Seattle University Publishes Landmark Legal Treatise On Tribal Trust Land

Eric Eberhard, Distinguished Indian Law Practitioner in Residence at the Seattle University Center for Indian Law and Policy, has published an 862-page treatise on the principles and issues involved in Tribal trust lands. The treatise was produced in conjunction with the University’s law conference entitled “Perspectives on Tribal Land Acquisitions in 2010: A Call to Action”, and provides in-depth discussions of the legal background and current developments of Tribes’ quest to preserve and protect their traditional lands.

The treatise can be downloaded HERE, and CD copies can be obtained by contacting the Seattle University Center for Indian Law and Policy.

Professor Eberhard also serves as Vice-Chair of the American Bar Association’s Native American Concerns Committee, and is leading the organizational effort to create a new academic law journal focused exclusively on legal issues affecting Native Americans.

Cobell Trust Lawsuit Resolved In Multi-Billion Dollar Settlement

Secretary of the Interior Ken Salazar and Attorney General Eric Holder today announced a settlement of the long-running and highly contentious Cobell class-action lawsuit regarding the U.S. government's trust management and accounting of over three hundred thousand individual American Indian trust accounts. Also speaking at the press conference today were Deputy Secretary of the Interior David Hayes and Associate Attorney General Tom Perrelli.

“This is an historic, positive development for Indian country and a major step on the road to reconciliation following years of acrimonious litigation between trust beneficiaries and the United States,” Secretary Salazar said. “Resolving this issue has been a top priority of President Obama, and this administration has worked in good faith to reach a settlement that is both honorable and responsible. This historic step will allow Interior to move forward and address the educational, law enforcement, and economic development challenges we face in Indian Country.”

“Over the past thirteen years, the parties have tried to settle this case many, many times, each time unsuccessfully," said Attorney General Eric Holder. "But today we turn the page. This settlement is fair to the plaintiffs, responsible for the United States, and provides a path forward for the future.”

Under the negotiated agreement, litigation will end regarding the Department of the Interior’s performance of an historical accounting for trust accounts maintained by the United States on behalf of more than 300,000 individual Indians. A fund totaling $1.4 billion will be distributed to class members to compensate them for their historical accounting claims, and to resolve potential claims that prior U.S. officials mismanaged the administration of trust assets.

In addition, in order to address the continued proliferation of thousands of new trust accounts caused by the "fractionation" of land interests through succeeding generations, the settlement establishes a $2 billion fund for the voluntary buy-back and consolidation of fractionated land interests. The land consolidation program will provide individual Indians with an opportunity to obtain cash payments for divided land interests and free up the land for the benefit of tribal communities.

By reducing the number of individual trust accounts that the U.S must maintain, the program will greatly reduce on-going administrative expenses and future accounting-related disputes. In order to provide owners with an additional incentive to sell their fractionated interests, the settlement authorizes the Interior Department to set aside up to 5 percent of the value of the interests into a college and vocational school scholarship fund for American Indian students.

The settlement has been negotiated with the involvement of the U.S. District Court for the District of Columbia. It will not become final until it is formally endorsed by the court. Also, Congress must enact legislation to authorize implementation of the settlement. Because it is a settlement of a litigation matter, the Judgment Fund maintained by the U.S. Departments of Justice and Treasury will fund the settlement.

“While we have made significant progress in improving and strengthening the management of Indian trust assets, our work is not over,” said Salazar, who also announced he is establishing a national commission to evaluate ongoing trust reform efforts and make recommendations for the future management of individual trust account assets in light of a congressional sunset provision for the Office of Special Trustee, which was established by Congress in 1994 to reform financial management of the trust system.

The class action case, which involves several hundred thousand plaintiffs, was filed by Elouise Cobell in 1996 in the U.S. District Court for the District of Columbia and has included hundreds of motions, dozens of rulings and appeals, and several trials over the past 13 years. The settlement funds will be administered by the trust department of a bank approved by the district court and distributed to individual Indians by a claims administrator in accordance with court orders and the settlement agreement.

Interior currently manages about 56 million acres of Indian trust land, administering more than 100,000 leases and about $3.5 billion in trust funds. For fiscal year 2009, funds from leases, use permits, land sales and income from financial assets, totaling about $298 million were collected for more than 384,000 open Individual Indian Money accounts and $566 million was collected for about 2,700 tribal accounts for more than 250 tribes. Since 1996, the U.S. Government has collected over $10.4 billion from individual and tribal trust assets and disbursed more than $9.5 billion to individual account holders and tribal governments.

The land consolidation fund addresses a legacy of the General Allotment Act of 1887 (the “Dawes Act”), which divided tribal lands into parcels between 40 and 160 acres in size, allotted them to individual Indians and sold off all remaining unallotted Indian lands. As the original holders died, their intestate heirs received an equal, undivided interest in the lands as tenants in common. In successive generations, smaller undivided interests descended to the next generation.

Today, it is common to have hundreds—even thousands—of Indian owners for one parcel of land. Such highly fractionated ownership makes it extremely difficult to use the land productively or to provide beneficial use for any individual. Absent serious corrective action, an estimated 4 million acres of land will continue to be held in such small ownership interests that very few individual owners will ever derive any meaningful financial benefit from that ownership.

Additional Information is available at the following sites: www.cobellsettlement.com.
The Department of the Interior website: www.doi.gov. The Office of the Special Trustee website: www.ost.doi.gov
 

Accounting Ordered For Federal Trust Land Mismanagement

Eloise Cobell (Photo by Karen Kuehn)

A class-action suit regarding mismanagement of lands affecting 500,000 Native Americans recently got a boost, as the U.S. Court of Appeals for the D.C. Circuit has ruled in the Cobell litigation that the federal government must provide an accounting for land royalties owed to individual plaintiffs.

The lawsuit was filed 13 years ago and claims compensation for Native Americans for land-related royalties from the profits of oil, gas, grazing, and timber – commodities that were taken from Tribal lands that the government has managed in trust for Tribal members since the 19th Century. In 2008, U.S. District Judge James Robertson ruled that an accurate accounting by the Department of Interior was impossible, and awarded the group of plaintiffs $455 million, a fraction of the $47 billion+ being claimed in the lawsuit.

The U.S. Court of Appeals for the D.C. Circuit disagreed with this result, and found that the lower court erred in eliminating the government accounting. Chief Judge David B. Sentelle said the decision essentially allowed the Interior Department "to throw up its hands and stop the accounting." "Without an accounting, it is impossible to know who is owed what," Sentelle wrote. "The best any trust beneficiary could hope for would be a government check in an arbitrary amount."

The D.C. Circuit panel acknowledged that the task is complicated and the Interior Department should focus on the "low-hanging fruit", dealing with clear cases where compensation is owed. "We must not allow the theoretically perfect to render impossible the achievable good," Sentelle wrote.
 

Probate of Native American Trust, Personal, and Real Property Under AIPRA

As is frequently the case with issues dealing with Tribal law, the question of what court has jurisdiction to probate a decedent’s assets -- and which law that court will apply -- is much more complicated for an Native American decedent than it is for non-Native citizens. Three different sovereigns may have jurisdiction and control over the property – a Tribe, a state, or the federal government. Which court will have jurisdiction, and which law will apply, depends on the nature of the property (personal, real, or trust), where the decedent lived and was domiciled, and where the property was located at the time of death. Trust property is handled exclusively by federal government under the American Indian Probate Reform Act (AIPRA), while a Native decedent’s personal and real property is distributed under either Tribal or state law.  Duncan Connelly's article provides an overview of how AIPRA governs the probate process for trust or restricted land, and describes the established, albeit complicated, system of probate for an Native American decedent’s non-trust land personal and real property. The issues discussed warrant careful consideration as Tribes and their members work to implement personal and collective priorities regarding the protection of cultural resources and Tribal assets.
 

Should Tribes Be Allowed To Tax Trust Lands?

(Photo courtesy of Martha Lou Perritti)

In nearly every jurisdiction throughout the United States, local governments derive a significant portion of their operating revenue from property taxes.  The money land owners pay in property taxes goes to fund basic infrastructure such as roads and schools and services such as police and fire protection.

There is however one jurisdiction within which the local government cannot collect property taxes: Tribal lands held in federal trust.

Tribal governments cannot impose property taxes on reservation land that has been taken into trust by the federal government, which is typically most if not all of the land owned by Tribal members within the bounds of a reservation.  Tribes are thus deprived of the benefit of countless millions of dollars in revenue that would normally be available to any other municipality.  With poverty and sub-standard facilities still endemic on reservations throughout America, there is a sad irony in the fact that the place where property taxes could do the most good are the only places they cannot be collected and put back into the community.

The denial of taxing authority to Tribes also has another negative impact on Native Communities, this time in the context of the national consciousness.  In order to make up for unavailable property tax revenue, many Tribes utilize alternative income sources such as casino gaming and discounted tobacco products to finance basic services within their reservations.  Since in most states these offerings are only available within the sovereign territory of a Tribe, many Americans hold an ill-informed view that Native Americans enjoy "special privileges", and that other benefits and services to Tribes should therefore be curtailed.  The lack of understanding of why these alternative revenue sources are necessary could perhaps be overcome by touring the decrepit infrastructure with which many Tribal Communities continue to be saddled, but such ventures by non-Natives are far from routine.

There's no insurmountable obstacle to allowing Tribes to tax land within their jurisdictions.  The federal government could enter into taxing agreements with Tribes that would allow for collection of some form of property tax, which Tribes could help structure so as to increase revenue without placing an undue financial burden on Tribal members.  Numerous models for such agreements already exist, in the form of retail sales tax compacts between state and Tribal governments for business activities occurring on reservations.