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Interior asks Congress for power to take Indian lands
Monday, July 18, 2005

The Bush administration is once again asking Congress for authority to take "unclaimed" Indian lands and to eliminate its trust responsibility to tens of thousands of individual Indians.

In a letter to the Senate Indian Affairs Committee, the Interior Department urged Sen. John McCain (R-Arizona) to add provisions to a bill that is already on the Senate floor. Although the proposed changes were described as "technical," they would give the federal government powers that haven't been the subject of a hearing or prior public debate.

Matt Eames, Interior's director of Congressional affairs, said the department needs the ability to take lands that are owned by individual Indians who can't currently be located. Nearly 49,000 Indian beneficiaries, who are owed an estimated $73.9 million, would be affected.

"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," the May 10 letter stated. "This is not the case with inactive Individual Indian Money accounts or real property interests."

Eames also proposed language to address two court cases -- including one that went all the way to the U.S. Supreme Court -- that favored individual Indians and their constitutionally protected property rights. He said the department needs authority to take highly fractionated lands from beneficiaries, albeit with compensation.

"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," Eames told McCain.

The proposals came in the administration's official response to S.536, the Native American Omnibus Act of 2005. The bill was approved by McCain's committee on May 12 and could be scheduled for a Senate vote any time.

If added to the bill, the provisions would eliminate the federal government's responsibilities to tens of thousands of Indian beneficiaries throughout the country who either can't be located or who share ownership in highly fractionated pieces of land. Interior officials have said keeping track of these account holders is costing the department millions of dollars.

Over the years, several proposals have been floated in an attempt to close the accounts, an effort that former assistant secretary Neal McCaleb once described as "termination." Not surprisingly, Indian Country hasn't reacted positively.

In late 2002, the department proposed an unclaimed property act that was soundly rejected by tribal leaders who were participating in the task force on trust reform. Interior officials blamed the legislation's quick demise on the task force, saying tribal leaders prematurely shared the information with the plaintiffs in the Cobell v. Norton lawsuit and with the media.

But the department, tribes, Indian landowners and other stakeholders were able to come together and pass the American Indian Probate Reform Act. The bill, signed into law by President Bush in October 2004, encourages estate planning by individual Indians, establishes a uniform probate code and helps tribes consolidate fractionated lands.

Past efforts, however, have not met muster in the courts. In the Babbitt v. Youpee case, the Supreme Court ruled that Congress violated the property rights of about 18,000 individual Indians in the Great Plains and the Midwest by taking their lands without just compensation. The decision was issued in 1997 and the department is still trying to sort out the mess.

More recently, a federal judge has found another piece of legislation to be unconstitutional in the DuMarce v. Norton case. It affects members of the Sisseton-Wahpeton Tribe whose fractionated lands were taken without just compensation.

The relevant parts of the Interior Department's letter are as follows:
The Department also suggests additional amendments be added to S. 536. ... We also recommend two new titles be added to the bill that would provide a technical correction to address the decisions in Youpee v. Babbitt and DuMarce v. Norton and give the Secretary the authority to address unclaimed property.

Youpee and Sisseton-Wahpeton
A new title should be added to S. 536 that would provide a technical correction to address the decisions in Youpee v. Babbitt and DuMarce v. Norton. The United States Supreme Court in Youpee held the escheat provision of the Indian Land Consolidation Act as unconstitutional. In DuMarce, 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 a new title be added 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.

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 Individual Indian Money 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.

Native American Omnibus Act:
S.536 | Report 109-67 [Contains DOI Letter]

American Indian Probate Reform Act:
Public Law No: 108-374

Court Decisions:
DuMarce v. Norton | Babbitt v. Youpee

Relevant Links:
Office of Special Trustee - http://www.ost.doi.gov
Indian Trust: Cobell v. Norton - http://www.indiantrust.com

Related Stories:
Trust reform costs put at $3B, thanks to Bush (06/13)
OST audits fare no better under Ross Swimmer (06/07)
Norton lobbies Congress on trust fund accounting (03/11)
DOI says probate bill doesn't solve fractionation (11/10)
Bush puts signature to probate reform legislation (10/28)
Probate reform bill ready for Bush's signature (10/07)
Anderson touts benefits of Cobell trust fund case (02/25)
Tribes back improvements in probate reform bill (10/16)
Tribes focus energies on 'core' trust reform issues (05/30)
On fractionation, little progress in decades (05/09)
Fractionation a growing problem in Indian Country (05/06)
Bill offers 'extinguishment' of trust fund claims (11/06)
Legislation to create a 'passive' Indian trust (10/18)
Bush proposal to take 'unclaimed' Indian land (09/26)
Rift widens on trust reform negotiations (9/12)
Tribes scrap talks on trust standards (9/11)
Tribal leaders debate trust reform bill (5/23)
McCaleb gets too close to termination (1/29)
Interior moving to close trust fund accounts (1/25)

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