amended by striking the second proviso and inserting 
the following: ``Provided, That the rules of intestate succession under 
the Indian Land Consolidation Act (25 U.S.C. 2201 et seq.) (including a 
tribal probate code approved under that Act or regulations promulgated 
under that Act) shall apply thereto after those patents have been 
executed and delivered:''.
    (e) Transfers of Restricted Indian Land.--Section 4 of the Act of 
June 18, 1934 (25 U.S.C. 464), is amended in the first proviso by 
striking ``, in accordance with'' and all that follows through the 
colon and inserting ``in accordance with the Indian Land Consolidation 
Act (25 U.S.C. 2201 et seq.) (including a tribal probate code approved 
under that Act or regulations promulgated under that Act):''.

SEC. 5. EFFECTIVE DATE.

    This amendment made by this Act shall not apply to the estate of an 
individual who dies prior to the later of--
            (1) the date that is 1 year after the date of enactment of 
        this Act; or
            (2) the date specified in section 207(g)(5) of the Indian 
        Land Consolidation Act (25 U.S.C. 2206(g)(5)).

            Passed the Senate November 20, 2002.

            Attest:

                                                             Secretary.
107th CONGRESS

  2d Session

                                S. 1340

_______________________________________________________________________

                                 AN ACT

   To amend the Indian Land Consolidation Act to provide for probate 
           reform with respect to trust or restricted lands.
```