[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
THE STATUS AND FUTURE OF THE COBELL LAND CONSOLIDATION PROGRAM
=======================================================================
OVERSIGHT HEARING
BEFORE THE
SUBCOMMITTEE ON INDIAN, INSULAR AND
ALASKA NATIVE AFFAIRS
OF THE
COMMITTEE ON NATURAL RESOURCES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
Tuesday, May 23, 2017
__________
Serial No. 115-6
__________
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COMMITTEE ON NATURAL RESOURCES
ROB BISHOP, UT, Chairman
RAUL M. GRIJALVA, AZ, Ranking Democratic Member
Don Young, AK Grace F. Napolitano, CA
Chairman Emeritus Madeleine Z. Bordallo, GU
Louie Gohmert, TX Jim Costa, CA
Vice Chairman Gregorio Kilili Camacho Sablan,
Doug Lamborn, CO CNMI
Robert J. Wittman, VA Niki Tsongas, MA
Tom McClintock, CA Jared Huffman, CA
Stevan Pearce, NM Vice Ranking Member
Glenn Thompson, PA Alan S. Lowenthal, CA
Paul A. Gosar, AZ Donald S. Beyer, Jr., VA
Raul R. Labrador, ID Norma J. Torres, CA
Scott R. Tipton, CO Ruben Gallego, AZ
Doug LaMalfa, CA Colleen Hanabusa, HI
Jeff Denham, CA Nanette Diaz Barragan, CA
Paul Cook, CA Darren Soto, FL
Bruce Westerman, AR Jimmy Panetta, CA
Garret Graves, LA A. Donald McEachin, VA
Jody B. Hice, GA Anthony G. Brown, MD
Aumua Amata Coleman Radewagen, AS Wm. Lacy Clay, MO
Darin LaHood, IL
Daniel Webster, FL
David Rouzer, NC
Jack Bergman, MI
Liz Cheney, WY
Mike Johnson, LA
Jenniffer Gonzalez-Colon, PR
Jason Knox, Chief of Staff
Lisa Pittman, Chief Counsel
David Watkins, Democratic Staff Director
------
SUBCOMMITTEE ON INDIAN, INSULAR AND ALASKA NATIVE AFFAIRS
DOUG LaMALFA, CA, Chairman
NORMA J. TORRES, CA, Ranking Democratic Member
Don Young, AK Madeleine Z. Bordallo, GU
Jeff Denham, CA Gregorio Kilili Camacho Sablan,
Paul Cook, CA CNMI
Aumua Amata Coleman Radewagen, AS Ruben Gallego, AZ
Darin LaHood, IL Darren Soto, FL
Jack Bergman, MI Colleen Hanabusa, HI
Jenniffer Gonzalez-Colon, PR Raul M. Grijalva, AZ, ex officio
Vice Chairman
Rob Bishop, UT, ex officio
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CONTENTS
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Page
Hearing held on Tuesday, May 23, 2017............................ 1
Statement of Members:
LaMalfa, Hon. Doug, a Representative in Congress from the
State of California........................................ 1
Prepared statement of.................................... 2
Torres, Hon. Norma J., a Representative in Congress from the
State of California........................................ 3
Prepared statement of.................................... 4
Statement of Witnesses:
Cason, James, Acting Deputy Secretary, U.S. Department of the
Interior, Washington, DC................................... 5
Prepared statement of.................................... 6
Additional Materials Submitted for the Record:
List of documents submitted for the record retained in the
Committee's official files................................. 25
OVERSIGHT HEARING ON THE STATUS AND FUTURE OF THE COBELL LAND
CONSOLIDATION PROGRAM
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Tuesday, May 23, 2017
U.S. House of Representatives
Subcommittee on Indian, Insular and Alaska Native Affairs
Committee on Natural Resources
Washington, DC
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The Subcommittee met, pursuant to notice, at 2:03 p.m., in
room 1324, Longworth House Office Building, Hon. Doug LaMalfa
[Chairman of the Subcommittee] presiding.
Present: Representatives LaMalfa, Radewagen, Bergman;
Torres, Gallego, Soto, and Hanabusa.
Also present: Representative McEachin.
Mr. LaMalfa. The Subcommittee on Indian, Insular and Alaska
Native Affairs will come to order. The Subcommittee is meeting
today to hear testimony on the status and future of the Cobell
Land Consolidation Program.
Under Committee Rule 4(f), any oral opening statements at
hearings are limited to the Chairman, the Ranking Minority
Member, and the Vice Chair, to allow us to hear sooner from our
witnesses and help Members keep to their schedules. Therefore,
I ask unanimous consent that all other Members' opening
statements be part of the hearing record, if they are submitted
to the Subcommittee Clerk by 5:00 p.m. today.
So ordered.
Also, we will ask unanimous consent that the gentleman from
Virginia, Mr. McEachin, be allowed to sit with the Subcommittee
and participate in the hearing.
Without objection, so ordered.
STATEMENT OF HON. DOUG LaMALFA, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Mr. LaMalfa. The purpose of today's hearing is to perform a
status check on the Land Buy-Back Program for Tribal Nations,
which was set up by the Obama administration and Congress in
the $3.4 billion settlement of the Cobell v. Salazar lawsuit.
The program operates according to the Indian Land Consolidation
Act, through which the Secretary of the Interior offers to
purchase, at fair market value, interests in highly
fractionated allotments of land held in trust by the United
States for the benefit of individual Indians.
Upon a sale, the Secretary continues to hold title to the
allotment in trust, but the beneficial interests purchased from
individuals are transferred to a tribe in whose reservation the
allotment is situated.
The consolidation of fractionated lands into a single owner
reduces the Interior Department's burden in administering these
lands, and it benefits Indians and tribes by increasing the
potential for approving productive uses of these properties.
Though the Indian Land Consolidation Act is subject to
annual appropriations, the Obama administration saw an
opportunity to use the legislative settlement of Cobell in
order to make a direct appropriation of $1.9 billion, an
appropriation to conduct a land buy-back program the Secretary
of the Interior would design and implement.
At the rate in which that administration spent money from
the program, it appears all the money will be spent well before
2022, at which time any unspent money must revert back to the
Treasury. It is fair to ask--what kind of progress has been
made, and has the program been a success, overall?
While the issue is not terribly familiar to those who do
not routinely work in the field of Indian affairs, Indian land
fractionation has been an enormous burden for the Department,
and has denied thousands of individual Indians any economic
benefit from their lands. If left unchecked, the Department's
responsibilities associated with Indian land fractionation will
cut deeply into its annual budgets, draining resources
necessary for the Department to meet its other responsibilities
to Indians.
Today's witness, the Acting Deputy Secretary of the
Interior, will share the Trump administration's perspective as
it inherits this fractionation problem and the Land Buy-Back
Program.
[The prepared statement of Mr. LaMalfa follows:]
Prepared Statement of the Hon. Doug LaMalfa, Chairman, Subcommittee on
Indian, Insular and Alaska Native Affairs
The purpose of today's hearing is to perform a status check on the
Land Buy-Back Program for Tribal Nations, which was set up by the Obama
administration and Congress in the $3.4 billion settlement of Cobell v.
Salazar lawsuit. The program operates according to the Indian Land
Consolidation Act, through which the Secretary of the Interior offers
to purchase, at fair market value, interests in highly fractionated
allotments of land held in trust by the United States for the benefit
of individual Indians. Upon a sale, the Secretary continues to hold
title to the allotment in trust, but the beneficial interests purchased
from individuals are transferred to a tribe in whose reservation the
allotment is situated.
The consolidation of fractionated lands into a single owner reduces
the Interior Department's burden in administering these lands, and it
benefits Indians and tribes by increasing the potential for approving
productive uses of these properties.
Though the Indian Land Consolidation Act is subject to annual
appropriations, the Obama administration saw an opportunity to use the
legislative settlement of Cobell in order to make a direct
appropriation of $1.9 billion appropriation to conduct a land buy-back
program the Secretary of the Interior would design and implement.
At the rate at which the Obama administration spent money from the
program, it appears all the money will be spent well before 2022, at
which time any unspent money must revert to the Treasury.
It's fair to ask: what kind of progress has been made, and has the
program been a success?
While the issue is not terribly familiar to those who don't
routinely work in the field of Indian affairs, Indian land
fractionation has been an enormous burden for the Department, and it
has denied thousands of individual Indians any economic benefit from
their lands. If left unchecked, the Department's responsibilities
associated with Indian land fractionation will cut deeply into its
annual budgets, draining resources necessary for the Department to meet
its other responsibilities to Indians.
Today's witness, the acting Deputy Secretary of the Interior, will
share the Trump administration's perspective as it inherits the
fractionation problem and the Land Buy-Back Program.
______
Mr. LaMalfa. The Chairman will now recognize the Ranking
Minority Member for any statement.
STATEMENT OF THE HON. NORMA J. TORRES, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mrs. Torres. Thank you, Mr. Chairman, and good afternoon
everyone. We are here today, as stated, to talk about the
Cobell Land Consolidation Program, a program which was put into
place to lessen some of the results of the disastrous
government policies of allotment and assimilation in the late
19th and 20th centuries.
Although the policy of allotment ended in 1934, its impacts
are still felt across Indian Country today. This policy
dictated a forced conversion of communally held tribal lands
into parcels for individual Indian ownership. When the allottee
died, title ownership was divided up among all of the heirs,
but the land itself was not physically divided. This has
resulted in the highly fractionated ownership of much Indian
land today.
Today, many of these lands have hundreds, even thousands in
some cases, of individual owners, making it difficult, if not
impossible, to reach a consensus on land use. The cost to the
government to manage these fractionated lands is also
substantial, and the costs are rising as every generation
inherits more fractions.
The Cobell Land Buy-Back Program was created to strengthen
tribal sovereignty and self-determination by identifying and
transferring these fractional lands back to the tribes,
stimulating economic development and unlocking the land's
potential.
Since the start of the program in 2012, more than $1.1
billion has been paid to landowners, and there has been 23
percent reduction in fractional land interests nationally. This
is the equivalent of nearly 2.1 million acres of land has been
transferred to tribal governments.
Some tribes have seen a greater reduction in fractionation.
The late Elouise Cobell's tribe, the Blackfeet Nation, has seen
a 51 percent reduction in fractional interests on their land,
and many tribes have already benefited, both economically and
socially, from adding these lands to their existing tribal
base.
For example, land secured through this program for the Crow
Tribe will be used for a new community water plant on land that
is now 100 percent tribally owned.
But the Cobell settlement is about more than just a
judgment that must be honored. It is about a chance to restore
the trust and faith of our Native communities in our Federal
Government. It is about atoning for the ill-conceived policies
of the past, and affording tribes and tribal members a much
better future.
Let me state that the Cobell settlement never envisioned
that the Buy-Back Program would completely solve fractionation
across Indian Country. It does not compel landowners to sell,
so there is always the option for landowners to opt out.
Additionally, all purchase offers reflect fair market value,
and Interior would not have known at the time of the settlement
what the value would be for each location.
So, it is no surprise that it is estimated that the
original $1.6 billion allocated for this program will not be
enough to purchase all of the willing fractionated interests in
Indian Country. But the work the program is doing has laid
important groundwork and has been very successful in reducing
the amount of fractionated interests to date. This program has
been proven successful so far, and I can see no reason to not
continue this program and uphold the government's
responsibility to Indian Country.
Finally, let me add a note about transparency and
accountability. The Ranking Member and other members of this
Committee have sent multiple letters to this Administration
requesting information, all of which have gone unanswered. I
want to stress that it is extremely difficult to work with an
administration without timely and accurate responses to our
letters. So, I hope our witness here today can assure us that
questions and requests about this program will not be met with
the same radio silence.
Thank you, Mr. Chairman, and I yield back.
[The prepared statement of Mrs. Torres follows:]
Prepared Statement of the Hon. Norma J. Torres, Ranking Member,
Subcommittee on Indian, Insular and Alaska Native Affairs
Thank you Mr. Chairman. We are here today to talk about the Cobell
Land Consolidation Program--a program which was put into place to
lessen some of the results of the disastrous government policies of
Allotment and Assimilation in the late 19th and early 20th centuries.
Although the policy of Allotment ended in 1934, its impacts are
still felt across Indian Country today. This policy dictated the forced
conversion of communally held tribal lands into parcels for individual
Indian ownership. But when an allottee died, title ownership was
divided up among all of the heirs, but the land itself was not
physically divided. This has resulted in the highly fractionated
ownership of much Indian land today.
Today, many of these lands have hundreds, even thousands, of
individual owners, making it difficult, if not impossible, to reach a
consensus on land use. The cost to the government to manage these
fractionated lands is also substantial, and the costs are rising as
every generation inherits more fractions.
The Cobell Land Buy-Back Program was created to strengthen tribal
sovereignty and self-determination by identifying and transferring
these fractionated lands back to the tribes, stimulating economic
development and unlocking the land's potential.
Since the start of the program in 2012, more than $1.1 billion has
been paid to landowners, and there has been a 23 percent reduction in
fractional land interests nationally. This is the equivalent of nearly
2.1 million acres of land has been transferred to tribal governments.
Some tribes have seen even a greater reduction in fractionation.
The late Elouise Cobell's tribe, The Blackfeet Nation, has seen a 51
percent reduction in fractional interests on their land, and many
tribes have already benefited, both economically and socially, from
adding these lands to their existing tribal base.
For example, land secured through this program for the Crow Tribe
will be used for a new community water plant on land that is now 100
percent tribally owned.
But the Cobell settlement is about more than just a judgment that
must be honored. It's about a chance to restore the trust and faith of
our Native communities in our Federal Government. It's about atoning
for the ill-conceived policies of the past and affording tribes and
tribal members a better future.
Let me state that the Cobell Settlement never envisioned that the
Buy-Back Program would completely solve fractionation across Indian
Country. It does not compel landowners to sell, so there is always the
option for landowners to opt-out. Additionally, all purchase offers
reflect fair market value, and Interior would not have known at the
time of the settlement what the value would be at each location.
So it's no surprise that it is estimated that the original $1.6
billion allocation for this program will not be enough to purchase all
of the willing fractionated interests in Indian Country. But the work
the program is doing has laid important groundwork and has been very
successful in reducing the amount of fractionated interests to date.
This program has proven successful so far, and I can see no reason to
not continue this program and uphold the government's responsibility to
Indian Country.
Finally, let me add a note about transparency and accountability.
The Ranking Member and other members of this Committee have sent
multiple letters to this Administration requesting information, all of
which have gone unanswered. I want to stress that it is extremely
difficult to work with the Administration without timely and accurate
responses to our letters. So, I hope our witness here today can assure
us that questions and requests about this program will not be met with
the same radio silence.
Thank you Mr. Chairman, and I yield back.
______
Mr. LaMalfa. Thank you, Ranking Member. Now it is time to
introduce our witness. It is Mr. James Cason, Acting Deputy
Secretary of the U.S. Department of the Interior.
Mr. Cason, under our Committee Rules, you must limit your
oral statement to 5 minutes. But if it is longer than that,
your entire statement will appear in the hearing record.
Of course, you have to operate the microphone. Press the on
button when you begin. The light on the witness microphone will
turn green. After 4 minutes, yellow. And then, a red light
means red light. So, that will be 5 minutes; and we appreciate
you being here.
I would now like to recognize Mr. Cason for your testimony.
Thank you.
STATEMENT OF JAMES CASON, ACTING DEPUTY SECRETARY, U.S.
DEPARTMENT OF THE INTERIOR, WASHINGTON, DC
Mr. Cason. Thank you, Mr. Chairman, Ranking Member Torres,
and members of the Subcommittee. My name is Jim Cason. I am
currently serving as the Acting Deputy Secretary for the
Department of the Interior. Thank you for the invitation to
appear today to update the Committee on the status of the
Department of the Interior's Land Buy-Back Program.
In the interest of time, I will ask the Chairman to enter
my written remarks into the record. Thank you.
I worked on the Cobell settlement during my time at
Interior during George W. Bush's presidency. I spent about 8
years working on this program, so I have a lot of experience
dealing with it.
When I departed my post in 2009, I cautiously hoped the
groundwork we had laid would result in the consolidation of the
fractionated interests. After expending a total of $1.3 billion
to date, it is my view that Interior has not been very
successful in materially reducing fractionated interests.
When the program started in 2013, this fractionation was
already an enormous burden. At the time I left the Bush
administration, we were talking about 4 million fractionated
interests. The prior administration now talks about 3 million
purchasable interests. So, it is a little bit unclear as to
what has been the focus for the program during the last 8
years.
When I returned to Interior, I began to examine the
progress the program has made, and I quickly learned that we
had expended 75 percent of the funds and consolidated only 14
percent of the interests. I noticed Member Torres had mentioned
23 percent. The staff gave me the figure of 14, so apparently
that figure is a little bit in question as well.
The Department is spending anywhere between $7.50 per
acre--and that is for mineral interests only, no surface and no
prospects for mineral exploration--to $648,817 for a single
acre of land. In my opinion, there is no reason we would ever
spend that amount of money on a single acre of land.
Meanwhile, the rate of fractionation rapidly grows as more
owners pass away. With only roughly $600 million left in the
fund, I have talked to the program staff about updating its
strategy to reduce fractionation at an increased pace. However,
Congress has an important role in this conversation, and will
determine the direction that the program will take.
I see my testimony here today as an opportunity to let
Congress know the severity of the situation, and to work with
all of you on a meaningful path forward.
Congress has the option to allow the program to continue
the use of the remaining dollars to resolve fractionated
interests. We can keep going down this same pathway that the
prior administration went. Once the funds are exhausted, the
program will no longer continue forward. Given its popularity
in Indian Country, this may be the preferred approach for
Congress.
Or, in the alternative, Congress could consider amendments
to allow Interior to leverage the remaining resources to
carefully target interests for acquisition. The Department
could be granted authority to purchase and hold fractionated
interests, which would then be resold to individual Indians or
tribal members. The revenue collected would be placed back into
the land buy-back fund for future fractionated land purchases,
so we would have the opportunity to leverage the money that is
still available.
I viewed the Buy-Back Program as a once-in-a-lifetime
opportunity to meaningfully address fractionated interests that
plague individual allottees and hamper tribal relations and
activities. The program, unfortunately, has made relatively
little progress in resolving this ongoing problem. In fact, in
my mind, we are almost back to where we started 8 years ago,
just merely treading water.
Fractionated tracts threaten financial interests, present
and future land utilization, and are costly for the Department
to manage. I suggest that Congress take a fresh look into the
future direction Interior takes on this program: a continuation
of the status quo, or language providing authorities to
leverage the remaining funds.
Thank you for your time. I am pleased to answer the
questions that you have.
[The prepared statement of Mr. Cason follows:]
Prepared Statement of James Cason, Acting Deputy Secretary, United
States Department of the Interior
Chairman LaMalfa, Ranking Member Torres, and Members of the
Subcommittee, my name is Jim Cason. I am currently serving as the
Acting Deputy Secretary of the Department of the Interior. Thank you
for the invitation to appear today to update this Committee on the
status of the Department of the Interior's (Department or Interior)
Cobell Land Consolidation Program, commonly known as the Land Buy-Back
Program for Tribal Nations (Buy-Back Program).
I worked on the Cobell settlement over the course of my tenure at
Interior during President George W. Bush's presidency. When I departed
my post in 2009, I cautiously hoped the groundwork we had laid would
result in the consolidation of fractional interests, which was a core
component of the settlement. Since returning to Interior, I have
specifically focused on examining the status of implementing the Buy-
Back Program. After expending a total of $1.3 billion dollars to date
and consolidating nearly 700,000 fractional interests (representing the
equivalent of 2.1 million acres) on more than 40,000 tracts at 39
locations, it is my view that Interior has not been successful in
materially reducing fractional interests.
introduction--land fractionation and its challenges
Fractionation results from a past policy of breaking up tribal land
bases into individual allotments or tracts and then the division of
ownership among more and more owners after the death of the original
owner or allottee. Although allotted land itself is not divided
physically, the children, spouses, and other relatives of the original
and successive landowners inherit undivided common ownership interests
in the land. As a result, fractionation has grown exponentially over
generations.
Many allotted tracts now have hundreds or even thousands of
individual owners. When tracts have so many co-owners, various
challenges arise for more than 150 reservations across Indian Country
and for Interior, including the following:
First, many fractionated tracts are under-utilized, unoccupied, or
unavailable for any purpose. As a result, tribes are experiencing major
challenges that impact tribal sovereignty and self-determination.
Additionally, many tribal reservations experience a checkerboard
ownership pattern, where some tracts of land are owned by non-Indian
landowners not subject to tribal jurisdiction, creating jurisdictional
challenges. Both fractionated tracts and checkerboard reservations tie
up land within reservation boundaries, making it difficult to pursue
economic development, housing, and infrastructure.
Second, the Department is responsible for administrative activities
related to fractional interests--from maintaining Individual Indian
Monies (IIM) accounts for individual landowners to recordkeeping
associated with each interest. These activities cost the Department
hundreds of millions of dollars annually in appropriated funds. These
costs are driven by the number of landowners who own fractional
interests across Indian Country, as well as the number of fractional
interests. A portion of the Bureau of Indian Affairs' (BIA's) annual
budget for Realty, Leasing, Land Title and Records, Probate, Forestry,
and Natural Resources (a total of $126.8 million for FY 2017) relates
to the management of trust resources held for individual landowners.
For example, BIA maintains records for each interest, documenting how
and from whom each segregated interest was inherited. In addition, when
an owner of an IIM account or fractional interest in real property
dies, current law provides that those trust assets (regardless of
value) will be subject to a probate administration. Current estimates
provide that it takes on average over 2 years to complete a single
probate administration with an average cost in excess of $3,000 (this
is regardless of the underlying value of the estate). As of September
30, 2015, there were approximately 54,000 IIM accounts with current
balances between one cent ($0.01) and one dollar ($1.00). The aggregate
value of these small balance accounts is approximately $16,000. Thus,
it is estimated that it would require over $162 million to probate the
combined value of $16,000 in those accounts.
Consolidation of fractional interests reduces the potential
administrative costs associated with managing fractionated land.
buy-back program and results thus far
The Cobell v. Salazar Settlement Agreement (Settlement) provides
for a $1.9 billion Trust Land Consolidation Fund (Fund) to help address
fractionation. The Settlement makes the Fund available to the
Department to acquire fractional interests in trust or restricted land
from individuals who are willing to sell their interests for fair
market value. The Fund is available for a 10-year period. Any monies
remaining in November 2022 return to the Treasury.
In 2012, immediately after appeals were exhausted through the U.S.
Supreme Court and the Settlement became final, the Secretary of the
Interior (Secretary) established the Buy-Back Program to implement the
land consolidation aspects of the Settlement. The principal goal of the
Program is to acquire fractional land interests through voluntary sales
that place purchased interests into trust for tribes.
When the Program began purchasing fractional land in 2013, the
scope of fractionation included, in part, approximately:
Approximately 150 unique locations with 97,000
fractionated tracts, totaling 11 million tract acres; and
3 million purchasable fractional interests (comprising 8.3
million equivalent acres within the 97,000 tracts) held by
243,000 individual owners residing in all 50 states and in
many foreign countries.
Program implementation thus far has focused on a subset of the 150
locations.\1\ As detailed in reports issued each year, the Program has
considered various factors to determine the sequence of implementation
locations, including the severity of fractionation. To date, the
Program has announced 105 locations for implementation through 2021.
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\1\ Although the Program has identified 150 locations with
fractionated land, it is important to recognize that there are
additional land areas, beyond the 150, which are not currently a focus
of the Program. This includes certain ``off-reservation'' or public
domain lands where tribal jurisdiction is sometimes unclear, as well as
fractionated tracts in Alaska; the Settlement and the Claims Resolution
Act of 2010 provide that the Fund will be distributed in accordance
with provisions of 25 U.S.C. Sec. Sec. 2201 et seq., which includes a
provision specifically excluding lands located within Alaska. See 25
U.S.C. Sec. 2219.
---------------------------------------------------------------------------
Since the Program began making offers in December 2013, more than
$1.18 billion has been paid to landowners with interests at 39 of the
105 locations. Specifically, the Program offers landowners fair market
value for their fractional interests, as required by the Settlement. As
of May 19, 2017, the Program has paid landowners $1,180,837,370 to
consolidate 696,894 interests equivalent to 2,107,109 acres. This
amount includes the base payment of $75 the Program provides to
landowners to compensate them for their time and effort spent in
reviewing and completing their offer packages; in total, the Program
has paid landowners approximately $6 million in base payments.
As of May 19, the Program has acquired land at an average cost of
$558 per acre, with a range of $7.50 per acre for mineral interests
determined to have no viable economic mineralization to $648,817 per
acre for a 2.52 acre tract that was a tribal acquisition priority. As
of February 2017, 75 percent of the interests purchased and 82 percent
of the equivalent acres consolidated cost less than $861 per acre.
More than 13,600 tracts have reached at least 50 percent tribal
ownership as a result of Program purchases. Notable increases in tracts
with at least 50 percent tribal ownership include Navajo (7,000 percent
increase) and Blackfeet (1,600 percent increase). Getting tracts to 50
percent or more tribal ownership enables more effective land use and
management. For example, before Program implementation at the Crow
Creek Indian Reservation, there was a single tract with approximately
1,200 unique owners. After Program implementation, there are now about
850 unique owners, but the Tribe now owns 50.7 percent of the trust
interests. Because the Tribe owns the majority of the trust interests,
the Tribe can make land use decisions, making the BIA leasing process
more efficient.
The Department is able to close IIM accounts of landowners who sell
all their fractional land interests through the Buy-Back Program. To
date, OST has closed 9,370 accounts as a direct result of the Program,
some of which may reopen. It is difficult to close accounts because the
Program is voluntary and because some owners have interests in multiple
locations and may also inherit interests in the future once probates
are completed.
Taking into account Program and other reductions and increases in
interests due to ongoing fractionation and other reasons,\2\ the
present number of fractional interests associated with the 150
locations is 2,552,201, which is a 14 percent reduction since 2013. The
percent reduction for the 39 locations where implementation has
occurred is 21 percent. Location specific results include Blackfeet,
which has seen a 51 percent reduction in fractional interests.
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\2\ Moreover, even as the Program consolidates interests, new
interests are also being created. Ongoing fractionation has resulted in
the addition of nearly 170,000 fractional interests since 2013.
Additionally, 70,000 additional interests were created due to
partitioning work and nearly 19,000 interests were entered into the BIA
title system (Trust Asset and Accounting Management System (TAAMS)) for
several locations in Eastern Oklahoma.
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To date, the Program has expended 75 percent (more than $1.17
billion) of the portion of the Fund available for purchasing fractional
interests. It has also expended 26 percent of the $285 million allowed
for implementation costs ($73.4 million or approximately 6 percent of
land sales), which sum includes mapping, mineral evaluation, appraisal,
and outreach costs to implement the Program, some of which is expended
by tribal governments through cooperative agreements.\3\ The total
amount remaining in the Fund is $585,790,674.
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\3\ The Settlement also authorized the creation of the Cobell
Education Scholarship Fund, overseen by the Cobell Board of Trustees,
which provides financial assistance to American Indian and Alaska
Native students for post-secondary education and training. Based on a
formula explained in the Settlement, the Buy-Back Program provided
funding to the Scholarship Fund. As of April 2017, the Program reached
its cap of $60 million in transfers to the Scholarship Fund.
---------------------------------------------------------------------------
The Program's ability to address fractionation is limited by
various factors, especially the size and term of the Fund and the
voluntary nature of the Program.
The Department has long realized the magnitude of the problem of
fractionation in Indian Country. In 2003, Interior staff testified
before the Senate Committee on Indian Affairs that addressing
fractionation would cost $10 or $20 billion if not addressed quickly.
In 2012, the Department noted that the Fund would not be sufficient to
purchase all fractional interests across Indian Country. In 2016, the
Program estimated the cost of remaining fractional interests at more
than $20 billion, which does not include all fractional interests in
Indian Country. In addition, the Fund is only available for a limited
time of 10 years, currently set to end in November 2022, which has
creates an additional constraint on Program operations.
Another key parameter is that the Program is voluntary. Landowners
who receive offers can chose whether or not to sell their interests. As
of May 19, 2017, the Program had sent offers to 135,283 landowners,
58,422 of whom accepted their offer and chose to sell some or all of
their fractional interests. While the acceptance rate has averaged 43
percent at the 39 locations where the Buy-Back Program had been
implemented to date, it has varied from approximately 80 percent
regarding offers for interests at the Swinomish Indian Reservation to
approximately 23 percent for offers at the Rosebud Indian Reservation.
More than half of the landowners who have received an offer have chosen
not to sell their fractional interests. This could be due to a number
of reasons, including that the cultural heritage associated with the
land is sometimes more important to the landowner than its monetary
worth. In a survey issued by the Program in 2016, landowners indicated
that reasons not to sell included that they wanted to keep land in the
family.
Another limitation is that the Program has avoided certain types of
fractional interests due to their complexity and other factors. For
example, the Program has not been purchasing interests held by
approximately 27,800 deceased individuals with estates to be probated.
Nor has it been purchasing the interests held by more than 6,000
individuals under a legal disability (e.g., non-compos mentis or
minors). Moreover, there are additional owners with interests that will
not be acquired by the Program, such as owners of fee interests or
owners of full (1/1) ownership interests, the latter of which may
fractionate when the owner passes away.
improving the impact of the program
In a recent notice to tribal points of contact at the approximately
150 locations identified by the Program, the Program indicated that it
is undergoing a brief strategy review period during which the
Department is analyzing potential changes to the Program to further
address fractionation. During the strategy review period, the Program
will move forward with implementation at those locations where a fully
executed cooperative or other agreement has been reached between a
tribe and the Program. The Program will wait until the review period is
complete before continuing work at locations where no such agreement
exists.
I have directed the Buy-Back Program to update its purchase offer
strategy to construct landowner purchase offers to better balance
reducing fractionation while also facilitating an increase in the
number of tracts that reach at least 50 percent tribal ownership. This
approach follows evaluation of numerous alternatives and analysis and
it considers various factors, including: greater emphasis on the goal
of reducing fractionation, existing or potential decision-making
ability on tracts, available funding, cost, tribal acquisition
preferences, and past or potential response rate.
During the strategy review period, we have invited tribal
communities to provide their feedback on various strategies, which
could include: further sharing of appraisals, focusing on land value,
interest size (e.g., less than 25 percent ownership in a tract), and
tract control; facilitating co-owner purchases; or revising the
schedule of 105 locations (e.g., adding or removing locations and/or
returning to locations that already received offers). We have been
clear that potential adjustments could change where implementation may
occur, including adding or removing locations and/or returning to
locations where purchase offers have already been sent.
While the Department is doing as much as it can to review and
improve the Program, it is clear Congress has a role as well. The
Department has identified at least two potential paths forward for
Congress' consideration. Ultimately, Congress will determine the
direction Interior goes.
Congress may leave the initial legislation in place and allow the
Program to use the remaining dollars to resolve a small portion of the
ongoing increase in fractionation. After those finances are exhausted,
the Program would no longer be able to continue further work on
resolving fractional interests. Depending on Congress' objectives for
the Program, allowing it to proceed untouched may be sufficient
considering its popularity among tribes across the country. Many tribes
who have actively participated have already seen the benefits of
consolidating the number of landowners for a single tract. The
collective advantages across Indian Country are enormous, including the
restoration of land productivity and production of long-term
sustainability for tribal communities.
That said, the remaining dollars will quickly deplete. In the
alternative, Congress could offer amendments to the legislation which
would allow the Department to leverage the remaining $586 million
dollars to carefully target interests. Such changes could take the form
of granting the Department authority to purchase and hold fractional
interests, which would then be resold to an individual tribal member or
tribe. The revenue collected from those sales would then be placed
directly back into the Buy-Back Program with the intention of funding
future purchases of the most fractionated land.
This revolving fund model would afford us the flexibility to target
specific tracts, purchase interests therein, and even combine
neighboring tracts for sale, which would in turn allow tribes to have
greater control of a greater amount of interests. Leveraging the
limited remaining dollars gives the Department a future to continue our
trust responsibilities to Indian Country while meaningfully addressing
the core problem we initially sought to resolve.
The two alternatives discussed above are intended to commence a
critical dialogue about the future of the Buy-Back Program. In no way
are these suggestions final, nor has Indian Country been formally
consulted on these options. I see my testimony today before the
Committee as an opportunity to update Congress on the severity of the
situation and determine what may be the best path forward. The
Department looks forward to working with Congress on this important
issue.
conclusion
I view the Buy-Back Program as a once in a lifetime opportunity to
meaningfully address fractional interests that plague tribal
communities and their efforts toward sovereignty and self-
determination. Interior's data suggests that the Program has made
relatively little progress in resolving this ongoing problem. In fact,
in my mind we are almost back where we started 8 years later, just
treading water. Fractionated tracts threaten financial interests,
present and future land utilization, and are costly to the Department.
I suggest that the authorizing and appropriating committees of
jurisdiction take a fresh look into the future direction Interior takes
on this Program: a continuation of the status quo or language providing
authorities to leverage the remaining funds.
This concludes my written statement. Thank you for your time, and I
am pleased to answer any questions you may have.
______
Mr. LaMalfa. Thank you for your testimony. We will now
proceed to questions from Members on the panel, and I will
recognize myself first for 5 minutes.
So, indeed, thank you for your information so far. I think
you mentioned in your testimony there were 3 million
purchasable interests----
Mr. Cason. Yes.
Mr. LaMalfa [continuing]. That had been determined by the
Department in 2013. You mentioned that there were 97,000
fractionated tracts, totaling 11 million acres. So, at this
point, 14 percent of those that had been eligible have actually
been handled with approximately a billion dollars--so, about
one-seventh of what could be done. It sounds like we are going
to be pretty short of dollars for the short term.
Now let me jump to the lien situation, which was supposed
to be put in place so that land would be purchased, the lien
would be paid off, therefore putting money back into the fund,
like a revolving fund, where the tribe would end up eventually
owning the land after the lien was satisfied. So, the revolving
fund allows this to keep going on almost into perpetuity,
theoretically.
In 2014, the Secretary determined that the lien requirement
under the Act does not apply at all to the Cobell Land Buy-Back
Program. What do you think of that determination? And is it
even a legal determination, under the law?
Mr. Cason. Mr. Chairman, I think it removed one of the
tools that potentially we could have used to address the
fractionated interest problem. In this case, I mean----
Mr. LaMalfa. You mean in terms of it being a revolving fund
to help replenish the----
Mr. Cason. Yes. I think Representative Torres raised the
issue that we need to take a look at the long-term answer to
address this problem, and that the Cobell settlement, in and of
itself, did not offer enough money to completely address the
fractionation problem. And I agree with that.
The issue for us is what tools do we have to increase our
ability to address the fractionation problem. And the approach
that is currently being used--or has been used in the past 8
years--has been an approach that does the least amount to
leverage the money that Congress made available to address this
problem. And one of those factors was the issue of whether or
not we could place a lien on these productive tracts that were
being given to tribes----
Mr. LaMalfa. Yes, let's focus on that point pretty tightly,
that the lien requirement does not apply at all to the Cobell
land. How could that determination be made?
Mr. Cason. The lien requirement?
Mr. LaMalfa. Yes.
Mr. Cason. As I understand it, it was a decision by
Secretary Salazar that he did not want to impose that upon the
tribes when they were given land.
Mr. LaMalfa. But the original law states differently, does
it not?
Mr. Cason. It does.
Mr. LaMalfa. All right. I guess these lands currently that
are held by individuals in their fractionated form are lands
that are held in trust by the U.S. Government for these
individuals, correct?
Mr. Cason. Yes, that is correct.
Mr. LaMalfa. OK. And as more generations--as it spreads
wider and wider amongst families, largely, the fractions will
only get smaller and more numerous. So, that is the point of
this.
My understanding is that statistically--though an effort
has been made in good faith I think the last few years through
this program to consolidate--the normal attrition rate, the
numbers are actually getting larger of lands that are
fractionated even more and more so as generations move. Is that
correct?
Mr. Cason. Yes. It is my understanding from the staff that,
largely, what they have accomplished in the last 8 years is
dealing with the increase in fractionation that has occurred
over time, and that hasn't increased now because of the
purchase program. But getting at the base of the fractionated
interests that existed at the beginning, we have barely
scratched the surface.
Mr. LaMalfa. I guess the question needs to be asked. Are we
being successful, or do we need to have an entirely different
look at how this would be done?
My view of it is why are we in this situation where we are
pushing individual tribal members to be in this, and to have to
settle up with the tribe? It seems like maybe more autonomy,
more sovereignty, self determination would let them determine
that on their own, especially if a tribe in the neighborhood
can see that there is an economic opportunity. Maybe they would
come to them for that.
Mr. Cason. I think, Mr. Chairman, what I would recommend is
that we actually have more of a conversation about how we would
manage this program in the future, because what we are doing
right now is not very successful at managing the fractionation
problem.
Mr. LaMalfa. OK. I better stop there, my 5 minutes, and I
will now recognize our Ranking Member. Thank you.
Mrs. Torres. Thank you, Mr. Chairman.
Mr. Cason, I apologize if I used the wrong numbers here.
The 23 percent reduction that I cited, I actually got that from
a press release dated April 24, 2017 from your Department, so--
--
Mr. Cason. Congresswoman, don't feel like you need to
apologize, because I am having a hard time finding accurate
numbers as well.
Mrs. Torres. And that is part of the bigger problem that we
have when we talk about transparency issues. It makes it very
difficult for you and for me to do our jobs when we don't have
enough data.
When this program was created and the $1.1 billion was
allocated, was there ever a conversation about this money being
in a place where it could collect interest, so at least if we
are not adding to this pool of money, it is in a place where it
could collect interest?
Mr. Cason. Yes, that did occur. Congresswoman, I sat for
months working with people up here on Capitol Hill, trying to
fashion a settlement to the Cobell lawsuit during President
George Bush's administration, but we did not get all the way
through the process before the administration turned over. So,
it was discussed as a potential. I am not sure whether it did
or did not make it into the final legislation.
Mrs. Torres. OK. When you talked about the sales going back
to individuals, wouldn't that create an even bigger problem,
the problem that you already cite in your testimony of a
checkerboard of tribal lands, where the lands are not
continuous?
Mr. Cason. We have a very complicated land management
pattern, that is for sure. With the allotment era that you
referred to, a lot of the tribal lands were broken up into
allotments and given to individuals, and then we ran into the
issues of succession of interests and the fractionation that
occurred thereafter.
So, right now, we are sitting there with a huge hodge-podge
of individual allotments that are owned by many, many people
and tribal interests. And some tribes have interests in the
individual allotments, so it is a very complicated land
management pattern that is generally not productive.
Mrs. Torres. So, the problem is that the land continues to
fractionate even after we are attempting to reduce
fractionation through the Buy-Back Program. You noted that many
land interests are still held in single ownership, but can
still fractionate after the owner's death. The Bureau of Indian
Affairs used to provide will-writing services to landowners to
address this and to try to prevent further fractionation. This
practice was discontinued in 2005 under the Bush
administration. Do you know why?
Mr. Cason. I do. I was actually part of that process. The
reason why is we were advised by our attorneys that if we, the
Department of the Interior, took on the issue of advising will
construction, that we had potential liability for the results.
So, the determination was made that we should not be involved
in the actual construction of wills.
We did, however, work with other third parties to provide
those services, so that the services were available; but it was
not the Department of the Interior that was actually presenting
a will or drafting the will.
Mrs. Torres. Through a private contractor?
Mr. Cason. I don't recall whether we had private
contractors that we paid for, but we definitely had third-party
organizations that were willing to do that work.
Mrs. Torres. Are there any tribal leaders who have
requested the changes that you are suggesting?
Mr. Cason. I have not had any tribal leaders come in. And I
think, in fairness to everybody, the way that the prior
administration ran this program is a very good deal for tribal
leaders. Essentially, if you take a look at it, we provide
money to the tribe to go out and search for fractionated
interests that they want. We buy those fractionated interests,
and then we give it to them. So, I don't think there is any
tribal leader that would say, ``Gee, I don't want free money.''
Mrs. Torres. Well, not necessarily free money. Remember,
they were the original owners of this land that was taken from
them, pillaged from them.
Are there any tribal leaders who have supported your
proposal through the open comment period?
Mr. Cason. We haven't raised any proposal. And I didn't
give you a proposal either, other than what is working--what we
have going on right now is not materially addressing the
problem. So, if we want to materially address the problem, we
need to look at something different than what we are doing.
So----
Mrs. Torres. Thank you. My time has expired. I thought you
had spoke of bringing forward a proposal.
Mr. LaMalfa. Thank you. We will move to Mrs. Radewagen for
5 minutes.
Mrs. Radewagen. Thank you, Chairman LaMalfa, Ranking Member
Torres, for holding this hearing. And thank you, Secretary
Cason, for your testimony today. It is good to see you again.
Mr. Cason. And nice to see you, too.
Mrs. Radewagen. As we are all aware, the original
appropriation for the Buy-Back Program was $1.9 billion, which
is less than 10 percent of what Interior has estimated to be in
issue with the $20 billion price tag.
With only $585 million of the buy-back fund left, it seems
obvious to me that this is not something we can just spend our
way out of, but rather requires a careful approach and
additional planning.
Secretary Cason, you mentioned some of this in your written
testimony, but could you please highlight for us some of the
strategies or improvements to the program you think would help
Interior use the remaining funds efficiently and maximize the
consolidation of fractured interests?
In addition to these strategies, what would you need from
Congress, in terms of legislation, to help meet the goals of
the program?
Mr. Cason. OK, great question. I think there are a number
of things, potentially, we can do; and it would require some
differences in legislation to allow us to do it.
The way that the program is structured right now, there is
zero opportunity to leverage any of the money that we have
left. And that is a potential problem, because as we are going
through this process--I think today the President is revealing
a budget for Fiscal Year 2018. I think the prospect for the
future is fiscal austerity, and trying to save money for the
taxpayers.
So, at a rate of $100 million per 1 percent, trying to
address this problem--and that is at figuring it is $10 billion
as opposed to $20 billion--it doesn't look very cost-effective
to dump a lot of money into this program.
Things that we could do differently are, if we had the
authority to purchase individual interests and hold those
interests, rather than transferring them to the tribe
immediately, and consolidate tracts so that we could
potentially resell them, would be a way to leverage the funds.
Let me give you an example. If we had a tract that had,
say, 30 owners, and 1 of the owners was a 50 percent owner, I
think we could go through a process of buying the other 50
percent and then selling it to the original anchor owner who
has the 50 percent. But right now we can't do that. Right now,
if we buy that other 50 percent, we give it to the tribe, and
there is no way that we can leverage the funds.
So, I think there are some things that we could do there
that would make it better. I have talked to the staff about
their choices and how they buy land. I would never authorize
spending $650 grand per acre for these fractionated interests.
It is just way too expensive. I would redirect our staff to buy
interests in a much narrower arena, where we get lots of
interests for a little bit of money, as opposed to spending a
lot of money for relatively few interests. So, that is one of
the things that we are taking a look at.
I have discussed with them where we would place our
program, and I think there are areas where we can buy
fractionated interests on an average of $400 or $500 an acre,
as opposed to some other areas that they are currently looking
at that are anywhere between $50,000 and $100,000 an acre. So,
I think if we make some wise choices about where we go, we can
leverage the money a lot better than the way we do it right
now.
I think these are things that we would have to talk to you
folks about and see if you have direction you want to offer.
Otherwise, it will be basically up to me to try to redefine the
program.
Mrs. Radewagen. Thank you, Mr. Chairman. I yield back.
Mr. LaMalfa. OK. We will go next to Mr. Soto for 5 minutes.
Mr. Soto. Thank you, Chairman. I had more of a policy
question about how to potentially avoid some of these issues in
the future. It appears from the notes that fractionation occurs
because you have some individuals, Native Americans, who pass
intestate. Is that correct?
Mr. Cason. Yes.
Mr. Soto. And there is nothing under law that addresses
that situation currently, other than the local intestate laws
of the tribe or of the state?
Mr. Cason. Well, that is not quite true, Congressman.
Congress has been wrestling with this issue for quite a while.
And in the legislation that we work with, there have been a
number of attempts to try and find solutions where somebody
passes intestate but has minor fractional interests, and how
those are addressed. And there has been some opportunity with
legislation to purchase interests in probate, if you know what
their values are and you can liquidate those.
But all of the attempts that we have made so far have not
been effective at really dealing with this problem, because it
is so widespread and so broad that the tinkering on the edges
of the margins has not corrected the problem.
Mr. Soto. So, if we came up with a law that said if there
was no claim by the heirs within a certain amount of time, you
could look at imminent domain, maybe you could look at up to 20
or 30 years, if we had to then revert back to the tribe after
that claim period has lapsed, would that be something that may
help to avoid this in the future?
Mr. Cason. I suppose that is true in certain isolated
cases. My reaction to your question is we have a category of
landowners who are called ``Whereabouts Unknown.'' And in those
particular cases where we have a whereabouts unknown, and we
don't know how to communicate to them that they have interest
in land, then it might be possible having some kind of
reversionary clause, or reversionary possibility might address
those issues.
But that is not the big driver for our program, so I would
say that is one of the marginal fixes where, potentially, we
could get some of the interests that way.
Mr. Soto. What is the scenario for the big--what is the big
driver scenario, then?
Mr. Cason. The big driver on this program is how do we stop
fractionation to begin with. And I would think that one of the
things that we might want to consider--but it would require
legislation--is imposing a deed restriction on the allotments
to not allow them to fractionate.
And just for example, if you had a fractionated property
that had two owners, so each owned 50 percent of undivided
interest, you would have a deed restriction that you pass on to
an heir the way that you got it, 50 percent--either one or two
heirs, but it does not go beyond 50 percent. That would help
stem the tide of future fractionation.
But Congress has been unwilling in the past to entertain
something like that because everyone likes to have that
opportunity of, if I die, I want to pass on whatever assets I
have to all my children. So, if I have four or five children, I
want to pass on an interest to each of them.
Mr. Soto. Couldn't we do that as a baseline in the case of
intestate, or in the case where a person's intent was not
actually listed? So, it would be the baseline unless any
landowner said otherwise; and we would have, in the situation
where someone was neglectful to do anything, these baseline
rules with the ability to waive, simply by having a writing
that says otherwise.
Mr. Cason. Congressman, I think the answer is, in my
opinion--Congress is the trust settlor for all of Indian
Country, so Congress has the ability to construct a legal
construct for how we address these issues. And the balance
point that Congress has to strike is that desire to allow
families to operate the way that families normally do versus
the cost and impositions that occur with fractionation.
If you take a look at what happens as a result, we end up
at this point in time with a huge number of fractionated
interests that are, basically, overwhelming. And it costs us a
ton of money to address these in several different ways. For
instance, on realty, we have to keep track of each one of these
fractionated interests and make sure that we can add up and
have recorded all of the interests on a particular tract, no
matter how small they get, so that we can get to one over one.
One of the suggestions I would make to you folks is that if
you take any page that is in front of you, we have fractionated
interests that, relative to your page, are equal to or smaller
than a period at the end of the sentence on a page. We actually
measure some of these fractionated interests in parts per
quadrillion, so it has gone to a ridiculous end.
So, I am thoughtful that if you really want to solve the
problem, that we need to do something different than we have
been doing. But if all you want to do is just try to keep it in
check, keeping it in check at this point is costing us $100
million per 1 percent, to keep it in check. It is a difficult
problem.
Mr. LaMalfa. Thank you. OK. The gentleman yields back. I
will now recognize Mr. Bergman for 5 minutes.
Mr. Bergman. Thank you, Mr. Chairman, for having the
hearing today. In the first district of Michigan we have eight
different tribes. While this is not about our geographical
area, it is very informative for me as I serve those folks to
ensure that we, as the Federal Government, do the right thing
for our Native Americans and all the tribes.
One quick question. Of the monies that were allocated, the
$3.412 billion, how much of that, if any, has been spent on
legal fees?
Mr. Cason. As I recall the settlement for Cobell, the
attorneys agreed to $99 million as their cut.
Mr. Bergman. So, just a one-time fee for that?
Mr. Cason. Yes.
Mr. Bergman. So, any monies that are being expended now are
not for legal fees?
Mr. Cason. Yes. The remainder of the money was divided,
$1.9 billion of it was associated with buying fractionated
interests, and the remainder was sent out as payments to Indian
Country to individual allottees who may or may not have been
affected by the accounting of the Department.
Mr. Bergman. OK, thank you. I yield back.
Mr. LaMalfa. The gentleman yields back. We will go for a
second round here.
I would like to follow on that--oh, I am sorry, I messed
that up. I recognize Ms. Hanabusa for 5 minutes. My apologies.
Ms. Hanabusa. That is all right. Thank you, Mr. Chair.
Mr. Cason, in reviewing the recent FR submittals in the
Federal Register of April 12, 2017, it seems to say there that
you had a listening session. Were you a party to that listening
session?
Mr. Cason. No, ma'am. I didn't go to that; my staff went.
Ms. Hanabusa. Your staff went. But it seems to be an annual
event, correct?
Mr. Cason. Yes.
Ms. Hanabusa. So, I assume that your staff, who may last
through administrations, you have some there who have actually
attended these listening sessions over a period of time? Would
that be a correct assumption?
Mr. Cason. Yes, ma'am.
Ms. Hanabusa. I assume also that, because of the
deadlines--in other words, you know we are going to stop
funding in 2022, or we are going to run out of funding in 2022,
and at that point in time it is actually estimated that more
than 4 million equivalent purchasable fractionated acres will
still exist.
And I assume also at that time they are saying that there
will be some funds that will be returned to the Treasury, as
well. It is anticipated.
Mr. Cason. I would say, Congresswoman, that the intention
of the Department in the last administration was to spend all
of that money before the end of 2022, so that none of it would
be returned.
Ms. Hanabusa. But would you still agree that there would be
an expectation that about 4 million acres would still be
fractionated out there?
Mr. Cason. About 4 million fractionated interests, total.
The purchasable piece is basically an artifact of the program,
where they have separated out a number of fractionated
interests that they have lesser interests in. They could be
off-reservation tracts, they could be tracts owned by non-coms,
or could be tribal interests, as well, that did not need to be
purchased. So, they have separated out a number of interests
that they did not plan to purchase, but they still exist.
Ms. Hanabusa. I am very interested in one fundamental
issue, which is Cobell is a settlement of a lawsuit. Right? And
the legislation that fell from that are all in an effort to
settle that lawsuit.
So, what happens in 2022, in your mind, when you still have
fractionated shares out there, we no longer have money, and
there are still about 4 million out there--what do you
anticipate occurring? Do you anticipate going back to the
courts and saying, ``This is the best job we could do,'' or do
you come back to Congress and say, ``We still have to do more''
?
I mean, I assume this is something that is going on in
these listening sessions, as to where do we go from now to
2022, and after 2022.
Mr. Cason. I think that is a great question. The staff that
has been working on this program over the last administration
has expressed a view that when the money runs out, they are
anticipating asking Congress for more money.
In my opinion, I doubt that this Administration would do
that, that we have already been given what I consider to be a
once in more than one generation opportunity to address this
problem, and that the problem has not been effectively
addressed. So, I doubt that this Administration would come to
Congress and ask for a big pile of more money to continue doing
the same thing.
Ms. Hanabusa. What would be this Administration's position
to Congress as you would anticipate it to be?
For example, would it be, ``Look, we did what we said we
were going to do under the initial settlement of this lawsuit,
we had a sum certain and we spent that money, and therefore we
have settled'' ? Do you believe that would be the position of
this Administration, so the Cobell settlement is deemed to be
finished or satisfied?
Mr. Cason. Well, I think if you continued forward doing
nothing different, then you could spend all the money and say
we have satisfied the Cobell requirements. The reason that I
came up here to visit with you folks is because we have at
least an opportunity to think about other ways to leverage the
remaining money.
So, $1.3 billion of the $1.9 billion is gone, and we have
$600 million, basically, left. So, the choice today is do we
want to approach this problem in a little different way? Is
there a way that we can actually change the requirements so
that we can leverage the other $600 million that is there? Or
is our goal basically just to allow the program to exhaust
itself under the prior administration's plan, and everybody
will be happy with the way the program is implemented, but it
doesn't get anything done?
The thing that is important----
Ms. Hanabusa. I am sorry, my time is expired.
Mr. LaMalfa. Ms. Hanabusa, would you like to do your second
round right now, since you are on a roll?
Ms. Hanabusa. If you will----
Mr. LaMalfa. Five more minutes.
Ms. Hanabusa. Right, thank you.
Mr. LaMalfa. You are welcome.
Ms. Hanabusa. So, you have me for 5 more minutes, so bear
with me. So, those are the alternatives, as I see it. I assume
that you have had this discussion, as well. We are going to
either let the program go the way it is, and at that point in
time you would have said we have done everything and,
therefore, the Cobell settlement is satisfied.
Mr. Cason. Is done.
Ms. Hanabusa. And your other alternative is, OK, we have
$600 million more, which means that you are accepting the
amount of money that has been allocated--because, in your
words, that seems to be more than a generous amount for a
generation to satisfy.
In that situation, do you not believe that you need the
whole ``concurrence'' of the plaintiffs and the parties in
interest in order to modify the program as it developed over a
period of time, and that is not something that the Secretary
can unilaterally implement?
Mr. Cason. Actually, no, I don't think that. And the reason
I say that is because the settlement was basically a
legislative settlement, so Congress has the opportunity to
amend that settlement if they choose to.
If we were in a different environment, where it was a
litigation settlement, then I would agree with you. We would
need the plaintiffs to agree with what we are doing.
Ms. Hanabusa. But----
Mr. Cason. But in this particular case, I don't think you
do.
Ms. Hanabusa. But don't you believe that the settlement,
irrespective of the fact that it really did receive the
concurrence of the plaintiff--so, even if it may not have been
just purely a legal settlement, it still had the concurrence of
the plaintiffs?
So, do you still believe that the Congress itself can take
the unilateral action of passing another piece of legislation
and saying this is how we are going to expend the remaining
amounts of the Cobell settlement, and still have it qualify as
the settlement?
Mr. Cason. I think Congress has the authority to make
changes. And, Congresswoman, what I would suggest is what we
are doing is not working. We can keep doing what we are doing
right now and change nothing, and end up spending the other
$600 million and basically not accomplish much. So, we can do
that, and I am sure the plaintiffs would be happy and the
tribes would be happy. But it does not help solve our
fractionation problem.
Ms. Hanabusa. But, Mr. Cason, the problem that I have with
what you just said is the fact that Congress created the
problem back in 1887, or whatever that year was, in the Dawes
Act. I mean we created the problem.
Mr. Cason. Right.
Ms. Hanabusa. We created, obviously, the Cobell settlement.
And now you are coming in and saying we have to do it again. We
have to do something else and take another stab at this. And I
don't know if we are going to do it any better.
But the bottom line, it seems to me, in all of this is that
you are having these annual listening sessions. What are the
people saying to the Department? What are they saying? What do
they want? Is their reaction the same as yours? In other words,
it is not working?
Mr. Cason. No. And I would say, I have to bifurcate the
answer a little bit. What I mean by that is there is a problem
for----
Ms. Hanabusa. You have a little more than a minute, so you
have to be very concise.
Mr. Cason. Well, Mr. Chairman, could I have a little bit
more time to explain?
Mr. LaMalfa. We will see how you do.
Mr. Cason. OK. I think you have to bifurcate that. We,
which is Congress and the executive branch, have a problem with
fractionation. And on the other side, when we are talking to
folks in the listening sessions, those people do not have our
same problem.
The folks that go to the listening sessions are more
interested in dividing the pie that is currently available,
that $600 million. They are interested in how much of this am I
going to be able to get--so I want money to come to my
reservation, I want the number of dollars to be bigger, I need
a contract so I can go out and look for interests, I need you
to buy my interests.
All of the listening session is oriented toward the people
who want to consume the money. But for us, Congress and the
executive branch, we have a different problem. We have to
manage whatever these fractionated interests are. I have a
realty program in the Bureau of Indian Affairs that has to keep
track of these 4 million interests, so we spend tens of
millions of dollars every year trying to do that.
If an individual has a fractionated interest, I have to
probate it. So, we spend thousands of dollars on those
probates, each one of them, and the prognosis for the number of
probates we have to do is up to $168 million to do those.
I also have other programmatic issues that are affected by
this that we, collectively, have to address. So, there are two
different problems that we are trying to address, or two
different issues. One is our collective problem, and the other
is how people want to divide up the pie--we don't get that
conversation in a listening session.
Ms. Hanabusa. Thank you, Mr. Chair, I yield back.
Mr. LaMalfa. OK, thank you. Going back here once again,
this is a kind of an obtuse situation we have here. But going
back, we have a 1994 law that was intended to fix past problems
of bad recordkeeping.
So, when the lawsuit came about in 1996, the Cobell
lawsuit, it was originally seeking to just require the Interior
to complete its job on going back and making an accounting of
these lands, who owned them, et cetera, et cetera. More of a
political solution was found in 2009 with the Cobell lawsuit to
kind of wipe away the past and go forward with the $1.9 billion
out of a total picture of $3.4 billion to settle this.
So, we come back to the original question being--how is the
Department doing on accounting for the lands, and who all owned
it? Instead, we are just going to buy pieces of those lands and
give them to the appropriate tribe in that neighborhood, in
that reservation.
You talk about the listening on that. Yes, of course, there
are people that, if you are buying these pieces, these small
parcels, whatever they are, from individual Indians, and now it
is a gift to a tribe overall, of course they are happy to see
that. The lien issue worked pretty well, as a revolving fund,
since the problem we were trying to fix was all these little
tiny fractions of land.
Now, all of a sudden, we have a drain on the Treasury,
since the lien process, or some other mechanism of fronting the
money to buy it from the individual, these lands that are held
in trust for individual Indians--and no one wants to use
eminent domain, it was being talked about, or some other trick.
We have done enough to the Indians on their land over centuries
as it is, so we are going to respect that.
And we also know that for a lot of individuals there is a
heritage that goes with this land. There is a long-term--a
family. My family, we are on the fifth generation of farming
our land in Northern California, and that means something.
So, we really see that a solution is not going to be more
money in 2022, or in some years from now when this runs out. We
don't seem to be able to leverage it, unless we were able to
reverse the course that Mr. Salazar determined a few years ago,
that a lien is not necessary or usable. If we are not doing
either one of those, then we are on an unsustainable path here.
So, wouldn't the solution be outside of this box, where we
have individual tribal members that, if they didn't have the
Federal Government after them saying, hey, we have to--if the
Federal Government wasn't in the business of accounting for it,
and spending tens of millions of dollars of being in the realty
business, as you said, maybe they would just like to be left
alone. In order for them to be left alone, what if the land
became in their individual full property right?
And then, if they are in the neighborhood of a developable
resource, and somebody says, ``Hey, you know what? You 64
members of this family here that all have this little piece,
you have something there that we could develop here,
economically,'' that the tribe could come in and say, ``You
know, we will buy all your \1/64\, a fraction of all that, or
work with you on that and develop whatever might be there.''
We have Washington, DC, and their meddling out of the way
of what the tribes would like to do. Wouldn't that be the win?
There is your question.
Mr. Cason. Mr. Chairman, there are lots of possibilities in
Indian Country to address things like that. And what I mean by
that is, one of the things that we have researched and drawn
conclusions on is how many fractionated interests can
landowners actually sustain to effectively manage their lands.
Because our first choice is, if a landowner is able to exercise
jurisdiction over their land, and make choices about how to
effectively use it, that is terrific. That is what we want.
And what we found is once you get beyond about 10 or 12
interests, it becomes effectively unmanageable, because----
Mr. LaMalfa. Well, let's jump in there. You talked a while
about maybe one happens to have 50 percent and the other 50
percent of a particular parcel is divided amongst 12.
Mr. Cason. Right.
Mr. LaMalfa. Well, that seems like it might be a family
decision, if they are motivated by an idea somebody has of
developing or doing something economically with that land. We
do not need Washington, DC telling them how to do that.
Mr. Cason. Right.
Mr. LaMalfa. So, if it is land that is held in trust, then
perhaps--would it be converted to some other form, fee land or
something, where they have the full property right, and they
can determine and they can account for it, and they can decide
amongst themselves, like, well, why don't all 12 of us decide
to--1 block of 12, 50 percent, another--you know, something
like that?
Mr. Cason. Right.
Mr. LaMalfa. How would that look?
Mr. Cason. Well, we actually do that now.
Mr. LaMalfa. But again, the Department is complaining about
tens of millions of dollars administration, and we have the
Department in the middle of their business.
Mr. Cason. Well, I think it ends up being an issue of how
many of these fractionated interests--let me go back for a
second.
We have on the order of----
Mr. LaMalfa. I better--hold that thought until the next
round, so I can recognize our colleagues. Thank you.
Mr. Cason. I am sorry.
Mr. LaMalfa. OK, no, it is a long deal.
Mrs. Torres for 5 minutes, thank you.
Mrs. Torres. Thank you, Mr. Chairman.
It seems like we were going back and forth, talking about
theories, and maybe we ought to try this, maybe we ought to try
that. The primary goal of the program is to strengthen tribal
sovereignty, correct?
Mr. Cason. Actually, no. The primary reason for the Cobell
settlement was to address the individual accounting for
individuals in Indian Country.
Mrs. Torres. Which would strengthen tribal sovereignty and
self-determination.
Mr. Cason. Not really. The Cobell settlement, or the Cobell
litigation, was basically oriented toward addressing issues of
accounting for individual Indians and the payments of royalties
to them. It became an extra piece to add the $1.9 billion on to
the Cobell settlement----
Mrs. Torres. Let me stop you because time is going by
really quick, and it seems like we are going back and forth and
not even sticking to your statement. So, I am getting a lot of
very confusing information. This is why we wrote a letter or
letters, and are requesting information back in written form--
--
Mr. Cason. OK.
Mrs. Torres [continuing]. So that I can compare apples to
apples. I mean certainly you can agree with me on that issue.
Land is going to have different costs in different parts of
the country. So, I think that when we look at maximizing this
dollar, if you are only looking at the cost of land, and not
really looking at the bigger picture of what the tribes really
need, it is a short-sighted plan.
At some point, I hope that you will, in consultation with
the tribes, come up with an ending to this. Right? Whether it
is a request for more money to Congress, whether it is figuring
out how this plan--but not quite a plan--that you have proposed
is going to be implemented. But we need to have that as a
starting point. Do you understand what I am saying?
Mr. Cason. That is part of the reason I am here, what we
are doing is not working, and so I wanted to start a
conversation with you folks about what can we do differently.
Mrs. Torres. I understand that, sir, but your testimony,
what you have verbally stated to us and what you have sent to
us in writing, is a bit conflicting, and that is why I am
trying to figure out, really, what your intentions are in
moving forward.
Let me ask you this. Don't tribes already have the
authority to purchase a fractionated interest from individuals?
Mr. Cason. They do have certain authorities to purchase
interests.
Mrs. Torres. But they are not----
Mr. Cason. But why would they do that, when we give it to
them for free?
Mrs. Torres. No. Or they wouldn't do that because maybe
they don't have the money. Not every tribe has a casino in
their backyard, or has a very successful business that is a
money-making business for them. Not all tribes are the same,
sir. I hope you understand that.
Mr. Cason. Yes, Congresswoman, I do understand that, and I
have spent a lot of time with the Indian tribes. So, yes, I do
understand that.
Mrs. Torres. So, if they can already purchase the land and
they are not doing it because they cannot afford it, or because
they are, as you stated, too greedy to buy their own land--I
don't know how that would happen, when every conversation that
I have with them is about getting the property under tribal
sovereignty. It just seems to me that we have really set them
up to fail.
When this program was initially created, we should have
known that we were not putting enough money, and we should have
written an ending to this program. Where do we go, should the
$1.1 billion not be enough? We should have been collecting
interest on this money that has been sitting there in an
account somewhere.
Once again, I think we have been shortsighted in helping
tribes purchase their own land. So, I am disappointed with our
ability to get information from the Department, and I hope to
be able to follow up with you, and I hope that you will be in a
better position, so that we don't have to talk about press
releases that have inaccurate information.
Mr. Cason. OK. Thank you, Congresswoman.
Mr. LaMalfa. The gentlelady yields back.
Mr. Gallego, would you like to be recognized for 5 minutes?
Not quite? OK.
It's back in my court, then. All right, earlier on you
suggested a couple of options.
Status quo, which I think there is probably fairly broad
dissatisfaction with the sustainability of that. We do not seem
to be narrowing, at a pace, the number of fractionated lands in
a way that you would call a success, long term.
One idea, again, letting the Interior come back to the
revolving fund concept, the lien concept, whichever term you
want to use, so that a tribe that wants to come forward, or a
group of people that are individual tribal members that own the
lands, are approached with an economic opportunity. Maybe they
have energy, maybe they have something else on that land that
they would develop. They could then move forward on their own
without the Department of the Interior being that big brother
in the way of that.
So, talk a little more about the revolving fund and how you
felt that was going before that was wiped away in the, I
believe, 2009 decision. Oh, 2014, sorry, yes.
Mr. Cason. I am not familiar that the Department actually
collected any monies out of the revolving fund, one way or the
other. I would be happy to get back to you with an answer on
that. My sense is that establishing liens in the past has been
problematic, because the Department never spent very much
energy in collecting any of the monies generated by Indian
lands that were under lien.
So, I suspect I wouldn't find very much if I go look, but I
would be happy to do that.
Mr. LaMalfa. OK. I would suspect it is probably close,
because the numbers we are talking about, the numbers of
parcels or potential, could become an accounting nightmare,
additionally, to what you already have.
Mr. Cason. Yes, that is one of the reasons the Department
did not collect liens.
Mr. LaMalfa. So, a streamlined process of consolidation
that leads to the autonomy of individuals, if they want to be
participants or not. Again, if people have this fractionated
land and they are happy with it, then who are we to say,
``Well, you need to cut a deal with your cousins or a governing
tribe somewhere,'' if they are happy with that situation?
Again, it is a heritage issue for some.
So, what is the most effective tool to get the Department
of the Interior out of the middle of that process of accounting
for it or not? I think that is an important discussion, over-
arching, so we are not doing this any more. Because I keep
coming back to the question when it was first brought to me.
Why are we doing this?
My interest, part of the interest in working on this
Committee is working for more Indian sovereignty and more of
their own ability to pursue their interests as they see fit.
And this DC partnership is not always very conducive to that,
and on the fiscal side, it has not shown to be cost-effective
for the taxpayers.
So, with that, I will pause here. Mr. Gallego, would you
like to be recognized for 5 minutes? Mr. Gallego.
Mr. Gallego. Great. Thank you.
Mr. Cason, is that correct?
Mr. Cason. Yes.
Mr. Gallego. Thank you, Mr. Cason. I had to catch up and
read your testimony. Just maybe one or two questions.
The first question is, the Indian Reorganization Act was
enacted to restore tribal homelands to the tribes after the
Dawes Act, which, as you know, resulted in over 90 million
acres of land loss for the tribal--tribes have still not
recovered from the failed policies of the Dawes Act, and they
are still--now the current statements out of the Department and
a hearing scheduled for tomorrow to see how the Indian
Reorganization Act can be updated.
So, what is specifically your view on where the Indian
Reorganization Act needs to be--how it should be updated, and
what ways do you think that should happen?
Mr. Cason. I think for answering this question we do not
need to do anything with the Indian Reorganization Act.
Mr. Gallego. So, you do not believe that we have to update
it at all? It currently works as--it is highly functioning and
it is serving its purpose?
Mr. Cason. I would say that since the Act was in 1934,
there has been so much successive legislation that we do not
need to go back to the 1934 Act to address this problem.
Mr. Gallego. I yield back. Thank you.
Mr. LaMalfa. Do you have any more questions, Mr. Gallego?
OK, the gentleman yields back.
I think, with that, if there is no more business in front
of us here--I do appreciate Mr. Cason for his appearance today
and the important testimony, as we work through this.
I think Committee members would like to follow up with
additional questions, so we would have that opportunity to have
you respond to those in writing. Under Committee Rule 3(o),
members of the Committee must submit witness questions within 3
business days following the hearing for the hearing record, and
it will be held open for 10 business days for these responses.
If there is no further business in front of the Committee,
without objection, the Subcommittee stands adjourned.
[Whereupon, at 3:12 p.m., the Subcommittee was adjourned.]
[LIST OF DOCUMENTS SUBMITTED FOR THE RECORD RETAINED IN THE COMMITTEE'S
OFFICIAL FILES]
-- Ranking Member Torres Submission: Choctaw Nation of
Oklahoma Letter addressed to Chairman LaMalfa and
Ranking Member Torres with written testimony dated
May 23, 2017.
-- Ranking Member Torres Submission: Mandan, Hidatsa and
Arikara Nation of the Fort Berthold Reservation
Comments on Land Buy-Back Program for Tribal
Nations Under the Cobell Settlement dated May 31,
2017.
-- Ranking Member Torres Submission: Comments for the Record
from the Quinault Indian Nation dated May 23, 2017.
-- Ranking Member Torres Submission: Statement of Troy Scott
Weston, President of the Oglala Sioux Tribe dated
May 23, 2017.
[all]