[Congressional Record Volume 148, Number 44 (Thursday, April 18, 2002)]
[Senate]
[Pages S2968-S2974]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCAIN (for himself, Mr. Daschle, and Mr. Johnson):
  S. 2212. A bill to establish a direct line of authority for the 
Office of Trust Reform Implementations and Oversight to oversee the 
management and reform of Indian trust funds and assets under the 
jurisdiction of the Department of the Interior and to advance tribal 
management of such funds and assets, pursuant to the Indian Self-
Determinations Act and for other purposes; to the Committee on Indian 
Affairs.
  Mr. McCAIN. Madam President, today I am introducing a discussion bill 
intended to provide the basis for further reform of the administration 
and management of the assets and funds held by the United States in 
trust for federally recognized Indian tribes and individual Indians. 
I'm pleased to be joined by my two distinguished colleagues from South 
Dakota, Senators Daschle and Johnson.
  As a result of over 300 treaties and an extensive course of dealings 
between the United States and Indian tribes, the Federal Government 
holds the legal title to lands held in trust for Indian tribes and 
individual tribal members. The revenues derived from the use of these 
lands and the resources found on trust lands, along with the proceeds 
from claims that have arisen from the wrongful taking or the loss of 
use of the assets, comprise the funds that are held in trust by the 
United States for the benefit of individual Indians and Indian tribes.
  Today, the United States maintains approximately 1,400 trust fund 
accounts for 315 Indian tribes with funds in excess of $2.6 billion, 
and over 260,000 individual Indian money, IIM, accounts with about $400 
million in funds. Approximately 45 million acres of land are held in 
trust by the United States for the benefit of Indian tribes and about 
11 million acres are held in trust for individual Indians. These lands 
contain vast amounts of minerals, coal, oil and gas, water, forest 
resources, and agricultural resources.
  These funds, lands, and resources comprise the trust estate held by 
the United States for the benefit of tribes and individual Indians. The 
Interior Department distributes leasing and sales revenues of $300 
million per year to more than 225,000 individual Indian money accounts 
and about $800 million a year to the 1,400 tribal accounts. It manages 
income from more than 100,000 active leases for tribes and individual 
Indians.
  Indian tribes depend on the revenues from these trust assets to 
provide basic governmental services. IIM account holders are often 
living at, or near, the poverty level, and they rely on these revenues 
for basic essentials such as housing, food, and transportation. The 
manner in which trust assets and trust funds are managed by the 
Department has very real impacts on the lives of hundreds of thousands 
of Indian people every day. All too often, those impacts are not 
positive.
  The administration and management of individual Indian trust assets 
and funds are extremely difficult due to the problem of fractionated 
heirship of lands that are a continuing legacy of the misguided and 
discredited allotment policies of the late nineteenth and early 
twentieth centuries. Today, the Department and individual Indians are 
left with the nightmare of 1.4 million fractional interests of two 
percent or less involving 58,000 tracts of individually owned trust and 
restricted lands, each of which requires administration and often 
provides nothing but frustration in return for all involved. For some 
of these accounts, it may cost more to print and mail statements 
annually than the assets themselves are worth. A lasting solution needs 
to be found that reconsolidates these assets under Indian ownership.
  Many of my colleagues are familiar with the never-ending stream of 
GAO reports, news accounts, and hearings detailing the deplorable 
history of the Federal effort to manage these trust funds. Far less is 
known about the condition of trust assets and the history of their 
management. However, it doesn't take very long to recognize that the 
problem of mismanagement extends far beyond trust funds to the lands 
and resources that generate most of the funds. The Interior Department 
cannot provide accurate information on the number of leases on Indian 
lands for any purpose or the amount of revenues that should be 
attributed to any parcel of trust land despite repeated attempts to 
develop the necessary database and record keeping systems. In addition, 
the records for some lands and trust accounts have been lost or 
destroyed for entire time periods.
  In 1994, the Congress enacted the American Indian Trust Fund 
Management Reform Act. This law was intended to bring about a series of 
major reforms in the management of Indian trust funds and assets under 
the auspices of a Special Trustee in the Interior Department. Some 
positive changes have occurred. Most trust account holders now receive 
regular statements on their accounts. Most of the revenues derived from 
Indian trust assets are now posted to the correct account in a 
reasonable period of time.
  However, the major structural reforms that were called for in the 
1994

[[Page S2969]]

Act have not been achieved. It is still not possible to tell with 
complete certainty what tribal lands and resources are leased and what 
revenues are generated from all tribal lands and resources. The 
original intent of the 1994 Act was for the Special Trustee to go out 
of business after completing a plan for the restructuring of the day-
to-day management of tribal and individual trust funds and assets.
  The Special Trustee did develop a plan that called for the creation 
of a government sponsored enterprise to take control of the entire 
Indian trust estate and manage it. The tribes and individual 
beneficiaries of the trust were nearly unanimous in their condemnation 
and rejection of this plan.
  The 1994 Act also established a procedure through which tribes can 
withdraw their trust funds from federal trust and manage them directly. 
Only a few tribes have taken this course. The Interior Department has 
not encouraged tribes to withdraw their funds and the tribes have been 
reluctant to do so for the simple reason that the federal trust is 
terminated by the act of withdrawing the funds. Anyone who is familiar 
with the devastation brought about by the various efforts over the 
years to terminate the unique relationship between the tribes and the 
Federal Government will not be surprised by the lack of success in the 
implementation of this part of the 1994 Act.
  The 1994 Act also called for the completion of audits of all 
individual and tribal trust fund accounts. After years of effort and 
the expenditure of millions of dollars, in 1997, the Interior 
Department finally provided the tribal account holders with a 
``reconciliation'' of their accounts. These reconciliation reports only 
covered a small fraction of the years the accounts have been maintained 
and the reports were not audits as was required by the 1994 Act. Some 
tribes accepted the results of the reconciliation of their accounts. 
Most did not. None of the IIM accounts were reconciled and have not 
been to this day, despite the requirements of the 1994 Act. There are 
no plans to comply with the mandate of the 1994 Act for an actual 
accounting for any of the trust fund accounts. Conducting such an 
accounting would be difficult due to the lack of records. But it can be 
accomplished and every reasonable effort should be made to make sure 
this important work gets done soon.

  Last fall, Secretary Norton unveiled a proposal to take all of the 
trust fund and asset management functions out of the Bureau of Indian 
Affairs, in order to vest them in a new Bureau of Indian Trust Asset 
Management, BITAM. This proposal is estimated to have a price tag of 
about $300 million in its first year or two.
  Secretary Norton's proposal was intended to respond to the short-
comings of the 1994 Act and the orders of Judge Lamberth in the Cobell 
v. Norton litigation that has been in the Federal District Court for 
the District of Columbia since 1997. This litigation involves the 
individual trust accounts and seeks an accounting of the funds managed 
by the Departments of the Interior and Treasury since 1887. Past 
failures to reconcile accounts led to contempt orders against former 
Secretaries Babbitt and Rubin. Judge Lamberth is currently considering 
contempt orders against Secretary Norton and Assistant Secretary 
McCaleb for actions they have taken or have failed to take with regard 
to these trust funds and for misleading the court about what is 
actually being done.
  Indian leaders across the country have condemned Secretary Norton's 
proposal to establish BITAM and have since offered a variety of 
alternative proposals. As I understand it, while the Secretary is 
working with tribal leaders to evaluate different options proposed by 
the tribes, the BITAM proposal remains the Department's preferred 
option.
  Representatives of the Tribes have been working on a range of 
possible reforms through a special Task Force established by Secretary 
Norton at their request. We have been in contact with members of the 
Task Force and am somewhat heartened by the fact that they believe they 
are making real progress toward meaningful reforms. The bill we are 
introducing is not intended to undermine that process, but will 
hopefully assist it. In any event, we must give careful consideration 
to the recommendations the Task force ultimately develops and try to 
act on them at the appropriate time. I believe Senators Daschle and 
Johnson would join me in urging the Department to continue to work with 
the Task Force as it completes its work in the months ahead.
  Even as we monitor these developments, I, and many others in 
Congress, continue to be concerned about the future management of trust 
funds and assets. We believe that further reform is necessary and that 
it must comport with the Interior Department's trust responsibility at 
the same time that it advances the self-determination policies that 
have been so successful in the past 30 years. The status quo is simply 
not acceptable.
  Just to reinforce our intent, the bill we are introducing today is 
not intended to be the ultimate solution to the problems that have been 
revealed in the management of the trust funds and trust assets. 
However, we believe it critical to the on-going reform process to 
introduce a bill that focuses on two elements that are important to 
achieving a lasting reform in the management of these funds and assets.
  First, the bill will establish a direct line-of-authority over the 
management of the trust funds and trust assets at the highest levels 
within the Department. Judge Lamberth, and other oversight agencies 
such as the General Accounting Office, have lamented the lack of 
accountability in the Interior Department and strongly recommended the 
designation of one official who will ultimately be responsible for the 
management of the trust funds and assets.
  This bill addresses this issue by establishing the Office of Trust 
Management and Reform in the Department of the Interior. This office 
will be under the authority of a Deputy Secretary who will report 
directly to the Secretary and who will oversee the work of the 
Assistant Secretary for Indian Affairs, the special Trustee, the 
Director of the Minerals Management Service and the Director of the 
Bureau of Land Management with regard to trust funds and trust assets.
  I am certain that many of my colleagues who are concerned about this 
issue will join me in ensuring that candidates nominated by the 
President for the Deputy Secretary position are not only qualified in 
financial management, natural resource management, and federal Indian 
policy, but also are widely supported by the tribal community.
  The new Deputy Secretary will be the person ultimately responsible 
for the overall management of these funds and assets. The Deputy 
Secretary will have the authority to require the Special Trustee and 
the Assistant Secretary for Indian Affairs, along with the Directors of 
the Bureau of Land Management and the Minerals Management Service, to 
take the steps necessary to put into place the changes needed to ensure 
the proper administration and management of the trust funds and assets. 
The Deputy Secretary will be appointed by the President, subject to the 
advice and consent of the Senate, for a term of six years and may only 
be removed for cause. This should give the Deputy Secretary the 
independence necessary to bring about meaningful reform, while still 
ensuring accountability.
  The current Tribal task force working with the Secretary is 
considering a structure for the management of Indian affairs that would 
elevate all of the current responsibilities of the Assistant Secretary 
for Indian Affairs, the Special Trustee, and the Deputy Commissioner, 
to the Deputy Secretary level in the Department. We look forward to 
learning more about the scope of the Task Force proposal and its costs 
or cost savings. As necessary, this bill can be modified to accommodate 
such a proposal if the Task Force concludes that doing so would be 
appropriate.
  This Task Force has served an important role to the tribes in working 
with the Department on these matters and many would like to see its 
function continue as a collaborative component to the Department's 
management. In order to ensure a continuing role for the tribes in the 
day-to-day activities of the Department with respect to the management 
of the trust funds and the trust assets, this bill amends the 1994 Act 
to provide that the advisory board

[[Page S2970]]

that was established to assist the Special Trustee will be 
reconstituted and continue as an advisory board for the Deputy 
Secretary. The composition of the advisory board is broad enough to 
enable the Deputy Secretary to include members with expertise in the 
areas of trust fund management, investment, and related 
responsibilities of the Deputy Secretary.
  The other major feature of the bill is the focus on the successful 
policy of self-determination. Any fair review of Federal Indian policy 
over the course of the last century will point to the policies of 
termination and assimilation through allotment as abject failures. Many 
of the most intractable problems the tribes and federal policy makers 
wrestle with today stem from the wreckage caused by these misguided 
policies of the past.
  On the other hand, the policy of self-determination, which was first 
proposed by President Nixon in 1971, has shown itself to be the single 
most successful Federal Indian policy in the history of our Nation. The 
reasons for this success are many, but the core reason is one we can 
all recognize and relate to: self-determination involves Indian people 
directly in identifying and defining the problems facing the tribes, 
and more importantly, it empowers them to implement the solutions they 
know will work best. Putting it in slightly different terms, the self-
determination policy recognizes the fact that the government closest to 
the people is the best government to recognize and resolve local 
problems. Indian policy made by the Federal Government for the Federal 
Government has never worked and never will work. Indian policy made by 
the tribal governments with appropriate Federal assistance has shown 
that it does work.
  Portions of the 1994 Act and Secretary Norton's BITAM proposal have 
some things in common. In varying degrees, both are attempts by the 
Federal Government to make Indian policy for the federal government. 
Neither provides a proper role for tribal governments. This bill 
provides a framework by which tribes can become more involved in the 
day-to-day management of their trust assets and trust funds through the 
Indian Self-Determination Act. It does not dismantle the BIA. It does 
provide a foundation for the tribes, the Department, and the Congress 
to develop and implement meaningful reform over the next several years. 
Every major provision of this bill is based on solutions that have been 
proposed by the tribes.
  The bill builds on the concept of beneficiary co-management of trust 
funds and assets. This is not a new idea. It was advanced by the tribes 
in the 1980's and 1990's. It is embodied in the Indian Forest Resources 
Management Act that Congress enacted in 1990 and the Indian 
Agricultural Resources Management Act enacted in 1994. It is implicit 
in the Indian Self-Determination Act and it is a proven formula for 
progress.
  This bill does not deal with the issues of the past. It does not 
address concerns about claims for past mismanagement. It does not deal 
with the need for an accounting of tribal and individual trust funds. 
It does not deal with the condition of the trust lands and assets. 
These are all very serious matters.
  My purpose is not to avoid these issues or indicate any disregard for 
them. Rather, we are simply trying to find a way to move forward on a 
more constructive basis. Representatives of the tribes have been 
working on a way to move forward on these issues a more constructive 
basis. We must give careful consideration to the recommendations they 
develop and try to act on them at the appropriate time.
  Both the House and the Senate recently passed S. 1857 to deal with 
the statute of limitations on past claims for mismanagement of the 
tribal trust funds. Judge Lamberth is considering remedies for 
mismanagement of the individual Indian trust funds. Secretary Norton 
has established the Office of Historical Trust Accounting to try to 
produce an accounting for the individual funds. We need to monitor all 
of these efforts and be prepared to enact additional legislation if 
necessary and if sought by the tribes.
  We are hopeful that we can build on the modest successes realized 
under the 1994 Act by providing greater accountability in the 
Department of the Interior and recognizing the fact that the tribes 
must be involved as active participants in the management and 
administration of the trust funds and assets without the threat of 
termination of the trust responsibility. It took over 100 years to 
create the problems we now confront with the Indian trust funds and 
assets. The Indian people did not create these problems. The Federal 
Government did. It is going to take many more years to resolve the 
problems. The 1994 Act was a step in the right direction. We believe 
this bill can lead to further progress through greater accountability 
and direct involvement of those who have the most at stake, the tribes 
and Indian people.
  Once again, Senators Daschle, Johnson and I propose this legislation 
as a vehicle for discussion for all those concerned with ending decades 
of mismanagement of Indian trust funds and trust assets. We look 
forward to receiving comments on this legislation and call on our 
friend, the chairman of the Committee on Indian Affairs, to use this 
bill as the basis for hearings on these matters when the committee is 
prepared to do so.
  I ask that the bill and a section-by-section summary of the bill be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2212

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Indian Trust Asset and Trust 
     Fund Management and Reform Act of 2002''.

     SEC. 2. DEPUTY SECRETARY FOR TRUST MANAGEMENT AND REFORM.

       (a) Definitions.--Section 2 of the American Indian Trust 
     Fund Management Reform Act of 1994 (25 U.S.C. 4001) is 
     amended--
       (1) in paragraph (1), by striking ``(1) The term'' and 
     inserting the following:
       ``(8) Special trustee.--The term'';
       (2) in paragraph (2), by striking ``(2) The term'' and 
     inserting the following:
       ``(4) Indian tribe.--The term'';
       (3) in paragraph (3), by striking ``(3) The term'' and 
     inserting the following:
       ``(7) Secretary.--The term'';
       (4) in paragraph (4), by striking ``(4) The term'' and 
     inserting the following:
       ``(5) Office.--The term'';
       (5) in paragraph (5), by striking ``(5) The term'' and 
     inserting the following:
       ``(1) Bureau.--The term'';
       (6) in paragraph (6), by striking ``(6) The term'' and 
     inserting the following:
       ``(2) Department.--The term'';
       (7) by adding at the end the following:
       ``(3) Deputy secretary.--The term `Deputy Secretary' means 
     the Deputy Secretary for Trust Management and Reform 
     appointed under section 307(a)(2).
       ``(6) Reform office.--The term `Reform Office' means the 
     Office of Trust Reform Implementation and Oversight 
     established by section 307(e).'';
       (8) by moving paragraphs (1) through (8) (as redesignated 
     by this subsection) so as to appear in numerical order; and
       (9) by adding at the end the following:
       ``(9) Trust assets.--The term `trust assets' means all 
     tangible property including land, minerals, coal, oil and 
     gas, forest resources, agricultural resources, water and 
     water sources, and fish and wildlife held by the Secretary 
     for the benefit of an Indian tribe or an individual member of 
     an Indian tribe pursuant to Federal law.
       ``(10) Trust funds.--The term `trust funds' means all funds 
     held by the Secretary for the benefit of an Indian tribe or 
     and individual member of an Indian tribe pursuant to Federal 
     law.''.
       (b) Deputy Secretary for Trust Management and Reform.--
     Title III of the American Indian Trust Fund Management Reform 
     Act of 1994 (25 U.S.C. 4041 et seq.) is amended by adding at 
     the end the following:

     ``SEC. 307. DEPUTY SECRETARY FOR TRUST MANAGEMENT AND REFORM.

       ``(a) Establishment.--
       ``(1) In general.--There is established within the 
     Department the position of Deputy Secretary for Trust 
     Management and Reform.
       ``(2) Appointment and removal.--
       ``(A) Appointment.--The Deputy Secretary shall be appointed 
     by the President, by and with the advice and consent of the 
     Senate.
       ``(B) Term.--The Deputy Secretary shall be appointed for a 
     term of 6 years.
       ``(C) Removal.--The Deputy Secretary may be removed only 
     for good cause.
       ``(3) Administrative authority.--The Deputy Secretary shall 
     report directly to the Secretary.
       ``(4) Compensation.--The Deputy Secretary shall be paid at 
     a rate determined by the Secretary to be appropriate for the 
     position, but not less than the rate of basic pay prescribed 
     for Level II of the Executive Schedule under section 5313 of 
     title 5, United States Code.
       ``(b) Duties.--The Deputy Secretary shall--
       ``(1) oversee all trust fund and trust asset matters of the 
     Department, including--

[[Page S2971]]

       ``(A) administration and management of the Reform Office; 
     and
       ``(B) financial and human resource matters of the Reform 
     Office; and
       ``(2) engage in appropriate government-to-government 
     relations and consultations with Indian tribes and individual 
     trust asset and trust fund account holders on matters 
     involving trust asset and trust fund management and reform 
     within the Department.
       ``(c) Staff.--In carrying out this section, the Deputy 
     Secretary may hire such staff having expertise in trust asset 
     and trust fund management, financial organization and 
     management, and tribal policy as the Deputy Secretary 
     determines is necessary to carry out this section.
       ``(d) Effect on Duties of Other Officials.--
       ``(1) In general.--Except as provided in paragraph (2), 
     nothing in this section shall be construed to diminish any 
     responsibility or duty of the Assistant Secretary of the 
     Interior for Indian Affairs or the Special Trustee relating 
     to any duty of the Assistant Secretary or Special Trustee 
     established under this Act or any other provision of law.
       ``(2) Trust asset and trust fund management and reform.--
     Notwithstanding any other provision of law, the Deputy 
     Secretary shall have overall management and oversight 
     authority on matters of the Department relating to trust 
     asset and trust fund management and reform.
       ``(e) Office of Trust Reform Implementation and 
     Oversight.--
       ``(1) Establishment.--There is established within the 
     Office of the Secretary the Office of Trust Reform 
     Implementation and Oversight.
       ``(2) Reform office head.--The Reform Office shall be 
     headed by the Deputy Secretary.
       ``(3) Duties.--The Reform Office shall--
       ``(A) supervise and direct the day-to-day activities of the 
     Assistant Secretary of the Interior for Indian Affairs, the 
     Special Trustee, the Director of the Bureau of Land 
     Management, and the Director of the Minerals Management 
     Service, to the extent they administer or manage any Indian 
     trust assets or funds;
       ``(B) administer, in accordance with title II, all trust 
     properties, funds, and other assets held by the United States 
     for the benefit of Indian tribes and individual members of 
     Indian tribes;
       ``(C) require the development and maintenance of an 
     accurate inventory of all trust funds and trust assets;
       ``(D) ensure the prompt posting of revenue derived from a 
     trust fund or trust asset for the benefit of each Indian 
     tribe (or individual member of each Indian tribe) that owns a 
     beneficial interest in the trust fund or trust asset;
       ``(E) ensure that monthly statements of accounts are 
     provided to all trust fund account holders;
       ``(F) ensure that all trust fund accounts are audited at 
     least annually, and more frequently as determined to be 
     necessary by the Deputy Secretary;
       ``(G) ensure that the Assistant Secretary of the Interior 
     for Indian Affairs, the Special Trustee, the Director of the 
     Bureau of Land Management, and the Director of the Minerals 
     Management Service provide to the Secretary current and 
     accurate information relating to the administration and 
     management of trust funds and trust assets;
       ``(H) provide for regular consultation with trust fund 
     account holders on the administration of trust funds and 
     trust assets to ensure, to the maximum extent practicable in 
     accordance with applicable law, the greatest return on those 
     funds and assets for the trust fund account holders; and
       ``(I) enter into contracts and compacts under section 102 
     of the Indian Self-Determination Act (25 U.S.C. 450f) or 
     section 403 of the Indian Self Determination and Education 
     Assistance Act (25 U.S.C. 458cc) to provide for the 
     management of trust assets and trust funds by Indian tribes 
     pursuant to a Trust Fund and Trust Asset Management and 
     Monitoring Plan developed under section 202 of this Act.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as are necessary to 
     carry out this section.''.
       (c) Advisory Board.--
       (1) In general.--Section 306 of the American Indian Trust 
     Fund Management Reform Act of 1994 (25 U.S.C. 4046) is 
     amended to read as follows:

     ``SEC. 306. ADVISORY BOARD.

       ``(a) Establishment and Membership.--Notwithstanding any 
     other provision of law, the Deputy Secretary described in 
     section 307 shall establish an advisory board to provide 
     advice on all matters within the jurisdiction of the Office 
     of Trust Reform. The advisory board shall consist of 9 
     members, appointed by the Deputy Secretary after consultation 
     with Indian tribes and appropriate Indian organizations, of 
     which--
       ``(1) 5 members shall represent trust fund account holders, 
     including both tribal and Individual Indian Money accounts;
       ``(2) 2 members shall have practical experience in trust 
     fund and financial management;
       ``(3) 1 member shall have practical experience in fiduciary 
     investment management; and
       ``(4) 1 member, from academia, shall have knowledge of 
     general management of large organizations.
       ``(b) Term.--Each member shall serve a term of 2 years.
       ``(c) FACA.--The advisory board shall not be subject to the 
     Federal Advisory Committee Act.''.
       (2) Previous Advisory Board.--The advisory board authorized 
     under section 306 of the American Indian Trust Fund 
     Management Reform Act of 1994 (25 U.S.C. 4046) as in effect 
     on the day before the date of enactment of this Act shall 
     terminate on the date of enactment of this Act.
       (d) Conforming Amendments.--
       (1) Section 302 of the American Indian Trust Fund 
     Management Reform Act of 1994 (25 U.S.C. 4042) is amended--
       (A) in the second sentence of subsection (a), by striking 
     ``who shall'' and inserting ``who, except as provided in 
     subsection (b)(3), shall''; and
       (B) in subsection (b), by adding at the end the following:
       ``(3) Trust fund management.--The Special Trustee shall 
     report directly to the Deputy Secretary with respect to 
     matters relating to trust fund management and reform.''.
       (2) Section 303 of the American Indian Trust Fund 
     Management Reform Act of 1994 (25 U.S.C. 4043) is amended--
       (A) by striking subsection (a);
       (B) in subsection (b)(1), by striking ``The Special 
     Trustee'' and inserting ``Except as provided in section 
     307(d), the Special Trustee'';
       (C) in subsection (c)(5)(A), by striking ``or which is 
     charged with any responsibility under the comprehensive 
     strategic plan prepared under subsection (a) of this 
     section,'';
       (D) by striking subsection (f); and
       (E) by redesignating subsections (b) through (e) as 
     subsections (a) through (d), respectively.

     SEC. 3. INDIAN PARTICIPATION IN TRUST FUND ACTIVITIES.

       Title II of the American Indian Trust Fund Management 
     Reform Act of 1994 (25 U.S.C. 4021 et seq.) is amended--
       (1) by striking sections 202 and 203; and
       (2) by inserting after section 201 the following:

     ``SEC. 202. PARTICIPATION IN TRUST FUND AND TRUST ASSET 
                   MANAGEMENT ACTIVITIES BY INDIAN TRIBES.

       ``(a) Planning Program.--To meet the purposes of this 
     title, a 10-year Indian Trust Fund and Trust Asset Management 
     and Monitoring Plan (in this section referred to as the 
     `Plan') shall be developed and implemented as follows:
       ``(1) Pursuant to a self-determination contract or compact 
     under section 102 of the Indian Self-Determination Act (25 
     U.S.C. 450f) or section 403 of the Indian Self Determination 
     and Education Assistance Act (25 U.S.C. 458cc), an Indian 
     tribe may develop or implement a Plan. Subject to the 
     provisions of paragraphs (3) and (4), the tribe shall have 
     broad discretion in designing and carrying out the planning 
     process.
       ``(2) To include in a Plan particular trust funds or assets 
     held by multiple individuals, an Indian tribe shall obtain 
     the approval of a majority of the individuals who hold an 
     interest in any such trust funds or assets.
       ``(3) The Plan shall be submitted to the Secretary for 
     approval pursuant to the Indian Self-Determination Act (25 
     U.S.C. 450f et seq.).
       ``(4) If a tribe chooses not to develop or implement a 
     Plan, the Secretary shall develop or implement, as 
     appropriate, a Plan in close consultation with the affected 
     tribe.
       ``(5) Whether developed directly by the tribe or by the 
     Secretary, the Plan shall--
       ``(A) determine the amount and source of funds held in 
     trust;
       ``(B) identify and prepare an inventory of all trust 
     assets;
       ``(C) identify specific tribal goals and objectives;
       ``(D) establish management objectives for the funds and 
     assets held in trust;
       ``(E) define critical values of the Indian tribe and its 
     members and provide identified management objectives;
       ``(F) identify actions to be taken to reach established 
     objectives;
       ``(G) use existing survey documents, reports and other 
     research from Federal agencies, tribal community colleges, 
     and land grant universities; and
       ``(H) be completed within 3 years of the initiation of 
     activity to establish the Plan.
       ``(b) Management and Administration.--Plans developed and 
     approved under subsection (a) shall govern the management and 
     administration of funds and assets held in trust by the 
     Bureau and the Indian tribal government.
       ``(c) No Termination Requirement.--Indian tribes 
     implementing an approved Plan shall not be required to 
     terminate the trust relationship in order to implement such 
     Plan.
       ``(d) Plan Does Not Terminate Trust.--Developing or 
     implementing a Plan shall not be construed or deemed to 
     constitute a termination of the trust status of the assets or 
     funds that are included in, or subject to, the Plan.
       ``(e) Liability.--An Indian tribe managing and 
     administering trust funds and trust assets in a manner that 
     is consistent with a Plan shall not be liable for waste or 
     loss of an asset or funds that are included in such Plan.
       ``(f) Indian Participation in Management Activities.--
       ``(1) Tribal recognition.--The Secretary shall conduct all 
     management activities of

[[Page S2972]]

     funds and assets held in trust in accordance with goals and 
     objectives set forth in a Plan approved pursuant to and in 
     accordance with all tribal laws and ordinances, except in 
     specific instances where such compliance would be contrary to 
     the trust responsibility of the United States.
       ``(2) Tribal laws.--
       ``(A) In general.--Unless otherwise prohibited by Federal 
     law, the Secretary shall comply with tribal law pertaining to 
     the management of funds and assets held in trust.
       ``(B) Duties.--The Secretary shall--
       ``(i) provide assistance in the enforcement of tribal laws 
     described in subparagraph (A);
       ``(ii) provide notice of such tribal laws to persons or 
     entities dealing with tribal funds and assets held in trust; 
     and
       ``(iii) upon the request of an Indian tribe, require 
     appropriate Federal officials to appear in tribal forums.
       ``(3) Waiver of regulations.--In any case in which a 
     regulation or administrative policy of the Department of the 
     Interior conflicts with the objectives of the Plan, or with a 
     tribal law, the Secretary may waive the application of such 
     regulation or administrative policy unless such waiver would 
     constitute a violation of a Federal statute or judicial 
     decision or would conflict with the Secretary's trust 
     responsibility under Federal law.
       ``(4) Sovereign immunity.--This section does not constitute 
     a waiver of the sovereign immunity of the United States, nor 
     does it authorize tribal justice systems to review actions of 
     the Secretary.
       ``(5) Trust responsibility.--Nothing in this section shall 
     be construed to diminish or expand the trust responsibility 
     of the United States toward Indian funds and assets held in 
     trust, or any legal obligation or remedy resulting from such 
     funds and assets.
       ``(g) Report.--
       ``(1) In general.--Not later than 180 days after the 
     enactment of this section, and annually thereafter, the 
     Secretary shall submit a report to the Committee on Indian 
     Affairs of the Senate and the Committee on Resources of the 
     House of Representatives.
       ``(2) Contents.--The report required under paragraph (1) 
     shall detail the following:
       ``(A) The efforts of the Department to implement this 
     section.
       ``(B) The nature and extent of consultation between the 
     Department, Tribes, and individual Indians with respect to 
     implementation of this section.
       ``(C) Any recommendations of the Department for further 
     changes to this Act, accompanied by a record of consultation 
     with Tribes and individual Indians regarding such 
     recommendations.''.

     SEC. 4. REGULATIONS.

       (a) In General.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of the Interior shall 
     promulgate regulations to carry out the amendments made by 
     this Act.
       (b) Active Participation.--All regulations promulgated in 
     accordance with subsection (a) shall be developed with the 
     full and active participation of Indian tribes that have 
     trust funds and assets held by the Secretary.
                                  ____


     Section-by-Section Summary--Indian Trust Asset and Trust Fund 
                   Management and Reform Act of 2002


                         section 1. short title

       This section provides that the Act may be cited as the 
     ``Indian Trust Asset and Trust Fund Management and Reform Act 
     of 2002.''


      section 2. deputy secretary for trust management and reform

       Paragraph (a) of this section provides that Section 2 of 
     the American Indian Trust Fund Management Reform Act of 1994 
     (25 U.S.C. 4001) is amended to add new definitions for the 
     terms ``Deputy Secretary,'' ``Reform Office,'' ``Trust 
     Assets,'' and ``Trust Funds,'' and to redesignate the 
     paragraphs of Section 2 of the 1994 Act.
       Paragraph (b) of this section amends Title III of the 1994 
     Act by adding provisions to establish the position of Deputy 
     Secretary for Trust Management and Reform in the Department 
     of the Interior. The Deputy Secretary will be appointed by 
     the President, with the advice and consent of the Senate, for 
     a term of six years and may only be removed for cause. The 
     Deputy Secretary will report directly to the Secretary and 
     will be responsible for the oversight of all trust fund and 
     trust asset administration and management, including 
     consultation with Indian tribes and individual Indian trust 
     asset and trust fund account holders.
       This section authorizes the Deputy Secretary to hire staff 
     in the Reform Office with expertise in trust fund and asset 
     management, financial organization and management and tribal 
     policy. The existing responsibilities of the Assistant 
     Secretary for Indian Affairs and the Special Trustee would 
     not be affected by the duties of the Deputy Secretary, except 
     that each will be required to report to the Deputy Secretary 
     on matters involving trust funds and trust assets.
       This section also provides for the establishment of the 
     Office of Trust Reform Implementation and Oversight which 
     shall be headed by the Deputy Secretary and which will be 
     responsible for the supervision of the day-to-day activities 
     of the Assistant Secretary, the Special Trustees, the 
     Director of the Bureau of Land Management and the Director of 
     the Minerals Management Service in their administration of 
     management of any Indian trust funds or assets, consistent 
     with the provisions of Title II of the Act, as amended.
       The duties of the Office of Trust Reform include: 
     authorization to require the development and maintenance of 
     an accurate inventory of all trust properties, funds and 
     other assets; ensure the prompt posting of revenues derived 
     from trust funds, properties and assets; ensure that trust 
     fund account holders receive monthly statements; ensure that 
     trust fund accounts are audited at least once a year or more 
     frequently if necessary; ensure that the Secretary receives 
     current and accurate information relating to 
     the administration and management of trust funds, 
     properties and assets; provide for regular consultation 
     with trust fund account holders to ensure the greatest 
     return on trust assets and properties for the trust 
     account holders; and enter into contracts and compacts 
     under the Indian Self-Determination Act to provide for the 
     management of trust assets and funds by Indian tribes.
       Such sums as maybe necessary are authorized to be 
     appropriated to carry out the provisions of Section 307 of 
     the Act.
       Paragraph (c) of Section 2 amends Section 306 of the 1994 
     Act to reconstitute the Advisory Board for the Special 
     Trustee as the Advisory Board for the Deputy Secretary. The 
     Advisory Board will be comprised of nine members, five of 
     whom shall be representative of tribal and individual trust 
     fund account holders; two of the Board members shall have 
     experience in trust fund and financial management; one Board 
     member shall be experienced in fiduciary investment 
     managements and one member shall be from academia and shall 
     have knowledge of management of large organizations. Each 
     member of the Advisory Board will serve for a term of two 
     years. The Board will not be subject to the Federal Advisory 
     Committee Act.
       Paragraph (d) of Section 2 sets forth conforming amendments 
     to Section 302 and Section 303 of the 1994 Act.


        Section 3. Indian Participation in Trust Fund Activities

       Section 3 amends the 1994 Act by striking Sections 202 and 
     203 of the Act relating to the withdrawal of trust funds and 
     the termination of the trust responsibility. It inserts a new 
     Section 202 to provide for the development and implementation 
     of Indian Trust Fund and Trust Asset Management and 
     Monitoring Plans by the Secretary and Indian tribes pursuant 
     to the Indian Self-Determination Act. Indian tribes are to be 
     afforded broad discretion in designing and carrying out the 
     planning process. Funds and assets held in trust for multiple 
     individuals may be included in a Tribal Plan with the consent 
     of a majority of the individuals who hold an interest in any 
     such assets or funds.
       If a Tribe chooses not to develop or implement a plan, the 
     Secretary is required to do so in close consultation with the 
     affected Tribe.
       Each plan is required to: determine the amount and source 
     of funds held in trust; identify and prepare an inventory of 
     all trust assets; identify specific tribal goals and 
     objectives; establish management objectives for the funds and 
     assets held in trust; define the critical values of the 
     Indian tribe and provide identified management objectives; 
     use existing surveys, reports and other research from Federal 
     agencies, tribal community colleges and land grant 
     universities; and, be completed within three years after the 
     start of activity to establish a plan.
       Approved plans will govern the management and 
     administration of funds and assets held in trust by the 
     Secretary and the Indian Tribes. The development and 
     implementation of a plan by an Indian Tribe or the Secretary 
     does not require the termination of the trust responsibility 
     and shall not be construed or deemed to constitute a 
     termination of the trust status of the assets or funds that 
     are included in or subject to the Plan. An Indian tribe shall 
     not be liable for waste or loss of a trust asset or trust 
     funds if it is acting in accordance with an approved plan.
       The Secretary is required to conduct all trust fund and 
     trust asset management activities in accordance with tribal 
     law and to provide assistance in the enforcement of tribal 
     law unless doing so is prohibited by Federal law or would be 
     contrary to the trust responsibility of the United States. 
     The Secretary may waive any regulations or administrative 
     policies of the Department of the Interior that are in 
     conflict with Tribal law or an approved plan unless such a 
     waiver would constitute a violation of a Federal statute or 
     judicial decision or would conflict with the Secretary's 
     trust responsibility.
       This Section of the Act does not constitute a waiver of the 
     sovereign immunity of the United States or authorize Tribal 
     justice systems to review actions of the Secretary. Nothing 
     in this Section shall be construed to diminish or expand the 
     trust responsibility of the United States toward Indian trust 
     funds and assets held in trust.
       Not later than 180 days after the date of enactment, and 
     annually thereafter, the Secretary is required to file a 
     report with the Committee on Indian Affairs of the Senate and 
     the Committee on Resources of the House of Representatives.
       The report shall detail: the efforts of the Department to 
     implement this Section; the nature and extent of the 
     consultation between the Department, Tribes and individual 
     Indians with respect to the implementation of this section; 
     and, any recommendations of the Department for further 
     changes to the Act, along with a record of the Department's 
     consultation with Tribes and individual Indians regarding 
     such recommendations.


                         section 4. regulations

       Section 4 requires the Secretary to promulgate regulations 
     for the implementation

[[Page S2973]]

     of the amendments to the Act within one year after enactment, 
     with the full and active participation of the Indian tribes 
     that have trust funds and assets held by the Secretary.

  Mr. DASCHLE. Madam President, today I am joining with Senators John 
McCain and Tim Johnson to introduce a legislation that is intended to 
focus attention on the need to address and correct the longstanding 
problem of inefficient management of the assets and funds held by the 
United States in trust for federally recognized Indian tribes and 
individual American Indians.
  Indian Country has faced many challenges over the years. Few, 
however, have been more important, or more difficult, than ending the 
mismanagement of the Indian trust fund and restoring integrity to this 
administrative process.
  For over 100 years, the Department of Interior has managed a trust 
funded with the proceeds of leasing of oil, gas, land, and mineral 
rights for the benefit of Indian people. Today, the trust fund may owe 
as much as $10 billion to as many as 500,000 Indians.
  To give some perspective, the 16 tribes of the Great Plains in South 
Dakota, North Dakota, and Nebraska comprise 10 million acres of trust 
lands representing over one-third of the trust accounts. Many enrolled 
members of the nine South Dakota tribes have trust accounts.
  How these trust funds have been and will be managed is being 
litigated in Cobell versus Norton, and the resolution of this lawsuit 
will have far-reaching implications throughout Indian country. It is 
impossible not to evaluate potential solutions in the context of this 
lawsuit.
  There is clear consensus in Indian Country that the current 
administration of the trust fund is a failure. The daunting question 
has always been how to reform it.
  Last fall, the Secretary of the Interior unveiled plans to reorganize 
the Bureau of Indian Affairs, BIA and segregate the oversight and 
accounting of trust-related assets in a new Bureau of Indian Trust 
Asset Management, BITAM. In testimony before the U.S. District Court, 
she acknowledged that, ``We undoubtedly do have some missing data--and 
we are all going to have to find a way to deal with the fact that some 
information no longer exists.''
  The Secretary's controversial reorganization proposal was presented 
to the court in a hasty effort to avoid being held in contempt of court 
with minimal consultation with the tribes or individual Indian account 
holders, not to mention Congress. In South Dakota, tribal leaders 
communicated to Tim Johnson and me their concern that the Secretary's 
solution appeared to be a fait accompli, conceived without meaningful 
participation of the stakeholders most directly affected by it. They 
felt strongly that this proposal should not be implemented without 
further consultation with the tribes.
  Earlier this year, in the face of administration assurances that its 
reorganization plan was not set in stone, the Interior Department 
requested that $200 million from the BIA and $100 million from the 
Office of the Special Trustee, be reprogrammed to ``a single 
organization that will report to the Secretary through an Assistant 
Secretary, Indian Trust.'' This contradiction set off red flags in 
Congress, and a clear and direct message was sent to Secretary Norton 
by Senators Inouye, Campbell, Byrd, Johnson and others that no action 
should be taken to implement her proposed reorganization plan 
administratively.

  Given these developments, Senators McCain, Johnson, and I felt that 
Congress should be more assertive in forcing discussing about what role 
Congress might play in ensuring that tribes and individual Indian 
account holders have a voice on shaping trust reform policy. It is our 
hope that this bill will stimulate better dialogue among the Congress, 
the Interior Department, and Indian Country on this problem.
  With that goal in mind, the bill has been reviewed by representatives 
of the Great Plains tribes at a meeting in Rapid City. Mike Jandreau, 
chairman of the Lower Brule Sioux Tribe, has been an effective advocate 
and champion of trust reform, not only for his tribe, but also for all 
Indian people. Mike and Flandreau-Santee Sioux Tribal chairman and 
Great Plains Tribal chairman's association president, Tom Ranfranz led 
a very impressive and productive working session with tribal leaders 
from South Dakota, North Dakota, Nebraska, Montana, and Wyoming that 
both raised awareness of the stakes of this issue and built support for 
the bill that is being introduced today.
  I commend the willingness of these participating tribal leaders to be 
a part of a public process that will hopefully not stop until Indian 
country feels comfortable with a final product they create. The McCain-
Johnson-Daschle bill is intended to be a starting point for promoting 
greater understanding of what needs to occur to achieve meaningful 
trust reform.
  At this point, I would like to share with my colleagues some initial 
observations on this proposal that were raised yesterday by 
participating South Dakota treaty tribes and tribes of the Great Plains 
and Rocky Mountain regions. These comments demonstrate how thoughtfully 
Indian leaders are approaching the trust problem, and I fully expect 
that their suggestions will be considered and incorporated as the bill 
moves through the committee process.
  The following issues are of great importance to the Great Plains 
Tribal Chairman's Association.
  Providing the Deputy Secretary with sufficient authority to ensure 
that reform of the administration of trust assets is permanent; They do 
not believe the bill at present gives the Deputy Secretary the full and 
unified authority needed.
  Including cultural resources as a trust asset for management 
purposes.
  Incorporating the Office of Surface Mining and Bureau of Reclamation 
and other related agencies within the Department of Interior and the 
Federal government under the purview of the Deputy Secretary.
  Assuring that the legislation not infringe on tribal sovereingnty by 
interfeering with tribal involvement in the management of individual 
trust assets or tribal assets, or both.
  Maintaining the Bureau of Indian Affair's role as an advocate for 
tribe.
  Maintaining current levels of Bureau of Indian Affairs employment.
  Applying Indian employment preference to all positions created by the 
legislation.
  Providing in law that Bureau of Indian Affairs funds not be used to 
fund the Deputy Secretary appointed by the legislation.
  Stressing the importance of appropriating adequate funding allow 
reform to succeed.
  Reflecting in the legislative history that much of the funding needed 
for real trust reform be allocated at the local agency and regional 
levels of the Bureau of Indian Affairs.
  Placing more tribal representatives, including tribal resources 
managers, from the various Bureau of Indian Affairs regions on the 
advisory board to the Office of Trust Reform.
  The issues of trust reform and reorganization within the Bureau of 
Indian Affairs are nothing new to us here on Capitol Hill, or in Indian 
Country. Collectively, we have endured many efforts, some well 
intentioned and some clearly not, to fix, reform, adjust, improve, 
streamline, downsize, and even terminate the Bureau of Indian Affairs 
and its trust activities.
  These efforts have been pursued in both Republican and Democratic 
administrations. Unfortunately, they have rarely sought meaningful 
involvement from tribal leadership, or recognized the Federal 
Government's treaty obligation to tribes.
  Both meaningful consultation and acceptance of tribal status are 
critical if we expect to find a workable solution to the very real 
problem of trust management. The bill Senators McCain, Johnson, and I 
are introducing today reflects this conviction.
  There is no more important challenge facing the tribes and their 
representatives in Congress than that of restoring accountability and 
efficiency to trust management. And nowhere do the bedrock principles 
of self-determination and tribal sovereignty come more into play than 
in the management and distribution of trust funds and assets.
  This measure recognizes that the only effective long-term solution to 
the trust problem must be based on government-to-government dialog. I

[[Page S2974]]

believe the discussion the bill generates will not only provide the 
catalyst for meaningful tribal involvement in the search for solutions 
but also form the basis for true trust reform. I look forward to 
participating with tribal leaders in pursuit of this important 
objective.
  Mr. JOHNSON. Madam President, I rise today to join my colleagues, 
Senator John McCain and Senator Tom Daschle, as sponsors of the Indian 
Trust Asset and Trust Fund Management and Reform Act of 2002. This 
legislation we are introducing today is intended as simply the first 
step in the legislative process as we continue to work closely with 
tribes to address the need for further reform of the management of the 
trust funds and assets that have been mismanaged for decades. I am 
hopeful that by taking this action today, we will begin to further the 
discussion of this critical issue, knowing full well that there will be 
ongoing consultation and input from tribal leaders and tribal members 
all across the country.
  As many of my colleagues are aware, the issue of trust fund 
mismanagement is one of the most urgent problems we are faced with in 
Indian Country. Of all the extraordinary circumstances we find in 
Indian Country, and especially in South Dakota, I do not think there is 
any more complex, more difficult and more shocking than the 
circumstances we have surrounding trust fund mismanagement.
  This problem has persisted literally for generations, and continues 
today. Administrations of both political parties have been inadequate 
in their response, and the level of direction and the resources 
provided by Congresses over past decades has also been sadly 
inadequate. The Federal Government, by law, is to be the trustee for 
Native American people. When the Trust Fund Management Act of 1994 was 
passed, I was hopeful that this accounting situation would at last be 
remedied. Unfortunately, this has not been the case.
  Last year's attempt by Secretary Norton and the Department of the 
Interior to address this ongoing problem has also fallen far short of 
what is needed. In fact, Indian leaders all across the country widely 
opposed the plan released by the Secretary last November to create a 
new Bureau of Indian Trust Asset Management, BITAM. Unfortunately, the 
Secretary released the Department's plan without seeking input and 
consulting with the very people who are supposed to benefit from these 
trust fund accounts.
  Many tribal leaders have offered counter proposals to the 
Department's plan, however, Secretary Norton continues to stand behind 
and defend BITAM as the best alternative to addressing this problem. I 
believe it is now time for Congress to attempt once again to make real 
progress on this issue. As I stated earlier, the bill my colleagues and 
I have introduced today is not intended to be a final product, but 
rather the beginning of a process that will lead to further 
improvements, revisions and refinements based on the continued input of 
tribal leadership.
  One of the main provisions of our legislation is to establish the 
position of a Deputy Secretary for Trust Management and Reform in the 
Department of the Interior. The Deputy Secretary will be appointed by 
the President, with the advice and consent of the Senate, for a term of 
6 years and may only be removed for cause. The Deputy Secretary will 
report directly to the Secretary and will be responsible for the 
oversight of all trust fund and trust asset administration and 
management, including consultation with Indian tribes. It is my hope 
that the Deputy Secretary is provided the adequate authority to 
administer the trust assets and to ensure that reform of the 
administration of trust assets is permanent.
  In addition, we must maintain and strengthen the integrity of 
services of the Bureau of Indian Affairs, BIA, as the primary agency 
providing trust services directly to tribes. This reorganization should 
not by any means diminish the BIA in it's role as advocate for tribes 
and must include the necessary funding to allow for real trust reform 
to be implemented at the regional and agency levels.
  We have already benefitted from the input of the many tribal 
officials in South Dakota, including the input of the Great Plains 
Tribal Region and Montana Wyoming Tribal Leaders' Council. I would like 
to take this opportunity to thank Mike Jandreau, chairman of the Lower 
Brule Sioux Tribe and a member of the Interior Department's Tribal Task 
Force, as well as Tom Ranfranz, president of the Flandreau Santee and 
chairman of the Great Plains Tribal Chairman's Association for their 
advice and counsel as we attempt to address the many challenges facing 
trust reform. Their important insight into the trust fund management 
issues and their leadership, along with the other tribal chairs in the 
Great Plains and Rocky Mountain Regions who have been very helpful to 
me as we to address the shortcomings of the Department's plan and try 
to find a legislative approach that will finally begin to improve this 
situation,.
  Madam President, I have high hopes that this issue may finally be 
laid to rest. It is crucial that the first Americans of this proud 
country be treated with the dignity and respect that has been so sadly 
lacking for far too long. This legislation provides a new foundation 
from which we may once again begin to rebuild the trust that the U.S. 
Government has, in the eyes of the Indian people, let crumble into the 
rubble of a bureaucratic maze.
                                 ______