alienation without the consent of the Secretary. Each such sale and conveyance shall be subject to the following terms and conditions:

(a) The consideration for the sale shall be the appraised fair market value as determined by the Secretary;

(b) The consideration may be paid in installments, under a plan approved by the Secretary, and the obligation to pay may be evidenced by interest bearing certificates of indebtedness issued to former owners of conveyed lands representing their proportionate shares of the appraised market value;

(c) Such certificates shall provide for their redemption on a preferred basis out of any income realized from such lands through cultivation, sale, or otherwise and may, in the discretion of the Secretary, require a minimum annual payment out of tribal income generally;

(d) Outstanding certificates shall not constitute an encumbrance upon such lands and the lands may be otherwise encumbered or mortgaged by the tribe upon approval of the Secretary. For the purpose of any foreclosure or sale proceeding pursuant to such encumbrance or mortgage, the tribe shall be regarded as vested with an unrestricted fee simple title to the lands, the United States shall not be a necessary party to the proceeding, and any conveyance of the lands pursuant to the proceeding shall divest the United States of title to the lands.

SEC. 4. CONSERVATION OF ASSETS.-Whenever the Secretary determines that fractionation of ownership interests is preventing the effective use of any trust or restricted lands for which he would otherwise be authorized by law to execute or approve a contract or lease for the trust or unrestricted interests, he is hereby authorized, in his discretion and without the request or consent of owners, (a) to execute a lease for the use of such lands, (b) to execute a contract for the sale of any of the timber on such lands, or (c) to grant a right-of-way or easement over such lands, such action to be binding upon the owners of both restricted and unrestricted interests.

SEC. 5. ADMINISTRATIVE PARTITION OF TRUST OR RESTRICTED LANDS.-Whenever requested by individual Indians or an Indian tribe holding the majority interest in trust or restricted lands, the Secretary may, in his discretion, order the partition of the complete beneficial interest in such lands in kind or, if partition in kind is not practicable, order the sale of the complete interest in such lands, including any unrestricted interests, at not less than the appraised fair market value. For the purpose of this section the Secretary may represent the interests of any person who is a minor, who is non compos mentis, or who after reasonable notice cannot be located. Any partition or sale shall be subject to the following conditions:

(a) The Secretary shall have determined that such action is in the best terest of the Indian owners and not detrimental to the local Indian comunity;

(b) A sale shall be on the basis of competitive bids, except that prior to a competitive sale the tribe shall have a preferred right to purchase at the appraised value any lands offered for sale that are located within the boundaries of or immediately adjacent to its reservation;

(c) Title acquired by a tribe pursuant to this section shall be taken in the form prescribed by section 3. Title acquired by an Indian who is determined by the Secretary to need assistance in handling his affairs, or by an Indian who already owns a trust or restricted interest in such lands, may be taken in the name of the United States in trust for such Indian, or in the name of the Indian subject to a restriction against alienation without the approval of the Secretary. Such lands shall not be taxable;

(d) The proceeds of any sale shall be distributed to the owners under the terms and conditions of any law otherwise applicable to such distribution. SEC. 6. JUDICIAL PARTITION. The owner of an undivided and unrestricted interest in trust or restricted lands may petition the Secretary to consent to partition of such lands. The Secretary shall grant such consent if in his judgment such action will not adversely affect any Indian owner of a trust or restricted interest or be detrimental to the local Indian community. In such event, any State court of competent jurisdiction may hear and render judgment for partition in kind or judicial sale of such lands in accordance with the law of the State wherein the lands are situated. For the purpose of any such action the Indian owners shall be regarded as vested with an unrestricted fee simple title to the lands, the United States shall not be a necessary party to the proceeding, and

any partition or conveyance of the lands pursuant to the proceeding shall divest the United States of title to the lands, terminate the Federal trust, and terminate all restrictions against alienation or taxation of the lands imposed by the United States: Provided, That any title acquired in the proceedings by an Indian or Indian tribe may with the consent of the Secretary be taken in a trust or restricted status under the circumstances stated in section 5 (c).

SEC. 7. NOTICE. The Secretary shall give actual or constructive notice of any action proposed to be taken under sections 3, 4, and 5 of this Act, and shall provide an opportunity for any party in interest to submit written or oral objection to the proposed action.

SEC. 8. EXECUTION OF TITLE DOCUMENTS. The Secretary is authorized to execute such patents, deeds, assignments, releases, certificates, orders, leases, contracts, or other instruments as may be necessary or appropriate to carry out the purposes of this Act.

SEC. 9. REGULATIONS. The Secretary is authorized to issue such regulations as are necessary to carry out the purposes of this Act.

SEC. 10. This Act shall not repeal any authority of the Secretary under other law, but it shall supersede any limitation on the authority of the Secretary that is inconsistent with this Act.

Hon. CLINTON P. ANDERSON,

EXECUTIVE OFFICE OF THE PRESIDENT,

BUREAU OF THE BUDGET, Washington, D.C., August 9, 1961.

Chairman, Committee on Interior and Insular Affairs, U.S. Senate, New Senate Office Building, Washington, D.C.

DEAR MR. CHAIRMAN: This is in response to your request for the views of the Bureau of the Budget on S. 1392, a bill relating to the Indian heirship land problem.

The purpose of the bill is to authorize and direct the Secretary of the Interior to partition or sell the undivided Indian interest in any tract of trust or restricted Indian land upon the request of an Indian owner, unless the Secretary finds that such sale would not be in the best interests of the Indian owners. The bill further provides that such sales would be on the basis of competitive bids except that an owner or the tribe may purchase at the appraised value if no owner objects.

In order to assist tribes to purchase heirship lands, S. 1392 would authorize Federal loans to tribes for this purpose and would increase the authorization of appropriations to the revolving fund for loans from $10 million to $50 million. The bill further provides that the trust or restricted status of Indian land shall cease when title passes by inheritance or devise unless the Secretary determines that the prospective owner is unable to manage his own affairs prudently. Also, general extensions of trust periods after January 1, 1964, would be prohibited; extensions would be permitted for individual Indians only on the basis of specific determination as to competency.

The Department of the Interior, in its report to your committee on S. 1392, has recommended enactment of a substitute draft bill which represents a considerably different approach to the problem. In brief, the proposed substitute would authorize the sale of heirship lands that are not in productive use to the tribe occupying the reservation without the consent of the owners. The sale would be at the appraised fair market value and payment for the land could be made in installments. The former owners could be issued certificates of indebtedness. Other heirship lands could be disposed of by the Secretary on a similar basis or by competitive bid upon request of the owners of a majority interest.

The substitute further provides that the Secretary may, under certain conditions, lease, sell timber from, or grant rights-of-way over heirship lands without consent of the owners.

In addition, the proposed substitute would authorize the partition of heirship lands upon petition by an owner of an undivided and unrestricted interest if, in the judgment of the Secretary, such action would not adversely affect any Indian owner of a trust or restricted interest or be detrimental to the local Indian community. The partition action would be carried out by any State court of competent jurisdiction.

We are enclosing for the information of your committee the views of the Department of Justice on the Interior-proposed substitute. These views raise serious questions about the portions of the draft bill which deal with the compensation of individuals whose interests in heirship lands would be sold.

If these questions are resolved to the satisfaction of the committee, the Bureau of the Budget would not object to enactment of the proposed substitute bill. Sincerely yours,

PHILLIP S. HUGHES, Assistant Director for Legislative Reference.

Hon. DAVID E. BELL,

Director, Bureau of the Budget,

Washington, D.C.

U.S. DEPARTMENT OF JUSTICE,

OFFICE OF THE DEPUTY ATTORNEY GENERAL,

Washington, D.C., August 8, 1961.

DEAR MR. BELL: This is in response to your request for the views of the Department of Justice on a proposed report of the Department of the Interior on the bill (S. 1392) relating to the Indian heirship land problem.

The four paragraphs in the material numbered "2" on pages 1 and 2 of the draft report summarize the Indian heirship land problem arising under the statutes governing the descent and distribution of Indian allotted lands (25 U.S.C. secs. 372 and 373 (1958)), and some of the provisions of the proposed substitute draft bill. As far as is here material, section 3 of the substitute bill would authorize the Secretary of the Interior to convey to the Indian tribe occupying a reservation, with its consent, the complete beneficial interest in an Indian trust or restricted allotment in that reservation which is in heirship status and in which there is fractionation among multiple owners of the beneficial interest therein, without the consent of such owners, in consideration of the payment to each of them of his respective proportionate share of the appraised fair market value of such interest. As set forth in the draft report, the substitute bill would provide that such payment may be made in installments, and that the obligation to pay may be evidenced by interest-bearing certificates of indebtedness issued to a former individual Indian owner, representing his proportionate share of such value.

While the draft report would indicate that the holder of a certificate is assured of some minimum annual payment, either from income from the land or out of tribal income generally, it should be noted that under the redemption provisions in section 3 (c) of the substitute bill, any such minimum annual payment from tribal income generally is entirely a matter in the discretion of the Secretary. Moreover, the draft report does not refer to section 3 (d) of the substitute bill, expressly providing that outstanding certificates shall not be an encumbrance on such land, and that such land may be otherwise encumbered or mortgaged by the tribe with the approval of the Secretary. In short, the immediate holder of such a certificate would receive it as the result of a transaction which would constitute not only an involuntary, but also an unsecured, loan by him to finance for the benefit of the tribe the purchase on an installment plan of his beneficial interest in an allotment in heirship status.

The draft bill does not make it clear whether the Secretary, the tribe, or either, may issue a certificate. In either event, in view of the limitations in section 3(c) of the substitute bill as to the source of funds to redeem a certificate, it would seem that a certificate would not be an express or implied contract with the United States on which the certificate holder, in the event of default, could recover payment from the United States under the Tucker Act (62 Stat. 940, 28 U.S.C. sec. 1491 (1958)). Since any claim against the United States would be that of the individual holder, as distinguished from an Indian tribe, it would not be cognizable as an Indian claim against the United States within the provisions of title 28, United States Code, section 1505 (1958). In the event of default, a holder would have no recourse against the United States.

The general rule set forth in the Federal Indian Law (U.S. Interior Department, 725 (1958)), and in Handbook of Federal Indian Law (U.S. Interior Department, 339 (1942)), is that tribal funds held by the United States are not subject to the claims of third parties unless payment thereof is clearly authorized by statute or treaty, or by lawful action of the tribe itself. Under the

substitute bill, in the event of default, the holder of a certificate would have no assured recourse to tribal funds held by the United States. The certificate would, therefore, have little, if any, merchantability.

It is true that the United States, as guardian of Indian tribes and individual Indians and as trustee of their trust or restricted property, possesses a plenary power to manage Indian affairs which is not to be confused with its power of eminent domain. Under its power to manage Indian affairs, it may, without making compensation, do many things affecting Indian property. Under that power it may lease tribal lands and apply the rentals for the benefit of the tribe. (See Cherokee Nation v. Hitchcock, 187, U.S. 294 (1902).)

This power is, however, subject to the Constitution. Stephens v. Cherokee Nation) 174 U.S. 445, 478 (1899)). In addition, the Supreme Court has held that the private property rights of an Indian are constitutionally secured and enforced to the same extent and in the same way as those of other residents and citizens of the United States, although the Indian may be subject to the guardianship of the United States as to his personal status. Choate v. Trapp (224 U.S. 665, 677 (1912)), and cases cited there.

If the substitute bill is predicated on the theory that a conveyance by the Secretary to the tribe is an exercise of the power of eminent domain of the Federal Government to condemn interests in private property for public use and that condemnation for the benefit of an Indian tribe constitutes a public use, it should be noted that the guaranty of just compensation in the fifth amendment to the Constitution for property taken for public use entitles the owner to certain and adequate provision for obtaining compensation before his occu-pancy is disturbed. Cherokee Nation v. Southern Kansas R. Co., 135 U.S. 611, 659 (1890). This guaranty does not mean receiving annual stipends, but means that owners are entitled to compensation; not that their heirs or estates are to receive installment payments. United States v. 9.94 Acres of Land in City of Charleston, 51 F. Supp. 478 (D.C.S.C. 1943). The substitute bill fails to make certain and adequate provision for obtaining compensation, and it specifically provides for installment payments. In both respects, it fails to meet the constitutional guaranty of just compensation under the fifth amendment for property taken for public use.

If, on the other hand, the substitute bill is predicated on the theory that under the plenary power of the Federal Government to manage Indian affairs, Congress may enact legislation authorizing the Secretary to convey to an Indian tribe the entire beneficial interest in an allotment in heirship status on which there is a fractionation of that interest among multiple owners, the provisions of the substitute bill, denying an Indian immediate and full payment for his interest in privately owned Indian property, fail to meet the standard prescribed by the Supreme Court respecting the protection of such private property rights.

Also, it is noted that section 4 of the proposal would extend the Secretary's authority to sell fractionated interests in or small tracts of trust or restricted lands upon his determination that they are idle or economically unproductive, or to lease such interests or to contract to sell the timber thereon "without the consent of the owners." The interests mentioned are vested, and doubts arise as to the constitutionality of such disposal. The retention of ownership of the interests by tribes purchasing them would not appear to dissipate such doubt. The provisions of section 7 that the Secretary shall give actual or constructive notice of such disposal, and shall provide opportunity to any party in interest to submit written or oral objection, may meet requirements as to due process, but do not supersede the requirement of judicial determination of just compensation in exercise of the power of eminent domain. As mentioned above, the private property rights of an Indian are constitutionally secured to the same extent as those of other citizens, although he may be subject to the guardianship of the United States as to his personal status. Choate v. Trapp, 224 U.S. 665, 677. As stated by Mr. Justice Van Devanted in Chippewa Indians v. United States, 301 U.S. 358 (1937);

"Our decisions, while recognizing that the Government has power to control and manage the property and affairs of its Indian wards in good faith for their welfare, show that this power is subject to constitutional limitations and does not enable the Government to give the lands of one tribe or band to another, or to deal with them as its own." Id., 375–376.

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Subject to the foregoing conclusions, the Department of Justice would have no objection to the proposed report of the Department of the Interior.

Sincerely yours,

BYRON R. WHITE, Deputy Attorney General.

Hon. CLINTON P. ANDERSON,

U.S. DEPARTMENT OF JUSTICE,

OFFICE OF THE DEPUTY ATTORNEY GENERAL,

Washington, D.C., August 9, 1961.

Chairman, Committee on Interior and Insular Affairs,
U.S. Senate, Washington, D.C.

DEAR SENATOR: This is in response to your request for the views of the Department of Justice concerning the bill (S. 1392) relating to the Indian heirship land problem.

This bill is a measure proposed to aid in a solution of the problem of the administration of Indian trust or restricted allotments resulting from the fractionation among multiple owners of the beneficial interest therein under the statutes governing the descent and distribution of such allotments (36 Stat. 855, as amended, 25 U.S.C. sections 372 and 373 (1959)).

The bill would authorize and direct the Secretary of the Interior, upon the request of any such owner, to partition or sell the undivided interest therein, unless the Secretary finds that such partition or sale would not be in the best interests of the Indian owners and so reports to Congress. The bill also specifies that such sales shall be at a price not less than one substantially equal to the appraised value, and that the proceeds shall be distributed under the individual Indian money regulations (25 CFR, pt. 104 (supp. 1960)). The bill would also authorize interest-bearing loans by the Federal Government to an Indian tribe which wants to purchase such interests and which has a plan for their use that the Secretary has approved. As security for the loan the tribe would be required to give the United States a mortgage on land so purchased and on such other tribal property as the Secretary deems necessary to secure the loan adequately.

As guardian of the Indian tribal and individual Indian wards of the Nation and as trustee of their trust or restricted property, the United States has plenary power to manage Indian affairs. (Cf. Thomas v. Gay, 169 U.S. 264 (1898); Lone Wolf v. Hitchcock, 187 U.S. 553 (1903)). While the power is subject to the Constitution Stephens v. Cherokee Nation (174 U.S. 445 (1899)), the provisions of the bill for prompt payment in full for the account of the Indian owners of a price not less than substantially the fair market value of Indian heirship land which may be sold under the bill appear to be constitutionally adequate. (Cf. Choate v. Trapp, 224 U.S. 665 (1912)) cf. also 33 Op. Atty. Gen. 25 (1921), 59 Interior Dec. 100 (1945)).

The subject of this legislation is not a matter for which the Department of Justice has primary responsibility, and accordingly we make no recommendation as to the enactment of the bill. However there are certain features of the proposal to which attention is invited.

Since it is only by implication that the bill would authorize the Secretary to issue rules and regulations respecting the subject matter of the bill the committee may wish to consider whether specific authority in this connection should be provided.

Section 10 of the bill would make a number of provisions to prevent as far as possible an increase in the heirship land problem. Section 10(b) would provide that title to an interest in heirship land shall pass by operation of law in a nontrust or unrestricted status unless the Secretary of the Interior determines before the close of an Indian probate proceeding that the Indian heir or devisee is not competent to manage his own business affairs with such reasonable degree of prudence and wisdom as will be apt to prevent him from losing his property or the benefits thereof, the standard prescribed in United States v. Debell, 227 Fed. 760, 770 (8th Cir. 1915). Section 10 (c) would impose a like requirement on other acquisition by an Indian of title to land or an interest therein in a trust or restricted status, i.e., land which may later pass into Indian heirship status.