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August 22, 2014

GENERAL MEMORANDUM 14-064

Interior Secretary Jewell Reaffirms Federal Trust Relationship With Indian Tribes

On August 20, 2014, Interior Secretary Sally Jewell issued Secretarial OrderNo. 3335 (attached) which reaffirms the Interior Department's federal trust responsibilityto federally-recognized Indian tribes and individual Indian beneficiaries. SecretaryJewell issued the Order in response to recommendations made by the SecretarialCommission on Indian Trust Administration and Reform.

The Order reflects the work of the Commission which spent considerable effort todefine the scope and nature of the trust responsibility.1 The Order says that, "The trustresponsibility consists of the highest moral obligations that the United States must meetto ensure the protection of tribal and individual Indian lands, assets, resources, and treatyand similarly recognized rights." The Order also emphasizes the Department's liability toIndian tribes for certain breaches of trust, stating that the Supreme Court has "concludedthat certain obligations are so fundamental to the role of a trustee that the United Statesmust be held accountable for failing to conduct itself in a manner that meets the standardof a common law trustee."

The Order recites the underpinnings of the trust relationship and its manifestationthrough acts of Congress, Presidential actions, court decisions, and Departmental policy.The order also recognizes the Department's shortcoming with respect to themismanagement of tribal and individual Indian trust assets. The Order says that theDepartment has attempted "to rebuild the trust relationship" with tribes by settlingnumerous breach of trust lawsuits, including the settlement of the Cobell lawsuit.

The Order sets forth seven "guiding principles" which the Secretary has orderedthe entire Department to honor:

1. Respect tribal sovereignty and self-determination, which includes the right ofIndian tribes to make important decisions about their own best interests.

1 The Commission did not end up actually providing a definition of the trust responsibility. Instead, theCommission cited the 1977 American Indian Policy Review Commission's report which included astatement from the National Tribal Chairman's Association which "categorized the trust responsibility asincluding 1) protection and proper management of Indian resources, properties and assets; 2) protectionsand support of tribal sovereignty; and 3) provision of community and social services to tribal members."The Commission recommended that Congress "should delineate the trust responsibility with morespecificity, accompanied by robust judicial enforcement provisions … and the Administration, Congressand Indian tribes should work to advance agreed‐upon legislation."

General Memorandum 14-064August 22, 2014


2. Ensure to the maximum extent possible that trust and restricted fee lands, trustresources, and treaty and similarly recognized rights are protected.

3. Be responsive and informative in all communications and interactions with Indiantribes and individual Indian beneficiaries.

4. Work in partnership with Indian tribes on mutually beneficial projects.

5. Work with Indian tribes and individual Indian beneficiaries to avoid or resolveconflicts to the maximum extent possible in a manner that accommodates andprotects trust and restricted fee lands, trust resources, and treaty and similarlyrecognized rights.

6. Work collaboratively and in a timely fashion with Indian tribes and individualIndian beneficiaries when evaluating requests to take affirmative action to protecttrust and restricted fee lands, trust resources, and treaty and similarly recognizedrights.

7. When circumstances warrant, seek advice from the Office of the Solicitor toensure that decisions impacting Indian tribes and/or individual Indianbeneficiaries are consistent with the trust responsibility.

Although the principles reference the "rights" of tribes, we note that the Orderitself states that it is "for guidance purposes only" and "is not intended to, and does not,create any right to administrative or judicial review or any legal right or benefit,substantive or procedural, enforceable by a party against the United States, its agencies,or instrumentalities, its officers or employees, or any other person."

The Order is significant because it is an unprecedented attempt by a federalDepartment to articulate the importance of the trust responsibility to Indian tribes andindividuals and prescribe a set of policies designed to advance, instead of hinder, its ownobligations to fulfill that responsibility.

Secretary Jewell also issued an eleven page paper (attached) reporting on steps theInterior Department has taken or will take in response to the Commission's report. Thepaper describes its actions to:

Create an interagency service center to support Indian oil and gas development.

Create and implement a strategic plan to improve customer service, as well asensuring proper contact information is included on the Office of the SpecialTrustee website and individual beneficiary statements.

Use market studies, information technology, and develop an automated MassAppraisal Valuation System to speed up land appraisals.

Begin examining probate reform options.

Publish a proposed rule to take land into trust for Alaska Native tribes.

General Memorandum 14-064August 22, 2014


We note that the Order supplements but does not supplant Secretary Ken Salazar's2011 Secretarial Order No. 3317 which sets for the Department's policy for consultingwith Indian Tribes. For further information on Secretarial Order No. 3317 see ourGeneral Memorandum 11-152 of December 16, 2011.

Please let us know if you would like to have additional information regardingSecretarial Order No. 3335.

# # #

Inquiries may be directed to:Geoffrey Strommer ([email protected])Chris Stearns ([email protected])Marie Howard ([email protected])

mailto:[email protected]



ORDER NO. 3335

THE SECRETARY OF THE INTERIOR

WASHINGTON

Subject: Reaffirmation of the Federal Trust Responsibility to Federally Recognized Indian Tribes and Individual Indian Beneficiaries

Sec. 1 Purpose. In 2009, Secretary's Order No. 3292 established a Secretarial Commission on Indian Trust Administration and Reform (Commission). The Commission issued its Final Report and Recommendations in December 2013, which sets forth its views and recommendations regarding the United States' trust responsibility. In response to the report, this

. Order sets forth guiding principles that bureaus and offices will follow to ensure that the Department of the Interior (Department) fulfills its trust responsibility.

Sec. 2 Authority. This Order is issued pursuant to the U.S. Constitution, treaties, statutes, Executive Orders, and other Federal laws that form the foundation of the Federal-tribal trust relationship and in recognition of the United States' trust responsibility to all federally recognized Indian tribes and individual Indian beneficiaries.

Sec. 3 Background. The trust responsibility is a well-established legal principle that has its origins with the formation of the United States Government. In the modem era, Presidents, Congress, and past Secretaries of the Interior have recognized the trust responsibility repeatedly, and have strongly emphasized the importance of honoring the United States' trust responsibility to federally recognized tribes and individual Indian beneficiaries.

a. Legal Foundation. The United States' trust responsibility is a well-established legal obligation that originates from the unique, historical relationship between the United States and Indian tribes. The Constitution recognized Indian tribes as entities distinct from states and foreign nations. Dating back as early as 1831, the United States formally recognized the existence of the Federal trust relationship toward Indian tribes. As Chief Justice John Marshall observed, "[t]he condition of the Indians in relation to the United States is perhaps unlike that of any other two people in existence ... marked by peculiar and cardinal distinctions which exist nowhere else." Cherokee Nation v. Georgia, 30 U.S. 1, 16 (183·1). The trust responsibility consists of the highest moral obligations that the United States must meet to ensure the protection of tribal and individual Indian lands, assets, resources, and treaty and similarly recognized rights. See generally Cohen's Handbook of Federal Indian Law§ 5.04[3] (Nell Jessup Newton ed., 2012); Seminole Nation v. United States, 316 U.S. 286,296-97 (1942).

The U.S. Supreme Court has repeatedly opined on the meaning of the United States' trust responsibility. Most recently, in 2011, in United States v. Jicarilla, the Supreme Court recognized the existence of the trust relationship and noted that the "Government, following 'a humane and self-imposed policy ... has charged itself with moral obligations of the highest responsibility and trust,' obligations 'to the fulfillment of which the national honor has been

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committed.'" The Comt further explained that "Congress has expressed this policy in a series of statutes that have defined and redefined the trust relationship between the United States and the Indian tribes. In some cases, Congress established only a limited trust relationship to serve a narrow purpose. In other cases, we have found that particular 'statutes and regulations ... clearly establish fiduciary obligations of the Govemment' in some areas. Once federal law imposes such duties, the common law 'could play a role.' But the applicable statutes and regulations 'establish l the I fiduciary relationship and define the contours of the United States' fiduciary responsibilities."' United States v. Jicarilla Apache Nation, 131 S. Ct. 2313, 2324-25 (2011)(intemal citations omitted).

While the Court has ruled that the United States' liability for breach of trust may be limited by Congress, it has also concluded that certain obligations are so fundamental to the role of a trustee that the United States must be held accountable for failing to conduct itself in a manner that meets the standard of a common law trustee. "This is so because elementary trust law, after all, confirms the commonsense assumption that a fiduciary actually administering trust property may not allow it to fall into ruin on his watch. 'One of the fundamental common-law duties of a trustee is to preserve and maintain trust assets."' United States v. White Mountain Apache Tribe, 537 U.S. 465,475 (2003)(intemal citations omitted).

b. Presidential Commitments to the Trust Responsibility. Since this country's founding, numerous Presidents have expressed their commitment to upholding the trust responsibility. In the historic Special Message on Indian Affairs that marked the dawn of the self-determination age, President Nixon stated "[t]he special relationship between Indians and the Federal government is the result of solemn obligations which have been entered into by the United States Government ... [T}he special relationship ... continues to carry immense moral and legal force. To terminate this relationship would be no more appropriate than to terminate the citizenship rights of any other American." Public Papers of the President: Richard M. Nixon, Special Message on Indian Affairs (July 8, 1970).

For more than four decades, nearly every administration has recognized the trust responsibility and the unique government-to-govemment relationship between the United States and Indian tribes. President Obama established a White House Council on Native American Affairs with the Secretary of the Interior serving as the Chair. President Barack Obama, Executive Order No. 13647, Establishing the White House Council on Native American Affairs (June 26, 2013). The Order requires cabinet-level participation and interagency coordination for the purpose of "establish[ ing] a national policy to ensure that the Federal Government engages in a true and lasting govemment-to-govemment relationship with federally recognized tribes in a more coordinated and effective manner, including by better carrying out its trust responsibilities." See also President Barack Obama, Memorandum on Tribal Consultation (Nov. 5, 2009); President George W. Bush, Executive Order No. 13336, American Indian and Alaska Native Education (Apr. 30, 2004); President William J. Clinton, Public Papers of the President: Remarks to Indian and Alaska Native Tribal Leaders (Apr. 29, 1994); President George H.W. Bush, Public Papers of the President: Statement Reaffirming the Govemment-to-Govemment Relationship Between the Federal Govemment and Indian Tribal Governments (Jun.14, 1991); President Ronald Reagan, American Indian Policy Statement, 19 Weekly Comp. Pres. Doc. 98 (Jan. 24, 1983); President Gerald L. Ford, Public Papers of the President: Remarks at a Meeting

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with American Indian Leaders (July 16, 1976); President Richard M. Nixon, Public Papers of the President: Special Message on Indian Affairs (July 8, 1970); President Lyndon B. Johnson, Public Papers of the President: Special Message to the Congress on the Problems of the American Indian: "The Forgotten American" (March 6, 1968).

c. Congress. Congress has also recognized the United States' unique responsibilities to Indian tribes and individual Indian beneficiaries. Recently, Congress passed a joint resolution recognizing the "special legal and political relationship Indian tribes have with the United States and the solemn covenant with the land we share" and acknowledged the "long history of depredations and ill-conceived polices by the Federal government regarding Indian tribes" and offered "an apology to all Native peoples on behalf of the United States." lllth Cong. 1st Sess., S.J. Res 14 (Apr. 30, 2009). Congress has expressly and repeatedly recognized the trust responsibility in its enactments impacting Indian Affairs. See, e.g., Indian Education and SelfDetermination and Assistance Act of 1975; Tribal Self-Governance Amendments of 2000; American Indian Trust Fund Management Reform Act of 1994; Federally Recognized Indian Tribe List Act of 1994; Tribally Controlled Schools Act of 1988 and Indian Education Act of 1972; Indian Child Welfare Act of 1978; Indian Mineral Development Act of 1982; Helping Expedite and Advance Responsible Tribal Home Ownership Act of 2012 (HEARTH Act).

d. The Department of the Interior. The Department likewise has recognized its obligations as a trustee towards Indian tribes and individual Indian beneficiaries and has been vested with the authority to perform certain specific trust duties and manage Indian affairs.

The Bureau of Indian Affairs (BIA) was transferred from the War Department to the Department in 1849. Congress delegated authority to the Department for the "management of all Indian affairs and of all matters arising out of Indian relations[,]" 25 U.S.C. § 2 (2014); see also 25 U.S.C. § 9 (2014); 43 U.S.C. .§ 1457. The BIA became the principal actor in the relationship between the Federal Government and Indian Tribes, and later Alaska Native Villages, exercising administrative jurisdiction over tribes, individual Indians, their land and resources.

The BIA has evolved dramatically over the last 185 years from an agency implementing past policies of allotment and assimilation, to a bureau charged with promoting and supporting Indian Self-Determination. In addition, several other bureaus and offices within the Department were created for or have specific duties with respect to fulfilling the trust responsibility, such as the Bureau of Indian Education, Office of the Assistant Secretary- Indian Affairs, Secretary's Indian Water Rights Office, Office of the Special Trustee for American Indians, Land Buy-Back Program for Tribal Nations, Office of Historical Trust Accounting, Office of Natural Resource Revenue, Office of Appraisal Services, and Office of Minerals Evaluations. All of these programs support and assist federally recognized tribes in the development of tribal government programs, building strong tribal economies, and furthering the well-being of Indian people. As instruments of the United States that make policy affecting Indian tribes and individual Indian beneficiaries, the Bureau of Land Management, Bureau of Reclamation, Fish & Wildlife Service, National Park Service, and the Department's other bureaus and offices share the same general Federal trust responsibility toward tribes and their members.

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In an extended legal opinion regarding the meaning of the trust responsibility, former Department of the Interior Solicitor Leo M. Krulitz concluded that "[t]he trust responsibility doctrine imposes fiduciary standards on the conduct of the executive. The government has fiduciary duties of care and loyalty, to make trust property income productive, to enforce reasonable claims on behalf of Indians, and to take affirmative action to preserve trust property." Memorandum from Department of the Interior Solicitor Leo M. Krulitz to Assistant Attorney General James W. Moorman, at 2 (Nov. 21, 1978). This opinion remains in effect today.

In exercising this broad authority, past Secretaries have acknowledged that the Department's relationship with Indian tribes and individual Indian beneficiaries is guided by the trust responsibility and have expressed a paramount commitment to protect their unique rights and ensure their well-being, while respecting tribal sovereignty. See e.g., Secretary's Order 3317, Department of the Interior Policy on Consultation with Indian Tribes (Dec. 01, 2011 ); Secretary's Order 317 5, Departmental Responsibilities for Indian Trust Resources (Nov. 8, 1993); Secretary's Order 3206, American Indian Tribal Rights, Federal Trust Responsibilities, and the Endangered Species Act (Jun. 5, 1997); Secretary's Order 3215, Principles for the Discharge of the Secretary's Trust Responsibility (Apr. 28, 2000); Secretary's Order 3225, Endangered Species Act and Subsistence Uses in Alaska (Jan. 19, 2001).

The Department has also sought to build a strong government-to-government relationship with Indian tribes. The Department of the Interior Policy on Consultation with Indian Tribes, which was adopted in December 2011, sets forth standards for engaging with Indian tribes on a government-to-government basis to ensure that the decisions of the Department consider the impacts on affected Indian tribes and their members.

Sec. 4 A New Era of Trust. During the last few decades, the trust relationship has evolved. In the Era of Tribal Self-Determination, the Federal trust responsibility to tribes is often fulfilled when the Department contracts with tribal goveniments to provide the Federal services owed under the trust responsibility. Because tribal governments are more directly accountable to the people they represent, more aware of the problems facing Indian communities, and more agile in responding to changes in circumstances, tribal governments can often best meet the needs of Indian people. In sum, the Federal trust responsibility can often be achieved best by empowering tribes, through legislative authorization and adequate funding to provide services that fulfill the goals of the trust responsibility.

In recent decades, the trust relationship has weathered a difficult period in which Indian tribes and individual Indians have resorted to litigation asserting that the Department had failed to fulfill its trust responsibility, mainly with regard to the management and accounting of tribal trust funds and trust assets. In an historic effort to rebuild the trust relationship with Indian tribes, the Department recently settled numerous "breach of trust" lawsuits. This includes Cabell v. Salazar, one of the largest class action suits filed against the United States, and more than 80 cases involving Indian tribes. Resolution of these cases marks a new chapter in the Department's history and reflects a renewed commitment to moving forward in strengthening the governmentto-government relationship with Indian tribes and improving the trust relationship with tribes and individual Indian beneficiaries.

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As part of the Cabell Settlement, the Department established a Secretarial Commission on Indian Trust Administration and Reform in 2009 through Secretary's Order No. 3292. The Commission issued its final report in December 2013. The report highlighted the significance of the Federal trust responsibility and made recommendations to the Department on how to further strengthen the commitment to fulfill the Department's trust obligations. The Commission urged a "renewed emphasis on the United States' fiduciary obligation" and asserted that this "could correct some [issues], especially with respect to ensuring that all federal agencies understand their obligations to abide by and enforce trust duties."

As a response to the Commission's recommendation, this Order hereby sets forth seven guiding principles for honoring the trust responsibility for the benefit of current and future generations.

Sec. 5 Guiding Principles. Pursuant to the long-standing trust relationship between the United States, Indian tribes and individual Indian beneficiaries and in furtherance of the United States' obligation to fulfill the trust responsibility, subject to Section 6 below, all bureaus and offices of the Department are directed to abide by the following guiding principles consistent with all applicable laws. Bureaus and offices shall:

Principle 1: Respect tribal sovereignty and self-determination, which includes the right of Indian tribes to make important decisions about their own best interests.

Principle 2: Ensure to the maximum extent possible that trust and restricted fee lands, trust resources, and treaty and similarly recognized rights are protected.

Principle 3: Be responsive and informative in all communications and interactions with Indian tribes and individual Indian beneficiaries.

Principle 4: Work in partnership with Indian tribes on mutually beneficial projects.

Principle 5: Work with Indian tribes and individual Indian beneficiaries to avoid or resolve conflicts to the maximum extent possible in a manner that accommodates and protects trust and restricted fee lands, trust resources, and treaty and similarly recognized rights.

Principle 6: Work collaboratively and in a timely fashion with Indian tribes and individual Indian beneficiaries when evaluating requests to take affirmative action to protect trust and restricted fee lands, trust resources, and treaty and similarly recognized rights.

Principle 7: When circumstances warrant, seek advice from the Office of the Solicitor to ensure that decisions impacting Indian tribes and/or individual Indian beneficiaries are consistent with the trust responsibility.

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Sec. 6 Scope and Limitations.

a. This Order is for guidance purposes only and is adopted pursuant to all applicable laws and regulations.

b. This Order does not preempt or modify the Department's statutory mission and authorities, position in litigation, applicable privilege, or any professional responsibility obligations of Department employees.

c. Nothing in this Order shall require additional procedural requirements related to Departmental actions, activities, or policy initiatives.

d. Implementation of this Order shall be subject to the availability of resources and the requirements of the Anti-Deficiency Act.

e. Should any Indian tribe( s) and the Department agree that greater efficiency in the implementation of this Order can be achieved, nothing in this Order shall prevent them from implementing strategies to do so.

f. This Order is intended to enhance the Department's management of the United States' trust responsibility. It is not intended to, and does not, create any right to administrative or judicial review or any legal right or benefit, substantive or procedural, enforceable by a party against the United States, its agencies, or instrumentalities, its officers or employees, or any other person.

Sec. 7 Expiration Date. This Order is effective immediately and will remain in effect until it is incorporated into the Department Manual, or is amended, suspended, or revoked, whichever occurs first.

Secretary of the Interior

Date:

Implementing Reforms for Indian Trust Administration –

Meeting Trust Obligations & Supporting Self Governance and Economic Growth

The proper management and administration of trust assets maintained for individual Indian

beneficiaries and tribes is one of the Department of the Interior’s (Department) most significant

fiduciary responsibilities. In December 2012, the $3.4 billion settlement in the 14-year Cobell

class action lawsuit regarding the United States Government’s management and accounting of

individual Indian trust accounts and resources became final and effective. The settlement

honorably and responsibly addressed longstanding injustices and demonstrated President

Obama’s commitment to reconciliation and empowerment for tribal nations.

Under the settlement, $1.5 billion is being distributed to class members to compensate them for

their historical accounting claims and to resolve potential claims that the United States

mismanaged the administration of trust assets. The agreement also established a $1.9 billion fund

for the voluntary buy-back of individual trust or restricted interests in land, and consolidation

and transfer of those interests to tribes.

The $1.9 billion fund to consolidate and transfer trust or restricted lands to tribes is part of the

Administration’s broader commitment to restoring tribal homelands. Restoring tribal homelands

remains a key priority for Indian Affairs. Since 2009, there have been over 1,700 fee-to-trust

applications processed nationwide and over 250,000 acres brought into trust. Secretary Sally

Jewell’s goal during this Administration is to acquire over 500,000 acres in trust for tribal

governments.

Following the Cobell settlement, Secretary Ken Salazar established the Secretarial Commission

on Indian Trust Administration and Reform (Commission) in consultation with Indian tribes.

The Commission was tasked with undertaking a forward-looking, comprehensive evaluation of

how the Department manages and administers its trust responsibilities.

During 2012 and 2013, the Commission held a series of webinars and public hearings

throughout the country to gather public input. The Secretary also engaged a private contractor to

assist the Commission in reviewing the day-to-day trust administration functions carried out by

the Department’s bureaus and offices. Based upon this information, the Commission compiled

and submitted a final report to the Secretary. This report, entitled the Report of the Commission

on Indian Trust Administration and Reform (Commission Report), was published in December

2013.

The Department appreciates the significant time spent by members of the Commission in

preparing the Commission Report. Their thoughtful recommendations and the extensive analysis

undertaken by both the Department and Commission during the Commission’s work helped

August 20, 2014 Page 2

generate substantial improvements to the Department’s management of trust assets and assisted

in identifying key areas for continuous improvements.

The following outlines initial reforms implemented throughout the Department to address issues

raised in the Commission Report, and identifies actions that the Department has taken or will

take to improve the Department’s trust administration. Also, the Department continues to review

the Commission Report and will endeavor to work with Indian tribes to implement additional

reforms during this Administration.

The Office of Special Trustee’s Achievements Prior to

the Commission Report

Even prior to finalization of the Cobell settlement and

the subsequent Commission Report, the Department

had undertaken extensive reform efforts to improve its

management of trust assets. Until the mid-1990s, no

single organization in the Department was solely

dedicated to implementing a comprehensive and

uniform fiduciary standard to administer the trust

responsibility over tribal and individual Indian trust

assets. As a result of independent reviews, audits, legal

cases, complaints, and congressional hearings that

documented the consequences of this situation,

Congress passed the American Indian Trust Fund

Management Reform Act of 1994 (1994 Act). The 1994

Act mandated a number of reforms, including the

creation of the Office of the Special Trustee for

American Indians (OST) to oversee and coordinate trust

reforms within the Department.

OST is responsible for:

The financial management of $4.7 billion,

comprised of $4.0 billion in tribal funds and $751

million in Individual Indian Money (IIM) funds.

Management responsibilities include the receipt,

investment, disbursement and accounting of these

funds.

Appraisals of real property—providing impartial

estimates of value for a variety of specific real property

interests on land owned in trust or restricted status.

What is a Fiduciary Trust

Officer (FTO)?

A Fiduciary Trust Officer is an

OST employee who has

extensive knowledge of

fiduciary trust issues. FTOs are

dedicated to working with the

Bureau of Indian Affairs (BIA),

other federal employees, and

external partners to provide

trust beneficiaries with

information and assistance on

all aspects of their trust assets.

What is the role of the BIA in

managing the Indian fiduciary

trust?

The BIA is responsible for

resource management,

including property leases,

permits, rights-of-ways, and

other land uses, as well as

recording title ownership,

preparing probates for

adjudication and managing

supervised individual Indian

trust accounts through its social

services staff.


Indian trust records management, providing authoritative guidance and records

management oversight throughout Interior.

The evaluation of Indian trust programs managed by the Department and tribes under

self-determination compacts.

Services provided to trust beneficiaries—coordinating reform efforts to improve overall

trust asset management and beneficiary services throughout Interior.

Providing litigation support and historical account research and analysis for the

Department’s Office of the Solicitor and the U.S. Department of Justice on matters that

implicate the Secretary of the Interior’s trust responsibilities.

Since 1994, OST has led reforms throughout Interior’s Trust Administration System (TAS) with

dedicated Fiduciary Trust Officers and Regional Trust Administrators placed across Indian

country; the integration of technology to streamline and standardize all title, accounting and asset

management; a records management system now considered one of the best in the Nation; and a

Fiduciary Trust Model.

Over the last decade, implemented reforms include:

Improved Trust Administration Services

An automated, centralized one-day collection, deposit, and distribution process, which

handles the receipt and disbursement of over $1.2 billion annually by check, direct

deposit and debit card, averaging over 37,000 transactions daily.

Implementation of a centralized commercial lockbox, online payments, and modernized

software to better manage trust accounts.

Over 800,000 beneficiary Statements of Performance issued annually, which include trust

land ownership, encumbrance information, and improved transaction descriptions.

Preparation of annual trust fund financial statements that are audited by an independent

accounting firm.

Implementation of a tax compliance group, which issues over 15,000 tax forms annually.

Creation of a dedicated probate processing team, which allows OST to close

approximately 9,500 individual Indian estate accounts annually.

Improved Services to Beneficiaries

Retained five Regional Trust Administrators with extensive backgrounds in trust

management, and deployed over 45 Fiduciary Trust Officers located across Indian

country to serve the local Indian trust beneficiaries on trust matters and services.

o The OST Agency offices have responded to an average of 139,700 beneficiary

contacts per year, over the past 3 years.

Implemented the Trust Beneficiary Call Center (TBCC) in 2004 and for the first time

ever provided Indian Trust Beneficiaries with an easily accessible point of contact for

answering questions about trust assets and handling requests for account updates.


o Since its inception, TBCC has responded to over one million calls with a First

Line Resolution rate of 97 percent, compared to an industry standard among

call centers of 49 percent.

Creation and coordination of various outreach and training activities, such as financial

education skills training, beneficiary empowerment and financial planning, as well as

estate planning.

Provided tribes with access to accounts and Statements of Performance via the

internet, and actively assessing methods to improve account accessibility for

individual account holders.

Accounting and reconciliation of “Special Deposit Accounts” (used to temporarily

hold receipts pending determination of the appropriate recipients). Over the past

10 years, OST has disbursed approximately $62 million in undistributed SDA funds

to the appropriate recipients.

Developed and implemented an automated, centralized appraisal request system,

which generates, logs, tracks and reports status of appraisal requests for the entire

TAS.

The Department has made these and other reforms to address long standing deficiencies and key

issues raised in the Cobell litigation. The OST’s development of a single, unified financial

management system has ushered in a new and sustained era of reform that continues today.

Indian trust beneficiaries now have direct access to staff that are trained in fiduciary trust

matters, and best practice policies, procedures, and systems are in place for the management of

individual Indian and tribal trust accounts, as well as the collection and distribution of trust

funds.

A significant milestone reached in FY 2013 illustrates the success of these measures: OST

received an unmodified opinion – “a clean audit” – for the IIM Trust Fund financial statements

for the first time since the initial audit was performed in 1995. (Current and past annual audits

are available at: www.doi.gov/ost/audit.)

These reforms have taken place despite substantial growth in the Department’s fiscal

responsibilities. Between 1995 and today, the tribal and IIM trust balances increased from

approximately $2.7 billion to $4.7 billion, and the number of beneficiary accounts increased

from approximately 300,000 to over 400,000. In FY 2013, OST received $1.4 billion and

disbursed $1.2 billion from tribal and IIM accounts (73 percent of those funds were disbursed

electronically), while operating with a budget of less than $140 million.


The improvements made were the result of hard work, hard

choices, and a commitment to fulfilling the United States

Government’s trust obligation, on the part of both the

Department and Congress. The Department recognizes that

maintaining this level of excellence requires continued focus.

Periodic reviews and institutionalization of trust reforms will be

needed to ensure continued adherence to the strictest fiduciary

standards so that progress is not reversed.

The OST’s success illustrates the importance of maintaining an

organizational structure with segregated fiduciary duties,

dedicated solely to the management and oversight of tribal and

individual Indian trust assets. The OST provides this structure,

and the Department remains committed to ensuring its continued

success in fulfilling its obligation to responsibly manage and

account for trust resources.

Moving Forward to Implement the Commission’s

Recommendations

The Commission’s recommendations include a number of

operational improvements to enhance and strengthen the

Department’s management of trust assets. The Department takes

these recommendations seriously and is undertaking

improvements at all levels. The following are examples of

specific recommendations in the Commission Report, along with

how the Department has attempted to address them.

Procedural

Recommendation: Maximize the sharing of recommendations

between the Bureau of Indian Affairs (BIA) and Tribal Realty employees to identify possibilities

for improvement of outreach, coordination, and customer service activities. This joint team can

provide meaningful ways to centralize records management processes related to probate;

modernize processes including data collection and sharing between BIA and Tribal Realty

Offices; and encourage the use of MOUs between BIA and Tribal Realty Offices to explicitly

define roles and responsibilities (pp. 44).

Departmental Response:

What is an Individual Indian

Money (IIM) account?

An IIM account is an interest-

bearing account that is

managed by DOI on behalf of a

person who has money or

other assets held for them in

trust by the federal

government.

Where do the trust funds

deposited into an IIM Account

come from?

Money comes into the trust

through a variety of sources

including commercial,

industrial, recreational and

agricultural leases. Money is

also collected for rights-of-way

uses, grazing and range

permits, land sales and some

court judgment or settlement

awards for tribes and

individuals.

Do the funds in an IIM account

earn interest?

Yes, if funds are held in an

account for more than one day

they are invested and earn

interest.


The Department fully supports providing better outreach and customer service to tribes

and individual Indian beneficiaries and is willing to coordinate efforts with tribes to

provide the best service possible.

Currently, the Department has many MOUs or Agreements in place with tribes outlining

the use of administrative fees to support trust programs, and the Department is willing to

enter into more MOUs to improve communication and service. The Department notes

that effective MOUs identify the roles and responsibilities for both tribal and BIA Realty

staffs clearly to eliminate as much duplicative work as possible. However, in the absence

of a 638 contract or a compact in place with a tribe to perform services for allotted lands

and the beneficiaries who own those lands, our ability to collect information and share

records containing personal identity information (PII) is restricted by the Privacy Act.

For example, because probates contain PII, the Privacy Act may limit our ability to

centralize the management of those records to provide access to both tribal and Federal

employees.

Recommendation: At the regional level, separate and further distinguish the role of the BIA

Superintendents and agency staff with that of the Fiduciary Trust Officers to reduce beneficiary

confusion about their roles and responsibilities (pp. 45).


The Department supports providing clear, concise information outlining the roles and

responsibilities of the Superintendents and the Fiduciary Trust Officers to beneficiaries to

reduce confusion to beneficiaries. That communication can be accomplished with

brochures, posters, website information and clear guidance when a beneficiary contacts

either office or the call center. To date, there is a need for more training provided to staff

about those roles and responsibilities. The BIA and OST can work collaboratively

toward better job training for staff and also to more clearly identify the roles of BIA and

OST and making that information readily available to all stakeholders.

Information Technology

Recommendation: With respect to the Department’s management of oil and gas resources, the

Commission recommended implementing an integrated system that can track backlogs of

Communitization Agreements (CA) and Applications for Permit to Drill (APD). Additionally,

this tracking system should also identify and track moneys held in escrow by Payors who are

pending final approval (pp. 48-49).


The Department distributed a draft concept paper and consulted with tribes on a multi-

agency service center to provide long term support of Indian oil and gas development.


The Service Center would provide a wide suite of support services to BIA agencies and

regional offices; BLM field offices and state offices; OST Fiduciary Trust Officers and

Regional Trust Administrators; and the Department’s Office of Natural Resource

Revenue to address backlogs and implement an integrated system as it relates to leasing,

permitting, developing, and reporting for oil and gas development on Indian trust lands.

The Service Center may also be developed in a manner that addresses the specific

recommendations of the Commission: to help track backlogs of CAs and APDs and to

implement a mechanism to help identify and track moneys held in escrow by Payors who

are pending final approval.

Customer Service

Recommendation: The Commission recommended a number of steps to improve customer

service, including enhancing technology for customer service, providing more training to

beneficiaries and improving access to information (pp.49 – 53).


The Department is implementing a strategic plan to meet trust responsibilities. The OST

has developed a strategic plan based upon five broad strategic goals, which include:

o Provide superior fiduciary trust management;

o Continue advancement of government-to-government relations with federally

recognized Indian tribes;

o Maintain effective historical accounting and support of dispute resolution and

litigation;

o Protect and responsibly manage beneficiary trust assets through automation,

technology, and beneficiary participation; and

o Build a 21st century workforce and workplace.

The Department is improving training opportunities for beneficiaries by providing

training to beneficiaries regarding their IIM statements and Statements of Performance;

and developing improved educational materials regarding IIM Statements of

Performance, which will be included in the statements and used at outreach events.

The Department is increasing the quality of and access to beneficiary resources by:

o Implementing improvements to OST’s website to ensure Trust Beneficiary Call

Center and Fiduciary Trust Officer contact information is clearly and prominently

visible and a “Who do I contact” section is added to the FAQ section;


o Ensuring contact information is included on beneficiary Statements of Performance

and online accounts; and

o Disseminating contact information to tribal and BIA offices and increase outreach by

Fiduciary Trust Officers.

Appraisals

Recommendation: The Commission recommended that the Department streamline the appraisal

methodology (pp. 56-59).


Develop and implement Market Studies, where applicable, to meet the recommendation

from a 2005 GAO study requiring the use of Market Studies to expedite the valuation

process to support leasing of agricultural lands;

Leverage technology to connect systems that host land ownership and physical data; and

Integrate Geographical Information System and Multiple Regression Analysis to develop

an automated valuation model called the Mass Appraisal Valuation System.

Probate

Recommendation: The Commission also provided a number of recommendations to improve

probate. For example, the Commission recommended that in lieu of conducting probates, the

Department should promote the use of alternative strategies such as use of transfer on death or

gift deeds, living trusts, affidavits, or wills (pp. 53).


BIA recognizes a need for a campaign to educate and create awareness about the probate

and estate planning processes. The BIA with the OST and the Office of Hearing and

Appeals (OHA) began an initiative to inform individual American Indians and Alaska

Natives (AI/AN) of their role in the management of their trust assets, especially in the

context of probate and estate planning.

The initiative provides information for the benefit of AI/AN who own trust property or

may stand to inherit trust property. A poster introducing the initiative will be posted at

tribal, BIA, and OST locations. Brochures will be available that explain the probate

process and options that trust property owners have for estate planning. In addition, the

information will be accessible on a new BIA web page: www.bia.gov/yourland/.


The BIA anticipates the information will be available to the public by the end of fiscal

year 2014. The information will be shared with OST, and the Land Buy-Back Program

for their outreach initiatives

Recommendation: Since the current probate process begins at the agency level with the probate

clerk, steps must be taken to make the probate clerk's job more efficient. Elimination or

reduction of unnecessary and additional duties will speed up the completion of the probate file

(pp. 54).


The BIA, OST and OHA meet on a quarterly basis to discuss and address outstanding issues.

We have received recommendations submitted by the Commission. At our next meeting, we will

discuss these issues and submit our recommendations to BIA management for review.

In general and with respect to probate, the Department has begun promoting the use of estate

planning to avoid time and expense of current formal Federal probate process. Several options

the Department is currently exploring to address probate concerns are as follows:

Non-Probate Transfers on Death. Provide Indian trust beneficiaries with ability to

execute Payable on Death or Transferable on Death beneficiary designations.

Revocable Trusts/Family Limited Partnerships. Allow common private-sector estate

planning entities (e.g., revocable trusts, family limited partnerships, etc.) to hold title to

Indian trust assets to: (i) avoid probate; (ii) reduce fractionation; and (iii) provide better

lifetime management options.

Gift Deeds. Streamline and simplify the current inter vivos transfer process for Indian

trust assets (i.e., gift deeds).

Small Estate Affidavit. Adopt private-sector small estate process to significantly reduce

the length, complexity and cost of transferring Indian trust assets at death.

Overarching Staffing Needs

Recommendation: The Commission Report makes an overarching recommendation for the

Department to retain current employees that are committed to fulfilling the trust responsibility to

Indian tribes and to work to recruit a new generation of staff committed to carrying out the

Federal Government’s obligations to Indian tribes (pp. 4, 67).


This recommendation has been and remains an overarching policy objective within

Indian Affairs, as well as within OST and other Departmental offices that interact with

Indian tribes on a regular basis. Moreover, the Department has been engaged in trying to


address capacity challenges caused in part by budget restraints coupled with increasing

program and resource needs at the tribal level.

Address workforce capacity challenges. Develop and implement a workforce plan that is

tailored to attaining program goals. Workforce planning is a continual process used to

align the needs and priorities of an organization with those of its workforce to ensure it

can meet the organization’s goals and objectives.

Alaska

Recommendation: The Commission recommended that the Department take land into trust for

Alaska Native tribes in Alaska to establish Indian country and tribal jurisdiction.


This past April, the Department issued a proposed rule that would delete a provision in

the Department’s land-into-trust regulations that excludes from the scope of the current

regulations land acquisitions in trust in the State of Alaska outside of the Metlakatla

Indian Reservation. This proposed rule would pave the way for all Alaska Native tribes

to potentially exercise greater regulatory autonomy over their traditional lands if those

lands are placed into trust.

Conclusion

The responsible management, administration, and accountability of Indian trust assets are and

will remain among the highest priorities of the Department. Today, the Department is

responsible for managing 56 million surface acres and 57 million acres of subsurface mineral

estates held in trust by the United States for individual Indians and Indian tribes. More than

11 million acres belong to individual Indians and nearly 44 million acres are held in trust for

Indian tribes. On these lands, the Department manages over 119,000 leases for such things as

mineral development, oil and gas extraction, and grazing. The Department also manages

approximately $4.7 billion in trust funds. In FY 2013, income from Indian trust assets, including

settlements and judgments, use permits, and land sales, totaling approximately $791 million was

collected for about 393,000 open IIM accounts. Approximately $642 million was collected for

about 3,000 tribal accounts (for over 250 tribes).

The Department recognizes that the management of these assets has a very real effect on

people’s lives and livelihoods and the Department is committed to remaining vigilant in

maintaining the existing reforms and the ongoing evaluation and analysis of trust administration.


In addition, the Department recognizes it is important to keep the fiduciary responsibilities

related to the accounting, management, and oversight of individual Indian and tribal trust assets

separate from other Departmental bureaus/programs. The Department will continue to maintain

a management structure that ensures the adherence to best practices, a focus on beneficiaries, and

a commitment to continuous improvement.

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