GM 16-040

Indian Trust Asset Reform Bill Enacted

On June 22, 2016, the President signed HR 812 as PL 114-178, the Indian Trust Asset Reform Act (Act). The Act reaffirms the responsibility of the United States to Indian tribes; authorizes a demonstration project for tribes to voluntarily negotiate with the Secretary of the Interior to manage their own trust assets; creates the option for the Secretary to establish an Under Secretary for Indian Affairs; and sets up a process to terminate the Office of the Special Trustee. HR 812 was introduced by Representatives Simpson (R-ID); Cole (R-OK); and Heck (D-WA). Companion legislation was introduced by Senator Crapo (R-ID). A copy of HR 812, as presented to the President for signature, is here: https://www.gpo.gov/fdsys/pkg/BILLS-114hr812enr/pdf/BILLS-114hr812enr.pdf

Background. The Act is generally considered to be the first major trust reform bill enacted since the American Indian Trust Fund Management Reform Act of 1994 (PL 103-412)— the legislation which was responsible for the creation of the Office of the Special Trustee in the first place. Previous iterations of the Act had been introduced and debated in the past several Congresses but never enacted. Below we briefly describe each title.

Title I – Recognition of Trust Responsibility. This title reaffirms the responsibility of the United States to Indian tribes and sets forth congressional findings recognizing the federal trust responsibility, including a duty to promote tribal self-determination regarding governmental authority and economic development.

Title II – Indian Trust Asset Management Demonstration Project. This title directs the Secretary of the Interior to establish and carry out an Indian trust asset management demonstration project. In order to participate, a tribe must first submit a written application which is subject to Secretarial approval. After approval, a tribe is to then submit a proposed Indian trust asset management plan (proposed plan). The proposed plan is required to include provisions that: identify the trust assets that will be the subject of the plan; establish objectives and priorities for these assets; allocate funding to meet these objectives and priorities; establish procedures for non-binding mediation or resolution of any dispute between the tribe and the federal government relating to the plan; establish a process for the tribe and the federal agencies affected by the plan to conduct evaluations of compliance with the plan; and identify any federal regulations that will be superseded by the plan. If the tribe has contracted or compacted functions or activities under the Indian Self-Determination and Education Assistance Act (ISDEAA) relating to the management of trust assets then the proposed plan is also required to include provisions that identify the functions or activities that are being or will be performed by the tribe under the contracts, compacts, or other agreements under the Act (such as the forest land management and surface leasing activities described below) and describe the practices and procedures that the tribe will follow. During the development of the proposed plan, the Secretary is required to provide technical assistance. The Secretary may not approve a proposed plan unless it is consistent with federal treaties, statutes, and executive orders applicable to the trust assets or their management. The Secretary must approve or disapprove a proposed plan within 120 days of submission. This demonstration project will remain in effect for ten years after the date of enactment but may be extended at the Secretary’s discretion.

Title II also includes a section on forest land management and surface leasing. This section allows the Secretary to approve a proposed plan which includes or incorporates by reference tribal surface leasing and/or forest land management regulations that would allow the tribe to conduct such activities under tribal regulation without separately obtaining Secretarial approval. “Forest land management activities” are defined by reference in section 304(4) of the National Indian Forest Resources Management Act. “Surface leasing transaction” means a residential, business, agricultural, or wind or solar resources lease of trust land or of fee land subject to restrictions against alienation. This section also provides that tribes may choose to submit a separate approval request to the Secretary for tribal regulations governing forest land management activities, even if that tribe does not submit or intend to submit an Indian trust asset management plan.

Title III – Improving Efficiency and Streamlining Processes. This title has four main sections.

Sec. 303 authorizes the Secretary to establish the position of Under Secretary for Indian Affairs within the Department of the Interior. Among the Under Secretary’s designated duties would be the requirement that the Under Secretary coordinate with the Special Trustee for American Indians in order to ensure the orderly transition of Special Trustee functions to one or more appropriate federal entities. The Under Secretary would coordinate Bureau of Indian Affairs policies with the: Bureau of Reclamation; Bureau of Land Management; Office of Natural Resources Revenue; National Park Service; and U.S. Fish and Wildlife Service. The Under Secretary would also provide for regular consultation with Indians and Indian tribes who own interests in trust resources and trust fund accounts.

Sec. 304 requires the Secretary, one year from the date of enactment, to prepare a report, in consultation with Indian tribes which includes a transition plan for the Office of the Special Trustee (OST) to terminate within two years of the date of the report, unless the Secretary determines that an orderly transition cannot be accomplished within that timeframe. If the Secretary determines that more time is needed to complete the transition, the Secretary must submit an explanatory report and suggest an alternative transition date for congressional approval. This section also provides that tribes and tribal consortia may include OST fiduciary trust officers in their ISDEAA agreements.

Sec. 305 requires the Secretary, in consultation with tribes, to ensure that appraisals and valuations of Indian trust property are administered within 18 months of the date of enactment by a single entity within the Department of the Interior. This section also requires the Secretary to establish minimum qualifications for persons to prepare appraisals and valuations of Indian trust property. Once these minimum standards are met, the appraisals and valuations will not require Secretarial review or approval.

Sec. 306 requires the Secretary to identify any resulting cost savings from any function or activity that OST will not have to operate or carry out as a result of any transfer of functions or personnel under Title III and provide this information to the Tribal-Interior Budget Council (TIBC) or other appropriate advisory committee. The TBIC or other advisory committee may provide recommendations within 90 days of receiving such information on how any cost savings should be reallocated, incorporated into future budget requests, or appropriated.

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