[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]




 
S. 1721, A BILL TO AMEND THE INDIAN LAND CONSOLIDATION ACT TO IMPROVE 
     PROVISIONS RELATING TO PROBATE OF TRUST AND RESTRICTED LAND.

=======================================================================

                          LEGISLATIVE HEARING

                               before the

                         COMMITTEE ON RESOURCES
                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             SECOND SESSION

                               __________

                        Wednesday, June 23, 2004

                               __________

                           Serial No. 108-98

                               __________

           Printed for the use of the Committee on Resources



 Available via the World Wide Web: http://www.access.gpo.gov/congress/
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                         COMMITTEE ON RESOURCES

                 RICHARD W. POMBO, California, Chairman
       NICK J. RAHALL II, West Virginia, Ranking Democrat Member

Don Young, Alaska                    Dale E. Kildee, Michigan
W.J. ``Billy'' Tauzin, Louisiana     Eni F.H. Faleomavaega, American 
Jim Saxton, New Jersey                   Samoa
Elton Gallegly, California           Neil Abercrombie, Hawaii
John J. Duncan, Jr., Tennessee       Solomon P. Ortiz, Texas
Wayne T. Gilchrest, Maryland         Frank Pallone, Jr., New Jersey
Ken Calvert, California              Calvin M. Dooley, California
Scott McInnis, Colorado              Donna M. Christensen, Virgin 
Barbara Cubin, Wyoming                   Islands
George Radanovich, California        Ron Kind, Wisconsin
Walter B. Jones, Jr., North          Jay Inslee, Washington
    Carolina                         Grace F. Napolitano, California
Chris Cannon, Utah                   Tom Udall, New Mexico
John E. Peterson, Pennsylvania       Mark Udall, Colorado
Jim Gibbons, Nevada,                 Anibal Acevedo-Vila, Puerto Rico
  Vice Chairman                      Brad Carson, Oklahoma
Mark E. Souder, Indiana              Raul M. Grijalva, Arizona
Greg Walden, Oregon                  Dennis A. Cardoza, California
Thomas G. Tancredo, Colorado         Madeleine Z. Bordallo, Guam
J.D. Hayworth, Arizona               Stephanie Herseth, South Dakota
Tom Osborne, Nebraska                George Miller, California
Jeff Flake, Arizona                  Edward J. Markey, Massachusetts
Dennis R. Rehberg, Montana           Ruben Hinojosa, Texas
Rick Renzi, Arizona                  Ciro D. Rodriguez, Texas
Tom Cole, Oklahoma                   Joe Baca, California
Stevan Pearce, New Mexico
Rob Bishop, Utah
Devin Nunes, California
Randy Neugebauer, Texas

                     Steven J. Ding, Chief of Staff
                      Lisa Pittman, Chief Counsel
                 James H. Zoia, Democrat Staff Director
               Jeffrey P. Petrich, Democrat Chief Counsel


                                 ------                                

                            C O N T E N T S

                              ----------                              
                                                                   Page

Hearing held on Wednesday, June 23, 2004.........................     1

Statement of Members:
    Grijalva, Hon. Raul M., a Representative in Congress from the 
      State of Arizona, Prepared statement of....................    39
    Kildee, Hon. Dale, a Representative in Congress from the 
      State of Michigan, Prepared statement of...................    39
    Pombo, Hon. Richard W., a Representative in Congress from the 
      State of California........................................     1
        Prepared statement of....................................     2
    Rahall, Hon. Nick J., II, a Representative in Congress from 
      the State of West Virginia.................................     3
        Prepared statement of....................................     4

Statement of Witnesses:
    Colombe, Hon. Charles C., President, Rosebud Sioux Tribe, 
      Rosebud, South Dakota......................................    21
        Prepared statement of....................................    23
    Giles, Marcella, Esq., Member, Indian Land Working Group.....    40
        Prepared statement of....................................    41
    Lyons, Hon. Maurice, Chairman, Morongo Band of Mission 
      Indians, Banning, California...............................    27
        Prepared statement of....................................    28
    Oshiro, Lisa C., Directing Attorney, California Indian Legal 
      Services...................................................    46
        Prepared statement of....................................    47
    Swimmer, Ross O., Special Trustee for American Indians, U.S. 
      Department of the Interior.................................     5
        Prepared statement of....................................     7


LEGISLATIVE HEARING ON S. 1721, TO AMEND THE INDIAN LAND CONSOLIDATION 
 ACT TO IMPROVE PROVISIONS RELATING TO PROBATE OF TRUST AND RESTRICTED 
                     LAND, AND FOR OTHER PURPOSES.

                              ----------                              


                        Wednesday, June 23, 2004

                     U.S. House of Representatives

                         Committee on Resources

                            Washington, D.C.

                              ----------                              

    The Committee met, pursuant to call, at 10 a.m., in Room 
1324, Longworth House Office Building, Hon. Richard W. Pombo 
[Chairman of the Committee] presiding.
    Members Present: Representatives Pombo, Walden, Hayworth, 
Osborne, Renzi, Pearce, Bishop, Rahall, Faleomavaega, Pallone, 
Inslee, Udall of New Mexico, Udall of Colorado, Grijalva, and 
Herseth.

  STATEMENT OF THE HON. RICHARD W. POMBO, A REPRESENTATIVE IN 
             CONGRESS FROM THE STATE OF CALIFORNIA

    The Chairman. The Committee on Resources will come to 
order. The Committee is meeting today to hear testimony on S. 
1721, the American Indian Probate Reform Act of 2004.
    The Chairman. Under Rule 4(g) of the Committee Rules, any 
oral opening statements at hearings are limited to the Chairman 
and Ranking Minority Member. This will allow us to hear from 
our witnesses sooner and help Members keep to their schedules. 
Therefore, if other Members have statements, they can be 
included in the hearing record under unanimous consent.
    The Chairman. The bill on which the Committee is receiving 
testimony today addresses one of the major problems that led to 
the Indian Trust Fund lawsuit, the fractionalization of Indian 
land and the lack of sound Federal or tribal probate laws. The 
Cobell lawsuit arose from the historic failure of past 
Administrations to properly account for monies generated from 
revenue-producing activities on individual Indian trust lands. 
While such a failure should not be excused, it was a failure 
made difficult to remedy because of the phenomenon of Indian 
land fractionalization. Within another generation, it will be 
almost impossible to fix unless we change existing law 
concerning probate and fractionalization.
    Fractionalization has created a situation in which hundreds 
of individual Indians own undivided interests in a single 
parcel of trust land that may generate only pennies in revenue 
for each owner. It is not difficult to see what problems that 
causes. It's nearly impossible to obtain consensus from so many 
owners to do anything productive or meaningful with the land. 
It is extremely difficult to manage trust accounts for each of 
the owners. If the co-owners of such a parcel die without 
leaving a will, the land continues to fractionate 
exponentially.
    With the passing of a couple more generations, the number 
of owners of this property will explode, resulting in an 
administrative catastrophe. The problem has to be addressed 
now. S. 1721 represents a major step toward slowing and 
hopefully stopping the continued fractionation of small 
ownership interests in Indian land. It does so through a 
variety of measures, including the creation of a uniform 
Federal probate code and the authorization for tribes to adopt 
their own probate codes.
    The legislation contains numerous incentives for the 
Department of the Interior, tribes and owners of individual 
trust lands to consolidate parcels through partition. Most 
important, the bill encourages Indians to creates wills so that 
they have the maximum freedom to divide their property to their 
chosen heirs.
    I look forward to hearing an analysis of this lengthy and 
complicated bill from today's witnesses, all of whom had key 
roles in helping to draft the product before the Committee 
today.
    [The prepared statement of Chairman Pombo follows:]

        Statement of The Honorable Richard W. Pombo, Chairman, 
                         Committee on Resources

    The bill on which the Committee is receiving testimony today 
addresses one of the major problems that led to the Indian trust fund 
lawsuit--the increasing fractionation of Indian land and the lack of 
sound federal or tribal probate laws.
    The Cobell lawsuit arose from the historic failure of past 
Administrations to properly account for monies generated from revenue-
producing activities on individual Indian trust lands. While such a 
failure should not be excused, it was a failure made difficult to 
remedy because of the phenomenon of Indian land fractionation. Within 
another generation, it will be almost impossible to fix unless we 
change existing law concerning probate and fractionation.
    Fractionation has created a situation in which hundreds of 
individual Indians own undivided interests in a single parcel of trust 
land that may generate only pennies in revenue for each owner. It's not 
difficult to see what problems fractionation causes. It's nearly 
impossible to obtain consensus from so many owners to do anything 
productive or meaningful with the land. It's extremely difficult to 
manage trust accounts for each of the owners.
    If the co-owners of such a parcel die without leaving a will, the 
land continues to fractionate exponentially. With the passing of a 
couple more generations, the number of owners of this property will 
explode, resulting in an administrative catastrophe. The problem has to 
be addressed now.
    S. 1721 represents a major step toward slowing--and hopefully 
stopping--the continued fractionation of small ownership interests in 
Indian land. It does so through a variety of measures, including the 
creation of a uniform federal probate code and the authorization for 
tribes to adopt their own probate codes. The legislation contains 
numerous incentives for the Department of the Interior, tribes, and 
owners of individual trust lands to consolidate fractionated parcels 
through partition. Most important, the bill encourages Indians to 
create wills so that they have the maximum freedom to devise their 
property to their chosen heirs.
    I look forward to hearing an analysis of this lengthy and 
complicated bill from today's witnesses, all of whom had key roles in 
drafting the product before the Committee today.
                                 ______
                                 
    The Chairman. I'd now like to recognize the Ranking Member 
Mr. Rahall.

 STATEMENT OF THE HON. NICK J. RAHALL, II, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF WEST VIRGINIA

    Mr. Rahall. Thank you, Mr. Chairman.
    Mr. Chairman, to be frank, slogging through the bill 
pending before us today is a tedious chore. With terms like 
pendency of probate, afterborn heirs and revocation of owner-
managed status, this is a bill only a probate lawyer and the 
green eyeshade folks can love.
    What is not a chore, however, is looking into the faces of 
Indian country whose very family and tribal traditions depend 
on how we respond to the land crisis this bill seeks to 
address. This bill is about the proud Sioux father who has 
spent a lifetime teaching his children and his grandchildren 
the importance of a piece of land. He has taught them through 
stories told to him by his father and to his father by his 
grandfather, how they all connected to that land. He tells them 
that soon the land will be theirs to tend and to pass on to 
their children and their children's children. The bill is about 
the elderly Navajo woman who has toiled and tended her herd of 
sheep for years the way she learned from her mother. Now old 
and tired, she dreams of seeing generations yet to come getting 
nourishment from that very land. And this bill is about the 
young Indian couple living in the lush Northwest having 
recently inherited land. They excitedly plan their future, 
counting on revenue from land resources they hold and will 
protect.
    I understand this high value of land, where the value is 
not only commercial, but spiritual. In Appalachia we, too, 
cherish land passed down through the generations. We also 
respect that tradition, and along with our families and our 
Maker, we hold it in the highest regard. For all of these 
reasons, we have to get it right with this bill. We must ensure 
Indian lands stay in Indian hands and in trust status.
    Congress has made several previous attempts to address the 
administration and management of Indian allotments, and each 
endeavor has produced mixed results. We have had parts of two 
such attempts deemed unconstitutional, and the latest fix is 
under threat of being the cause of thousands of acres of land 
coming out of trust status if implemented as the Administration 
plans. This would be a devastating policy throughout Indian 
country.
    So, Mr. Chairman, I welcome our witnesses here this 
morning, and I thank them for coming to give us the benefit of 
their expertise as they are the ones dealing with these 
problems on a day-to-day basis.
    And if I may ask the consent of the Chair, before we hear 
from our witness, to welcome our newest member of the Resources 
Committee, Ms. Stephanie Herseth from the State of South 
Dakota. I do introduce her to our full Committee this morning. 
South Dakotans, as we all know, were faced with the unfortunate 
task of replacing their lone Representative to this body, and 
they rose to the occasion by electing an energetic, bright and 
highly qualified woman. Congresswoman Herseth is a lawyer by 
training, who has worked to enrich South Dakota by bringing 
tribal concerns to the attention of the South Dakota Public 
Utilities Commission, advocating with the legal counsel for the 
elderly and in 2003 serving as the executive director of the 
South Dakota Farmers Union Federation.
    This Committee and the Forest Subcommittee to which she has 
been appointed will undoubtedly benefit from her perspective on 
a range of issues, particularly Indian affairs, as 12 percent 
of her constituents are of Native American descent. And in the 
words of President John Yellowbird, still of the Oglala Sioux 
tribe from South Dakota, and I quote, we think she belongs in 
Congress, and her appointment to this Committee is icing on the 
cake.
    I couldn't have said it any better, and I join with my 
colleagues in welcoming Stephanie to the Committee. And I know 
that her addition to the Congress is one in which all of us can 
benefit. Welcome, Stephanie.
    [The prepared statement of Mr. Rahall follows:]

            Statement of The Honorable Nick J. Rahall, II, 
                Ranking Democrat, Committee on Resources

    Mr. Chairman. To be frank, slogging through the bill pending before 
us today is a tedious chore. With terms like ``pendency of probate,'' 
``after-born heirs,'' and ``revocation of owner-managed status,'' this 
is a bill only a probate lawyer and the green-eyeshade folks can love.
    What is not a chore, however, is looking into the faces of Indian 
Country whose very family and tribal traditions depend on how we 
respond to the land crisis this bills seeks to address.
    This bill is about the proud Sioux father who has spent a lifetime 
teaching his children and his grandchildren the importance of a piece 
of land. He has taught them through stories told to him by his father, 
and to his father by his grandfather, how they are all connected to 
that land. He tells them that soon the land will be theirs to tend and 
pass on to their children and to their children's children.
    This bill is about the elderly Navajo woman who has toiled and 
tended her herd of sheep for years the way she learned from her mother. 
Now old and tired she dreams of seeing generations yet to come getting 
nourishment from that very land.
    And this bill is about the young Indian couple living in the lush 
northwest, having recently inherited land, they excitedly plan their 
future, counting on revenue from land resources they hold and will 
protect.
    I understand this high value of land. Where the value is not only 
commercial but spiritual. In Appalachia, we too cherish land passed 
down through the generations. We also respect that tradition and, along 
with our families and our Maker, we hold it in the highest regard.
    For all of these reasons, we have to get it right with this bill. 
We must ensure Indian lands stay in Indian hands and in trust status.
    Congress has made several previous attempts to address the 
administration and management of Indian allotments and each endeavor 
has produced mixed results.
    We have had parts of two such attempts deemed unconstitutional and 
the latest fix is under threat of being the cause of thousands of acres 
of land coming out of trust status if implemented as the Administration 
plans. This would be a devastating policy throughout Indian country.
    So, Mr. Chairman, I welcome our witnesses here this morning and 
thank them for coming to give us benefit of their expertise as they are 
the ones dealing with these problems on a day-to-day basis.
                                 ______
                                 
    The Chairman. Congratulations, and welcome to the 
Committee.
    I'd like to introduce our first witness, Ross Swimmer, the 
Special Trustee for American Indians.
    Let me take this time to remind all of today's witnesses 
that under our Committee Rules, oral statements are limited to 
5 minutes. Your entire written statement will appear in the 
record.
    Mr. Swimmer, welcome to the Committee. If I could have you 
stand and raise your right hand.
    [Witness sworn.]
    The Chairman. Welcome back to the Committee. It's nice to 
have you. I have reviewed your testimony, and we are all very 
anxious to have a chance to discuss this bill further with you. 
So if you're ready, you can begin.

    STATEMENT OF ROSS SWIMMER, SPECIAL TRUSTEE FOR AMERICAN 
            INDIANS, U.S. DEPARTMENT OF THE INTERIOR

    Mr. Swimmer. Thank you, Mr. Chairman and members of the 
Committee. I appreciate the opportunity to be here to visit 
with you today about 1721. I appreciate that our testimony, 
written testimony, will be accepted for the record.
    I'd also like to recognize not only the work of this 
committee, but the work of the Senate Indian Affairs Committee, 
and especially Senator Campbell and Senator Inouye, who have 
led the effort in developing S. 1721, and the staff work that 
was done in conjunction with meeting many American Indian 
groups, the California Indian Legal Services, NCAI, the Indian 
Land Working Group and various tribal leaders, some of whom 
you'll hear from today. This has certainly been a joint effort 
of a lot of people that are bringing this bill forward.
    I would also like to advise the Committee that I am here as 
a Special Trustee for American Indians. This issue is very high 
profile in the trust. It deals with trust assets. Mr. Anderson, 
the Assistant Secretary, would be here, Mr. Chairman, however, 
he is also testifying right now before the Senate Indian 
Affairs Committee on another matter that's very important to 
the Bureau of Indian Affairs.
    I would like to express the Administration's support for S. 
1721. In fact, this may be considered one of the most important 
legislative acts of this congressional session. It is important 
not only to the Administration in solving some of the very 
difficult problems involving fractionation in Indian country, 
but it's important to Indian country as a whole because of what 
has happened over the century, the last century, and this 
century, in fact, as fractionation continues to plague Indian 
country.
    As you mentioned, it's not the first time it's been before 
Congress. It actually was raised in the 1920s, the 1930s, 
1970s, and actually dealt with for the first time legislatively 
in the 1980s. And I think we all know what happened then. There 
was an effort to deal with the very small fractionated 
interests, the 2 percent or less of interests that were owned 
by Indian individuals, and that solution was to escheat those 
interests to the resistive tribe over which jurisdiction was 
being exercised.
    Unfortunately, the Supreme Court did reverse the 
legislative mandate and held that it was unconstitutional, that 
it was an actual taking of property without compensation, and 
as a result of that effort, and the Court's subsequent ruling, 
of course, things were made even worse because we now have 
thousands of interests that were escheated to tribes that have 
to be dealt with and subsequent probates that have happened, 
even to the owners of those interests back in the '80s.
    S. 1721 is important for several reasons. There are several 
portions of the act. One is the Uniform Probate Code. The 
Uniform Probate Code will allow the adjudicators, the 
administrative law judges and attorney decisionmakers within 
the Bureau of Indian Affairs to work within a single probate 
code rather than having to deal with multiple State codes. It 
is not unusual now for an Indian individual to pass away and 
leave interests, as many as 10 or more interests, all of which 
may be located in different States, and all of which would have 
to be probated under those State laws. This uniform code, we 
believe, will allow a much more uniform probate of those 
estates and administration of the estates, and make the probate 
much more efficient.
    We believe the bill will protect trust land status. It 
defines highly fractionated land. There is a single heir rule 
for inheriting of highly fractionated land. It makes the land 
acquisition program permanent, what we call the Indian Land 
Consolidation Program. And it creates a partitioning authority 
to support returning land to a single Indian or tribal owner. 
It also provides for a pilot program for family trusts to be 
created and allows for self-directed trusts by consenting 
owners who want more responsibility for the management of their 
property and less oversight by the Secretary.
    Our written statement contains examples of several problems 
created by the fractionation of Indian ownership. I would like 
to add that although we have given examples in the written 
testimony, these are not exceptions. The examples you see in 
the written testimony are more the rule than the exception. 
There are millions of acres of land today that are not 
benefiting Indian owners because of highly fractionated 
ownership.
    I would also like to suggest to the Committee that whether 
this be bill through an amendment or subsequent legislation 
that the Committee may consider, that there are two issues 
remaining that do need to be dealt with. One is what we call 
the Youpee issue, which I mentioned earlier, the overturning of 
the law by the Supreme Court, which in essence said that the 
escheat of property less than 2 percent was unconstitutional. 
We need to have that defined that it is a taking and a 
legislation that would authorize a payment for those interests.
    We also have an issue with whereabouts unknown. Over the 
years, many, many individual Indian people are no longer known 
to the Department as far as their address is concerned. They 
have been--we have attempted to contact them many, many times 
and get--have no success in doing so. We have as many as 40-, 
45,000, I believe, last count of whereabouts unknown that own 
this property, and it would be impossible to purchase their 
interest if we attempted because we can't locate them. We do 
need to have some relief in the form of what most States have, 
a uniform unclaimed property act of some sort that would allow 
these interests then to be disposed of or acquired by the 
Secretary for the benefit of the tribe.
    With that, again, I would like to say, too, that the 
Administration is very supportive of this bill, and once again, 
thank those who participated in the development of it and be 
happy to answer any questions you might have.
    The Chairman. Thank you.
    [The prepared statement of Mr. Swimmer follows:]

  Statement of Ross O. Swimmer, Special Trustee For American Indians, 
                    U.S. Department of the Interior

    Mr. Chairman and Members of the Committee, I am pleased to be here 
today to provide the Administration's views on S. 1721, a bill to amend 
the Indian Land Consolidation Act (ILCA) to improve provisions relating 
to the probate of trust and restricted land. The Department would like 
to thank the Congress for its continued efforts to address this 
extremely important issue. This bill will provide the Department with 
valuable tools to help expedite the probate process through enactment 
of a uniform probate code, as well as provisions to help stop the 
exponential growth of fractionated interests. The Department strongly 
supports S. 1721.
    Secretary Norton has spent a major portion of her time as Secretary 
on the many issues surrounding reform of the Indian trust. Among the 
most important aspects of trust reform are the need to reform our 
Indian probate system and the need to stem the growing fractionation of 
individually owned Indian lands. Our current probate system is costly, 
cumbersome, and confusing. It contributes to fractionation rather than 
helping stem it. Fractionation of Indian lands is a continually growing 
problem. This Administration supports the swift enactment of legal 
reforms to Indian probate, and of measures aimed at reconsolidating the 
Indian land base and returning Indian lands to tribal ownership. As we 
have stated on numerous occasions, this may be our last opportunity to 
reform probate before the current system collapses.
    S. 1721 provides this reform. We at Interior worked extensively 
with the Senate Committee on Indian Affairs during its development and 
consideration of this bill. We believe you have a sound piece of 
legislation before you today that will benefit Indians, their heirs, 
and Indian Tribes.
    This legislation is one of the pieces necessary for true trust 
reform. Not only will it improve the probate process, but it will also 
allow the Department and Indian Country to consolidate Indian land 
ownership in order to restore full economic viability to Indian assets.
    S. 1721 provides a uniform probate code for Indian Country, adding 
consistency and clarity to the probate process. In addition, S. 1721 
provides valuable tools for attacking the fractionation problem, by 
defining highly fractionated lands, providing for a single heir rule 
intestate, allowing greater flexibility to consolidate and purchase 
interests during probate, making Interior's Land Acquisition Pilot 
Program permanent, and creating partition authority where the tribe or 
a current interest owner can request a sale of the parcel to make it 
whole with one individual.
    For nearly one hundred years, the fractionation problem has grown. 
We are now at the point where, absent serious corrective action, 
millions of acres of land will be owned in such small ownership 
interests that no individual owner will derive any meaningful value 
from that ownership. The ownership of many disparate, uneconomic, small 
interests benefits no one in Indian Country. It creates an 
administrative burden that drains resources away from other beneficial 
Indian programs. S. 1721 will help slow the growth of fractionated 
interests and provide necessary tools that we can build upon in the 
future to resolve this problem.
BACKGROUND
    Over time, the system of allotments established by the General 
Allotment Act (GAA) of 1887 has resulted in the fractionation of 
ownership of Indian land. As original allottees died, their heirs 
received an equal, undivided interest in the allottee's lands. In 
successive generations, smaller undivided interests descended to the 
next generation. Fractionated interests in individual Indian allotted 
land continue to expand exponentially with each new generation. Today, 
there are up to approximately four million owner interests in 10 
million acres of individually owned trust lands, a situation the 
magnitude of which makes management of trust assets extremely difficult 
and costly. These interests could expand dramatically by the year 2030 
unless an aggressive approach to fractionation is taken. There are now 
single pieces of property with ownership interests that are less than 
0.0000001 percent or 1/9 millionth of the whole interest, which has an 
estimated value of .004 cent.
    The Department is involved in the management of 100,000 leases for 
individual Indians and tribes on trust land that encompasses 
approximately 56 million acres. Leasing, use permits, sale revenues, 
and interest of approximately $195 million was collected in FY 2003 for 
approximately 240,000 individual Indian money (IIM) accounts, and about 
$375 million was collected in FY 2003 for approximately 1,400 tribal 
accounts. In addition, the trust currently manages approximately $2.8 
billion in tribal funds and $400 million in individual Indian funds.
    There are approximately 240,000 open IIM accounts, the majority of 
which have balances under $100 and annual throughput of less than 
$1,000. Interior maintains over 20,000 accounts with a balance between 
one cent and one dollar, and no activity for the previous 18 months. 
The total sum included in these accounts is about $5,700, for an 
average balance of .30 cents. Nonetheless, the Department has an equal 
responsibility to manage each account and the real property associated 
with it, no matter how small and regardless of account balance. 
Obviously, no one benefits from such expenditures.
    Under current regulations, probates need to be completed for every 
account with trust assets, even those with balances between one cent 
and one dollar. While the average cost for a probate process exceeds 
$3,000, even a streamlined, expedited process (if one was available) 
costing as little as $500 would require almost $10,000,000 to probate 
the $5,700 in these accounts.
    Unlike most private trusts, the Federal Government bears the entire 
cost of administering the Indian trust. As a result, the usual 
incentives found in the commercial sector for reducing the number of 
small or inactive accounts do not apply to the Indian trust. Similarly, 
the United States has not adopted many of the tools that States and 
local government entities have for ensuring that unclaimed or abandoned 
property is returned to productive use within the local community.
PERSISTENT PROBLEM
    The overwhelming need to address fractionation is not a new issue. 
In the 1920's the Brookings Institute conducted the first major 
investigation of the impacts of fractionation. This report, which 
became known as the Merriam Report, was issued in 1928 and formed the 
basis for land reform provisions that were included in what would 
become the Indian Reorganization Act of 1934 (IRA). The original 
versions of the IRA included two key titles; one dealing with probate 
and the other with land consolidation. Because of opposition to many of 
these provisions in Indian Country, most of these provisions were 
removed and only a few basic land reform and probate measures were 
included in the final bill. Thus, although the IRA made major reforms 
in the structure of tribes and stopped the allotment process, it did 
not meaningfully address fractionation (and the subsequent adverse 
impacts in the probate process).
    Accordingly, in August 1938, the Department convened a meeting in 
Glacier Park, Montana, in an attempt to formulate a solution to the 
fractionation problem. Among the observations made in 1938 were that 
there should be three objectives to any land program: stop the loss of 
trust land; put the land into productive use by Indians; and reduce 
unproductive administrative expenses. Another observation made was that 
any meaningful program must address probate procedures and land 
consolidation. It was also observed that Indians themselves were aware 
of the problem and many would be willing to sell their interests.
    Similar observations were made in 1977 when the American Indian 
Policy Review Commission reported to Congress that ``although there has 
been some improvement, much of Indian land is unusable because of 
fractionated ownership of trust allotments'' and that ``more than 10 
million acres of Indian land are burdened by this bizarre pattern of 
ownership.'' The Commission reiterated the need to consolidate and 
acquire fractionated interests and suggested in this report several 
recommendations on how to do so. Many of the observations and 
objectives made in 1938 and 1977 are the same today.
    In 1992, the General Accounting Office (GAO) conducted an audit of 
12 reservations to determine the severity of fractionation on those 
reservations. The GAO found that on the 12 reservations upon which it 
compiled data, there were approximately 80,000 discrete owners but, 
because of fractionation, there were over a million ownership records 
associated with those owners. The GAO also found that if the land was 
physically divided by the fractional interests, many of these interests 
would represent less than one square foot of ground. In early 2002, the 
Department attempted to replicate the audit methodology used by the GAO 
and to update the GAO report data to assess the continued growth of 
fractionation and found that it grew by over 40 percent between 1992 
and 2002.
    As an example of continuing fractionation, consider a real tract 
identified in 1987 in Hodel v. Irving 481 U.S. 704 (1987):
        Tract 1305 is 40 acres and produces $1,080 in income annually. 
        It is valued at $8,000. It has 439 owners, one-third of whom 
        receive less than $.05 in annual rent and two-thirds of whom 
        receive less than $1. The largest interest holder receives 
        $82.85 annually. The common denominator used to compute 
        fractional interests in the property is 3,394,923,840,000. The 
        smallest heir receives $.01 every 177 years. If the tract were 
        sold (assuming the 439 owners could agree) for its estimated 
        $8,000 value, he would be entitled to $.000418. The 
        administrative costs of handling this tract are estimated by 
        the BIA at $17,560 annually.
    Today, this tract produces $2,000 in income annually and is valued 
at $22,000. It now has 505 owners but the common denominator used to 
compute fractional interests has grown to 220,670,049,600,000. If the 
tract were sold (assuming the 505 owners could agree) for its estimated 
$22,000 value, the smallest heir would now be entitled to $.00001824.
    Fractionation continues to become significantly worse and as 
pointed out above, in some cases the land is so highly fractionated 
that it can never be made productive because the ownership interests 
are so small it is nearly impossible to obtain the level of consent 
necessary to lease the land. In addition, to manage highly fractionated 
parcels of land, the government spends more money probating estates, 
maintaining title records, leasing the land, and attempting to manage 
and distribute tiny amounts of income to individual owners than is 
received in income from the land. In many cases the costs associated 
with managing these lands can be significantly more than the value of 
the underlying asset.

CONGRESSIONAL RESPONSE
    Congress recognized 20 years ago the need to take firm action to 
resolve the problem of small uneconomic interests in Indian land. In 
1983 Congress attempted to address the fractionation problem with the 
passage of the Indian Land Consolidation Act (ILCA). The Act authorized 
the buying, selling and trading of fractional interests and for the 
escheat to the tribes of land ownership interests of less than two 
percent. A lawsuit challenging the constitutionality of ILCA was filed 
shortly after its passage. While the lawsuit was pending Congress 
addressed concerns with ILCA expressed by Indian tribes and individual 
Indian owners by passing amendments to ILCA in 1984.
    In 1987, the United States Supreme Court held the escheat provision 
contained in ILCA as unconstitutional because ``it effectively 
abolishes both descent and devise of these property interests.'' (See 
Hodel v. Irving (481 U.S. 704, 716 (1987)). However, the Court stated 
that it may be appropriate to create a system where escheat would occur 
when the interest holder died intestate but allowed the interest holder 
to devise his or her interest. The Court did not opine on the 
constitutionality of the 1984 amendments in the Hodel opinion. However 
in 1997, in Babbit v. Youpee (519 U.S. 234 (1997)), the Court held the 
1984 amendments unconstitutional as well.
    As a result, Committee staff, the Department, tribal leaders, and 
representatives of allottees worked together to craft new ILCA 
legislation. This cooperation led to enactment of the Indian Land 
Consolidation Act Amendments of 2000. Neither the 1984 amendments nor 
the 2000 amendments authorized the system discussed by the Court in 
Hodel where an interest holder would be able to devise his interest to 
an heir of his choice.
    The 2000 amendments attempted to address the fractionation problem 
through inheritance restrictions which, when effective, would make 
certain heirs and devisees ineligible to inherit in trust status, and 
require that certain interests be held by the heirs and devisees as 
joint tenants, with rights of survivorship. The legislation also 
contained provisions for the consolidation of fractional interests. 
Tribes and individual allotment owners can now consolidate their 
interests via purchase or exchange, with fewer restrictions. The 
legislation also attempted to enhance opportunities for economic 
development by negotiated agreement, standardizing, and in some cases 
relaxing the owner consent requirements. Finally, the amendments 
extended the Secretary's authority to acquire fractional interests 
through the Indian land acquisition pilot program, with the 
establishment of an Acquisition Fund, and the authorization of annual 
appropriations to help fund the acquisitions. While many of these new 
authorities were immediately effective, the inheritance restrictions 
were not. Under ILCA, the Secretary is required to certify that she has 
provided certain notices about the probate provisions of the 2000 
amendments before most of these provisions become effective. Congress 
requested that the Secretary not certify because additional amendments 
were needed.
    Some of the land related provisions are currently in effect, such 
as the pilot program to acquire fractionated interests. In fact, the 
BIA has conducted a pilot fractionated interest purchase program in the 
Midwest Region since 1999. As of March 31, 2004 the Department has 
purchased 78,321 individual interests equal to approximately 49,155 
acres. The Department is in the process of expanding this successful 
program nationwide. We also plan, where appropriate and to the extent 
feasible, to enter into agreements with Tribes or tribal organizations 
and private entities to carry out aspects of the land acquisition 
program. The 2005 budget request also includes an unprecedented amount 
of money for this program and we are pleased that S. 1721 would make it 
permanent. However, it is important to note that even with the success 
of this program, during this period the number of fractionated interest 
grew even larger.
    The 2000 amendments have begun enhancing opportunities for economic 
development by providing for negotiated agreement, standardizing, and 
in some cases relaxing the owner consent requirements. This has 
streamlined the leasing process for land owners to enter into business 
and mineral leases. While many of the land related provisions have 
proven to be successful, many other provisions, especially the probate 
provision, have proven to be complicated and difficult to implement.

S. 1721
    The Department was hopeful that the 2000 amendments would solve the 
fractionation problem. During congressional hearings on the amendments, 
the then Assistant Secretary, Kevin Gover, testified that the 
amendments would both eliminate or consolidate the number of existing 
fractional interests and prevent or substantially slow future 
fractionation. He also stated that several technical amendments needed 
to be made to the legislation.
    Unfortunately, the 2000 amendments have not solved the issue, in 
part due to ambiguities in the statute and in part due to the 
possibility that full implementation could result in the loss of trust 
status for a significant part of the Indian land base. The 2000 
amendments have proven to be complicated and difficult to implement. In 
addition, certain provisions were left to be dealt with in an 
anticipated package of amendments. For instance, the 2000 amendments do 
not contain a federal code of intestate succession and certain lands in 
California and Alaska were exempted from the probate provisions. At the 
same time, fractionation continues to be a pervasive problem in Indian 
Country.
    We are pleased that S. 1721 considers the above issues by providing 
for a uniform probate code and strengthening the ability of and adding 
greater flexibility to co-heirs, co-owners, and the tribe to purchase 
interests, renounce interests and enter into consolidation agreements 
during probate. The Department is also pleased that S. 1721 would 
provide for the authority to partition highly fractionated land.

Uniform Probate Code
    S. 1721 would provide a uniform probate code for Indians while 
still allowing tribes to set up their own codes for their members. As 
it currently stands, during probate the Department has to apply the 
state law where the trust asset is located. This has lead to the 
Department having to apply approximately 33 different state laws when 
probating individual trust estates. In many cases, interests in an 
estate are located in multiple states resulting in the application of 
numerous state laws being applied for one probate.
    The application of 33 different state laws has lead to a lack of 
consistency and predictability in administering probates in Indian 
Country. A uniform probate code will allow the entire estate of a 
decedent to be probated under one set of laws no matter where the real 
property is located. This will add clarity, consistency and 
predictability to the probate process.
    We are also pleased that S. 1721 would allow an individual to 
devise his property to anyone. Previous versions of ILCA limited the 
scope of available heirs in devising one's property. S. 1721 would 
allow the property to be devised by will to anyone; the only caveat 
would be whether the interest would be inherited in trust or restricted 
status or in fee. S. 1721 would also provide for a single heir rule 
intestate. Under the single heir rule, when interests are not being 
devised in testate (by a will), an interest of less than 5% in a parcel 
would be inherited intestate by the oldest in that class (the oldest 
child, the oldest grandchild, etc.). Overtime this will help 
consolidate interests. Extremely small interests will be prevented from 
further fractionating which in turn will help slow the growth of 
fractionated interests.
    S. 1721 would also strengthen the ability of and add greater 
flexibility to co-heirs, co-owners, and the tribe to purchase 
interests, renounce interests and enter into consolidation agreements 
during probate. Eligible heirs or devisees, co-owners, and the tribe 
with jurisdiction over the parcel would be allowed to purchase 
interests during probate prior to the distribution of the estate with 
the proceeds of the sale being distributed to the heir, devisee, or 
spouse whose interest was sold. Heirs would also be given the ability 
to renounce or disclaim their interests and enter into consolidation 
agreements during probate. These important tools will help enable 
individuals to consolidate their interests and prevent the continual 
fracturing of estates.

Partition
    S. 1721 would authorize the Department to conduct a partition 
proceeding of highly fractionated land. Highly fractionated lands are 
defined under S. 1721 as those lands having 50 to 100 owners with no 
co-owner owning more than 10% undivided interest or any trust or 
restricted land with more than 100 co-owners.
    Partition under S. 1721 is in essence a forced sale, which could 
only be brought upon the request of the tribe with jurisdiction or any 
person owning an undivided interest in the parcel of land. The 
applicant would be required to obtain consent for the sale from the 
tribe with jurisdiction over the parcel, an owner who for the three 
years preceding the partition proceeding had maintained a residence or 
business on the parcel, or from at least 50 percent of the undivided 
interest owners if any one owner's undivided interest has a value 
greater than $1,500.
    The Secretary, after receiving a payment or bond from the 
petitioner, would begin the partition process. The Secretary would 
provide notice to the other landowners, conduct an appraisal, allow the 
owners the right to comment on or object to the proposed partition and 
the appraisal as well as appeal, and conduct a sale. The tribe with 
jurisdiction over the parcel or any eligible bidder would be allowed to 
purchase the parcel.
    We are hopeful that tribes and individual interest owners will take 
advantage of this valuable consolidation tool. It is our hope that 
these highly fractionated parcels will be purchased so they can be put 
to greater economic and viable use. In addition, we look forward to 
working with the Committee to bring the language creating a new loan 
program into compliance with Federal credit standards.

REMAINING ISSUES
    We do request that prior to passing this legislation that Congress 
consider amending S. 1721 to provide the Department with the authority 
to dispose of unclaimed property and provide for a technical correction 
to address the Supreme Court decision in Babbitt v. Youpee, 519 U.S. 
234 (1997) and the District Court case decision in DuMarce v. Norton, 
Civ. 02-1026, 02-1040, 02-1041 (D.S.D.).

Unclaimed Property
    Under state law, a state may sell or auction off certain personal 
property that has not been claimed by an owner within a certain amount 
of time, usually within 5 years. This is not the case with inactive IIM 
accounts or real property interests. Often times the whereabouts of 
account owners are unknown to the Department because account holders do 
not respond to our requests for address information and our repeated 
attempts to locate them have been unsuccessful. This may be because the 
small amount in their account does not make such effort worthwhile. 
However, the Department must account for every interest regardless of 
size and we do not have the authority to stop administering accounts 
where whereabouts of the owner are unknown. We must have the authority 
to close these small accounts and restore economic value to the assets 
if the owner does not claim their interest within a certain amount of 
time. If the owner does not come forward, the revenue generated from 
the interest should be held in a general holding account against which 
claims could be made in the future if the owner's whereabouts become 
known or used to further the fractionation program.

Youpee and Sisseton-Wahpeton
    We also request a provision be added to S. 1721 that would provide 
a technical correction to address the decisions in Youpee v. Babbitt 
and DuMarce v. Norton. As mentioned above, the Supreme Court in Youpee 
held the escheat provision of ILCA as unconstitutional. In DuMarce v. 
Norton, the District Court for the District of South Dakota found 
unconstitutional a statute under which any interest of less than two 
and a half acres would automatically escheat to the Sisseton Wahpeton 
Sioux Tribe. As a result of these two decisions, the Department is 
faced with having to revest interests that escheated under both 
statutes back to the rightful heir. We request that Congress add a 
provision to S. 1721 declaring that any interest that escheated 
pursuant to these Acts be vested in the tribe to which they escheated 
unless they have been revested in the name of the heirs of the allottee 
by the Secretary since the escheatment. The provision should provide 
that the escheat of those interests to the tribes involved a taking by 
the United States and should provide compensation to the heirs of those 
escheated interests.

CONCLUSION
    The Department has been heavily engaged on working toward a 
constructive solution to the fractionation and probate issues. Over the 
last year the Department, congressional staff, the Indian Land Working 
Group, and the National Congress of American Indians have worked 
extensively on developing ideas and legislative language to 
constructively address probate reform and land consolidation. We are 
extremely pleased that many of those idea and suggestions are reflected 
in this bill.
    We thank the Congress for taking the lead on these important issues 
for Indian people and trust reform. S. 1721 addresses fractionation in 
a meaningful way and provides valuable tools for the Department to 
build upon. This concludes my statement. I will be happy to answer any 
questions you may have.
                                 ______
                                 
    The Chairman. You suggest a couple of different amendments 
to be made to the legislation. How critical do you believe 
those amendments are to having legislation enacted that would 
work?
    Mr. Swimmer. If there would be anything that would delay 
the implementation of the legislation as it's written in 1721, 
we would not suggest doing anything. If it could be amended to 
include those two issues, that would be fine. We think it is 
essential that this legislation be passed if at all possible. 
It is possible that these other two issues could be addressed 
in separate legislation as well.
    The Chairman. One of my biggest concerns is dealing with 
private property rights, any time we get into an issue like 
this, I have concerns about how the individual property rights 
will be treated. In your estimation, what in this legislation 
guarantees the protection of those individual rights of the 
individual tribe members, individual Indians?
    Mr. Swimmer. Well, I think throughout the bill there are 
provisions that assure that Indian individuals have the right 
to deal with their own property; whether it's through 
inheritance, in the probate process, even intestate situations, 
there are provisions for property being given to the 
appropriate heirs.
    In the purchase option in the Indian Land Consolidation 
Act, again, it is voluntary, and there--except in the partition 
provision, which only applies involuntarily to interests that 
are under 5 percent, I don't know of any other provision in the 
Act that would--could be considered, frankly, a taking of any 
kind. I think every provision, and including partition, because 
it's not--it doesn't even provide the degree of authority that 
you would normally find every day in State law for non-Indians. 
The forced sale that's available in the partition section would 
only apply to interests that are less than 5 percent. And then 
it gives options to the people there to purchase that property 
as well.
    So there is no sense of escheatment or anything like that 
in this bill, so I think throughout the bill that there are 
adequate provisions for protecting individual property 
interests.
    The Chairman. Just to follow that up, when you talked about 
an unclaimed property statute of some kind, would any lands or 
interests in lands that are taken under that provision go back 
to the tribe or other members of that tribe? Would we ensure 
that the lands stay there?
    Mr. Swimmer. Yes.
    The Chairman. So that would be written into the statute?
    Mr. Swimmer. What we have proposed to various working 
groups in the Indian community as far as unclaimed property, 
and what I believe was proposed at one time, or at least 
discussed at NCAI, was a provision whereby property that we 
could not locate or identify ownership would be converted from 
real property into cash for the appraised value. The property 
itself would then be transferred to the tribe, the respective 
tribe that has the jurisdiction. The cash would be put in an 
account available to the individual if and when that individual 
or their heirs came to claim the value of the land. It would 
allow some certainty, however, in land titles that we don't 
have now, because, as I said, these 45,000 people could 
potentially own 450,000 interests, and those interests will 
forever be unavailable or unusable, frankly, to the tribes or 
the individual themselves because their whereabouts are 
unknown.
    The Chairman. All right. Thank you.
    Mr. Rahall.
    Mr. Rahall. Thank you, Mr. Chairman.
    There is a provision that makes the Department's fractional 
interest buy-back initiative, the BIA Indian Land Consolidation 
Program, a permanent initiative. I'm wondering, how productive 
do you feel the pilot program has been? And how would the 
enactment of the pending legislation add to its effectiveness?
    Mr. Swimmer. The pilot program has operated for a couple of 
years in the Great Lakes area. It has been pretty successful. 
In fact, there, in fact, has not been a lack of willing 
sellers. I believe nearly 40 percent of the purchases that have 
been made from willing sellers were made from people who did 
not even realize they owned an interest in the land. These were 
people who basically had abandoned the property. They may have 
inherited and may realize that their great-great grandfather 
had an allotment, but didn't realize that that had passed down 
over the years, and they had some minor interest in a piece of 
property in the Great Lakes area.
    So what we're finding, though, is that as we work with 
tribes and let people know that we are engaged in a program to 
purchase these fractionated interests, that we have very, very 
strong response to that. We have paid, offered the appraised 
value, and it's been a very good program. I believe now we have 
acquired over some--I believe it's close to 70,000 interests 
representing several thousand acres, if you converted it to 
acreage. About 80 percent of those interests, I believe, have 
been below 2 percent ownership interest.
    But as I said, it's not uncommon that when we do purchase 
from an individual, we find that they own anywhere from 8 to 10 
interests maybe scattered all over the United States because of 
inheritance. We'll find people in the Great Lakes area that are 
now living in someplace east of the Mississippi. They may own 
land in South Dakota, Arizona, Oklahoma, Washington and not 
even realize it.
    And so we are having good success in the pilot, and we 
believe that as we are able to get appropriations to continue 
that program, that it will happen elsewhere.
    Now, what it allows us to do, of course, is consolidate 
those interests within the tribe. It makes those interests much 
easier to manage, and it also eventually avoids a probate cost 
of the people that are willing to sell their fractionated 
interest.
    Mr. Rahall. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Mr. Hayworth.
    Mr. Hayworth. Mr. Chairman, I thank you for the 
recognition. I would like to thank Mr. Swimmer and the other 
panelists we'll hear from in just a few minutes.
    I have no questions, just simply a sentiment to welcome the 
newest member of our committee, the lady from South Dakota, and 
I'd yield back my time.
    The Chairman. Mr. Pallone.
    Mr. Pallone. Thank you, Mr. Chairman. And I also want to 
welcome our new Congresswoman Stephanie Herseth for being up 
here. This is great to see you here today.
    I just wanted to thank the Chairman for holding the hearing 
and mention that again, which we all know, that the Committee 
has taken an active role in trying to help resolve the issue of 
trust reform. And I think along with the issue of trust 
accounting, land fractionation lies at the heart of trust 
reform, and I think if we're able to find a solution to put an 
end to land fractionation, we will move one step closer to 
solving the greater issue of trust reform. So that's why I 
think today is very important.
    And I also wanted to note that I think the way this issue 
has been approached is the way that we should be approaching 
trust reform in general. In other words, it seems clear that 
Indian country, Congress and the Administration have been 
working together for many years to find a solution to land 
fractionation, and it's with this kind of cooperative spirit 
that I think we could approach the issue of trust reform 
accounting in general. That's why I think this is so important.
    But I wanted to ask Mr. Swimmer, I had some general 
questions about the Administration's policy when it comes to 
land fractionation. According to the Office of Special Trustee, 
for the current fiscal year the BIA and the OST are estimated 
to spend about 220 million on activities related to 
fractionation. These costs are expected to grow sixfold in 20 
years to almost 1.2 billion annually. You know, I have 
mentioned my concern about the costs dealing with trust reform 
in general, and I have always--I will repeat again today that I 
think such funds, you know, could be used for other essential 
Indian programs. So I always worry about the fact that we are 
spending them on this.
    But Mr. Rahall, our Ranking Member, went into the whole 
issue of the pilot program, and, of course, one of the bills 
before us would make permanent the pilot program. And you 
talked a little bit, Mr. Swimmer about, you know, whether the 
pilot program was working in response to Mr. Rahall. But if you 
could be more specific and comment on the number of interests 
that you have acquired since the inception of the pilot 
program, and how much savings that has resulted in, and how 
much savings are expected from the expansion the program, 
because there--even though you've acquired a certain amount of 
interest, you know, there's evidence that those that remain, 
you know, continue to be fractionated at even a greater, you 
know, amount. So if you could be more specific about the number 
of interests and the savings and how much you expect to be 
saved from the expansion if it's made permanent.
    Mr. Swimmer. The pilot program, as I understand it--and the 
program is being operated by the Bureau of Indian Affairs out 
of the Great Lakes region and agency. It is my understanding 
that they have acquired between 70- and 80,000 interests. 
Those--and I believe that the amount of money spent approaches 
the $30 million over the last, say, 2-1/2 years that those 
interests have been acquired. In a number of tracts, and that 
would be your original allotments, say, an 80-acre tract or 
160-acre tract, that's where those interests are, it may be 
1,000 interests, for instance, in one tract. And many of those 
tracts, I don't have the exact percentage, I think it's 
probably around 35 to 40 percent now, they have acquired a 
majority interest on behalf of the tribe. And under the current 
legislation, that does allow the tribe to acquire the balance 
of those interests through some form of condemnation-type 
proceeding. They can pursue the other half------
    Mr. Pallone. And if I could--I don't want to cut you off, 
but I wanted to also ask about the compacts, because I 
understand that certain tribes weren't able to participate in 
the pilot program, specifically compact tribes such as the 
Confederated Salish and others, and I was wondering if there 
were going to be such limitations on the national program. 
Would you still have those same exclusions?
    Mr. Swimmer. I am not aware of those exclusions. In fact, I 
was advised by the lead person in the Bureau that Salish/
Kootenai, who is a compacted tribe, was given a sum of money 
from the last appropriations, from the '04 appropriation, to 
pursue its fractionated program that it already has under way 
that itself, the tribe itself, had begun several years ago. So 
unless that has changed in the last few weeks, I was told that 
they were one of the tribes.
    Now, the way I understand it's being operated now is that 
it was expanded from reservation to reservation. It started in 
the Great Lakes. It was then expanded into the Rosebud 
Reservation, and that it also, I believe, is now at Pima in 
Arizona. The idea was to try to go to the highly fractionated 
reservations, and I believe Crow is one that is on the list 
now.
    But we also, in addition to that, in order to achieve the 
cost savings that we've talked about, are trying to target 
those people who have accounts that have very small sums of 
money. For instance, I'd mentioned before at an earlier hearing 
we have 20,000 account holders who have an average balance of 
less than $1. Those, each one of those, even though their 
account balance and their land interest may amount to less than 
$1 in value, we may spend 3- to $4,000 to probate those 
estates.
    That's where I would expect the greatest savings to come 
in, the administration of the property interest. The actual 
leasing of it, is not that big a burden. It's going to be 
leased to a single or a group of lessees. The ownership, 
though, the expense of the ownership comes in trying to manage 
each of those accounts. If we have 1,000 owners, we have to set 
up 1,000 accounts. We have to collect the money. And 
oftentimes, in a case like I'm discussing, it may be a $500-a-
year lease. We divide that 1,000 different ways, deposit it, 
supposedly collect interest on it if it's more than a penny, 
and then track those accounts through probate. So our savings 
really comes a little bit throughout the system.
    To quantify those savings today, I just can't do that. I 
can't really tell you other than if we purchase 100 percent of 
the owners' property, that we are going to save in the probate. 
As I said, an average cost of probate's around 3,000 plus 
dollars. We are going to save in account maintenance and the 
setup of the account and tracking those moneys that may come in 
on that account, and that could be $100, $200 a year. And we 
will save in the administration of the land because we'll be 
talking about one owner, the tribe, who would then be able to 
lease the property without having to send notices out to 1,000 
people that it's going to be leased, or 100 people or whatever.
    So the savings are throughout the system. To give you a 
number, it would just have to be a guess at this point. But the 
savings are real ones. We've acquired all of the interests that 
an individual might have that are fractionated and that may be 
in many different jurisdictions, as I mentioned.
    Mr. Pallone. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. The gentleman's time has expired.
    Mr. Pearce.
    Mr. Pearce. Thank you, Mr. Chairman.
    Mr. Swimmer, I don't know if you regularly talk to Ms. 
Norton. This question really should be directed at that, but if 
you have regular communication, my concern is that in February 
2002, the Interior Department giving strong support, Congress 
passed and the President signed into law the mineral 
consolidation bill for the Pueblo of Acoma, P.L. 107-138. It 
provides that the Interior shall acquire nontravel mineral 
rights interest at the Pueblo of Acoma and consolidate 
ownership of these interests in trust for Acoma. It's pretty 
distressing to learn that 3 years after this, that after the 
completing of that bill, the--and the deadline for transferring 
those mineral rights, that the MMS is indicating an 
unwillingness, not just they haven't done, but an 
unwillingness, to carry out the law. And so my question is what 
do we do, and how are we going to get about it, and when can I 
get an answer back?
    Mr. Swimmer. I apologize. I am not familiar with that 
issue. I'll take the message back and get a response to you as 
soon as possible.
    Mr. Pearce. OK. And if the response is that MMS is still 
unwilling to do it, we would like explanations of why they feel 
like they've got the option to not follow a public law that's 
been passed and signed into law. And if they are going to do 
it, are they going to comply with the deadlines in the bill? So 
if we could get addressing on that. It's a pretty important 
matter. Acoma is one of the pueblos in my district that is 
trying to hard to make it on their own. They have got several 
avenues working, and when they see something that's passed into 
law, and they are just met with the same stonewall as before, 
it's awkward and it's--it really is not proper.
    Thank you, Mr. Chairman.
    The Chairman. Mr. Udall.
    Mr. Udall of New Mexico. I also would like to welcome our 
newest member to the Committee, Stephanie Herseth, and yield 
any time to her if she would like to proceed with questioning.
    Ms. Herseth. Thank you, Congressman Udall. I did have one 
question.
    You raised the issue, the Youpee issue, and the issue that 
came up as well as in the DeMars case which involved the 
Sisseton-Wahpeton Sioux tribe in South Dakota, and I am just 
wondering are there any other parts of those holdings in those 
cases or any other Supreme Court--relevant Supreme Court cases 
that you feel the bill doesn't adequately address as you 
provide here, suggesting an--in addition, a provision that 
addresses the escheat issue?
    Mr. Swimmer. There's nothing else in the bill that deals 
directly with those two issues. The bill, I believe, does 
address the root cause of those two issues by assuring that the 
individual property rights are protected, as well as if there 
is any purchase, that it is paid for.
    The escheat provisions that were in the 1983 and '84 
legislation were--they were the ones that were overturned by 
the Court. There was some consideration that the escheat 
provisions might be legal if they applied only to intestacy 
instead of not allowing an individual to write a will, for 
instance. But this bill doesn't acknowledge that, and it 
requires that payment be made. And I think that the 5 percent 
rule for highly fractionated heirship and allowing only a 
single heir to inherit is the closest that one might come to 
it, that only applies in intestacy. But I also believe that 
we're well within the Supreme Court's guidelines on that in 
this particular bill.
    The Youpee and the DeMars cases, though, present us a 
unique issue, and it is how to deal with subsequently, because 
now we have those roughly 60,000 interests that were involved 
in Youpee and Moore and Demars, and about 5- or 6,000 owners, 
and we need to compensate those folks. We've already 
transferred in many instances the property deeds to the tribe. 
We'd rather not transfer them back. What we'd like to do is 
compensate the people for the--what the Court has determined to 
be a taking, and we need congressional authority to do that.
    Ms. Herseth. Thank you. That's all I have.
    The Chairman. The gentleman yields back his time.
    Mr. Renzi.
    Mr. Renzi. Thank you, Mr. Chairman.
    Mr. Swimmer, thank you so much for coming by today. I had 
the opportunity to work with my colleague from Utah Mr. 
Matheson, and we were able to do a field hearing on Native 
American housing issues up in the Navajo Nation recently. And 
in the course of hearing some testimony, we learned that in 
dealing with trust lands and in dealing with the ability of 
trying to close escrow on trust lands, that the BIA has a 113-
year backlog. So while we're dealing with the reform of 
fractionalization here, and the ability to have a clear pathway 
toward ownership and eventually economic use, whether it be 
residential or commercial, we still, once we have the 
fractionalization problem or issue resolved hopefully through 
this legislation, are going to have to then deal with this 
backlog. You have got individuals who are Native Americans who 
are trying to buy homes on trust land, and who are waiting 
sometimes over 2 years for those closings to occur.
    Now, I realize you've done a great job, and we've had 
success in closing and gaining economic use out of fee simple 
lands, but on trust lands we have got this 113-year backlog. Do 
you think we should deal with that in this legislation, or is 
there an ability to come back and look at some sort of reform 
as it relates to privatization or contracting out the backlog 
so that we can reduce that 2-1/2-year wait that some of our 
Native Americans are having to deal with, even if they now gain 
ownership or a path to ownership, or if they've gained the 
ability of the banks to provide them with a mortgage?
    Mr. Swimmer. I think when you speak of backlog, you're 
referring to the title system that is slow, and being able to 
get title reports, title--what we call title status reports so 
that a mortgage company knows who owns a property and can put 
the mortgages on it, or that HUD can deal with it.
    This has been a problem that, in fact, has plagued the 
Bureau and Indian owners for years. The problem is caused by an 
antiquated title system that goes back 30, 35 years. That title 
system is currently, as we speak, under replacement. There's an 
investment, somewhere between 20 and 30 million, I understand 
that, that is being put into a new title system that is now 
being brought up in every title agency. We've got about eight 
offices where they maintain title. It will completely--at least 
our expectation is that it'll revolutionize where we are in 
being able to issue title reports.
    I am told by the Bureau that that system is to be fully 
implemented and that backlog you talked about substantially 
reduced by February or March of next year. They started this 
implementation in December of '03. We were given a 15-month 
period of time to get it fully installed across Indian country 
and to bring the backlog current. And that backlog means 
getting all of the title documents recorded that are waiting, 
literally stacks of documents waiting to be recorded so that 
accurate title status reports can be given. And I have tracked 
that myself, and I do believe that they are on target for 
making that deadline.
    Mr. Renzi. Now, this is the new software that was 
purchased. You're talking about the new technology and 
software?
    Mr. Swimmer. Yes.
    Mr. Renzi. Well, I look forward to following up then maybe 
working with you on some oversight as to what kind of successes 
and accomplishments you come through with. We have got to get 
down the 2-1/2-year wait.
    Mr. Swimmer. Oh, absolutely.
    Mr. Renzi. Thank you sir. Appreciate it.
    Thank you, Mr. Chairman.
    The Chairman. Mrs. Christensen.
    Mrs. Christensen. Thank you, Mr. Chairman. I, too, want to 
welcome our new colleague to the Committee.
    I just have one question. Just looking through some of the 
testimony that will follow yours, Mr. Swimmer, there was a--the 
Department of the Interior was allowed to provide input into 
the bill after the stated deadline for submission. And because 
of that, the point of view that they put forward, as I 
understand it, wasn't able to be addressed by the work group. 
Could you--and also created an unfair advantage for Interior 
versus everyone else who had to abide by a deadline. Would you 
respond to that, because I won't have a chance to ask you after 
the testimony is given?
    Mr. Swimmer. Sure. I am not aware of all of the time lines 
as far as the bill is concerned. It started--actually there was 
a draft of a bill nearly 2 years ago, and Interior was not able 
to support that particular draft from the Senate committee. It 
then went back, and a lot of folks in Indian country did get 
involved in it, and we were very pleased at that. We looked at 
a draft that came out. We made comment on it, sent it back out, 
and I would suggest that that probably occurred as many as 
three to five times. We met, and I personally met, and our 
congressional affairs folks met with the Senate committee, off 
and on, during those times, and I personally was not aware of 
any particular deadlines. In fact, I guess we worked on the 
bill and sent comments, oh, probably as late as, you know, a 
few weeks, maybe before it was introduced or marked up. I think 
it might have gone through a couple of markups even.
    My, and certainly the Administration's, effort was to be 
supportive and to try to get a bill that would address the 
problems that we face in probate land consolidation. And 
regardless of, you know, when comments came in, I would hope 
that everyone felt comfortable in submitting their comments 
whenever they wanted to. I would not want to, you know, have a 
deadline that said, well, if there's something that we really 
feel is a problem here, that we shouldn't comment on it.
    So I just--I'm just not aware that that occurred. And I 
haven't read the testimony, so if there are issues that are in 
there that someone has concern with, we'd be happy to talk 
about that. But I would say that our suggestions in the 
legislation were fairly minor. We were very pleased with the 
progress as we had monitored the legislation and reviewed 
various drafts, and we sent our comments out to the working 
groups from time to time. So, you know, I just--we feel like 
it's--it is a good bill and will help us meet these issues.
    Mrs. Christensen. Thank you, Mr. Chairman.
    The Chairman. Mr. Grijalva.
    Mr. Grijalva. Thank you, Mr. Chairman. And I also join with 
my colleagues in welcoming our new colleague to the Committee. 
Welcome.
    Mr. Chairman, if there's no objection, I'd like to submit a 
statement on the discussion today and fractionated land in 
particular as it applies to the Gila River Indian community, 
which is part of my district, and with that, I yield back.
    The Chairman. Mr. Udall.
    Mr. Udall of Colorado. Mr. Chairman, I want to welcome our 
new colleague from South Dakota, and I want to thank Mr. 
Swimmer for being here today.
    At this time I don't have any additional questions, but I 
would like to reserve the right to direct written questions to 
the Department of the Interior as we have a further chance to 
look over the legislation.
    Mr. Udall of Colorado. If I can add one other comment, I 
would like to thank you for continuing to pursue this. And I 
hope this is maybe a small step in the right direction.
    With that, Mr. Chairman, I'd yield back any time I have.
    The Chairman. Mr. Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman. And I, too, 
would like to offer my personal welcome to our new 
distinguished member of our committee here from the great State 
of South Dakota, Ms. Herseth, and look forward to working with 
her in the coming weeks and months in our committee.
    I also want to offer my personal welcome to Mr. Swimmer and 
my apologies for not being here earlier to have heard your 
testimony, but I have gone through some of the things that are 
stated in your statement. I see a very close parallel of the 
problems that we face not only with our Indian tribes. I say a 
sense of parallel on this issue, I notice that it's been over 
70 years. This is not a new issue. This problem has been 
infesting the Indian tribes for how many years, and just now at 
this point we've come to--certainly want to offer my 
commendation to the Senator from Colorado, the Chairman of the 
Indian Affairs Committee in the Senate, my good friend Senator 
Campbell for this initiative, and I take it that that bill has 
passed the Senate. It has the support of the Administration on 
a bipartisan basis; am I correct on this, Mr. Swimmer?
    Mr. Swimmer. Yes.
    Mr. Faleomavaega. OK. I wanted to ask, does this also have 
the support of the Indian Nations around the country?
    Mr. Swimmer. As far as I know, it does. I believe that 
there's been quite a bit of work done by various groups from 
Indian country on the bill, and, of course, you're going to 
hear from some of those people here soon.
    Mr. Faleomavaega. Well, the bill is over 100 pages, and I'm 
not--certainly not an expert in all these legalese terms and 
referrals and all this and that. I make a reference to say this 
is a parallel issue that I've attempted in the years past on 
another problem that has been bugging me for the times, the 16 
years that I have served on this committee, the regulations 
that were established by the Department to do the procedures of 
giving Federal recognition to tribes that apply. And, you know, 
some of these tribes have taken 15 years. They can't even 
afford the expense of paying attorneys and so-called experts in 
making them so-called qualified for the seven criteria. And 
unfortunately, when introducing the bills, I have not received 
any support from the Administration.
    The bottom line is you mentioned in your statement here 
that the turnaround aspects of this proposed bill to amend the 
law at least give the Indian people about a 2-year period to 
give some sense of results or substance when they make the 
probates and all this. And I want to mention to Mr. Swimmer 
that it takes 15 years for some tribes to even to get the 
advice and assistance of the Federal Recognition Division of 
the Department of the Interior to do this. And I realize and 
this is not the issue, but I'm saying I'm facing a parallel 
issue where this has taken so long, and I certainly, Mr. 
Chairman, I sincerely hope that if this has the bipartisan 
support of the other body and certainly with the 
Administration, I'm leaning very strongly toward supporting 
this legislation. And, again, I want to thank Mr. Swimmer for 
being here, and thank you, Mr. Chairman.
    The Chairman. Thank you.
    Are there any further questions of the witness?
    Well, Mr. Swimmer, thank you very much. Obviously, this is 
a complicated issue, and there may be further questions that 
Members have that they would like to submit to the 
Administration in writing, and if you could answer those in 
writing so that they can be included in the hearing record.
    Mr. Swimmer. Thank you.
    The Chairman. Thank you very much for being here.
    Mr. Swimmer. Thank you.
    The Chairman. Panel two is up next, consisting of The 
Honorable Charles Colombe, president of the Rosebud Sioux Tribe 
of South Dakota; and The Honorable Maurice Lyons, Chairman of 
the Morongo Band of Mission Indians.
    Mr. Emery. Mr. Chairman, the Rosebud Sioux Tribe sent me 
here to represent Charles Colombe. I'm tribal attorney for the 
Rosebud Tribe. May I sit with my client?
    The Chairman. Yes. You're more than welcome to sit with 
him. The president will be testifying, but you're more than 
welcome to sit with him. Please identify yourself for the 
record.
    Mr. Emery. Mr. Chairman, members of the Committee, for the 
record my name is Steven Emery, and I'm tribal attorney for the 
Rosebud Sioux Tribe of South Dakota.
    The Chairman. Thank you very much, Mr. Emery.
    [Witnesses sworn.]
    The Chairman. Welcome to the Committee. It's nice to see 
both you again. In fact, it's nice to see all three of you 
again.
    Before we begin, I would like to recognize Congresswoman 
Herseth to introduce her constituent.
    Ms. Herseth. Thank you, Mr. Chairman. Let me just first say 
that I'm honored to be serving on this distinguished panel. 
This is my first Resources Committee hearing, and I look 
forward to working with the Chairman, with my colleagues, 
Ranking Member Rahall, and working together on significant 
issues that affect so many people in South Dakota.
    As Congressman Rahall noted, Native Americans make up the 
single largest minority population in my State, and this 
committee has jurisdiction over issues of paramount importance 
to Native peoples in South Dakota, from Indian health care to 
trust reform to law enforcement issues. South Dakota tribal 
leaders will have my ear and will have a voice on these issues 
in this body.
    Regarding the issue at hand, I would like to commend you, 
Mr. Chairman, and others for bringing this important issue up 
for a hearing today, and I would like to welcome my fellow 
South Dakotans, President Charlie Colombe as well as Steven 
Emery. And Charlie is the president of the Rosebud Sioux Tribe 
in south central South Dakota, and he is a recognized expert on 
the areas of tribal probate and land fractionation issues.
    Ms. Herseth. I thank him for traveling to Washington for 
this hearing, and commend his testimony to all of my colleagues 
on the Committee. We will certainly benefit from his depth of 
knowledge and experience on this important matter.
    Thank you, Mr. Chairman. Thank you, Charlie.
    The Chairman. Thank you.
    Mr. Colombe, if you are ready, you can begin.

     STATEMENT OF THE HON. CHARLES C. COLOMBE, PRESIDENT, 
           ROSEBUD SIOUX TRIBE, ROSEBUD, SOUTH DAKOTA

    Mr. Colombe. Thank you, Mr. Chairman. Chairman Pombo, 
Committee, I really appreciate the opportunity to be here 
today. I think it is a great honor, and it is certainly a 
privilege for me to speak to you today. I submitted written 
testimony, and I would like to tee up, if you will, on my 
background in Indian land. And, frankly, it has been a large 
part of my adult life. And I can remember in 1943, when Rosebud 
passed a land consolidation program, I was a very small boy and 
one of my grandfathers was the President of the tribe when the 
'34 Act came in.
    This bill is unique in a couple of areas. Number one, it 
fixes most if not all of the problems, and probably there is 
always tweaking here or there that we could talk about. It 
fixes many, many of the problems that are out there. And I 
think, second, the importance, it has broad support by those 
people in the Administration. And I certainly support Mr. 
Swimmer's testimony. And it has support in Indian Country.
    We recognize that Indian people most often do not do wills. 
We look at that as some premonition that you are going to leave 
tomorrow if you do a will today. So intestate is the rule out 
there. This bill authorizes many ways to deal with that. It 
also protects private ownership of those trust allotted 
interests. And I would say on the Rosebud, going back to 1943, 
that we have had a consolidation program. And that's called 
Tribal Land Enterprise. And it in itself has been successful in 
the end. However, the means don't always justify the end. And I 
submitted information on that, that we will be talking about 
later.
    But moving forward, I worked in trust land issues. I did 
title examination, curative work--which is preparing judges 
orders--and administrative modifications for all of the trust 
lands or a great majority of the trust lands in the Great Lakes 
region, the Minneapolis area, what was the Aberdeen area, which 
is now Great Plains, all of the Billings or Rocky Mountain 
area. Did the Portland area, which is the Northwest tribes. And 
then created the title plan for the State of California. So I 
have a great deal of experience in running title in Indian 
Country. I did this as a government contractor.
    Additionally, I did 11 of the 19 pueblos in New Mexico. And 
there are clouds on a lot of title, frankly. But I would say, 
again, this bill addresses much of the issues. And I would hope 
that it doesn't get held up. It is a broad, broad step in the 
right direction. Again, I think it does much of what it is 
attempting to accomplish.
    Furthermore, Rosebud has the pilot program of the ILCA land 
consolidation purchases. And I in 1971 to '79 served on our 
tribal council. I ran our land consolidation program. I did 
10,000 purchases in 1 year in running that program as Chairman 
of the Natural Resource Committee. And, under the--under our 
Indian Land Consolidation Act, at that point what we did--and 
we had the first, the very first Farm Home Administration loan 
in the Nation. We had a memorandum of agreement in 1970 that 
authorized FMHA monies to be used to purchase Indian land. That 
was the first in the Nation. And, again, our Tribal Land 
Enterprise was first in the Nation and maybe the only one.
    So we have a great deal of experience in these areas. What 
I would like to do, Mr. Chairman, is give my broad support to 
this. And, again, I want to thank all of those who are working 
on this.
    And there is other areas of concern, obviously, that this 
doesn't address and it doesn't attempt to address, whether it 
be the Youpee issues, and that goes back to the old--the first 
Indian Land Consolidation Act that was signed by President 
Reagan I believe January 12, 1983. And, frankly, I did not 
support that. It was a taking, pure and simple.
    But if I could, Chairman, if I can offer anything else, I 
would rather answer questions specifically. And, again, I have 
a broad background in this area, and it is very easy to support 
what you folks are doing here today. And I commend the Senate 
committee. Thank you. If you have any questions, I would 
certainly try to answer those.
    [The prepared statement of Mr. Colombe follows:]

       Statement of The Honorable Charles C. Colombe, President, 
                  Rosebud Sioux Tribe of South Dakota

    Good morning, Committee and Chairman Pombo. My name is Charlie 
Colombe and I am President of the Rosebud Sioux Tribe of South Dakota. 
At Rosebud, we are descended from the Sicangu or Burnt Thigh Band of 
the Titonwan or Prairie Dwelling Lakota. It is a privilege and an honor 
to give testimony before the Committee on S. 1721, ``A bill to amend 
the Indian Land Consolidation Act.''
    As a preliminary matter, I would respectfully ask the Committee to 
seek amendment of Section 7 of S. 1770 which authorizes appropriations. 
Federal funding for any IIM or Trust claims paid in connection with any 
historical accounting or internal restructuring required by trust 
reform under the Cobell suit or tribal claims should be paid from the 
United States' permanent judgment appropriation under 31 U.S.C. 
Sec. 1304 and should not be paid or reimbursed from appropriations for 
the Department of the Interior/Bureau of Indian Affairs. The Permanent 
Judgment Fund should pay for the historic accounting, not current BIA 
appropriations because it is not right for the victims of this terrible 
mismanagement to be asked to forego services to pay for the accounting 
which should have been due tribes and their members since 1887. If the 
Cobell claims and the historic accounting are not paid from the said 
Permanent Judgment Fund it is unlikely that the accounting will be 
effected and that those historic claims will ever be paid.
    I have attached an exhibit to my testimony which analyzes how 
Rosebud Sioux Tribal members who have not received the benefits that 
they ought to have received from the Tribal Land Enterprise (hereafter 
``TLE'') since it was founded under Federal law in 1943. I offer this 
to the Committee because the Rosebud Sioux Tribe intends to bring this 
claim to the Committee in the near future and we will do our own 
accounting to demonstrate to this Committee and to the United States 
the breakdown in the United States' trust obligations to RST members.
    In the decades that I have spent working on tribal land issues, I 
have identified many issues that this bill remedies:
      Indians usually do not make wills;
      Indians dying intestate leads to the application of state 
law when the BIA probates the intestate estates because tribes lack the 
authority to probate trust property;
      Most Indian Reorganization Act Era tribal constitutions 
prohibit Tribes from probating trust assets; and
      The Rosebud Constitution prevents the RST Courts from 
probating trust property.
    S. 1721 would allow far greater latitude for tribal court 
jurisdiction by authorizing tribes to probate trust assets. Overall 
this legislation is the best opportunity that tribes have had, in my 
lengthy experience, to fix the fractionalization of trust lands. In 
addition, it prevents trust lands from passing out of trust ownership 
by allowing descendants of allottees to inherit trust land without 
subjecting the lands to taxation and state jurisdiction.
    Tribes throughout the United States have closely reviewed this 
legislation in behalf of their members. Virtually all tribes favor the 
enactment of S. 1721 because it offers tribes and their members the 
chance to consolidate their land holdings while maintaining tribal 
jurisdiction and tribal ownership of their lands. This is a truly 
significant aspect of the legislation given the harsh treatment of 
tribal jurisdiction and sovereignty by the Federal courts in recent 
years.
    Amending the Indian Land Consolidation Act to revise the 
requirements for testamentary and non-testamentary disposition of 
interests in trust, restricted lands, and personal property of an 
Indian will end the unfair application of state law to Indian property. 
In addition, tribes may now adopt their own probate codes to ensure 
that their members will inherit trust property in a timely, culturally 
appropriate manner.
    S. 1721 repeals the limitation of any bequest of an interest in 
trust, restricted land, or personal property to a decedent's Indian 
spouse. The legislation retains permission for an Indian decedent to 
will such interests to the tribe with jurisdiction over the land. 
Importantly, the Bill adds permission for allottees to bequeath such 
interests to the lineal descendants of the Indian making the will or to 
any person who owns a pre-existing undivided trust or restricted 
interest in the same parcel of land in trust or restricted status. 
These aspects of the bill will slow the migration of trust lands to fee 
status by making it easier for the allottees and holders of beneficial 
interests in trust lands to bequeath their trust property to their 
descendants and relatives who share undivided fractionated interests in 
the same tracts of trust land.
    S. 1721 regards a bequest of trust property as the bequest of the 
interest in trust or restricted status, unless the language of the will 
clearly shows that the person making the will planned to bequeath the 
trust property as a fee interest without restrictions or the interest 
bequeathed is a life estate. This Bill limits the order of the bequest 
of an interest in trust or restricted land as a life estate or in fee 
for an interest not bequeathed according to the general rule. Further, 
S. 1721 allows the owner of interests in trust or restricted personal 
property to bequeath such interests to any person or entity. Thus, it 
will be the will of the owner of the property interest that decides the 
disposition of the property, not state law or an administrative 
formula.
    When this legislation is enacted, where the maker of a will 
bequeaths interests in the same parcel of trust or restricted lands to 
more than one person, in the absence of express language in the will to 
the contrary, the bequest will be presumed to create joint tenancy with 
the right of survivorship in the property interests involved. The Bill 
allows for the partition and purchase of highly fractionated Indian 
land by eligible Indian tribes. This furthers the ability of tribes to 
consolidate their land holdings, the ultimate purpose of the Indian 
Land Consolidation Act (hereafter ``ILCA''). The Bill also sets forth a 
mechanism allowing co-owners of trust or restricted interests in a 
parcel of land to let surface leases of such a parcel without requiring 
the Secretary of the Interior's (hereafter ``Secretary'') approval of 
the lease.
    S. 1721 declares that, after enactment, it may not be construed to 
limit or otherwise affect the application of any Federal law requiring 
the Secretary to approve mineral leases or other agreements for the 
development of the mineral interest in trust or restricted land. The 
Bill allows interests in a parcel of trust or restricted land in the 
decedent's estate, under specified conditions, to be purchased at 
probate consistent with the Bill. S. 1721 proscribes secretarial 
approval of a tribal probate code that prevents the bequest of an 
interest in trust or restricted land by an Indian lineal descendant of 
the original allottee, or an Indian who is not a member of the tribe 
with jurisdiction over the interest, unless it provides for the 
renouncing of interests, the reservation of life estates, and payment 
of fair market value.
    The Act provides that authority otherwise available to a tribe to 
acquire an interest in trust or restricted land bequeathed by the owner 
to a non-Indian will not apply where the interest is part of a family 
farm bequeathed to a member of the decedent's family, and the inheritor 
agrees that the Indian tribe will have the opportunity to acquire the 
interest for fair market value if it is offered for sale to a person or 
entity that is not a family member of the landowner.
    S. 1721 will make the fractional interest acquisition program a 
permanent program. This means that tribes can preserve their 
reservations and their authority over them--to the extent that trust 
lands exist in their respective reservations. The Act sets forth 
procedures for the sale of trust interests to Indian landowners. This 
is an important clarification; now Indians will have notice of exactly 
how to acquire interests in trust and restricted property. ILCA 
mandates that the Secretary place a lien on all revenue accruing to an 
fractional interest in trust land acquired under ILCA until the 
Secretary receives payment in full to the Acquisition Fund of the 
purchase price of that interest. This allows the Secretary to assist 
tribes in the consolidation of fractionalized undivided interests in 
trust lands by--in essence--providing the tribes interest free loans 
because the BIA prepays the purchase price and over time the lease for 
the tract repays the BIA/Secretary and the lien is lifted.
    The Act allows the rules of intestate succession under the Indian 
Land Consolidation Act or under a tribal probate code approved under 
the Act or under regulations made pursuant to the said tribal probate 
code to apply to fee patented lands. This is a major change because 
previously tribes didn't have the authority to probate fee lands!
    It is helpful to tribes that S. 1721 instructs the Secretary to 
award grants to nonprofit entities who provide legal assistance 
services to tribes, individual owners of interests in trust or 
restricted lands, or Indian organizations under the Federal poverty 
guidelines. Up to now, unless the Interior Solicitor requested that the 
Justice Department represent tribes or the tribes paid the attorneys 
then there was no legal assistance available to further tribal 
interests in enhancing the tribal land base through purchase from 
individual tribal members.
    Under the Bill, the Secretary is required to notify each Indian 
landowner of specific information concerning each tract of trust or 
restricted land the landowner has an interest in. In the past, 
individual landowners were frequently denied access to this important 
information. This is a dramatic change from existing law and policy. 
Nowhere in the BIA has there ever been assistance in planning or 
creating private and/or family trusts concerning interests in trust or 
restricted lands. Now, the Secretary is mandated to provide individuals 
with such assistance!
    S. 1721 provides that as a matter of law, that after 6 years an 
undivided interest in a tract of trust or restricted land of a tribal 
member is abandoned and subject to this Act. This is important because 
currently heirs are required to obtain a judicial decree that a 
relative is deceased before the BIA can take action concerning the 
land. Of course, the Secretary must provide written notice to all of 
the heirs before holding a hearing to legally decide who the heirs to 
the trust property are. In addition, the Secretary must send notice 
annual with a response form as well as a change of name/address form to 
the putative owners of interests in trust or restricted land. This 
protects allottees by notifying them of any changes in their trust 
property interests the same year that the interests have changed.
    For the foregoing reasons, on behalf of the Rosebud Sioux Tribe and 
its members I ask that you support the enactment of S.1721. Thank you 
for your consideration.

                                 ______
                                 
                               EXHIBIT A

     ANALYSIS OF STEPS TO ACCOMPLISH LEGISLATIVE SETTLEMENT OF TLE 
                               LITIGATION

I.  HISTORICAL OVERVIEW OF TRIBAL LAND ENTERPRISES (TLE)
      Organized in 1943 as subordinate corporation of Rosebud 
Sioux Tribe
      BIA retained direct oversight over land values, 
certificate values and leasing practices
      Concept to use TLE shares of stock (certificates) in lieu 
of cash
      Provide remedy for increasing fractionation of land 
ownership and to consolidate land ownership
      Develop land management plan for benefit of participating 
tribal members
      Provide for preservation and safeguarding the values of 
individual ownership of land
      Simplify land exchange process
      TLE has consolidated land, but in doing so it has eroded 
tribal and individual equity in land
      Organized with concept to earn 4% dividend and accrue 
increasing land value.
Example:


                     ,--                                   ,

        1943 investment                        2003 value
        $100 savings, 4% interest, compounded    $1,073
 semi-annually                                   $  329
        $100 grazing land invested in TLE        $7,900
        $100 grazing land not put into TLE
 (Allotted)


TLE owner actually ends up with $329
For each $100 invested in TLE in 1943, owner has suffered a loss of 
        $8,644
Note, for example, $100 invested in 1952--owner's loss would still be 
$8,293

II. CAUSES OF THE PROBLEMS IN TLE
      All land is not equal; but, Todd County grazing land is 
appraised same as Gregory County grazing land. (USDA 2003 grazing land 
average value, Gregory $354.00, Todd $196.00)
      Since inception of TLE, land has not been transferred at 
its true value.
      By-laws not followed in valuing TLE certificates. 
(Sec. 28) TLE owners are continually harmed by undervalued certificates 
of interest.
      TLE has a history of management problems that still 
exist.
      No defined policy on leasing. No definition of 
application of ``Indian Preference'' so that some TLE owners, 
directors, employees, Rosebud Sioux Tribe Council members and favorites 
obtain cheap leases.
      Individuals without connections get no leases, or must 
bid much higher prices.
      Cheap leases transferred in direct violation of Code of 
Federal Regulations.
      Indian preference leases are at expense of Indian land 
owners.
      TLE management continues to refuse to acknowledge or 
address problems, and losses to owners continue.

III. EXAMPLES OF CURRENT MANAGEMENT PROBLEMS
      Certificate value has no relationship to equity value of 
TLE, i.e. current certificate value is $13.56-book value per 
outstanding share is approximately $70
      No earnings or increases in equity value are allocated or 
accrued for shareholders
      TLE management overhead expenses exceeds $600,000 per 
year, an amount equal to average annual land purchases
      Lease revenues are a fraction of market value, i.e. many 
of the leases are at $6.50 an acre, average market value is $14.00 an 
acre
      Lessees profit by assigning lease rights, representing 
income that should have been TLE's
      Adjusting lease rates and overhead expense should more 
than double TLE current average net earnings of $1,500,000
      Shareholders have no effective voice in, or control over 
management, as TLE operates in a manner to favor those in political or 
management control

IV. ACTION PLAN
    To attempt to avoid continuing extensive litigation involving all 
existing and past certificate owners, or liquidation of TLE, the 
Rosebud Sioux Tribal Council has passed a motion that they prefer to 
have TLE seek a legislative-administrative solution for the benefit of 
all past and present TLE owners, including the Rosebud Sioux Tribe. The 
plaintiffs have currently acquiesced in that procedure.
      Obtain review of all TLE certificate transactions, to 
provide a means of identifying losses suffered by TLE owners.
      Losses identified shall include individual and tribal 
losses.
      Review undertaken by competent certified public 
accounting firm so that it has integrity to all parties, and to 
Congress.
      If possible, obtain a final verification from GAO.
      Also use services of a certified land appraiser to help 
determine damages.
      Assess general damage claims from deficient leasing 
practices and failure to comply with CFR requirements for approving and 
filing sub-leases.
      Pending completion of certificate review, commence 
drafting proposed legislative solution.
      Utilize services of U.S. House of Representatives 
Committee on Resources and Senate Select Committee (Indians) to prepare 
legislation in draft form.
      Upon completion of the certificate review, finalize the 
legislative proposal with application of damage recovery.

V. TIMELINE
      June through August 15, 2004--Certificate review 
completed and assess damages from management deficiencies.
      September 1, 2004, final draft of proposed legislation, 
including damage outline.
      October 2004, final proposed legislation completed in 
form acceptable to House Committee on Resources and Senate Select 
Committee (Indians)

VI. CONCLUSION (REASONS THAT IMMEDIATE ACTION IS VITAL)
    On paper, TLE looks like a successful Indian enterprise. TLE audits 
disclose a net worth of over $42,000.000, with average net earnings 
exceeding $1,500,000. A closer look creates a rather disturbing 
picture. It is the picture of a company that has built a net worth at 
the expense of its owners, rather than for its owners.
      When through death, illness or other exigency, an owner 
has to sell TLE certificates, the owner receives $13.56 for each 
certificate (from 1997 through May 2004 it was $9.97). Those same 
certificates have a book value of over $70.00. TLE receives the 
windfall, at the expense of its owners.
      Book value is only a portion of actual land value. TLE 
management cannot even provide an accounting of how many acres are 
under TLE management.
      TLE has very seldom paid dividends, or returned any 
benefit to its owners. Annual TLE earnings are not accounted for, and 
are used in the manner determined by TLE management.
      Any TLE owner who has the audacity to complain suffers 
the consequences of management's unofficial blacklist.
      TLE continues to lease land for below market value rates, 
and redeem certificates at a fraction of their value
                                 ______
                                 
    The Chairman. Thank you.
    Chairman Lyons.

        STATEMENT OF THE HON. MAURICE LYONS, CHAIRMAN, 
        MORONGO BAND OF CALIFORNIA, BANNING, CALIFORNIA

    Mr. Lyons. Thank you, Chairman and Committee, for inviting 
the Morongo Band of Mission Indians to provide testimony on S. 
1721.
    The Morongo Tribe has been actively involved working with 
those drafting the legislation over the past few years. I have 
testified in front of the Senate Indian Affairs Committee in 
2002-2003 in an effort to get this bill passed. I come before 
you today with the same intent.
    The Morongo Reservation is located 17 miles west of Palm 
Springs. Our tribal membership enrollment is 1,200. Our 
reservation comprises approximately 33,000 acres of trust land, 
of which 31,115 are held in trust for the tribe and 1,286 acres 
are held in trust for allottees and heirs.
    Provisions within the Indian Land Consolidation Act of 2000 
prompted the Department to send out a series of notices to 
individual tribal members alerting them to expect changes in 
the rules of intestate succession and inheritance. These 
provisions would constrain the passing of interests in trust 
and restricted lands to non-Indians, and the notices had an 
immediate detrimental impact on our tribe's ability to plan for 
the future to manage the tribal lands affected and our tribal 
members' ability to pass down to their children and 
grandchildren the land.
    While the Department has to date been willing to not 
implement those amendments of the 2000 Act, we know that they 
are not able to defer it forever. To this end, we encourage you 
to act swiftly on this matter.
    We at Morongo share the desire of Congress to preserve 
trust status of existing allotments and other Indian lands. We 
appreciate the Committee's hard work in 1999 and 2000 to strike 
a deal between allottees and sovereign rights of interest of 
tribal governments. We are now--however, we now recognize 
unintended consequences of the 2000 Act have come about.
    For example, because the 2000 Act defines Indian, the 
Morongo Band is faced with having to revise its own membership 
criteria in order to enable our enrolled members to pass their 
interest in trust allotments to their children. Congress must 
understand, we do not feel revising our membership is the 
solution. The fact is that changing the membership is a 
divisive matter for tribal governments and their members. We 
should not be forced to amend our membership criteria in order 
to protect the rights of our members' children to continue 
having interest in family lands.
    Under the--further, under the 2000 amendments to ILCA, in 
an effort to prevent Indian lands from passing out of trust, 
non-Indian heirs were allowed to receive a life estate on 
Indian lands. Perceived as a substantial new restriction, this 
provision actually reversed the effect, prompting many tribal 
members to petition to have their lands taken out of trust to 
protect the interests they made in the lands through 
improvements.
    S. 1721 includes the solution to the problem we face in 
California. Specifically, the interplay between the revised 
definition of Indian and the new definition of eligible heirs 
will provide for anyone that owns an interest in trust land or 
restricted land in the State of California to continue to 
qualify as an Indian for the purpose of this act. As such, the 
heirs of that individual, without respect to the membership and 
qualifications of the Morongo Tribe, will be eligible to own 
trust lands upon the death of the owner. These changes allow 
the members of my family who no longer--who may no longer be 
eligible for membership in the Morongo, but they are definitely 
American Indians, to carry on the tradition of our family on 
our lands.
    Due to the unique history of reservations and rancherias in 
California, this definition is highly warranted. Mr. Chairman, 
as you know, many of the tribes which exist today in California 
are cobbled together based on geographic proximity of native 
people. For example, the Morongo Band of Mission Indians is 
made up of people from descendents from Cahuilla, Chemehuevi, 
Luiseno, Serrano, many, many others. There are people who live 
in the same area combined into Morongo Reservation. The 
situation is shared by many tribes located in California and is 
the basis for a much needed definition of these native people 
in California.
    I thank you, Mr. Chairman, for letting me ramble on here. 
Thank you.
    [The prepared statement of Mr. Lyons follows:]

          Statement of The Honorable Maurice Lyons, Chairman, 
                    Morongo Band of Mission Indians

    Thank you, Mr. Chairman, for inviting the Morongo Band of Mission 
Indians to provide you with our testimony concerning S. 1721, the 
American Indian Probate Reform Act of 2004, a bill to amend the Indian 
Land Consolidation Act. The Morongo Tribe has been actively involved in 
working with those drafting this legislation over the past several 
years and I have testified before the Senate Committee on Indian 
Affairs in 2002 and 2003 in an effort to get this bill passed. I come 
before you today with the same intent.
    As you might know, in 2002 Senator Ben Nighthorse Campbell, 
Chairman of the Senate Committee on Indian Affairs asked the Department 
of the Interior to delay implementation of certain provisions of the 
Indian Land Consolidation Act Amendments of 2000 (the Act) pending 
further Congressional review of concerns and confusion that has arisen 
in Indian country about the consequences--both intended and possibly 
unintended--of those amendments. To date, the Department appears to 
have honored the Senator's request and we are thankful for their 
willingness to do so.
    As I have explained to members of the Senate, provisions within the 
2000 Act prompted the Department to send out a series of notices to 
individual tribal members alerting them of expected changes to the 
rules of intestate succession and inheritance. These provisions would 
constrain the passing of interests in trust and restricted land to non-
Indians and the notices had an immediate detrimental impact on our 
tribe's ability to plan for the future and manage our tribal lands 
effectively and our tribal members' ability to pass their land down to 
their children and grandchildren.
    While the Department has to date been willing to not implement the 
amendments from the 2000 Act, we know that they are not able to defer 
this action forever. To this end, we encourage you to act swiftly on 
this matter.
    The Morongo Reservation is located approximately 17 miles west of 
Palm Springs. Our tribal membership enrollment is 1,200 and the 
reservation comprises approximately 33,000 acres of trust land, of 
which 31,115.47 acres are held in trust for the tribe, and 1,286.35 
acres are held in trust for individual allottees or their heirs.
    We at Morongo share the desire of Congress to preserve the trust 
status of existing allotments and other Indian lands, and we appreciate 
this Committee's hard work in 1999 and 2000 to strike a balance in the 
Indian Land Consolidation Act Amendments of 2000 between the individual 
property rights and interests of allottees and the sovereign rights and 
interests of tribal governments. However, we now recognize unintended 
consequences from this legislation have come about.
    For example, because of the way that the 2000 Act now defines 
``Indian,'' the Morongo Band is faced with having to revise its own 
membership criteria in order to enable some of our enrolled members to 
pass their interests in trust allotments to their own children. 
Congress must understand that we do not feel revising our membership is 
a solution. The fact is that change of membership is a very divisive 
matter for tribal governments and their members. We should not be 
forced to amend our membership criteria in order to protect the right 
of our members' children to continue having interests in their family 
lands.
    Further, under the 2000 amendments to ILCA, in an effort to prevent 
Indian lands from passing out of trust, non-Indian heirs were to be 
allowed to receive a life estate in Indian lands. Perceived as a 
substantial new restriction, this provision actually had the reverse 
effect, prompting many tribal members to petition to have their lands 
taken out of trust to protect the investments they made in the lands 
through improvements.
    S. 1721 includes a solution to the problem we face in California. 
Specifically, the interplay between the revised definition of 
``Indian'' and the new definition of ``eligible heirs'' will provide 
for anyone that owns an interest in trust or restricted land in the 
State of California to continue to qualify as an ``Indian'' for the 
purpose of this Act. As such, the heirs of that individual, without 
respect to membership qualifications in the Morongo Tribe, will be 
eligible to own trust lands upon the death of the owner. These changes 
will allow members of my family who may no longer be eligible for 
membership in the Morongo Tribe--but are most definitely American 
Indians--to carry on the traditions of our family on our lands.
    Due to the unique history of reservations and rancherias in 
California, this definition highly warranted. Mr. Chairman, as you 
know, tribes which exist today were largely cobbled together based on 
the geographic proximity of native people. For example, the Morongo 
Band of Mission Indians is made up from people who descended from 
Cahuilla, Chemehuevi, Luiseno, Serrano and many others. These people 
all lived in the same area and where combined into the Morongo Indian 
Reservation. This situation is shared by many of the tribes located in 
California and is the basis for a much needed definition for those 
native people who live California.
    Mr. Chairman, thank you for your time and willingness to hear about 
the concerns of the Morongo Band of Mission Indians.
                                 ______
                                 
    The Chairman. Thank you, Mr. Chairman. I understand that 
Mr. Emory will be available to answer any questions if any of 
the members have questions specifically that they would like 
him to answer.
    President Colombe, it is nice to hear your testimony. I 
didn't realize the extent of your background on this particular 
issue. Maybe we can pull the entire committee together and you 
could spend a couple of days trying to educate us so that we 
understand what this bill does.
    But I guess my first question to you is that would the--are 
the Rosebud Sioux prepared to adopt a probate code of their own 
if this bill were to pass?
    Mr. Colombe. Mr. Chairman, I think the Rosebud Sioux would 
be prepared to adopt a probate code. However, like most IRA 
tribes, Indian Reorganization tribes, we are prohibited by our 
current constitution from probating trust interests. So------
    The Chairman. And how do we fix that?
    Mr. Colombe. I think this bill opens the door for us to do 
that.
    The Chairman. So if the bill becomes law, you believe that 
you will be able to do it?
    Mr. Colombe. I believe it would be in our best interests to 
do it, and I believe that the people would support that very 
strongly.
    The Chairman. Obviously with your experience on this, do 
you have any feeling for how many other tribes would be in a 
similar situation that they would adopt their own probate code?
    Mr. Colombe. Mr. Chairman, I think if you look at the 
fractional interests, in the Great Plains region we have 
roughly 30 to 33 percent of all the fractional interests in the 
United States. You go then to the Rocky Mountain region, which 
us old guys call the Billings area, they have about the 
identical amount. So 60-some percent of all the fractional 
interests in the United States are in about 7 States there in 
the Midwest. I believe that the vast majority of us in South 
Dakota--we are all of Lakota, Dakota, Nakota descent. We all 
speak the same language, if you will. Our friends to the west 
in Montana, Wyoming, who have the equal amount, think a lot 
like we do. We all have the same problems, it is very rural. On 
the Rosebud Reservation, as an example, Chairman Pombo, there 
is 6,100 of our tribal members who have fractional interests. 
However, also on Rosebud there is 4,100 tribal members from the 
Oglala Sioux Tribe that have interests on the Rosebud.
    So we are so interconnected through land ownership that I 
think, again, while I can't guarantee that everyone will adopt 
a probate code, I think uniformly those tribes will find the 
benefit of this bill.
    The Chairman. And obviously you would be encouraging the 
other tribal leaders to------
    Mr. Colombe. Absolutely.
    The Chairman.--to adopt one?
    Mr. Colombe. Yes.
    The Chairman. Let me ask you this. I am told that there are 
very few Native Americans that have a will.
    Mr. Colombe. That is true, sir. And like I said, it's more 
of a cultural thing. We, as an example, seldom ever hear 
someone say--I wouldn't say to a councilman: Now, if you died 
tomorrow. I mean, it would be like whoa, he is sending me where 
I don't want to be.
    I think, Chairman, that we can work on processes to educate 
our people in those areas. And I believe--Mr. Swimmer brought 
up a deed process wherein--that is legal I think in all 
States--that might be an answer to the lack of wills or dying 
intestate.
    The Chairman. Obviously that is a major problem. And in 
listening to Mr. Swimmer's testimony and dealing with I believe 
you said 45,000 unidentified folks that own an interest, but 
they don't know where they are. I would rather have the 
individual decide who their heir is, whether it is by their 
cultural tradition or what have you, whoever their heir is; it 
should be that individual that is making that decision. And if 
we don't have a higher percentage of folks that have a will and 
a process in place, then you allow the government to make that 
decision. And I don't think any of us really want that.
    So I do think that is an issue that maybe we can put our 
heads together and figure out a way to deal with that.
    I just have one more question I wanted to ask Chairman 
Lyons. We have had the opportunity in the past to talk about 
the Morongo's situation with their land ownership. Can you tell 
me how many other tribes are in the same kind of situation that 
you are in? Do you have a feeling in California for how many 
are in the same situation?
    Mr. Lyons. There is very few in our situation. Most of the 
tribes in California are not allotted tribes. Ours--I think 
there is maybe Agua Caliente and maybe just one or two up 
north. But the rest are tribally assigned. So the tribes still 
own the property. But ours is a unique situation.
    And I am one of those that don't have a will and won't have 
one. But I have taken care of that. I have deeded all of my 
stuff. I have nothing. So I have nothing left, so I have taken 
care of it. But it is a unique situation for Morongos, 
especially, that this get passed and as soon as possible.
    The Chairman. Well, I have had a chance to discuss that 
with you in the past, and hopefully if we can get this 
legislation through and onto the President's desk, it can help 
to rectify some of the issues you are dealing with. But thank 
you very much.
    Mr. Pallone.
    Mr. Pallone. Thank you, Mr. Chairman.
    I couldn't help when you were talking about cultural 
differences to think about Italian Americans, which is my 
ancestry, and they are just the opposite. You know, I remember 
some of my ancestors actually had not only the plot but the 
monument with the date when they were born and the dash, and 
the only thing missing was the date that they died long before 
they even, you know, 10 or 12 years before they died. There 
really are differences.
    I just wanted to ask the Chairman and the President. We 
have talked about how land fractionation robs land of its value 
and its usefulness. I am just wondering if either of you would 
be able to describe how the land consolidation benefits the 
tribe. In other words, are there plans to make use of 
consolidated land? Will it spur economic development? You know, 
maybe give us some examples of what we are trying to accomplish 
is actually favorable and what your plans are and how you deal 
when it is consolidated, if you could.
    Mr. Lyons. Right on our reservation, on the corner where I 
live, there is a 15-acre piece, and there must be 200 to 300 
people in that. And what we are planning to do is when we get 
that all back to the tribe, we are going to open up, put our 
homes for the people that are moving back to the reservation 
in--we will allot one-acre parcels out to them so they can 
build a house there. If the Bureau ever gets the title search 
done. We have over 200 people waiting for 2 years now for a 
title search. The bank through the loan program won't do it 
because the title search is not done.
    But that is what we plan to do with it, is all of our 
allotted land is almost used up so we have got to get that land 
back into the tribe to give it back to our people.
    Mr. Pallone. Thanks.
    President Colombe, did you want to comment?
    Mr. Colombe. Yes, sir. I think the first thing it does, it 
restores land to tribal jurisdiction. And that in itself is a 
giant problem in Sioux Country and all across the Great Plains 
and Rocky Mountain region.
    Second, it does allow for economic development because it 
makes the land usable.
    And, third, we have, since the Indian reorganization, had 
the authority contained in the '34 Act for the government to 
put monies into land consolidation purchases. This Act does 
that. And, again, I think those questions that Mr. Swimmer 
spoke to, it is a lot cheaper to buy the land than it is to 
administer those small trust estates. And we need--we need as 
we go along to work together on this. And, again, there is 
many, many areas of concern that this addresses, someone said 
100 pages. And obviously it is very complex. But I think, 
again, the most important thing is it places that land under 
tribal jurisdiction rather than having it float around, if you 
will, under a situation where the tribe cannot pass a probate 
code, where State codes are used, and it deals with the 
inheritance of it and the purchase.
    Mr. Pallone. You had mentioned President Colombe, you said 
something in your statement about means don't justify the ends, 
and you had submitted something about, you know, the way things 
were going about--the way we were going about things. Was that 
specific to Rosebud, or------
    Mr. Colombe. Yes, sir. That is specific to Rosebud. Again, 
since 1943, we have had a land consolidation program there, and 
many thousands of our allottees have been harmed through that 
program, and it is basically lack of oversight by the 
government that allowed that to happen. We have also------
    Mr. Pallone. Is that going to be changed with the bill that 
we are considering or will that help?
    Mr. Colombe. It will help in that we will have a new 
consolidation program in place under the ILCA and we will be 
able to clean up and do an accounting on those people who have 
been harmed by the old program.
    Mr. Pallone. OK. Thanks a lot.
    Mr. Colombe. So it opens the door for us to operate a land 
consolidation program, which we are currently doing under the 
ILCA, and are continuing with our Tribal Land Enterprise.
    Mr. Pallone. OK. Thanks.
    Thanks, Mr. Chairman.
    The Chairman. Mr. Renzi.
    Mr. Renzi. Thank you, Mr. Chairman.
    Welcome both, Mr. President, Mr. Chairman, thank you both 
for coming today.
    Mr. President, I wanted to kind of draw on your background 
and your expertise for a moment and ask, when we talk about the 
consolidation and we look at the element of forced sales, do 
you anticipate that being a problem in the future of how we 
implement the program?
    Mr. Colombe. No, sir, I don't. I think that the forced 
sales is, again, it is not like the Act of 1983, and it has 
processes that I think protect the individual ownership 
interests.
    Mr. Renzi. Sir, following up on the Chairman's line of 
questioning. When you talk about Rosebud having a code, a 
probate code that you are ready to move forward with, and you 
in your statement talk about the fact that, in a positive 
manner, that you look forward to tribes being able to 
individually adopt their own codes, do you see us coming back 5 
years from now and recommending one model over another as it 
relates to one set of probate code? Or will the patchwork be 
able to accomplish--a patchwork across the Nation be able to 
accomplish the ability to consolidate without leaving gaps or 
clouds on the titles or the background investigations?
    Mr. Colombe. I think this Act sets up the framework to work 
within for tribes. Even without the adoption of their own code, 
this authorizes a process that I think would be, most of us can 
be very supportive of.
    Mr. Renzi. OK. Mr. Chairman, I------
    The Chairman. Would the gentleman yield for just a second?
    Mr. Renzi. Yes, sir.
    The Chairman. On his question, would it not be possible to 
take, because of your experience--I mean, obviously you have 
done this over the years--to take what you guys are doing and 
kind of hold that up as a model for other tribes to look at? 
And as we go through this in the future, being able to tell 
other tribal leaders, look at what Rosebud Sioux have? I mean, 
wouldn't that, I mean, I think Renzi is right with this. It 
would make things a lot simpler if we had a model that fit 
within the law and actually worked within the current system. I 
think this is a real good idea to try to come up with something 
like that.
    Mr. Colombe. Chairman Pombo, sir, we fully intend--like I 
said, we support this. And obviously there is other Indian land 
issues out there. I can name some of those that are gigantic. 
As an example, let me toss something out that this doesn't 
address at all but is a big issue at Rosebud. We have had 1,400 
plus HUD homes built there. 98 percent of those are built on 
tribal land. Many, many of those were built in the '60s, '70s, 
'80s and '90s and now are paid for. The Housing Authority is 
issuing bills of sales to those houses; however, the vast 
majority of those, 90-some percent, are built on tribal land. 
The tribe is bound by statute that they cannot sell that land. 
So suddenly you see the size of that problem. And we need to 
take the ILCA program while we are in the process of buying 
land for the fractional interests, we need to take some of 
those fractional interests and allow individual Indian folks to 
buy those and allow them to exchange those fractional interests 
for a tract that their house is sitting on. Because think of 
the fact that only a thousand of those homes--and if they were 
only worth 50,000 apiece, they are paid for, but those people 
don't have merchantable title. So we are going to use this 
program--and this is across allotted Indian Country that this 
happens. So we will use this as a tool to exchange land with 
our members, and we can trade trust deed for trust deed and 
they will truly end up with a merchantable title.
    As an example there, if you had a thousand of those homes 
worth 50,000 apiece and they were paid for, that would put $50 
million in our economy that isn't there today.
    So we not only support this--and there is other areas that 
we will use this bill to help us in.
    Mr. Renzi. Mr. Chairman, just one follow-up. Thank you, 
sir.
    Sir, I appreciate the insight and the depth of your 
substance. Can you take that same description, apply it to 
business site leasing as it relates to commercial economic 
interests where, particularly like on the Navajo Reservation, 
18 million acres, the largest Native American Indian 
reservation in America, and we trying to go to BIA to get 
approval for business site leasing. And, as the Chairman 
pointed out, not only are we having the backlog that Mr. 
Swimmer addressed as it relates to residential construction, 
but we also have a backlog as it relates to commercial entities 
who are willing to come to the Navajo Nation, let's say a Wal-
Mart or a Denny's restaurant or something that is going to 
allow the Native Americans to spend their money on the 
reservation, and allow that dollar to maximize itself and stay 
on the reservation rather than going off the reservation and 
providing jobs. And yet, when we look at finally consolidating 
fractionalized interest, we are not able then to in a timely 
manner get approval for a business site leasing so that those 
economic interests will stay the course and build.
    Can you help me understand that a little bit? Will there be 
a benefit there on the commercial side?
    Mr. Colombe. I think the great benefit, sir, is that we--as 
I stated, we are working on an Indian land bill, if you will, 
and we are all getting a much broader understanding of those 
problems out there, and as I spoke about the housing issue at 
Rosebud--and that is across the whole Midwest that this issue 
is out there. People have paid for something, and now they 
don't have title to it. That is a humongous issue. Isn't it? 
Imagine buying a home and not owning it because it is attached 
to a piece of land that can't be sold.
    The commercial development has been a giant problem, and we 
have only had three businesses on the Rosebud Indian 
Reservation in the last 10 years that have grossed over a 
million dollars a year by Indians. And, frankly, my family or 
myself started all three of them.
    We have other problems in those areas. I think there is, 
there is some new regulations that are coming that are dealing 
with--they are dealing with business leases. And, again, I 
would say this is a first step.
    Mr. Renzi. I don't want to take too much time. I just 
wanted to point out to the listening audience that we can't 
effectuate a change in Native American Indian housing, we can't 
increase Native American Indian housing until we increase the 
jobs and the earned income on the reservations; and we can't do 
that until we have better business site leasing provisions. And 
hopefully this is a first step, I think is what your point is.
    Thanks, Mr. Chairman.
    The Chairman. Mr. Faleomavaega.
    Mr. Faleomavaega. Thank you, Mr. Chairman, and I wanted to 
thank President Colombe and Chairman Lyons for their testimony.
    I wanted to ask you gentlemen if you knew how the Federal 
Government institutionalized the definition of the word 
``Indian,'' because the problem here is that this isn't just 
for the Native Americans. This also has a very, very negative 
and serious impact not only to the native Hawaiians and even to 
my own people. And let me tell you, it was the U.S. Congress 
that institutionalized the definition of an Indian. An Indian 
is you have to be at least 50 percent blood quantum Indian to 
be considered an Indian. And to me, it is a very racist and a 
divisive not only policy, but this is what Congress enacted 
years ago defining what an Indian is even today.
    And Chairman Lyons, you indicated that the problem now of 
defining what an Indian is and who is an heir to the very 
issues that we are discussing today. Let's say that I am a 
member of Morongo Tribe and I am 50 percent blood Morongo and 
an Indian in that respect. And if I marry a non-Indian, what 
happens to my heirs? Would they still be in compliance of 
defining of what an Indian is?
    Mr. Lyons. Under this act, yes. The heirs from that union 
still will be defined as an Indian in this act.
    Mr. Faleomavaega. And then in your tribal constitutions and 
laws, both President Colombe and Chairman Lyons, the rights of 
the tribal members--this is a concern that I have. Let's say 
three or four generations down the future, what would be the 
rights of the heirs of the members of this tribe who are of 
less than 50 percent quantum and blood and so-called being 
considered as an Indian? Will this bill protect the rights of 
those who have less than 50 percent blood quantum?
    Mr. Lyons. Yes.
    Mr. Faleomavaega. And your understanding--and I would like 
to know the latest in Indian Country. If now defining an Indian 
you don't have to be 50 percent blood quantum to be considered 
an Indian. Is that no longer the case among Native Americans?
    Mr. Lyons. That is no longer the case.
    Mr. Faleomavaega. Because this bothers me, because the 
native Hawaiians are fighting among themselves right now simply 
the Congress also enacted legislation to define what a native 
Hawaiian was, and that was 50 percent to be considered a native 
Hawaiian. And the same thing they did for my people, too, years 
ago. So we have got some very serious issues on this.
    But I just wanted to ask, is the new definition of Indian 
according to Federal law, regulations, or policy, you don't 
have to be 50 percent blood quantum to be considered an Indian?
    Mr. Lyons. No, you don't.
    Mr. Faleomavaega. So what is the new definition now to be 
considered an Indian? Because I wanted to------
    Mr. Lyons. It is ours--on our reservation it is according 
to the role of, I forget what year it is, but--and having 
Morongo blood. You just have got to have Morongo blood in you 
to be a Morongo Indian.
    Mr. Faleomavaega. Mr. Chairman.
    Mr. Colombe. Sir, if you are not enrolled, then this 
defines it.
    Mr. Faleomavaega. Indian.
    Mr. Colombe. An Indian. Which I think is something that we 
all can support.
    Mr. Faleomavaega. So it is fair. In other words, as long as 
you are enrolled, whether are 1-10th or 1-18th, you are still 
an Indian, a member of the tribe?
    Mr. Colombe. And then if you are not enrolled, this defines 
it.
    Mr. Faleomavaega. If you are not enrolled, then you have to 
be 50 percent blood quantum?
    Mr. Colombe. No. Two degrees of consanguinity, which is the 
great grandfather.
    Mr. Faleomavaega. Let me share with you the absurdity of 
this whole blood quantum thing that has unraveled even within 
my own tribe--I say my own tribe, the Samoan Tribe. I don't 
know if you have heard of my people. And we go to court in 
terms of who will be the new chief if the members of the tribes 
and the clan cannot decide, so the court makes a decision. And 
one of the issues to be considered is the amount of blood 
quantum that you have as a member of this clan that you are 
going to be competing for the tribal chairmanship of that clan. 
And as I said, the absurdity of it all is that, like today, I 
am--four generations ago great great grandfather was a 
paramount chief, so therefore I am only 1-18th blood quantum of 
the member of the clan; but if I win the case tomorrow in 
court, I am all of a sudden 100 percent paramount chief of that 
clan simply because of the way that Congress had enacted the 
law to determine what a Samoan was. And that is that you have 
to be 50 percent blood quantum in order to be considered a 
Samoan. And I was just very curious.
    Now, under the proposed bill, will this in any way impact 
the current problems we are having with the Indian Trust Fund 
on all the collections of the lands and the mineral rights and 
the situation that we are still not able to resolve, by the 
way? Some estimates from the 2 billion to $10 billion that 
Indian, the funds have not been properly--not only properly 
held in trust by the Federal Government; but will this bill in 
any way have a negative impact on the rights of our Native 
American community that have assets or financial holdings under 
the Indian Trust Fund?
    Mr. Colombe. Sir, I think it will have a positive impact. 
It will resolve many, many of those issues that are in Hodel. 
And, again, that is why I think it has such broad support. It 
has appealed to people who don't have the experience that I 
have been fortunate to have.
    Mr. Faleomavaega. Chairman Lyons?
    Mr. Lyons. I agree with him. I totally agree with him, with 
President Colombe.
    Mr. Faleomavaega. Just one quick comment, Mr. Chairman. I 
know my time is over. You mentioned earlier about housing. We 
had developed a law to amend the--allow our veterans--I am a 
Vietnam veteran. Because for years the tribal lands, homestead 
lands among the Hawaiians and communal lands among Samoans, we 
couldn't get loans from the lending--from banks, commercial 
banks because of the status of our lands. And now I want to 
note for the record that the Veterans Administration has given 
a special program to allow our vets to receive loans to build 
their homes on tribal lands even though they cannot be--you 
know, you cannot sell or convey it in fee simple. And I thought 
that this was a very positive result. And maybe it is something 
that can be done also to give assistance to the Indian tribes.
    Thank you, Mr. Chairman, and I thank the Chairman and the 
President of the--it is just always an honor to have our 
distinguished leaders from the Native American community appear 
before the Committee. Thank you, Mr. Chairman.
    The Chairman. Mr. Bishop.
    Mr. Bishop. Thank you. I appreciate the comments you made 
on this bill. You clarified some of the points to it. In every 
bill that comes before us there has to be a tradeoff of winners 
and losers. Can I just ask you, are there any tribes out there 
of which you are aware that are opposed to anything that is 
going on there because they see themselves as losers in this 
process?
    Mr. Lyons. I don't see any in California, to tell you the 
truth. I have not heard of any in California that are opposing 
it. None have come to me and told me, because they know I have 
been working on this for quite some time. So I don't know of 
any.
    Mr. Colombe. Sir, I think it is the most significant piece 
of land legislation--trust land legislation in my lifetime. And 
I believe most tribes recognize it as being a very workable 
document, and we also look at it as a process of education. 
And, yes, we have other issues that this doesn't resolve, but 
it opens the door. It is that first step. And I think there is 
broad support. And I have heard different times--and it has had 
a fair hearing. There is many, many people who have worked on 
this. And I personally have been very involved in it since 
actually 1971, in this process.
    And, again, the first Act was signed by President Reagan 
January 12, 1983, which it didn't have that support. That is 
where the Youpee case came. But this, I know of no one. There 
may be testimony that is written and otherwise that opposes 
this. Frankly, I don't know where it is at.
    Mr. Bishop. Then I have to congratulate you and the sender 
for reaching that unanimity. Thank you for your time for being 
here.
    Thank you, Mr. Chairman.
    The Chairman. Ms. Herseth.
    Ms. Herseth. Thank you.
    And, again thank you, President Colombe. And I want to 
thank you again for being here and traveling from South Dakota. 
I also want to thank Chairman Lyons for his testimony as well.
    If I could just follow up from the line of questioning that 
Chairman Pombo established at the outset. And we talked about 
assuming the bipartisan support of the bill as we move forward, 
assuming it becomes law. You pointed out that the Rosebud Sioux 
Tribe constitution as well as other IRA tribes have provisions 
prohibiting the courts, the tribal courts from probating. So 
the first step would be, before whether it is the probate code 
that the Rosebud Sioux Tribe may be considering, or as that may 
become a model or any other model or uniform code that each 
tribe would assume and would adopt, the first step would be to 
amend the tribal constitution?
    Mr. Colombe. Actually, this allows for a probate process 
that is within the current system. What it would do basically 
is we no longer have to follow the State probate code. We would 
follow this code in essence.
    Ms. Herseth. OK.
    Mr. Colombe. If that is clear. Then later on, if we choose, 
opt to doubt our own probate code, then we have to obviously 
amend our own constitution and come forth with a probate code. 
But in the interim this takes us out from under that State 
probate code and this is a much better document than the State 
would set forth.
    Ms. Herseth. Thanks for clarifying that. And then I just 
wanted to give you an opportunity, because of the depth of your 
experience and expertise on these issues, President Colombe, in 
addition to Congressman Pallone's question about the use of the 
consolidated lands for economic development and other uses, and 
then of course the question here as it relates to trust reform. 
Are there any other benefits to this proposal as you have seen 
based on the Rosebud Sioux Tribe's participation, the pilot 
program, that you would want to elaborate on as it relates to 
the large land based tribes in South Dakota and then throughout 
the region, as you mentioned, with 60 percent comprised within 
the 7 States predominantly in our region?
    Mr. Colombe. Yes, there are. There is a provision in here 
to provide legal services, which is a first. And, frankly, that 
is a very important part of this bill. That is--you know, it is 
put in there, and I don't think a lot of people will see the 
value of that. But understand that many times there are no 
legal services and no understanding. And it is such a complex 
field of law, Indian land title is, that there is not a lot of 
expertise there.
    Ms. Herseth. Well, just to follow up from that then in 
terms of the provisions as it relates to legal services. How 
about for the tribal courts themselves in administering and 
being involved in probate? Do you see other resources being 
necessary in assisting the tribal court system in engaging now 
under the provisions provided by the bill?
    Mr. Colombe. I think the jury may still be out on that. 
However, I would not recommend amending anything at this point. 
I think it is so important to get legislation in place and then 
build on that at a later date. And that is a--I think it is 
very important that we understand that it does create property 
rights. And most tribal codes do not have a process to protect 
individual property rights. So that portion of it--again, it is 
very complex, it is long. But there is--frankly, if I had 
something--and I have been over this, I have had Mr. Emory and 
another group of lawyers who I have worked with over the years, 
some of them very astute in these areas, have reviewed this 
with me, for me, and we support the bill. So I really 
appreciate all those other bells and whistles that are in it.
    Ms. Herseth. Very good. Thank you. I yield back. Thank you, 
Mr. Chairman.
    The Chairman. Mr. Walden.
    Mr. Walden. Thank you, Mr. Chairman. I appreciated the 
comments of our witnesses and those of the panel members, but I 
have no specific questions.
    The Chairman. Thank you.
    Mrs. Christensen.
    Mrs. Christensen. I have no questions, either, Mr. 
Chairman.
    The Chairman. Well, thank you very much. I want to thank 
this panel for your testimony. It has been very informative and 
very helpful for the Committee to have you. I appreciate both 
of you traveling to be here and to help us to understand this 
issue greater. Thank you very much.
    Mr. Colombe. Thank you, Chairman and Committee. I am 
extremely privileged to have been here today, and God be with 
you.
    The Chairman. Thank you.
    Mr. Lyons. Thank you.
    Mrs. Christensen. Mr. Chairman.
    The Chairman. Ms. Christensen.
    Mrs. Christensen. Thank you. I would like to just ask 
unanimous consent to have the statement of Representative Raul 
Grijalva and of Dale Kildee included in the record.
    The Chairman. Without objection, so ordered.
    [The prepared statement of Mr. Kildee follows:]

 Statement of The Honorable Dale Kildee, a Representative in Congress 
                       from the State of Michigan

    Good morning, Mr. Chairman. Thank you for holding this hearing 
today on such an important issue. The complex issue of fractionated 
ownership of Indian lands is a result of federal policy designed to 
break up tribal lands. Beginning with the passage of the 1887 General 
Allotment Act, Congress began enacting laws requiring the allotment of 
tribal land to individual Indians. Allotment laws provided 40-, 80-, 
and 160-acre tracts to individual Indians. Congress stopped the 
allotment process in 1934, after a loss of millions of acres of tribal 
lands and hundreds of thousands of acres that were lost to taxes that 
Indians did not know they owed.
    Because of the allotment policy, Indian allottees face the complex 
problem of owning fractionated interests in allotted land. Today, it is 
common for hundreds of owners to hold an interest in one tract of land.
    These owners are heirs of the original allotment holder whose land 
can become more fractionated as the number of beneficiaries increases. 
This means that hundreds of beneficiaries could own shares in income 
derived from one tract of land.
    While Congress has attempted to deal with land fractionation by 
passing the Indian Land Consolidation Act and amendments to that Act, 
problems still remain.
    We gather today to hear testimony regarding Senator Campbell's bill 
that once again attempts to deal with the issue of fractionated 
interest in lands. I look forward to hearing today's testimony. Thank 
you.
                                 ______
                                 
    [The prepared statement of Mr. Grijalva follows:]

Statement of The Honorable Raul Grijalva, a Representative in Congress 
                       from the State of Arizona

    I would like to express my thanks for the prompt scheduling of this 
hearing on S. 1721. Few issues are more complicated than issues 
concerning allotments on Indian reservations. Also, we should never 
lose sight of the fact that the allotting of Indian reservations was 
opposed by both Indian tribes and their members. Often Indians could 
only be induced to accept allotments under the threat that if they did 
not accept the land it would be given to non-Indian settlers. This is 
often exactly what happened. After land was allotted to individual 
Indians the remaining land was declared to be ``surplus'' land and was 
made available for only a fraction of its value.
    As the Chairman is aware, the Indian Re-Organization of 1934 (IRA) 
expressly repudiated the policy of allotting Indian reservations. It 
also created a process for reversing the effect of the allotment 
policy. For example, it prevented allotted land from being taken out of 
trust status. Those Indian tribes that organized themselves under the 
IRA entered into a contract with the federal government. I am sure we 
all agree that such a contract cannot be changed by one side without 
the approval of the other party to the contract. But in 1948 Congress 
apparently tried to unilaterally amend that contract by allowing land 
to be taken out of trust status.
    Ironically, the effect of the 1948 law happens to fall hardest on 
Indian tribes like the Gila River Indian Community (Community) that are 
trying to working to combat the growing problem of land fractionation. 
I have the pleasure of representing the Community. The Community is 
working with the Department of the Interior to address fractionation, 
for example as a participant in the pilot project to acquire 
fractionated interests. S. 1721 would expand and strengthen this 
important program. The Community has not limited itself to the use of 
federal resources in this effort to address fractionation. As I 
understand it, however, the Community must often decide between 
acquiring lower value fractional interests in land or acquiring higher 
value parcels that may be taken out of trust. The only rationale choice 
is for the Community to acquire the higher value parcels of land. As a 
result, the problem of fractionation continues to increase on the 
Reservation, even as the Community tries to work with the federal 
government to resolve this growing problem.
    I know the Community worked very closely with the Senate sponsor of 
this legislation, Senate Indian Affairs Committee Chairman Ben 
Nighthorse Campbell, when this bill was considered in the other body. 
The Community was very close to reaching a compromise on some 
amendments to the bill. In fact, at the request of Senate Indian 
Affairs Committee staff, the Community had begun to consult with the 
staff of this Committee to discuss its proposed amendments. At this 
juncture, Chairman Campbell perceived an opportunity to move the bill 
to this body without any amendments. In a good faith effort to keep 
this important legislation moving the Community did not object to 
moving S. 1721 with the understanding that Senator Campbell would 
assist the Community's effort to obtain the amendments it is seeking.
    I applaud this cooperative attitude and I look forward to working 
with the Community and the Chairman and Ranking Member of this 
Committee to develop amendments that reflect the Community's string 
desire to eliminate fractionation on its reservation lands and to 
prevent the creating of a patchwork collection of allotted, trust, and 
mixed ownership.
    I thank the Chairman of this Committee for his assistance on this 
important matter.
                                 ______
                                 
    The Chairman. I would like to call up our next panel.
    Marcella Giles, of the Indian Land Working Group, and Lisa 
Oshiro, representing the California Indian Legal Services. If I 
could just have you stand and raise your right hand.
    [Witnesses sworn.]
    The Chairman. Thank you very much. Let the record show they 
both answered in the affirmative.
    Welcome to the Committee. I want to thank you for your 
patience and in waiting for this point.
    Ms. Giles, if you are ready, we are going to begin with 
you.

          STATEMENT OF MARCELLA GILES, ESQ., MEMBER, 
                   INDIAN LAND WORKING GROUP

    Ms. Giles. Thank you. Thank you, Mr. Chairman, and thank 
you, members of this committee. On behalf of the Indian Land 
Working Group, I would like to thank you for the opportunity 
and for this, to make statements at this hearing, and to 
commend the Committee for its consideration of this very, very 
important piece of legislation.
    The Indian Land Working Group is represented in this piece 
of legislation in a manner in which I think exceeds almost a 
decade and a half of members of this association working toward 
the end result that is contained in this legislation. For many 
years, the association represents grassroots individual Indian 
owners who face this problem day in, day out, every week, every 
year, and trying to work with their tribal leadership, in 
trying to work with the bureaucracy, also find what I think 
Congressman Rahall said is very complex. And if the lawyers and 
others find it complex, you can imagine how individual Indians 
trying to make usable their land find the position and the 
status that they are experiencing today.
    In general, the Indian Land Working Group supports this 
legislation. Many of the provisions represent many years of 
hard work and trying to bring these issues to the forefront in 
order to preserve their interests.
    There are four particular provisions that I would like to 
note for the Committee. The first one is in fact, as has been 
discussed, is a comment that consolidation agreement during 
probate. It is at this time during probate that many Indians 
landowners have found themselves in probate, whether they have 
visited with the ancestor or with the decedent and find 
themselves in an intestate position, these consolidation 
agreements are put into effect by a probate order, an order 
from the probate court. That is a plus and an opportunity that 
the association has tried to work with Indian landowners in 
looking at some of the estate planning opportunities before 
they get to probate, but particularly in this piece of 
legislation that vehicle is provided.
    There is also a change in the consent requirement for 
leasing.
    I would also like to state for the record that we do have a 
small error, that the change that is reported in this 
legislation is that 90 percent consent is now required if there 
are five or less owners in a parcel, and I think an error 
there, we had 5 percent.
    A third part again which has been provided or talked about 
is the probate code and legal assistance grants. This is where 
our association has particularly been active in working with 
tribal leadership and working with land associations that will 
work with their tribal leadership in developing probate codes, 
consulting with the tribal leadership, and providing assistance 
in estate planning. Those legal assistance services grants 
would be enormously important for Indian landowners to be able 
to achieve some kind of usable land consolidation and working 
together so that an estate plan can be put into effect. And, 
also, to negotiate this probate complexity that everybody has 
talked about.
    Also, the family trust partnership corporation pilot 
projects that are identified in this piece of legislation are 
enormously important from the association's point of view. This 
legislation allows for 30 projects to be put in place. And in 
consultation with tribes and individual interests, or of 
individual Indians, the Secretary will develop regulations, 
guidelines, reporting requirements, and there will not be an 
impairment of the secretarial authority by this action.
    As in all consensus, there are some negatives that we are 
aware that exist. The association disagrees with the term, as 
the Congressman from Samoa noted, that any time there is a 
sense that there is a determination about--with the definition 
of Indian, there is a concern, and that concern has been noted 
for the record. However, knowing that this is a bill that has 
been developed with consensus, we are aware that the eligible 
heir has--terminology has been drafted and is providing 
protection in the sense that, for those who are going to be 
outside of enrollment eligibility for their tribe can inherit 
and are eligible to inherit for the two degrees from 
consanguinity.
    Another item that the association particularly would want 
to point to is the life estate for the non-Indian spouse or for 
the spouse as a life tenant. Under standard--generally standard 
probate, there is a one-third life estate and a one-third of 
revenue generated from the land. Here, I believe the life 
tenant of the spouse receives 100 percent.
    Other items are noted in our testimony, and we would be 
willing to respond to those specifics. However, I will conclude 
my statements this morning, and compliment the Committee again 
for their consideration of this legislation. Thank you.
    [The prepared statement of Ms. Giles follows:]

              Statement of Marcella Giles, Esq., Member, 
                       Indian Land Working Group

    Mr. Chairman, and members of the Committee, on behalf of the Indian 
Land Working Group, I would like to thank you for this opportunity to 
testify on S. 1721, the Indian Probate Reform Act of 2004.
    The Indian Land Working Group (ILWG) commends the Committee for 
consideration of this important legislation. Although the ILWG does not 
support this legislation in it's entirety, we support the intent and 
many of the provisions that address inheritance, management and use 
issues on allotted trust lands.
    The ILWG is working to assure that lands remain in Indian 
ownership, and that these lands are used and managed properly. With 
this in mind, we would like to mention several provisions in S.1721 
which are a positive change in addressing multiple ownership on trust 
allotments.
    Consolidation Agreements In Probate: During probate, the decision 
maker may approve consolidation agreements involving exchanges and 
gifts of property already owned by the parties or on the decedent's 
inventory. Such agreements are made final by the probate order. 
Interests subject to a consolidation agreement cannot be taken under a 
probate purchase option in Section 207(p) which impacts interests that 
are less than 5% of a tract.
    Change in Consent requirement for Leasing: 90% (rather than 100%) 
consent is required if there are 5% or less owners in a parcel.
    Probate Code and Legal Assistance Grants: Grants may be given to 
tribes, legal services and landowner groups (that are tax exempt) to 
provide assistance to tribes, landowners, and Indian organizations to 
develop tribal codes and to engage in estate planning
    Family Trust/Partnership/Corporation Pilot Project: The goal is to 
develop mechanisms for managing Indian lands held by multiple owners. 
In consultation with tribes and individual Indians, the secretary will 
develop up to thirty (30) pilot projects with regulations, guidelines, 
reporting requirements and revocation/suspension provisions. 
Secretarial authority is not impaired or diminished by this authority.

ADDITIONAL SPECIFIC COMMENTS CONCERNING S. 1721 ARE AS FOLLOWS:
    1.  The Indian Land Working Group opposes the definition changes 
made in S. 1721 in response to input provided by the Department of the 
Interior long after the stated deadline for submission of comments re 
S. 1721. No other sector was permitted to input changes or allowed to 
alter text subsequent to the deadline. Accordingly, a uniform standard 
has not been applied to all participants placing the non-governmental 
groups at a disadvantage by having their year-long processes nullified 
sub rosa.
    The result of the disparate treatment is that Interior has been 
afforded a unilateral veto outside of but over work group processes on 
central issues that informed important provisions of S. 1721 as agreed 
upon by tribal representatives, legal service organizations, landowner 
group representatives and others. Interior's demand that certain 
categories of individuals not be entitled to the benefit of the term 
``Indian'' (See Sec. 202) nullifies core work group assumptions about 
who would be entitled to be called ``Indian'' and who could hold 
property in trust.
    The particulars of ILWG's concerns about the department's demanded 
changes are set forth in a narrative entitled, ``Comments on Behalf of 
the Indian Land Working Group Re: DOI's Proposed Changes to S. 1721.''
    There is no valid justification for the department's failure to 
have officially ``advocated'' its position timely or at such a point 
that its views could be openly addressed by the work group. The 
department not only knew of work group processes, at various times, 
departmental personnel participated in them.
    The net procedural effect of the department's position is to return 
the definition of ``Indian'' issue to where it was prior to May 2003 
before work group processes earnestly began for all tribes but those in 
California. The department's position is even more restrictive than the 
definition of ``Indian'' contained in the initial S. 550 draft 
considered at the Albuquerque meeting of the work group which set the 
stage for subsequent activities.
    The substantive effect is to resurrect damaging structures (non-
Indians who hold land in trust) on the order of the previously-proposed 
and vigorously-opposed ``non-Indian estate,'' ``Indian heirship 
interest'' or ``passive trust interest'' which, like the 2% rule, would 
impair land holder rights for the sole purpose of getting rid of 
federal duties without fixing fractionation.
    One need look no farther than at the Chinooks to see the impact of 
the proposed system. The Chinooks experience restrictions but are not 
afforded general privileges due to their status as Indians who are not 
recognized but who nonetheless hold property in trust. The Chinooks are 
in land purgatory.
    By refusing to permit individuals who are bloodline descendants of 
trust landowners to be called Indian, even those within the two degrees 
it would allow to inherit, Interior advocates a radical and immediate 
system of termination.
    The concept of ``eligible heir'' simply creates Chinooks out of 
those so classified casting in jeopardy the ultimate retention of the 
land as a trust asset which in turn can impair tribal territorial 
integrity.
    The definition of Indian in the 2000 ILCA amendments fast tracked 
the transfer of land interests to tribes by disqualifying owners' 
immediate families from full intestate inheritance as Indians. It 
deprives actual Indian landowners of the opportunity to benefit their 
issue as Indians holding land in trust. A hybrid is created: non-
Indians who hold land in trust.
    The effort to retain property in trust or restricted status while 
declaring the owner's ``eligible heirs'' but not Indians violates the 
department's well-documented position that ``...[T]he Federal trust 
responsibility over allotted land or any fractional share thereof is 
extinguished as to that interest immediately upon its acquisition by a 
non-Indian.'' The bloodline descendants who are now classified as non-
Indian (and affected tribes) can expect to be confronted by intense 
jurisdictional problems in the post-Oliphant and Montana Rule judicial 
climate.
    The effect is duplicated under the 1721's devise provisions which 
permits the devise in trust to any ``Indian'' but allows other devisees 
to take as life estates or in fee by express action. By disqualifying 
landowner's immediate families from full inheritance in trust as 
Indians, ordinary expectations are thwarted making it necessary for 
actual Indian landowners to seek other avenues to benefit their 
families fully. Such measures include taking land out of trust which is 
destructive of tribal territorial integrity and jurisdiction. The 
``eligible heirs'' are not as in the Lara case ``non-member Indians.'' 
Such individuals are not classified as Indian at all.
    It is currently the informal practice in some BIA regions to sit on 
applications for patents in fee for fractional interests or arbitrarily 
to deny them approval. It has even been proposed, recently, by certain 
departmental officials that legislation be sought prohibiting the 
department from issuing patents for fractional interests.
    If challenged legally, standard principles of the law of real 
property and long- established Indian law principles would govern. 
Interior's subjective practices would be invalidated as arbitrary and 
capricious and an abuse of discretion because there is no objective 
codified authority for what they do. Restraints on alienation are 
generally disfavored in law. Such restraints as exist must be found in 
the allotment patent or certificate. Superimposition of additional 
restraints outside the organic documents is unlikely to pass legal 
muster.
    The department's radical insistence upon impairing the status of 
lineal descendants is responsible for the landowner panic that followed 
the enactment of the 2000 ILCA amendments. Its continued insistence 
upon similar draconian definitions and limitations to lighten its load 
will fuel further patent applications, general widespread opposition 
and litigation. Trustees are not typically given the power to 
unilaterally walk away from trust obligations, especially, after having 
first made a mess of them.
    Permitting inheritance in trust but prohibiting the individual who 
inherits to be called Indian sets such heirs and the department up for 
continuing legal problems, it is an incentive for equal protection 
challenges by non-Indians who are treated differently than the 
``eligible heirs'' and does little to advance the cause of coherent 
land administration or prevent landowner flight to fee.
    2.  There are two instances of merger in the new changes to S. 
1721: Sec. 207(a)(2)(C) and Sec. 207(a)(2)(D)(IV). The former is an 
intestate inheritance provision; the latter, is a provision of the 
single-heir rule. A tax exemption is a compensable interest. If 
extinguished by any method, here merger of the lesser estate (the 
beneficial interest) with the larger estate (the naked fee) thereby 
collapsing the trust, should not the decedent's estate must be 
compensated if a White Earth situation is to be avoided? While heirs 
have only expectancies, the decedent or the estate should be entitled 
to compensation for the elimination of a valuable protected property 
right held by it.
    3.  Use of the inventory at the time of the heirship determination 
as the sole basis for triggering application of the single-heir rule 
can easily lead to overlapping ownership on the order of that now found 
in the unrestored 2% interests.
    It was acknowledged during the March 27 conference call that BIA is 
behind in its posting. Posting, it was said ``should be caught up in 
two years.'' We have only experience by which to measure assurances of 
this type. In 1999, the BIA's probate backlog was to be eliminated in a 
couple of years. Despite expensive outsourcing, doubling probate 
manpower and the expenditure of huge sums, the backlog has more than 
doubled. It is therefore prudent to consider what circumstances are (a 
posting backlog) when considering this issue.
    The circumstance that will present the problem is common. A probate 
is held. The owners (e.g. three children entitled to an undivided 1/3 
each of the estate) are determined in a formal decision issued by a 
decision-maker. Once issued, the interests are deemed vested in the 
heirs as of the date of the decedent's death. At the time of the 
decision, all of the decedent's interests have not been posted to the 
estate. This may result in a single-heir inheriting what appears to be 
a less than 5% interest under Sec. 207(a)(2)(D)(i)-(iii).
    In this example, had all interests previously inherited by the 
decedent been properly posted, the amount would have exceeded the 5% 
threshold and the rule would not have been applied. Vesting principles 
entitle each of the three heirs to an undivided one-third of the estate 
as of the date of death but the provisions of the single-heir rule 
allow consideration only of the inventory at the time of the heirship 
determination.
    Most often, those who argue the position that ``there has to be a 
cutoff point'' tend to think in terms of what they call de minimus 
interests. By doing so, they overlook the fact that a small interest 
involving a timber sale, a major regional shopping center in an upscale 
part of a major metropolitan area or a producing mineral interest can 
have significant value.
    In the past, modifications under 43 CFR 4.272 ultimately would have 
caught up and corrected the deficient inventory. However, by 
restricting consideration to the ``decedent's estate inventory at the 
time of the heirship determination,'' the usual corrective device is 
overridden. Last in time, therefore wins through posting negligence 
even though subsequent modifications show that a different disposition 
was warranted.
    Does this quirky system result in the single-heir taking what was 
on the inventory and the additional interest when it is posted even 
though the full amount is 5% or over? Or does the single-heir take only 
what was listed on the inventory and the deprived true heir take the 
additional interest when it comes into the estate?
    One of two things must be done to fix the problems created by the 
``inventory at the time of the heirship determination'' restriction. 
Either eliminate the restriction or expressly make it subject to 43 CFR 
4.272.
    4.  The single-heir provisions as they pertain to tribes in effect 
give tribes no choice under the rule except who the single-heir 
designate will be demonstrating paternalism not self-determination as 
the overarching ILCA policy.
    5.  In Sec. 207, ILWG agrees with:
      The changed language describing right of representation. 
Prior S. 1721 language was legally and technically incorrect.
      The joint tenancy devise presumption and its restriction 
to post-certification wills.
      The changes in the intestate succession sequence. Prior 
S. 1712 language created a sequence without precedent in succession 
law.
      The changes in the lapsed gift language for wills. Prior 
S. 1712 language was difficult to read and did not conform to time-
tested Indian will anti-lapse provisions (43 CFR 4.261)
      The new renunciation language with ratification 
provisions. The additions cure problems the ILWG previously reported to 
departmental personnel arising from the Board of Indian Appeals' 
decision in the Estate of Gus Four Eyes and similar cases. The 
decisions were inconsistent with the majority of jurisdictions and at 
variance with beneficial departmental practice which aided retention of 
land in trust status and encouraged the use of disclaimers to prevent 
fractionation.
      The land consolidation agreement language in probate, 
including the exemption of lands subject to consolidation agreements 
from the operation of Sec. 207(p)(5)(A)(2).
    6.  In Sec. 207, The ILWG disagrees with:
      The intestate provision that assigns a full life estate 
with right to consume income in trust lands rather than a 1/2 life 
estate when they are children by another marriage.
          Contemporary life spans could deprive children by other 
marriages of any benefit of inheritance in a parent's estate. Modern 
uniform probate codes tend to establish shares based upon whether or 
not the surviving spouse is the parent of all the children to address 
this problem. (E.g. surviving spouse not parent of all the children 
takes one half and the children share the other half.)
          As written, the provision would entitle the spouse life-
tenant (if the decedent had issue) to 1/3 of the personal property on 
hand at death and a 100% life estate in the land. Based upon standard 
probate vesting rules, income derived from or associated with land 
after the date of death (the vesting point for the transfer of rights 
in the estate) goes to the person directed to receive the land under 
the rules of intestate succession. Here the spouse is given a 100% life 
estate in estate lands with the express right to consume income 
(described as the right to commit waste). The remaindermen would 
receive 2/3 of the cash on hand at death after payment of approved 
claims and nothing for the duration of the life estate. This effect 
appears not to be understood. He who has the rights to the real 
property has the right to receive the income therefrom. A 
remainderman's rights of use and benefit are deferred until the 
expiration of the life estate.
      The use of the concept of ``eligible heir'' in the 
intestate provisions (207(a)) is to prevent individuals being called 
Indians so that the department can avoid performance of management and 
administrative duties. ILWG also opposes its use in other provisions 
including but not limited to the single-heir provision, the 
renunciation provisions and the purchase option in probate 
authorization.
      207(b)(2) as written. It contains extensive cross 
references without narratively stating what particular provisions mean. 
Typical users will be unable to ascertain the meaning of the full 
provision. Laws that are not comprehensible are not usable by the 
intended user population.
      A forced spousal share inter alia may be based solely 
upon the fact of marriage for a stated period in Sec. 
207(k)(2)(A)(iii). Such a provision overrides the testamentary freedom 
of the testator. It fails to take into account the fact that spousal 
omission from a will can be a conscious choice in the act of testation, 
that Indian lands are sole and separate property and that, among 
certain tribes, spouses as a coordinated act, traditionally benefit 
separate groups of lineal descendants rather than each other.
      The rules of interpretation that were boiler plated out 
of a high-end source without regard to application to the real world of 
Indian estates and probate:
        E.g.'s:
          Sec. 207(i)(4) (birth out of wedlock) addresses a subject 
        governed by a statute in existence since 1891 (25 USC 371).
          Sec. 207(j)(3)(G) executory and future interests like (j)(5) 
        life estates ``pur autre vie'' [for the life of another] are 
        beyond exotic from the standpoint of Indian probate.
          Sec. 207(j)(4) (joint obliges) the department doesn't probate 
        secured debts so it would have no occasion to apply this 
        provision in a land context.
    7.  ILWG has questions and concerns about specific features of the 
partition provision:
      Persons within the pool of eligible purchasers are 
required to pay costs or provide a bond to cover the costs of serving 
and publishing notice. In cases where there is a lack of bids and the 
Secretary steps in to purchase the interest for a tribe, should waiver 
of costs be discretionary? If the applicant fails to pursue partition, 
upon what basis does the Secretary step into the applicant's shoes on 
behalf, possibly, of a third party, unless the object is to permit 
selective targeting of property. Individuals or tribes with no 
intention of follow through could initiate a partition against 
particular heirs and set them up for forced sale as an act of reprisal 
or political or personal enmity without expense or inconvenience to 
themselves.
          Given the limited notice the department (who lobbied for the 
notice provisions) gives owners, the potential low-balling of values 
obtainable under Sec. 215 valuations by geographic unit and the lack of 
consequences to parties who trigger partitions with no consequence to 
themselves if they decide to back out and the odd feature that there 
can be grants and low cost loans to ``successful bidders'' (meaning 
that individuals and tribes may be encouraged to trigger partition by 
sale without having the finances in advance to consummate the 
transaction, the entire process is suspect.
      Sec. 205(d)(2)(D)(i)(III): geographic unit valuations 
(Sec. 215) could easily be worked to eliminate all situations in which 
owner consent would be required.
      205(d)(2)(F)(i)(VII)and (H)(v): The right to a notice of 
the final appraisal and the right to pursue an appeal on value or 
partitionment is tied to receipt of comments from notices that are 
based upon ``last known addresses,'' which are notoriously inaccurate, 
with address inquiry required by the department only in instances in 
which letters are returned undelivered with no requirement that efforts 
to locate addresses be certified. Huge amounts of allotted land was 
lost in Oklahoma by the use and mis-use of constructive notice 
(publication). People were unaware that there property was the subject 
of a partition proceeding. Repeat of this unfortunate experience should 
not occur.
          Separately, tribes can be the third party beneficiary of 
partition proceedings in which there is no bid by eligible purchasers 
but they are not required, when they have such data (p. 20), to provide 
current addresses for notice purposes. There should be no prospect of 
gain in instances of data withholding.
    8.  ILWG has no objection to the owner-managed provisions but has a 
question regarding (g)(2). Does the phrase ``otherwise using such 
interest in land'' for purposes of jurisdiction include trespassers? 
[In (h)(1), the phrase ``subsequent descent'' should be changed to 
``subsequent inheritance.'' ``Descent'' is a term that applies to 
intestate succession.
    9.  Sec. 2212(b)(4): In connection with the mandate to minimize 
administrative costs and elimination of duplicate administrative 
proceedings, ILWG is informed that the special trustee has assigned a 
particular individual the responsibility of developing non-APA 
procedures to transfer property (funds and land) in lieu of regular 
probate processes. It is ILWG's further understanding that public land 
proceedings which often involve only permits and leases rather than 
actual ownership interests in land are not the subject of similar 
economies. The minimization effort, when combined with the elimination 
of requirements of procedural regulation to carry out particular 
provisions, appears to vest the department with ever greater unfettered 
discretion that, at most, will be governed by ``manual'' provisions 
which do not have the force and effect of law and are not subject to 
the same oversight or protective features associated with regulations.
                                 ______
                                 
    The Chairman. Thank you.
    Ms. Oshiro.

         STATEMENT OF LISA OSHIRO, DIRECTING ATTORNEY, 
                CALIFORNIA INDIAN LEGAL SERVICES

    Ms. Oshiro. Good morning, Chairman Pombo and distinguished 
members of the House Committee on Resources. On behalf of 
California Indian Legal Services and the California Indian 
community that we serve, I want to thank you for this 
opportunity to speak with you on S. 1721, the American Indian 
Probate Reform Act of 2004.
    The issues addressed by the Indian Land Consolidation Act 
and the proposed amendments in S. 1721 are very important to 
preserve the Indian land base throughout Indian Country, and 
especially to protect the very limited Indian land base in 
California.
    As Chairman Lyons had spoken to earlier, fractionation of 
allotments is not as significant in California as it is 
throughout the rest of Indian Country, but that is because 
there weren't as many reservations in existence at the time 
that the General Allotment Act was enacted. So you didn't have 
a lot of reservations being allotted. That was in 1887.
    In 1891, we had the Mission Indian Relief Act that created 
some reservations for tribes in southern California, and the 
rancherias that exist throughout northern and central 
California today weren't created until much later, after the 
allotment period had ended. So we don't have many of those, a 
lot of allotment of reservation lands.
    However, recognizing that there weren't many reservations, 
there were revisions to the General Allotment Act that provided 
for allotments on the public domain, and there were many 
individuals who received public domain allotments. And 
ironically, later, when an Indian agent was commissioned to 
study the homeless Indians in California and establish a 
rancheria system, those who held public domain allotments were 
overlooked because they had lands and the Federal Government 
did not establish a rancheria for their tribe. And that also 
later led to that tribe not being included on the list of 
federally recognized tribes.
    So it is especially in relation to these public domain 
allottees that the definition in the Indian Land Consolidation 
Act has been very important.
    The 2000 amendments, as has been alluded to, had created 
quite a bit of panic throughout Indian Country. Many Indian 
elders--when I first began in Indian Legal Services in 1996, 
one of my first clients was an Indian elder who was very 
concerned about being able to pass on her trust interests to 
her children and grandchildren and have them pass it on to 
successive generations, as this was a symbol of this Indian 
legacy and how they had survived so many different periods that 
had been aimed at really trying to terminate and assimilate 
their peoples.
    The definition that is contained in the proposed bill, we 
look to the definition of Indian as it also interplays with the 
definition of eligible heirs. And California Indian Legal 
Services jumped on the opportunity to be very intimately 
involved in drafting the language of the bill and negotiating 
various provisions, working with the Indian Land Working Group, 
the National Congress of American Indians, Indian tribes, and 
other organizations, and having sessions with the Senate 
Committee on Indian Affairs as well as BIA representatives to 
try to strike a balance and address all of our issues and 
concerns, and also take advantage of everyone's ideas, 
resources, and experience in putting together provisions that 
would slow fractionation, promote consolidation, and provide 
various estate planning services and tools to individual 
landowners, and I believe that this bill represents a lot of 
that work.
    We do recognize that there were continuing negotiations and 
discussions, there was a markup in the Senate committee in 
January, another markup in April because we were continuing to 
have these discussions. And we have agreed within our informal 
task force and in our discussions with Senator Campbell's staff 
that this is a very, very important step for us to take, and we 
would like to see S. 1721 pass during this session. However, we 
will continue to work together within the task force, we hope 
to continue to work with Congress and the Department of the 
Interior to address the remaining outstanding issues, whether 
it be additional technical amendments or other substantive 
changes and enhancements to the bill.
    So we commend this bill, we thank you for bringing it up 
for a hearing rather quickly after passage in the Senate, and 
we hope to continue to work with you to see its passage during 
this 108th Congress.
    Thank you.
    [The prepared statement of Ms. Oshiro follows:]

           Statement of Lisa C. Oshiro, Directing Attorney, 
                    California Indian Legal Services

    Chairman Pombo and distinguished members of the House Committee on 
Resources, on behalf of California Indian Legal Services, I thank you 
for this opportunity to address you on S. 1721, the American Indian 
Probate Reform Act of 2004, and other proposed amendments to the Indian 
Land Consolidation Act. The issues addressed by the Indian Land 
Consolidation Act and the proposed amendments in S. 1721 are very 
important to preserve the Indian land base throughout Indian Country 
and especially the very limited Indian land base in California.
Introduction
    California Indian Legal Services (CILS), a law firm devoted 
exclusively to the representation of Indian people and Tribes, submits 
these comments based upon the collective experience of the firm over a 
period of thirty-seven years. CILS was incorporated in 1967 by public 
interest attorneys and California Indian leaders. When it was created, 
CILS became the first non-profit law firm in the history of the United 
States devoted exclusively to representing the rights of Indian tribes 
and individual Indians. Over the years, CILS has had remarkable 
successes--ranging from the creation of the Native American Rights Fund 
to cases before the Supreme Court, the Ninth Circuit, other federal 
courts and state courts.
    CILS has represented most of California's 107 federally recognized 
tribes during its existence and has served as counsel in many 
successful cases resulting in the restoration of improperly terminated 
California Indian rancherias. CILS has also represented many California 
Indian tribes in their legislative efforts, often successful, to 
restore their rightful status as recognized tribes. In addition, CILS 
has represented over 30,000 California Indians in matters such as 
Indian status, land status, and probate. As general counsel to the 
Advisory Council on California Indian Policy, CILS helped publish the 
most comprehensive report on the history and status of California 
Indians ever commissioned by the United States Congress. 1 
Our historical role in California Indian affairs provides CILS with a 
clear perspective on how the probate provisions in the 2000 amendments 
to the Indian Land Consolidation Act would adversely impact California 
Indians, as well as on how S. 1721 eliminates those adverse impacts and 
would be beneficial for the California Indian community. Moreover, 
because we have a long history of representing tribes and individuals, 
CILS understands the sometimes competing nature of individual and 
tribal interests, and what policies strike a reasonable balance between 
such interests.
---------------------------------------------------------------------------
    \1\ Congress commissioned exhaustive reports that detailed the 
tragic history and its remaining effects on California Indians. See, 
Advisory Council on California Indian Policy, Final Reports and 
Recommendations to the Congress of the United States Pursuant to Public 
Law 102-416, September 1997.
---------------------------------------------------------------------------
The Indian Land and Natural Resource Base in California
    With 107 federally recognized tribes in California, one might 
expect the Indian land base in California to be substantial. However, 
the Indian land base in California is extremely small. The reservations 
and rancherias under the jurisdiction of the Pacific Region Office 
2 consist of approximately 400,000 acres of land held in 
trust for the benefit of California Indian tribes. An additional 63,000 
acres of public domain and reservation allotments are held in trust for 
the benefit of individual California Indians. 3 By contrast, 
the eighteen unratified treaties between the United States and 
California Indian tribes would have reserved approximately 8.5 million 
acres of Indian land in California. 4
---------------------------------------------------------------------------
    \2\ This does not include the three reservations that straddle the 
California/Arizona border, which are under the jurisdiction of the 
Phoenix Area Office. Bureau of Indian Affairs, Sacramento Area Office, 
``Trust Acreage--Summary, CY Ending December 31, 1996.''
    \3\ Id.
    \4\ See Flushman and Barbieri, Aboriginal Title: The Special Case 
of California, 17 Pac. L.J. 390, 418 (1986) at 403-404.
---------------------------------------------------------------------------
    Some federally recognized tribes in California have no tribal land 
base whatsoever. 5 Many of the reservations and rancherias 
in California are extremely small: most are less than 500 acres; 22 are 
100 acres or less and, of these, 16 are 50 acres or less; seven are 20 
acres or less; five are under 10 acres; and four are under five acres. 
6 Only 11 California Indian tribes have a land base of over 
10,000 acres. 7 This lack of land stems, at least in part, 
from Congress' failure to ratify negotiated treaties, the termination 
of California Indian tribes under the California Rancheria Act of 1958, 
as amended, and their partial restoration. 8
---------------------------------------------------------------------------
    \5\ See Table 1 to the ACCIP Economic Development Report.
    \6\ Id.
    \7\ The ACCIP Trust and Natural Resources Report, at pp. 11-12.
    \8\ ``The ACCIP Historical Overview Report: The Special 
Circumstances of California Indians,'' at p. 5,13; See, e.g., ``The 
ACCIP Termination Report: The Continuing Destructive Effects of the 
Termination Policy on California Indians.''
---------------------------------------------------------------------------
Effect on Indian Elders in California
    California Indian elders are a remarkable group of survivors. 
Beyond the ravages of the Mission Period and the Gold Rush era, 
California Indians have survived the unrelenting antipathy, until 
recent times, of the State of California to its native people, as well 
as a federal government that seemed intent on terminating their status 
or refusing to recognize their existence. Despite some of the poorest 
treatment and the most sordid history native people in the United 
States have ever experienced, California Indian elders have managed to 
remain Indian, survive as members of communities they have kept alive 
and vibrant against all odds, and have kept almost one-half million 
acres of individual and tribal lands in trust. California Indian elders 
find themselves once again fighting to maintain their existence as 
Indians and fighting to keep their precious limited land base.
    The California Indian community needs S. 1721 enacted into law 
rather than allowing the probate code and related provisions of the 
2000 amendments to the Indian Land Consolidation Act to become 
effective. Serving many Tribes and elders, CILS is in a unique position 
to gauge the effect of the 2000 amendments on the California Indian 
elder population and we regret to report that the uncertainty 
occasioned by the 2000 amendments to the Indian Land Consolidation Act 
has created great distress among California Indian elders. No other 
recently enacted piece of federal legislation has caused as much 
anguish and fear among the American Indian community, especially our 
elders.
    Since the passage of the 2000 amendments to the Indian Land 
Consolidation Act, Indian elders in California who possess interests in 
trust allotments have been under significant stress and discomfort--
because the definition of ``Indian'' and limitations in the probate 
provisions of the 2000 amendments would have the effect of preventing 
them from leaving their lands to many of their children, grandchildren, 
and great-grandchildren in trust.
    The 2000 amendments changed the definition of ``Indian'' to mean:
        ``any person who is a member of any Indian tribe or is eligible 
        to become a member of any Indian tribe, or any person who has 
        been found to meet the definition of 'Indian' under a provision 
        of Federal law if the Secretary determines that using such 
        law's definition of Indian is consistent with the purposes of 
        this chapter.''
    The above definition is especially troubling for current owners of 
off-reservation trust and restricted lands in California, generally 
public domain allotments, who are not members of federally recognized 
tribes, but are members of tribes which were terminated and are 
undertaking efforts to become restored; were previously recognized but 
not included on the Part 83 list of federally recognized tribes due to 
administrative oversight; or have petitioned for recognition and have 
either been waiting for many years on the ready list or are in other 
stages of processing their petitions for federal recognition with very 
limited resources.
    While the definition of ``Indian'' in the 2000 amendments does not 
limit that term to members of any ``federally recognized'' tribe, but 
rather any ``Indian tribe'' which is more broadly defined to mean:
        ``any Indian tribe, band, group, pueblo, or community for 
        which, or for the members of which, the United States holds 
        lands in trust;''
    CILS has received many frantic calls from elders holding public 
domain allotments who were told by the Bureau of Indian Affairs 
following the passage of the 2000 amendments that their allotments 
would no longer be held in trust once the 2000 amendments became 
effective. Thus, while we would argue that these unrecognized tribes 
are ``Indian communities for whose members the United States holds 
lands in trust,'' there is apparent disagreement over such 
interpretation. There has also been a great amount of uncertainty about 
which limited definitions the Secretary would incorporate under the 
latter half of the 2000 definition of ``Indian.''
    The proposed definitions of ``Indian'' and ``eligible heirs'' in S. 
1721 would provide both the Indian community and the Department of the 
Interior with greater certainty of who would qualify to hold and 
inherit interests in trust and restricted lands and would provide many 
California Indian elders with greater security in passing their 
interests to their lineal descendants in trust or restricted status.
Proposed S. 1721 Referred to the House Committee on Resources
    Since its inception, CILS' number one priority, as identified by 
the California Indian community, has been the preservation and 
enhancement of the Indian land base in California. This priority has 
led CILS to undertake significant efforts to ensure that some of the 
amendments to the Indian Land Consolidation Act enacted in 2000 be 
repealed or modified. To that end, CILS has worked closely with the 
Senate Committee on Indian Affairs since the 2nd Session of the 107th 
Congress, on S. 1721's predecessor bill, S. 1340; and CILS has served 
as coordinators, along with organizations such as the Indian Land 
Working Group and the National Congress of American Indians, for an 
informal S. 1721 Task Force. The S. 1721 Task Force, a coalition 
representing tribal and individual Indian interests, has sought to 
fashion a fair and effective substitute bill in S. 1721 which balances 
the needs of individual landowners, Indian tribes, and the Department 
of the Interior.
    CILS has assisted in coordinating numerous meetings, drafting 
sessions, discussion groups, community education forums and briefings. 
As a result of this significant effort by the national Indian 
community, the S. 1721 Task Force drafted and submitted a proposed 
substitute bill. Many of those provisions have made it into the current 
version of the bill with some provisions vastly improved through 
continued discussions and revisions and other provisions revised in 
attempts to strike a balance among the interests of Indian tribes, 
individual Indian landowners and the Department of the Interior.
    There are times when we face what appear to be almost 
insurmountable challenges. Indian land fractionation has presented many 
problems and significant challenges since the 1930s. Such challenges 
often require communities to come together and aggressively take on 
those challenges by making tough decisions which reflect a great deal 
of deliberation and compromise. Everyone agrees that the current level 
of fractionation of trust and restricted lands, and the associated 
management of the fractionated interests, pose massive problems for the 
owners of such interests (including Indian tribes), the Indian tribes 
with jurisdiction over such interests, and the Department of the 
Interior. S. 1721 has provided Indian Country with an opportunity for 
everyone to be a part of a solution which prevents further loss of 
trust and restricted lands, promotes the consolidation of fractionated 
interests in trust and restricted lands so that such lands and their 
resources may be protected and/or put to productive use for housing, 
schools, health clinics, cultural centers, economic development, and 
other community purposes. S. 1721 attempts to do all of these things 
while also respecting and protecting the rights and interests of 
individual landowners, and preserving and promoting the jurisdiction 
and sovereignty of Indian tribes.
    The current version of S. 1721 reflects hundreds of hours of 
drafting, discussions and negotiations and an effort to bring together 
the collective knowledge, experience, resources, and vision of 
individual owners of trust and restricted interests, Indian tribes, 
tribal staff, consultants and advocates, Indian organizations, 
Congressional members and staff, and DOI officials and staff to provide 
solutions with immediate and long-term benefits throughout Indian 
Country. S. 1721 proposes important land consolidation measures which 
we would be happy to discuss separately in greater detail. However, the 
bill's probate code and related provisions were the focus of the 
California Indian community and thus CILS.
    The centerpiece of S. 1721 is a more easily understood uniform 
federal probate code and its critical revision of the definition of 
``Indian'' and addition of the definition of ``eligible heirs.'' The 
proposed definition of ``Indian'' would includes members and those 
eligible for membership in any Indian tribe and would also grandfather 
in all current owners of interests in trust or restricted lands as of 
the date of the enactment. The proposed definition of ``eligible 
heirs'' would include all Indians as well as their lineal descendants 
within two degrees of consanguinity. For Indian Country in general, 
these definitions working together would allow families to protect and 
preserve their trust and restricted lands for at least the current and 
next two generations while working together with their tribes to 
determine long-term plans and solutions for maintaining the trust and 
restricted status of those lands.
    Due to the unique and special circumstances in California which are 
highlighted by the Advisory Council on California Indian Policy 
Reports, the proposed definition of ``Indian'' also includes a 
provision specifically applicable to the inheritance and ownership of 
trust and restricted lands in the State of California, providing for 
the continuing qualification of such owners as ``Indian'' for those 
purposes. Together with the proposed definition of ``eligible heirs,'' 
successive generations of lineal descendants may continue to inherit 
and own interests in the limited trust and restricted lands in 
California.
    These revisions and improvements to the uniform federal probate 
code will not slow fractionation or facilitate consolidation without 
appropriate estate planning and will drafting assistance. Thus, S. 1721 
proposes solutions to assist the Department of the Interior in 
encouraging estate planning throughout Indian Country through the 
assistance of tribal governments, Indian landowner organizations and 
Indian legal services programs. Indian families would be provided with 
more estate planning tools and services so that they may better manage 
their families' trust and restricted lands.
    California Indian elders deserve the comfort and the certainty that 
their precious trust lands will remain in their families and will be 
passed on to future generations. Moreover, they deserve the right to 
live out their lives secure in the knowledge that, whether by will or 
by intestate succession, their lands will remain protected and in trust 
status. We therefore urge the House Committee on Resources to act 
quickly during this 108th Congress and restore confidence and certainty 
to the trust probate process.
                                 ______
                                 
    The Chairman. Thank you, Ms. Oshiro.
    Just to begin with you, if I may. It is my understanding 
that the majority of tribes, if not all of the California 
tribes, are in support of the legislation as it is currently 
written, even though you may have concerns about different 
parts of it. But in general, most of the tribes are in favor of 
it.
    Ms. Oshiro. Yes, that is correct, and California Indian 
Legal Services is strongly in support of the bill. The 
definition of Indian does contain a California specific 
provision that is beneficial to both federally recognized 
tribes as well as members of unrecognized tribes throughout 
California.
    The Chairman. Well, thank you very much.
    Ms. Giles, I know that in your written testimony there were 
certain provisions in the bill that you had concerns over.
    Ms. Giles. Yes, sir.
    The Chairman. But would it be safe to say that the working 
group generally supports the legislation?
    The Chairman. The--when it comes to the specific issues 
that you've brought up, and I know I've been working with staff 
to try to address the issues that you brought up, that you 
submitted in your testimony, and I guess my question to you 
would be, would you prefer that the legislation pass and be 
signed into law as is, quickly? Because we have a lot of 
concerns that, if there are amendments made to the legislation 
as it's been worked out, that, in one sense, we kind of go back 
to square one and begin the consultation process again and 
making sure everybody is OK with whatever changes we make, and 
this ends up slipping a year or two off into the future. And I 
know there are a lot of people that have concerns with the 
further delay of this legislation.
    Ms. Giles. Yes, sir. The Indian Land Working Group does 
not--has developed within its own association a consensus that 
there should not be a delay in the passage, the quick passage 
of this legislation. It is understandable that there needs to 
be consensus made for the passage of this legislation, and the 
four particular provisions that I noted in the testimony today 
have been near and dear to the heart of the Indian Land Working 
Group.
    As I said, over a decade and a half, members of this 
association have worked intimately at the grass roots level 
with individual Indians who are totally impacted by this type 
of legislation. And they support those particular four 
provisions wholeheartedly. And the sense from the association 
is that the passage is a positive from the many, many years of 
work that this association has, in fact, in some times, 
initiated themselves.
    The Chairman. Well, I will tell you, the both of you, that 
if we can move this and move it quickly and get it signed into 
law, I'm sure there will come the opportunity to have technical 
amendments, if necessary, in the future. And, as you know, 
right now there seems to be very broad and general consensus 
that this is the right way to go, and we need to move forward 
with that legislation.
    But if there are issues that arise and we are successful in 
getting it signed into law, we do have to make technical 
amendments to it or we have to take another look at it. We will 
take advantage of that in the future and try to rectify any 
issues that come up because of some oversight that occurred or 
some issue that was identified at this hearing.
    But thank you, thank both of you very much for your 
testimony. Again, thank you for your patience in waiting and in 
being part of the panel.
    If there are any further discussions or any further 
questions that Members of the Committee have, they will be 
submitted to you in writing and if you can answer those in 
writing so that they can be included as part of the hearing 
record.
    Thank you very much. I thank all of the witnesses for their 
valuable testimony and my fellow Members of the Committee for 
their questions.
    If there is no further business, I, again, thank the 
Members and the Committee and our witnesses.
    The Committee now stands adjourned.
    [Whereupon, at 12:02 p.m., the Committee was adjourned.]

                                 
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