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Bush Returning U.S. to Termination Policy

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by Brad Jolly, Partner

October 30, 2006

In what is yet another example of the Bush Administration proving that those who do not learn from the past are doomed to repeat it, the administration has responded to the Cobell Settlement before Congress by adding provisions to slowly terminate the federal trust responsibility over both individual Indian and tribal trust lands. In a document entitled "New Issues for S.1439," the Bush administration has proposed that the Cobell settlement legislation include provisions that would consolidate fractionated Indian lands over the next 10 years to 10 owners and convert the federal trust relationship into a "beneficiary-managed" trust under which the United States would have no liability.

The specific terms of the Bush proposal would consolidate fractionated trust lands using both voluntary and involuntary means over the next 10 years. After consolidation, the management of Indian lands, including tribal lands, would shift to the so-called "beneficiary-managed" trust. According to the briefing paper released by the Senate Indian Affairs Committee, the land would retain its trust status for purposes of exemption from state taxation, but landowners would receive all income from the land directly, removing the responsibility for collecting and distributing income from trust lands from the Bureau of Indian Affairs ("BIA"). Additionally, BIA approval for leases would no longer be required. However, the United States would supposedly be responsible for preventing involuntary alienation of land, approving transfers of title, maintaining title records, and probating trust estates. The BIA would, supposedly, provide "management" financial support and technical assistance during the "transition period" to "assist owners in becoming efficient property owners and managers."

More disturbingly, the administration's proposal would require the resolution of all tribal trust claims in addition to the individual trust claims to be settled under the current draft of the legislation. The administration proposes setting up a judgment fund whereby tribes would receive a percentage based on its current landholdings and income generated from those landholdings. Of course, the government's current determination of the balance of all trust accounts would be deemed accurate. In other words, any money the United States stole, lost, or otherwise mismanaged would simply be gone and forgotten.

Finally, the administration's proposal would "limit" the government's liability during the 10 year consolidation period and the period of time from then until the New Termination is complete. After that, the United States could never be held liable for damages for any of its future mismanagement. It could only be forced to "correct errors."

At first glance, some may consider the removal of BIA regulation and approval of leases beneficial to individuals and tribes by removing a bureaucratic hurdle from this form of economic development. However, there are other legal implications to removing federal regulation of land leasing. For example, jurisdictional issues in Indian country can sometimes turn on the question, at least in part, of how much government regulation and involvement exists with respect to the subject matter -- the preemption analysis. The extensive government regulation of leasing provides a barrier to state regulation of what otherwise is often the conduct of non-Indians in Indian country - in many cases, it can stop at least one of the many persistent intrusions of states into the sovereign sphere of Indian nations, especially when structured and handled in a manner which ensures the exclusion of other state interests. With the Supreme Court's ever-increasing desire to increase states' rights at the destruction of tribal sovereignty and self-government, every available legislative and regulatory barrier to state incursions into Indian country must be preserved. The Bush administration's proposal would tear down one such barrier.

(Go to Articles & Writings)

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