Indian Trust Management Reform

DEPARTMENT OF THE INTERIOR

Bureau of Indian Affairs

25 CFR Parts 15, 18, 150, 152, and 179

Office of the Secretary

43 CFR Parts 4 and 30

RIN 1076-AE59

Indian Trust Management Reform

AGENCY:

Bureau of Indian Affairs, Office of the Secretary, Interior.

ACTION:

Proposed rule.

SUMMARY:

The Bureau of Indian Affairs (BIA) and the Office of the Secretary propose to amend several of their regulations related to Indian trust management to further fulfill the Secretary's fiduciary responsibilities to federally recognized tribes and individual Indians and to meet the Indian trust management policies articulated by Congress in the Indian Land Consolidation Act (ILCA), as amended by the American Indian Probate Reform Act of 2004 (AIPRA). These amendments address Indian trust management issues in the areas of probate, probate hearings and appeals, tribal probate codes, life estates and future interests in Indian land, the Indian land title of record; and conveyances of trust or restricted land. There is also an “Application for Consolidation by Sale” form that is associated with one of these amendments.

DATES:

Please submit your comments by October 10, 2006.

ADDRESSES:

You may submit comments, identified by the number 1076-AE59, by any of the following methods:

—Federal rulemaking portal:

http://www.regulations.gov.

Follow the instructions for submitting comments.

—Web site at

http://www.doitrustregs.com.

—E-mail:

Michele_F_Singer@ios.doi.gov.

Include the number 1076-AE59 in the subject line of the message.

—Fax: (202) 208-5320. Include the number 1076-AE59 in the subject line of the message.

—Mail: U.S. Department of the Interior, 1849 C Street, NW., Mail Stop 4141, Washington, DC 20240

—Hand delivery: Michele Singer, U.S. Department of the Interior, 1849 C Street, NW., Washington, DC 20240.

Comments on the information collection burdens, including comments on or requests for copies of the “Application for Consolidation by Sale” form, are separate from those on the substance of the rule. Send comments on the information collection burdens to: Interior Desk Officer 1076-AE59, Office of Management and Budget, e-mail:

oira_docket@omb.eop.gov;

or 202/395-6566 (fax). Please also send a copy of your comments to BIA at the location specified under the heading

ADDRESSES

.

FOR FURTHER INFORMATION CONTACT:

Michele Singer, Counselor to the Assistant Secretary—Indian Affairs, Department of the Interior, Bureau of Indian Affairs, 1849 C Street NW., Mail Stop 4141, Washington, DC 20240, telephone (202) 273-4680.

SUPPLEMENTARY INFORMATION:

I. Statutory Authority

II. Background

A. History of the Rule

B. The Need for this Proposed Rulemaking

C. Development of Proposed Reguatory Language

D. Status of Other Indian Trust Management Reform Regulations

III. Overview of Proposed Rule

IV. Part-by-Part Analysis

A. 25 CFR Part 15

B. 25 CFR Part 18

C. 25 CFR Part 150

D. 25 CFR Part 152

E. 25 CFR Part 179

F. 43 CFR Part 4

G. 43 CFR Part 30

V. Public Comments

A. Comments Received Prior to This Publication

B. Directions for Submitting Comments

VI. Procedural Requirements

A. Regulatory Planning and Review (Executive Order 12866)

B. Regulatory Flexibility Act

C. Small Business Regulatory Enforcement and Fairness Act

D. Unfunded Mandates Reform Act of 1995

E. Governmental Actions and Interference with Constitutionally Protected Property Rights (Executive Order 12630)

F. Federalism (Executive Order 13132)

G. Civil Justice Reform (Executive Order 12988)

H. Paperwork Reduction Act

I. National Environmental Policy Act (NEPA)

J. Government-to-Government Relationships with Tribes (Executive Order 13175)

K. Energy Effects (Executive Order 13211)

I. Statutory Authority

Regulatory amendments to these parts are proposed under the general authority of the Trust Fund Management Reform Act of 1994, 25 U.S.C. 4021

et seq.

, and the Indian Land Consolidation Act of 2000 (ILCA) as amended by the American Indian Probate Reform Act of 2004 (AIPRA), 25 U.S.C. 2201

et seq.

The following table provides additional statutory authority specific to each CFR part.

25 CFR part 15

5 U.S.C. 301; 25 U.S.C. 2, 9, 372-74, 410; 44 U.S.C. 3101

et seq.

25 CFR part 18

NEW-Tribal Probate Codes

5 U.S.C. 301; 25 U.S.C. 2, 9, 372-74, 410; 44 U.S.C. 3101

et seq.

; Pub. L. 108-374 (American Indian Probate Reform Act of 2004).

25 CFR part 150

Act of June 30, 1834 (4 Stat. 738; 25 U.S.C. 9). Act of July 26, 1892 (27 Stat. 272; 25 U.S.C. 5). Reorganization Plan No. 3 of 1950 approved June 20, 1949 (64 Stat. 1262). (Act of April 26, 1906 (34 Stat. 137); Act of May 27, 1908 (35 Stat. 312); Act of August 1, 1914 (38 Stat. 582, 598) deals specifically with land records of the Five Civilized Tribes. Act of February 14, 1920 (41 Stat. 415) amended March 1, 1933 (47 Stat. 1417; 25 U.S.C. 413); 5 U.S.C. 552a; and 31 U.S.C. 9701.

25 CFR part 152

R.S. 161; 5 U.S.C. 301. Interpret or apply sec. 7, 32 Stat. 275, 34 Stat. 1018, sec. 1, 35 Stat. 444, sec. 1 and 2, 36 Stat. 855, as amended, 856, as amended, sec. 17, 39 Stat. 127, 40 Stat. 579, 62 Stat. 236, sec. 2, 40 Stat. 606, 68 Stat. 358, 69 Stat. 666: 25 U.S.C. 378, 379, 405, 404, 372, 373, 483, 355, unless otherwise noted.

25 CFR part 179

86 Stat. 530; 86 Stat. 744; 94 Stat. 537; 96 Stat. 2515; 25 U.S.C. 2, 9, 372, 373, 487, 607, and 2201-11; Pub. L. 108-374 (American Indian Probate Reform Act of 2004).

43 CFR part 4

5 U.S.C. 301; 43 U.S.C. 1201.

43 CFR part 30

NEW—Probate Hearing Procedures

5 U.S.C. 301; 43 U.S.C. 1201.

II. Background

This rulemaking is a result of a collaborative, multi-year undertaking to identify a comprehensive strategy for improving Indian trust management. The Department of the Interior manages Indian trust assets in accordance with its fiduciary trust relationship with tribes and individual Indians. The term “tribes” is used in this preamble to refer to Federally recognized tribes. The purpose of today's proposed rulemaking is to allow the Department of the Interior to better meet its fiduciary trust responsibilities and to carry out the policies established by Congress to strengthen tribal sovereignty. This rulemaking will provide the Department with the tools to more effectively and consistently manage trust assets and better serve its trust beneficiaries (

i.e.

, Indian tribes and individual Indians).

A. History of the Rule

The Department of the Interior has been examining ways to better meet its fiduciary trust responsibilities since 1994, when Congress passed the Trust Fund Management Reform Act. Throughout this time, the Department has sought the participation and input of tribal leaders and individual Indian beneficiaries to identify ways in which the Department can better serve its beneficiaries.

In July 2001, the Secretary of the Interior (Secretary) issued Secretarial Orders 3231 and 3232. These orders created the Office of Historical Trust Accounting (OHTA) to perform historical accounting of trust assets and created a temporary Office of the Indian Trust Transition (OITT), which was charged with reorganizing the agency to better meet beneficiaries” needs. These Secretarial Orders also stated the Secretary's policy to take a more coordinated approach to ensure the overall success of trust reform.

In accordance with this policy, the Department reevaluated its approach to trust reform and, in January 2002, embarked on an examination and reengineering of its Indian trust management processes. This effort differed from prior trust reform efforts because it took a comprehensive approach to trust reform, linking individual trust reform issues to an overall strategy. To ensure that the strategy fully considered tribal concerns, the Department assembled a Joint Task Force of tribal representatives and representatives from the Department.

From members of this Joint Task Force, a subcommittee of both tribal representatives and Department representatives was formed. The subcommittee met regularly to review the “As-Is” processes of the way major trust functions were performed at that time. From this “As-Is” model, the subcommittee identified business goals and objectives the Department should meet in fulfilling its trust responsibilities and providing improved services to trust beneficiaries. It then developed the overall strategy to meet those goals and objectives, documented as the Comprehensive Trust Management (CTM) plan.

The CTM laid the groundwork for trust reform by providing strategic direction for development of the “To-Be” model, known as the Fiduciary Trust Model (FTM). The FTM redesigns trust processes into more efficient, consistent, integrated, and fiscally responsible business processes. In developing the FTM, the team incorporated years of Departmental consultation with tribes. The Department adopted the FTM in December 2004 to guide trust reform. Together with Indian affairs policies, the FTM forms the basis of today's rulemaking.

B. The Need for This Proposed Rulemaking

Since adopting the FTM, the Department has formed an FTM Implementation Team with tribal representatives. The FTM Implementation Team is leading internal organizational changes for improving performance and accountability in management of the trust. At the beginning of the reengineering process, the Joint Task Force had anticipated that regulatory changes would be necessary to fully implement trust reform. The Team has since determined, and the Secretary has confirmed, that certain regulatory changes are indeed needed to enable the Department to fully implement the FTM. Today's proposed rule includes many of these necessary regulatory changes.

Additionally, Congress enacted the American Indian Probate Reform Act of 2004. AIPRA amends ILCA to better meet the trust reform goals for land consolidation articulated in ILCA. Regulatory changes authorized by AIPRA are included in this proposed rule.

C. Development of Proposed Regulatory Language

This proposed rulemaking encompasses tribal and Departmental representatives’ efforts on the Joint Task Force, as well as the efforts of tribal representatives who have provided comments throughout the trust reform process. These efforts guided in-house teams in drafting the specific regulatory language included in this proposed rulemaking. The in-house teams consisted of Federal personnel from Department headquarters and the field, and included program officers and Department attorneys possessing extensive expertise in probate, land titles and records, acquisition and conveyance, leasing and grazing, and administrative appeals. On December 27, 2005, the Department shared advance copies of the proposed regulatory language (identified as “preliminary drafts” throughout this preamble) with leaders of each Federally recognized tribal government, as well as additional contacts in Indian country, for their input and recommendations. The Department has also presented the preliminary drafts and obtained the input of tribes at two formal consultation meetings: one in Albuquerque, New Mexico on February 14-15, 2006, and one in Portland, Oregon on March 29, 2006. Comments received during these consultations and in the time leading up to this publication have identified several issues that the Department considered in revising the preliminary drafts for publication as a proposed rule. In accordance with the government-to-government relationship with tribes, formal consultations are also being scheduled to take place during the comment period that follows this publication in the

Federal Register

to facilitate an informed final rule. See Section IV, Public Comments, for details on upcoming consultations.

D. Status of Other Indian Trust Management Reform Regulations

The Department is also developing regulatory amendments to land acquisitions (25 CFR part 151), leasing (25 CFR part 162), and grazing (25 CFR part 166), and developing draft regulatory language addressing trust fund accounting and appeals (new CFR part), unclaimed moneys/whereabouts unknown (new CFR part), and fees for service (new CFR part). Based on input received during the February 14-15, 2006, Albuquerque tribal consultation session, the Department has determined that these regulations require additional work before publication as a proposed rule. The Department plans to promulgate these additional regulations at some point in the future. Together, these regulatory changes will provide the Department with the tools it needs to better serve beneficiaries and will standardize procedures for consistent

execution of fiduciary responsibilities across BIA Regions.

III. Overview of Proposed Rule

The proposed rule amends various parts of the CFR to further implement Indian trust management reform and meet the policies expressed by Congress in ILCA, as amended by AIPRA. Together, these amendments form an integrated approach to Indian trust management related to probate, land records and title documents, and conveyances that allow the Department to better meet the needs of its beneficiaries.

The Department has revised many of these regulations, in accordance with the Plain Language Initiative (63 FR 31885 (June 10, 1998)) to facilitate ease of use and public comprehension.

In addition to making plain language revisions, amendments revise the regulations to:

•

Incorporate AIPRA changes to probate:

AIPRA created a uniform probate code to standardize intestate succession rules for trust and restricted property. The uniform probate code reinforces tribal sovereignty by eliminating the application of state laws in the probate of trust and restricted assets while deferring to approved tribal probate codes. AIPRA also established new mechanisms for consolidating fractionated interests at probate and through sale of highly fractionated tracts. The proposed amendments to probate regulations would implement AIPRA's provisions by requiring the additional information needed to determine heirs and devisees to be included in the probate file, and by establishing the procedures for directional disclaimers, purchases at probate and consolidation agreements. These regulations continue to refer all probate cases to OHA. The amendments streamline the OHA process by shortening deadlines to more reasonable time periods. Amendments to life estate provisions reflect AIPRA's change in the valuation of a life estate to be “without regard to waste” and base the valuation on the four-year average Single Life Factor used by the U.S. Internal Revenue Service in Table S of the 7520 rate schedule, without regard to gender.

•

Promote consolidation (reduce fractionation) of interests:

Allotments owned by Indians have become increasingly fractionated with the probate of each generation, resulting in the division of the allotment into smaller and smaller interests. These amendments meet the policy expressed by Congress to reduce fractionation (

i.e.

, the exponential increase in the number of ownership interests in a given parcel of land) of tribal and individual Indian interests in trust and restricted property through the use of several tools. These tools include the opportunities for tribes to establish a tribal land consolidation plan; purchase interests in land within their respective jurisdictions when offered for negotiated sale, gift, or exchange; make a tribal tract purchase (

i.e.

, obtain fractionated interests of non-consenting trust and restricted owners under certain circumstances); and unify ownership and consolidate interests in a tract through partition. The amendments allow both tribes and individual Indians to obtain highly fractionated interests through a new mechanism, created by AIPRA: consolidation by sale (called “partition of highly fractionated lands” in AIPRA). Additionally, the new AIPRA mechanisms being incorporated in probate regulations will offer opportunities to reduce fractionation through the distribution of probate property.

•

Improve service to beneficiaries:

Amendments to the Land Titles and Records Office (LTRO) regulations will update and standardize LTRO title practices and recordation to ensure the Secretary is able to accurately track and record accounting of trust and restricted interest owners, allowing the Secretary to better serve the beneficiaries. Amendments to the probate process are aimed at facilitating the process to reduce the probate backlog and better serve beneficiaries. By clarifying the requirements and processes for probate, approval of tribal probate codes, obtaining LTRO services and products, and conveying trust and restricted property, the Department improves communication and transparency, allowing better service to beneficiaries.

The Department is committed to fully explaining both the purpose and intended effects of these regulations in this preamble. More detailed explanations of each part are provided below, followed by summaries of comments received during tribal consultations on the preliminary drafts of these regulations. The Department welcomes any questions or comments requesting clarification of these parts, as well as additional comments. Additionally, upon finalization of any of these regulations, the Department plans to develop training and other explanatory materials, where appropriate, to facilitate transparency in implementation of these regulations.

IV. Part-by-Part Analysis

The following sections provide a description of the amendments with respect to each CFR part and provide distribution tables listing what current CFR sections are proposed for change, the new (

i.e.

, proposed) CFR section, and a description of the proposed changes. Because this proposed rule incorporates changes made to the preliminary drafts, which were distributed to tribes in December 2005, the following part-by-part analysis includes a discussion of major changes made to each preliminary draft of the CFR part in response to comments.

A. 25 CFR Part 15

The purpose of this part is to describe the authorities, policies and procedures the BIA (or tribe that has contracted or compacted to fulfill probate functions) uses to prepare a probate file for an Indian decedent's trust estate, except for restricted land derived from allotments made to members of the Five Civilized Tribes (Cherokee, Choctaw, Chickasaw, Creek and Seminole) in Oklahoma.

Amendments to this part revise several subsections to ensure that the probate file delivered to OHA for adjudication is as complete as possible. By requiring a certification by BIA that they have examined certain sources of information and that the file is as complete as possible based on those sources of information, the amendments will prevent multiple transfers of the probate file between BIA and OHA, facilitating the process. Additional changes to the records requirements, such as deleting the requirement for a birth certificate, are also intended to facilitate the probate process.

The amendments ensure that information is included in the probate file to determine whether heirs and devisees meet the AIPRA definition of “Indian.” The amendments also incorporate definitions regarding AIPRA's new methods for consolidating interests at probate:

• Consolidation agreements, which are agreements by the decedent's heirs and devisees to consolidate their inherited/devised interests in trust and restricted land or consolidate their inherited/devised interests in land with other interests they already own in trust and restricted land; and

• Purchase options at probate, which allow eligible purchasers to purchase or exchange a decedent's interest in trust or restricted land.

Amendments to this part ensure that the probate file contains information necessary for implementation of statutory solutions to fractionation set out in 43 CFR part 4, which addresses OHA probate hearings. Part 15 prescribes what must be included in a probate package and how it will be compiled.

Changes From Preliminary Draft

Several tribal commenters questioned why 25 CFR part 15 and 43 CFR part 4, which both address the probate process, are in separate CFR titles. The Department has determined that because these two parts address different agencies—25 CFR part 15 addresses BIA preparation of the probate file, and 43 CFR part 4 addresses adjudication of the probate file once OHA receives it from BIA—these parts are best kept in their respective titles.

Several commenters suggested that the definitions in both 25 CFR part 15 and 43 CFR part 4 should track the definitions as set out in ILCA, as amended by AIPRA. The Department has reviewed the regulatory definitions, and amended them as appropriate to ensure that they are consistent with AIPRA and with 43 CFR parts 4, 30.

The Department examined and changed terms, as appropriate, to ensure consistency with definition of terms in 43 CFR parts 4, 30. The Department also amended other terminology as a result of issues raised by tribal commenters: for example, it changed “trust financial assets” and “cash assets” to “trust personalty” to encompass both cash and securities, and it changed “beneficiaries” to “devisees,” which is a more precise term including only those who receive under a will. In section 15.8, the Department clarified what is meant by a “self-proved will.”

In response to tribal comments, the Department also significantly amended section 15.14. In the preliminary draft, this section had provided that, pending probate, the Secretary could take custody and control of the estate and take any action he or she determined to be necessary for the benefit of the estate, including sale of the land. The version of this section being proposed today instead provides limited emergency actions that BIA may take when assets in an estate may be significantly diminished or destroyed while the probate is pending. Each of the emergency actions require a request to or hearing before OHA, so no unilateral action may be taken to sell land pending probate under this provision.

At least one tribal commenter objected to the last provision in section 15.106 of the preliminary draft, allowing the Secretary to request any additional information in support of the probate file. The Department has deleted the provision allowing the Secretary to require additional information in support of the probate file.

The Department also clarified when claims against an estate may be filed and the deadline for filing such claims in section 15.202.

Distribution Table—25 CFR Part 15

The following distribution table indicates where each of the current regulatory sections in 25 CFR part 15 is located in the proposed 25 CFR part 15.

Current citation

New citation

Title

Remarks

15.1

15.1

What is the purpose of this part?

No change.

15.2

15.2

What terms do I need to know?

Additional definitions.

15.3

Who can make a will disposing of trust or restricted land or trust personalty?

New section.

15.4

What are the requirements for my will?

New section.

15.5

Can I revoke my will?

New section.

15.6

Can my will be deemed revoked by the operation of the law of any state?

New section.

15.7

What is a self-proved will?

New section.

15.8

Can I make my will, codicil, or revocation self-proved?

New section.

15.9

Do affidavits for my self-proved will, codicil, or revocation have to be in a certain format?

New section.

15.3

15.10

Will the Secretary probate all the land or assets in an estate?

Clarifies that the Secretary will probate only the trust or restricted property in an estate.

15.4

15.11

How does the probate process work?

Administrative changes.

15.12

What happens if assets in a trust estate may be diminished or destroyed while the probate is pending?

New section.

15.101

15.103

How do I begin the probate process?

Clarifies whom to contact at BIA to inform of a death.

15.104

Does BIA need a death certificate to prepare a probate file?

Clarifies that a death certificate should be provided and lists information and documents that must be provided if no death certificate is available.

15.102

15.102

Who may notify BIA of a death?

Plain language.

15.103

15.101

When should I notify BIA of a death?

Plain language.

15.104, 15.105

15.105

What other documents does BIA need to prepare a probate file?

Clarifies that certain documents may come from an authority other than a court. Adds requirement for: orders requiring payment of spousal support; identification of person or entity in whose favor an interest is renounced; court judgments regarding creditor claims; and place of enrollment and tribal enrollment or census number of the decedent and potential heirs and beneficiaries. Deletes requirement for birth certificate.

15.106

15.201

Can I get funds from the decedent's IIM account for funeral services?

Plain language.

15.107

15.107

Who prepares a probate file?

Incorporates new “probate staff” definition.

15.108

15.108

If the decedent was not an enrolled member of a tribe or was a member of more than one tribe, who prepares the probate file?

Redesignated. Plain language.

15.106

Can a probate case be opened when an owner of an interest has been absent?

New section.

15.201

15.301

What will BIA do with the documents that I provide?

Clarifies that BIA will also examine other documents and information (beyond those provided) to prepare a complete probate file and will transfer the probate file to OHA.

15.202

15.202

If the decedent owed me money, how do I file a claim against the estate?

Adds requirements to provide certain additional information in support of claim. Changes deadline for filing a claim to the conclusion of the first hearing rather than 60 days of verification of death.

15.203

15.302

What items must BIA include in the probate file?

Clarifies what the certified inventory of trust or restricted real property should contain. Adds requirements for supporting documents.

15.303

When is a probate file complete?

New section.

15.301

15.401

What happens after BIA prepares the probate file?

Redesignated. Deletes notification to interested parties.

15.302

15.402

What happens after the probate file is referred to OHA?

Adds provisions describing how BIA will handle claims it receives after it refers the probate file to OHA.

15.303

15.403

What happens after the probate decision is made?

Establishes a 30-day time period to file a written request for de novo review, a request for rehearing with the OHA deciding official, or an appeal. Establishes that BIA will not pay claims, transfer title, or distribute assets pending a de novo review, rehearing, or appeal.

15.401

15.501

How can I find out the status of a probate?

Clarifies that interested parties may contact the BIA agency or regional office.

15.402

15.502

Who owns the records associated with this part?

Clarifies that records made by or on behalf of the United States are owned by the United States.

15.403

15.503

How must records associated with this part be preserved?

Redesignated. Plain language.

15.504

Who may inspect these records?

Redesignated. Plain language.

15.505

What information must tribes provide BIA to complete the probate file?

Establishes that tribes must provide certain information when necessary to complete a probate file.

15.506

How does the Paperwork Reduction Act affect this part?

New section.

B. 25 CFR Part 18 [NEW]—Tribal Probate Codes

This new CFR part addresses the process for obtaining Secretarial approval of a tribal probate code and lists factors the Secretary will consider in reviewing the tribal probate code for approval. While tribes have had the authority to adopt their own tribal probate codes governing descent and distribution of trust and restricted lands located within the tribes’ respective reservations or otherwise subject to the tribes’ jurisdiction, part 18 clarifies that a tribe must obtain Secretarial approval of the code. This part lists the factors the Secretary will consider in reviewing a tribal probate code and establishes when an approved code, repeal, or amendment becomes effective. Upon approval, this part requires the tribe to notify tribal members of the tribal probate code.

Changes From Preliminary Draft

The Department made several plain language changes to the preliminary draft, which has resulted in combining certain sections and rearranging the sections to some degree. The Department added a new subsection (b) to section 18.1 to clarify that a tribal probate code may provide for a single heir rule that differs from the one provided in AIPRA.

The Department also clarified section 18.8(b) (section 18.9 in the preliminary draft) to provide that a tribal probate code or amendment will be applied to the estates of decedents who die on or after the effective date, rather than the date of approval, of the tribal probate code or amendment.

Finally, tribal commenters objected to section 18.12 of the preliminary draft, which provided how tribes should notify their members of a tribal probate code or amendment, as an inappropriate incursion into tribal sovereignty. The Department has deleted this section in its entirety.

Note:

A distribution table is not included here because these provisions are entirely new.

C. 25 CFR Part 150—Indian Land Record of Title

The LTRO determines, maintains, and certifies the title status of Indian land and provides various land title products and services to individual Indians, tribes, and other members of the public for land held in trust or restricted status by the United States. Trust status means that title is held by the United States in trust for the benefit of an individual Indian or tribe. Restricted status means ownership of the property is subject to Federal restrictions against alienation and/or encumbrance.

The proposed rule replaces 25 CFR part 150, Land Records and Title Documents, in its entirety, to provide clarification of LTRO's procedures and increase the ability of the LTRO to provide services and products to Indians, tribes, and the public comparable to those provided by state and local land records offices. The changes are described subpart by subpart, below.

Subpart A of the proposed rule, Purpose, Definitions, and Public Information, clarifies that the

Department will provide access to the information in the Indian Land Record of Title to individual Indians, tribes, and the public, except in those instances where access would violate law or policy restricting access to such records. The definition of “Indian land” is clarified to include only lands in trust or restricted status and Federal government-owned land that is under the jurisdiction of the BIA, and not land held in fee by Indians or fee land subject to the rights, occupancy, and use of Indians.

Subpart B of the proposed rule, The Indian Land Record of Title Designation as the Official Record of Indian Land, designates the Indian Land Record of Title as the official record of title instruments affecting Indian land. The proposed rule clarifies that constructive notice of the existence of the title instrument is provided by recording the instrument in the Indian Land Record of Title. Recording instruments with other Federal or state offices does not provide constructive notice with regard to Indian land.

Subpart C of the proposed rule, LTRO Procedures and Requirements to Record Instruments in the Indian Land Record of Title, designates the LTRO as the organization within the Federal government that has the responsibility to maintain the Indian Land Record of Title. This subpart describes the LTRO process for receiving and recording title and the process for correcting an error or omission in an LTRO product or service.

Subpart D of the proposed rule, Services and Products of the LTRO, describes the types of services and products offered by the LTRO. Subpart D also proposes charging fees to certain parties for the services and products provided by LTRO. The proposed fees implement the authority contained in 25 U.S.C. 413 and address a Congressional directive, in 31 U.S.C. 9701, for agencies to begin charging fees that are fair and reasonable based upon the value of the service provided by the Federal office. Under 25 U.S.C. 14b, the Secretary may order that such funds be directed to the appropriation account for the LTRO. A fee schedule will be published as a notice separate from this proposed rule. The proposed rule specifies exceptions to the fee.

These proposed provisions will provide a greater benefit to individual Indians, tribes, and the public through clarification of LTRO procedures and will improve LTRO's ability to serve beneficiaries.

Changes From Preliminary Draft

Since distribution of the preliminary draft, the Department made several changes to part 150. For example, the Department added cross-references to 43 CFR part 30 in proposed sections 150.206 and 150.207, relating to corrections of final probate records. The proposed part 150 also moves two sections regarding how to notify the LTRO of an error or omission in a service or product from subpart D to subpart C, for clarity. (See proposed section 150.208). The Department deleted the section in the preliminary draft, “What certified products does the LTRO produce,” and added the section, “What services and products may I order from the LTRO.” Additional changes and issues are discussed below.

Terminology:

The Department added language to clarify several definitions, including “interest,” “Land Titles and Records Office,” “title,” and “title instrument.” The Department also rewrote the definition for “tribe” to be consistent with existing regulatory definitions for this term.

Throughout the rule, the Department has modified the terminology to clarify that the rights of the individual beneficiary and tribe relate to an interest in trust (see also 25 CFR part 179).

Effect on Tribes that Compact or Contract LTRO Functions:

Several tribal commenters requested clarification on how this rule affects tribes that perform LTRO functions under a contract or compact. Records maintained by tribes under such a contract or compact are part of the Indian Land Record of Title and must be maintained under the same standards and policies. As such, the regulation includes compact and contract tribes under the definition of the “Land Titles and Records Office” for grammatical and textual convenience purposes. The inclusion of compact and contract tribes under this definition is not intended to reflect a limitation on the sovereignty of these tribes. Certain functions performed by the LTRO are inherently Federal functions and can only be performed by a government agency. The inclusion of the compact and contract tribes in this definition is not intended to authorize any such tribe to perform any inherently Federal function.

Access to the Indian Land Record of Title:

Several Indian commenters raised the issue of access to LTRO information. Specifically, these commenters pointed out that they are being denied access to LTRO information, sometimes under the auspices of the Privacy Act. The rule clarifies that the Indian Land Record of Title is a public record but that access is subject to the Privacy Act, Freedom of Information Act, and other law or policy restricting access. In some instances, portions of a copy of the title instruments must be redacted under the Privacy Act to eliminate personal information not otherwise included in the Indian Land Record of Title. Additionally, the Department may restrict access to reports prepared for the Secretary. The LTRO performs functions other than entering information into the Indian Land Record of Title and providing copies of maps and title instruments—the LTRO also takes the information from the record, reviews and examines and draws conclusions about it in preparation of a report. Where the LTRO prepares a report for the benefit of the Secretary, the Secretary has the discretion to restrict access to the report. For example, the public may not obtain a copy of the Probate Inventory Report until OHA opens the probate case. While access to the Indian Land Record of Title may be restricted by the Freedom of Information Act, Privacy Act, or other law or policy, the Department believes that in most cases, neither law or policy will restrict access to these records by individual Indians or tribes. Generally, information included in the Indian Land Record of Title will be available to the public without restriction. The Department has also clarified that owners of an interest in trust or restricted land within the same reservation, the tribe or any person that is leasing, using, or consolidating, or is applying to lease, use, or consolidate, such trust or restricted land or the interest in trust or restricted lands may obtain the following information without regard to the Privacy Act and any exemption contained in the Freedom of Information Act: The names, mailing addresses, information on the location of the parcel, and percentage of the parcel owned by each individual.

Who Approves Title Instruments:

The Department has deleted as unnecessary the section regarding who the Federal officials are that approve title instruments.

Fees:

Based on input received on the preliminary drafts, the Department recognizes that there is strong opposition to requiring Indians and tribes to pay for LTRO services and products. Several tribal commenters also expressed a preference for charging fees exclusively to non-Indians because they believe that providing LTRO products and services to non-Indians without charge burdens the LTRO and diverts monies from other Indian and tribal programs. The Department welcomes continued feedback on the

proposal for charging fees for LTRO products and services. The Department will continue to review ways to maximize the efficiency and effectiveness of the products and services provided by the LTRO and consider whether charging fees can assist with this effort. The Department has removed the fee schedule from the text of the regulation and will publish it in a separate notice. This will allow the Department to revise the fees without having to amend the rule.

LTRO Response Time:

During tribal consultations, several tribal commenters expressed their frustration at what they characterized as the slowness of the LTRO in responding to requests to provide services and products. The Department is currently undergoing implementation of a technological system that will provide a centralized database of the Indian Land Record of Title. It is the Department's belief that this system will increase the LTRO's ability to respond to requests for products and services in a more timely manner. Several tribal commenters suggested imposing timelines on the LTRO to respond to requests. Due to the complexity and variety of title instruments and reports generated from the information in the Indian Land Record of Title, the Department is unable to establish a baseline time period. Additionally, the Department believes that establishing time frames within this regulation would limit the flexibility to amend those time frames to reflect changes in processes.

Distribution Table—25 CFR Part 150

The following distribution table indicates where each of the current regulatory sections in 25 CFR part 150 is located in the proposed 25 CFR part 150.

Current citation

New citation

Title

Remarks

150.1

150.1

What is the purpose of this part?

Clarifies purpose by expanding on the services and products LTRO provides.

150.2

150.2

What terms do I need to know?

Adds several definitions for clarification.

150.4

Do I have to be an Indian or a tribe to obtain products or services from the Lands Titles and Records Office?

New section.

150.101

Must all title instruments affecting Indian land be recorded in the Indian Land Record of Title?

Designates the Indian Land Record of title as the official record of title instruments affecting Indian land. Clarifies that recording with the Indian Land Record of Title serves as constructive notice that the title instrument exists.

150.102

Do I have to check with any other governmental office to find title instruments to Indian land?

Clarifies that the Indian Record of Land Title is the source of all recorded instruments.

150.3

150.201

Who maintains the Indian Land Record of Title?

Establishes the LTRO as the office responsible for maintaining the Indian Land Record of Title.

150.4

150.202

Where is the LTRO located?

Indicates that the LTRO has locations throughout the United States, and that Bureau offices maintain contact information.

150.5

Deleted.

150.6

150.203

Who submits the title instruments for recording?

Clarifies that BIA and other government offices may submit title documents for recording. Deletes specific reference to the Administrative Law Judge submitting probate documents.

150.204

What does the LTRO do with the instruments that it receives?

Restates the steps LTRO takes when it receives documents.

150.205

What are the minimum requirements for recording a title instrument?

Clarifies requirements for recording.

150.7

150.206

What if the LTRO discovers a defect or error in a document?

Specifies LTRO procedures to address defects or errors discovered after recording.

150.207

What if a defect or error in a final probate record cannot be corrected?

Restates requirement for LTRO notification to deciding official for non-clerical errors in probate records. Establishes that the corrected document will be filed in the Indian Land Record of Title. Deletes reference to “Superintendent” and Administrative Law Judges.

150.208

How do I correct an error or omission in a title instrument or LTRO product or service?

New section.

150.209

What instruments qualify for recording in with the LTRO?

New section.

150.210

Does the LTRO maintain the original title instruments?

New section.

150.211

May I obtain a copy of the title instrument from the LTRO?

New section.

150.301

What services and products may I order from the LTRO?

New section.

150.8

150.302

How do I order services and products from the LTRO?

Discusses how to order any of LTRO's services and products.

150.303

Does BIA charge fees for any of the services provided by, or products produced by, the LTRO?

New section.

150.304

What will the LTRO do if the instrument contains information that is privileged or protected?

New section.

150.305

How does the Paperwork Reduction Act affect this part?

New section.

150.9

Deleted.

150.10

150.212

Is there any benefit of obtaining a certified copy of the title?

Restates that a certified copy can be used in place of an original in court or elsewhere.

150.11

150.3

When can I see land and title information from the Indian Land Record of Title?

Clarifies Department policy to allow public access to the Indian Land Record of Title. Deletes provision regarding nondisclosure of monetary consideration and provision.

D. 25 CFR Part 152—Conveyances

This part establishes the authorities, policy, and procedures governing the conveyance of trust or restricted land. Amendments reorganize this part to clarify the different procedures and requirements applicable to each type of conveyance. The reorganized sections incorporate statutory solutions aimed at reducing fractionation of interests. One such solution, consolidation by sale, is newly established by AIPRA. Consolidation by sale allows one or more eligible bidders to consolidate highly fractionated land by buying the highly fractionated interests at fair market value through a sale conducted by the Secretary. The amendments also:

• Provide instances where consent of the trust or restricted co-owner is not required to convey a fractional interest, making it easier to consolidate interests;

• Allow conveyance of land within a tribe's jurisdiction without tribal consent where the grantor owns 100% of the tract;

• Allow tribes to purchase fractional interests of non-consenting trust and restricted owners at fair market value (tribal tract purchases); and

• Clarify that the Secretary will have a lien on income derived from any interest purchased for a tribe under the Indian Land Consolidation program in the amount of the purchase price, until the lien is satisfied or removed by the Secretary.

The reorganization divides this part into various subparts. Proposed subpart A, General Provisions, provides relevant definitions, describes to whom the Secretary will provide ownership information related to conveyance in this part, and establishes the scope of the regulations.

Subpart B, Sales and Exchanges of Tribal Trust or Restricted Land, addresses sales and exchanges of tribal land pursuant to an approved tribal consolidation plan and certain exchanges of tribal land. This subpart describes what a tribal consolidation plan is, how to obtain approval of such a plan, and how to obtain approval of a sale or exchange in the absence of tribal consolidation plan.

Subpart C, Negotiated Sales, Gifts, and Exchanges of Individually Owned Lands, addresses conveyances of individually owned trust or restricted lands. This subpart provides for a tribal option to purchase any trust or restricted interests proposed for sale, gift, or exchange to unrestricted fee status.

Subpart D, Tribal Parcel Purchase, allows tribes to purchase tracts of trust or restricted lands where the tribe either owns at least 50% of the undivided interests in the tract or has obtained the consent of the co-owners of at least 50% of the undivided interests in the tract, subject to the right of an individual owner in possession of the tract to preempt the purchase.

Subpart E, Consolidation by Sale of Highly Fractionated Parcels, incorporates the new consolidation mechanism authorized by AIPRA. Consolidation by sale allows eligible bidders to consolidate interests in highly fractionated parcels where certain consents are obtained. This subpart also provides the procedures for conducting the sale by public auction or sealed bid. There is an “Application for Consolidation by Sale” form associated with this subpart. To obtain a copy of the information collection request submission to OMB or a copy of the form, send your request to the address related to information collections listed in

ADDRESSES.

Subpart F, Partitions in Kind, authorizes the Secretary to subdivide trust and restricted land with multiple owners into smaller tracts in which the interests of the owners are unified or consolidated. This subpart allows any owner of a fractionated interest to apply to the Secretary for partition.

Subpart G, Mortgages and Deeds of Trust, allows the Secretary to approve mortgages or deeds of trust encumbering individually owned land under certain circumstances.

Much of the current regulatory language is redesignated into subpart H, Patents in Fee, Certificates of Competency, and Orders Removing Restrictions, and subpart I, Special Provisions applicable to Osage and the Five Civilized Tribes.

Changes From Preliminary Draft

The Department made several changes to the preliminary draft of 25 CFR part 152. Many of the changes are intended to clarify and make terminology consistent.

Definitions:

The Department deleted the definitions for “competent” and “contiguous” and added definitions for “fair market value,” “family farm,” and “owner(s).” The Department revised the definition for “Indian.”

Land Consolidation Plans:

The preliminary draft had included a section stating that a tribal land consolidation plan may identify for purchase only lands contiguous to the reservation or otherwise subject to tribal jurisdiction. Several tribal commenters objected to the provision stating that the tribal land consolidation plan may identify for purchase only those lands that are located within or contiguous to the tribe's reservation boundaries, or otherwise subject to tribal jurisdiction. One tribal commenter stated that because it does not have fixed exterior reservation boundaries, this provision would prevent it from acquiring other lands which are in the vicinity of its separate trust parcels, but which are not within or contiguous to that tribe's “reservation boundaries.” A few tribal commenters stated that this limitation is substantive and is not contained in ILCA section 2203, and therefore should not be imposed by regulation. Another tribal commenter stated that this severely limits the unrestricted fee lands the tribe can purchase. The Department has deleted this restriction. Additionally, the Department has deleted the definition of “contiguous” since this deleted provision was the only appearance of the term “contiguous” in the regulation.

Several tribal commenters also noted that the tribal land consolidation plan conditions effectively require tribes to pre-identify every transaction to be carried out under the plan—whether for sale, purchase, or exchange. These commenters noted that this requirement

would cause the tribe to submit new plans or plan amendments for every such transaction. These commenters also asserted that this requirement will result in significant price inflation and force tribes to pay more for those targeted tracts than would be the case without the proposed pre-identification requirement. The Department has replaced the requirement for specifically identifying sales, purchases, and exchanges with a requirement that the plan include a description and map of the general area of the sales, purchases, and exchanges.

Several tribal commenters opposed the requirement for approval of a tribal land consolidation plan as an intrusion on tribal sovereignty. Submission of a tribal land consolidation plan is optional and within the tribe's discretion. However, an approved land consolidation plan will allow a tribe to sell parcels of its trust land in connection with an overall plan to consolidate its land holdings and/or decrease fractionation. Pursuant to federal law, sales under an approved consolidation plan may also be at slightly less than fair market value. If the tribe has no plans to sell its trust land, though, there is no need for it to prepare or submit a land consolidation plan for approval.

Finally, the Department clarified the process for sales and exchanges with a land consolidation plan and without a land consolidation plan.

Sales and Exchanges:

The Department revised section 152.210 (section 152.211 of the preliminary draft) to clarify that a grantor may waive the right to be notified of fair market value only if the grantee is Indian, among the other criteria. The Department also deleted section 152.212 of the preliminary draft, addressing requirements for appraisals to determine fair market value because the proposed draft instead incorporates the requirements into the new definition of “fair market value.”

Several tribal commenters questioned the meaning of the provision, “trust or restricted land may only be conveyed to a grantee in unrestricted fee status, where all of the trust or restricted interests in the tract are being conveyed” in section 152.205 (section 152.206 of the preliminary draft). The Department has deleted this phrase and clarified that the Indian tribe with jurisdiction will receive notice and has the option to purchase.

The preliminary draft provided that tribal consent for conveyance would be required if a law affecting probate and inheritance rights was in effect. The Department revised this section to clarify that tribal consent of a conveyance is required if the tribe enacted a law requiring consent.

The preliminary draft required the tribe to purchase the fractional interest where it fails to promptly consent to the sale. The Department has removed that provision from the regulation.

Several tribal commenters questioned use of the U.S. Department of Justice (DOJ) title standards. The Department deleted this reference and instead refers generally to Department of the Interior boundary standards.

Several tribal commenters objected to the proposed provision allowing the Secretary to liquidate off-reservation interests and allow a tribe to purchase an on-reservation interest where the transfer creates a different pattern of jurisdiction or aggravates existing jurisdictional conflicts. This commenter stated that this is contrary to the Federal policy of Indian self-determination. Another commenter stated that a distinction should be made between trust interests and restricted interests because tribes have a jurisdictional responsibility upon acquisition of the beneficial interest in trust parcels. The Department has deleted this section.

Tribal Tract Purchases:

Two tribal commenters expressed confusion over the provision stating that tribal tract purchase authority does not extend to “purchases that are limited to any such fractional interests held in unrestricted fee status.” The Department has deleted this provision and clarified that tribal tract purchases may include conveyances to the tribe of interests held in fee and that fee interests are included in the calculation to determine whether the tribe owns at least 50% of the tract. With regard to providing notice of a tribal tract purchase to owners whose whereabouts are unknown, the Department has lengthened the time before the closing of the sale that publication in a paper can occur from 30 days to 90 days. The Department has also clarified what action it will take if it does not approve the appraisal for a tribal tract purchase.

Consolidation by Sale:

Several tribal representatives commented on the fact that an individual holding the largest ownership interest in the tract, and 20% or greater of the ownership interests in the tract, has a right to match the highest bid. The Department has not made any substantive changes to these provisions because they are prescribed by AIPRA. One tribal commenter stated that the regulation should clarify that both trust and fee interests are subject to consolidation by sale. The Department has clarified this in section 152.402. Another tribal commenter asked whether a fee interest owner would be able to trigger a consolidation by sale. Proposed section 152.403 entitles only “eligible bidders” to submit applications for consolidation by sale. A fee owner may submit an application if he or she meets one of the categories for “eligible bidder.” Finally, the Department revised the definition of “bona fide” and made other clarifications.

Partition in Kind:

The Department simplified section 152.501, establishing what tracts may be partitioned and deleted the provision excluding partitions of restricted land in Alaska. The preliminary draft included a provision at section 152.606(b) stating that the tribe will not have the right of first refusal where encumbered land is purchased as a result of a foreclosure or sale proceeding. Several tribal commenters asserted that the tribe should have the right to purchase interests that are to be foreclosed and are to be taken into unrestricted fee status. The Department has deleted this provision and instead states that title will be taken in accordance with laws applicable to the foreclosure or sale proceeding.

Distribution Table—25 CFR Part 152

The following distribution table indicates where each of the current regulatory sections in 25 CFR part 152 is located in the proposed 25 CFR part 152.

Current

citation

New citation

Title

Remarks

152.1

What does this part do?

New section.

152.1

152.2

What terms do I need to know?

Adds and amends definitions.

152.3

Will the Secretary provide ownership information?

New section.

152.4

To whom will the Secretary provide ownership information?

New section.

152.5

Which subparts do not apply to Alaska?

New section.

152.2

152.101

What transactions are covered by this subpart?

Incorporates AIPRA principles by clarifying that the Secretary will only approve sales of tribal land when made in accordance with a consolidation plan.

152.102

What must a land consolidation plan include?

New section. Lists items that must be included in a tribal land consolidation plan.

152.103

Are there any restrictions on a land consolidation plan?

New section.

152.104

How does the Secretary approve a land consolidation plan?

New section.

152.105

How does a tribe receive approval for a sale or exchange under a land consolidation plan?

New section.

152.106

How may the tribe use the proceeds of a sale or exchange?

New section.

152.107

In the absence of an approved land consolidation plan, how does a tribe get approval for an exchange of tribal land?

New section.

152.108

What criteria will the Secretary use to determine whether to approve an exchange?

New section.

152.3

Deleted.

152.4

152.701

Application for patent in fee

Redesignated.

152.5

152.702

Issuance of patent in fee

Redesignated.

152.6

152.703

Issuance of patents in fee to non-Indians and Indians with whom a special relationship does not exist

Redesignated.

152.7

152.704

Application for certificate of competency

Redesignated.

152.8

152.705

Issuance of certificate of competency

Redesignated.

152.9

152.801

Certificates of competency to certain Osage adults

Redesignated.

152.10

152.802

Application for orders removing restrictions, except Five Civilized Tribes

Redesignated.

152.11

152.803

Issuance of orders removing restrictions, except Five Civilized Tribes

Redesignated.

152.12

152.804

Removal of restrictions, Five Civilized Tribes, after application under authority other than section 2(a) of the Act of August 11, 1955

Redesignated.

152.13

152.805

Removal of restrictions, Five Civilized Tribes, after application under authority of section 2(a) of the Act of August 11, 1955

Redesignated.

152.14

152.806

Removal of restrictions, Five Civilized Tribes, without application

Redesignated.

152.15

152.807

Judicial review of removal restrictions, Five Civilized Tribes, without application

Redesignated.

152.16

152.808

Effect of order removing restrictions, Five Civilized Tribes

Redesignated.

152.17, (152.18)

152.203

Who may convey an interest in trust or restricted land?

Clarifies who may convey interests with Secretarial approval.

152.19

Deleted.

152.20

Deleted.

152.21

152.201

What lands are covered by this subpart?

Clarifies scope of subpart.

152.202

What transactions are covered by this subpart?

Clarifies scope of subpart.

152.22

Deleted.

152.204

Who can receive an interest in trust or restricted lands?

New section.

152.205

What restrictions apply to a conveyance of trust or restricted land to fee status?

New section.

152.23

152.206

How does an owner initiate a negotiated sale, gift, or exchange?

Clarifies what a written request for negotiated sale, gift, or exchange must include.

152.207

Does a conveyance of a fractional interest require the consent of the co-owner(s)?

New section.

152.208

Is tribal consent required to convey an interest in trust or restricted land located within the tribe's jurisdiction?

New section.

152.24

152.210

When must fair market value be determined and provided to the grantor?

Establishes circumstances in which grantor may waive right to be provided with information as to the fair market value.

152.25

152.209

Is payment required for a negotiated sale, exchange, or gift?

Removes restrictions for conveyances at less than fair market value because 152.210 entitles the grantor to full information regarding the fair market value.

152.211

When must the Secretary receive payment for the conveyance of the land?

New section.

152.212

How does the Secretary decide to approve a negotiated sale, gift, or exchange?

New section.

152.213

How does the negotiated sale or exchange occur?

New section.

152.214

When is a negotiated sale, gift, or exchange effective?

New section.

152.215

How does an Indian Land Consolidation Program lien attach?

New section.

152.216

How is an Indian Land Consolidation Program lien removed?

New section.

152.217

When can a co-owner acquire an interest previously acquired on behalf of the tribe?

New section.

152.218

What if there are liens or other encumbrances on the lands to be conveyed?

New section.

152.301

What lands are covered by this subpart?

New section.

152.302

What transactions are covered by this subpart?

New section.

152.303

How does a tribe apply for a parcel purchase?

New section.

152.304

How and when will owners be notified of an application for tribal parcel purchase?

New section.

152.305

Can an individual owner preempt and succeed a tribe's right to purchase?

New section.

152.306

How and when will the Secretary review an application for parcel purchase?

New section.

152.307

How and when will the conveyance instrument be executed?

New section.

152.401

What terms do I need to know?

New section.

152.402

What lands are subject to consolidation by sale?

New section.

152.403

How do I apply to consolidate a parcel by sale?

New section.

152.404

What must the Secretary do before acting on an application for consolidation by sale?

New section.

152.405

What consents are necessary for a consolidation by sale?

New section.

152.406

How will the Secretary notify owners of the consolidation proceeding?

New section.

152.407

What action does the Secretary take on comments or objections?

New section.

152.408

What happens if the Secretary orders a new appraisal?

New section.

152.409

How can an owner appeal a consolidation by sale proceeding?

Limits discussion of advertising to consolidation by sale.

152.26

152.410

How will the Secretary notify owners of a sale after appeals have been decided?

Limits discussion of advertised sale to consolidation by sale.

152.27

152.411

Who may participate in an auction or sealed bid sale?

New section.

152.412

How does a tribe reserve its right to match the highest bid?

New section.

152.28

152.413

How will the Secretary determine the successful bidder?

New section.

152.29

152.414

What happens if no bid matches the fair market value?

Deletes provisions allowing the Secretary to reject bids.

152.30

Deleted.

152.415

When must the highest bidder pay for the purchase?

New section.

152.416

How will proceeds be distributed?

New section.

152.417

Is Federal financial assistance available to support a bidder's purchase?

New section.

152.418

What title is acquired?

New section.

152.31

Deleted.

152.32

152.219

How does a transaction affect collection of construction costs for irrigation projects?

Plain language.

152.33

Deleted. See subpart F.

152.34

Deleted. See subpart G.

152.35

Deleted.

Subpart F—Partitions in Kind

152.501

What lands are covered by this subpart?

New section

152.502

When does this subpart apply?

New section.

152.503

How can an owner initiate a partition action?

New section.

152.504

How will we notify the applicant's co-owners of an application for partition?

New section.

152.505

How and when will we review an application?

New section.

152.506

When will we execute the conveyance instruments?

New section.

Subpart G—Mortgages and Deeds of Trust

152.601

What does this subpart do?

New section.

152.602

How do owners submit an application for approval of a mortgage or deed of trust?

New section.

152.603

How will the Secretary review the application?

New section.

152.604

How may the mortgage or deed of trust be enforced?

New section.

152.605

Does the land remain in trust as a result of foreclosure or sale?

New section.

152.606

How does the Paperwork Reduction Act affect this part?

New section.

E. 25 CFR Part 179—Life Estates and Present and Future Interests

This regulation sets forth the authorities, policy and procedures governing the administration of life estates and future interests in Indian lands by the Secretary of the Interior.

Amendments to this part explicitly identify the rights and responsibilities of the life tenant, and define the life tenant's share of income, contract bonuses, and royalties derived from the use of the land and the extraction of minerals or other resources from the land. AIPRA established that life estates are “without regard to waste,” meaning that the life tenant is entitled to all income, contract bonuses, and royalties derived from use of the land and extraction of resources. The amendments to this part incorporate this change, providing that all life estates created after June 20, 2006, will be entitled to all income, contract bonuses, and royalties, in the absence of an order, conveyance document, or written agreement specifying otherwise.

The amendments delete the Single Life Factor table for determining the respective values of a life estate and remainder share and instead refer to Actuarial Table S, Valuation of Annuities, obtained from 26 CFR 20.2031. The amendments also eliminate the distinction between the genders in determining the value of a life estate; the current regulations generally value life estates held by females higher than those held by males.

New sections address several topics that allow the Department to determine the type of estate and interest in which a beneficial interest may be held, to ensure that the holder of a life estate, the measuring life for a life estate, the holder of a future interest, and class members can be ascertained in all cases, including when the conveyance document or probate order includes conditions. The amendments also address the termination and renunciation of life estates, establish why notification to BIA of the death of a life tenant is important, and establish that term estates will be treated in the same manner as life estates for the purposes of distributing income, cash bonus, and principal.

Changes From Preliminary Draft

The Department added several new definitions, including “class,” “condition,” “contingent remainder,” “conveyance document,” “estate,” “executory interest,” “extant person,” “grantee,” “grantor,” “holder,” “life tenant,” “open class,” “order,” “present interest,” “remainderman,” “reversionary interest,” “Secretary,” “term estate,” and “vested.” The Department also added several sections and expanded others since it released the preliminary draft of part 179.

Effect of State Law:

The preliminary draft stated that the Department would look to state law for guidance in the absence of Federal law or Federally approved tribal law. This section has been deleted because the Office of Hearings and Appeals will determine when it is appropriate to look to state law.

Ascertaining Beneficial Interests and Classes:

The Department has added several provisions that ensure that the Department can determine the type of estate and interest in which a beneficial interest may be held. For example, proposed section 179.3 ensures that the interest in a life estate vests only in specific, living persons, without conditions. Proposed section 179.4 ensures that the “measuring” life for a life estate is a specific person who is living at the time the conveyance document is approved or testator dies. Proposed section 179.5 ensures that the interest in future interest holders vests only in specific, extant persons, and if there are conditions, that those conditions can be satisfied before the Secretary's approval of the conveyance document, if the future interests are created by conveyance document, or by the death of the testator, if the future interests are created by will. This section will, in practice, forbid successive future interest in persons who are non-specific, non-living persons. Likewise, proposed sections 179.6, 179.7 and 179.8 indicate that, where the conveyance or will grants an interest to a class, the class will close and any conditions must be satisfied upon approval of the conveyance document or death of the testator. Proposed section 179.8 also describes the circumstances in which the Secretary may close or open a class. These changes allow the Secretary to know, at the time of approval of conveyance document or death of the testator, who holds the beneficial interests.

Without Regard to Waste:

During tribal consultations and during the period leading up to the publication of this proposed rule, several tribal commenters expressed concern with the preliminary draft's definition of “without regard to waste” and the phrase's effect on protection of the remainderman's interest from abusive practices of the life tenant. AIPRA states that all life estates created on or after June 20, 2006, shall be “without regard to waste” and defines this phrase as meaning that the life tenant shall be entitled to all income, including bonuses and royalties, to such land to the exclusion of the remaindermen. The Department has incorporated this concept into the regulations at proposed section 179.12, which provides that, where the order, conveyance document, or written agreement does not specify otherwise, life tenants will be entitled to all income, principal, contract bonuses, and royalties where the life estate was created by a conveyance document after the effective date of this regulation or by an order in a probate case where the testator died on or after June 20, 2006.

The Department has also added sections 179.9, 179.10 and 179.11, which respectively establish the privileges of a life tenant, the responsibilities a life tenant has to the remainderman, and action a remainderman may take to stop a life tenant from damaging and substantially diminishing property. Section 179.10 specifically states that, with respect to life estates created by probate order after June 20, 2006, or by conveyance document after the passage of this regulation, the life tenant may not destroy the estate, commit malicious waste, or fail to reasonably manage the land in a manner consistent with long-term utilization and trust status of the land.

Sale or Leasing of Interests:

The Department has clarified in proposed section 179.9 that the life tenant may rent or sell the life estate interest to someone else. Additionally, section 179.10 notes that provisions regarding the relationship between a life tenant and remainderman do not restrict or amend the authority of the Secretary to consent on behalf of interest owners to the leasing or transfer of Indian land.

Value of Current Life Estate and Remainder:

Several tribal commenters identified an issue with placing the Single Life Factor chart directly into the text of the regulation, stating that it will be difficult to update. The Department has addressed this issue by deleting the Single Life Factor chart from the text of the regulation and instead referring to an existing chart that is frequently updated.

Distribution Table—25 CFR Part 179

The following distribution table indicates where each of the current regulatory sections in 25 CFR part 179 is located in the proposed 25 CFR part 179.

Current

citation

New citation

Title

Remarks

179.1

179.1

What is the purpose of this part?

Clarifies that these regulations do not apply to any Federal statutory rights to purchase.

179.2

179.2

What terms do I need to know?

Adds several definitions.

179.3

Deleted.

179.3

Who can hold a life estate?

New section.

179.4

Who can be the measuring life for a life estate?

New section.

179.5

Who can be designated as a future interest holder?

New section.

179.6

Who can be members of a class?

New section.

179.7

How are interest holders determined if the conveyance document or order contains conditions?

New section.

179.8

How are members to be determined if there is an open class?

New section.

179.9

What are the privileges of a life tenant?

New section.

179.10

What is the life tenant's responsibility to the remainderman?

New section.

179.11

How can a future interest holder stop the life tenant from damaging his/her interest and substantially diminishing its value?

New section.

179.4

179.12

How will the Secretary distribute income and principal between the life tenant and the remainderman?

Incorporates AIPRA provisions for life estates created after AIPRA's effective date, providing that these life tenants are entitled to all income, principal, contract bonuses, and royalties.

179.5

179.13

How will the value of a current life estate and remainder be determined?

Replaces existing life estate value tables with a reference to one table. Deletes gender as factor affecting life estate values.

179.14

How does a life estate terminate?

New section.

179.15

What if I do not want an interest in a life estate?

New section.

179.16

Why do I need to notify the Secretary about the death of a life tenant?

New section.

179.17

How will term estates be treated?

New section.

179.6

Deleted.

F. 43 CFR Part 4, Subpart D

Currently, subpart D of 43 CFR part 4 addresses how OHA adjudicates the probate file that BIA prepares under 25 CFR part 15. The amendments remove the probate hearing procedures to a new part 30. See the discussion of these changes below.

G. 43 CFR Part 30

The amendments make many administrative changes to the part to better meet plain language requirements and make the OHA probate process as transparent as possible. In addition, the amendments make several substantive changes. Amendments to this part clarify the two types of probate proceedings (summary and formal), simplify the deadline for filing a claim against an estate, and clarify the authority of administrative law judges, Indian probate judges, and attorney decision makers.

Other amendments reduce the impact of fractionation on trust and restricted lands and expand land consolidation options by incorporating administrative procedures to implement AIPRA provisions related to consolidation agreements, renunciations in favor of a designated recipient, and purchase options at probate. Consolidation agreements permit heirs and devisees to exchange interests in trust or restricted lands for the purpose of consolidating ownership. Renunciations in favor of a designated recipient enable heirs or devisees that would have inherited a trust or restricted interest to renounce that interest in favor of another eligible party. The availability of the option to purchase a decedent's trust or restricted interests has been expanded to allow tribes, eligible family members, and co-owners of trust or restricted interests to exercise the option.

Changes From Preliminary Draft

Because a significant number of issues on 43 CFR part 4 were identified in tribal comments, the following discussion addresses the issues by subheading in the new 43 CFR part 30.

Overall:

The Department reorganized some sections in this subpart to provide a better logical flow. For example, the Department moved former sections 4.382 and 4.383, related to the omission and improper inclusion of property in an estate, to sections 30.126 and 30.127 under the “Judicial Authority and Duties” subheading. Additionally, former section 4.216, related to what happens when a person dies without a will and has no heirs, has been moved to section 30.254 under the “Miscellaneous” subheading. Section 4.217, related to settlement agreements, has been moved to section 30.150, under the new subheading “Consolidation and Settlement Agreements” (formerly, this subheading included only consolidation agreements). Provisions related to tribal purchase of interests under special statutes (sections 4.290 through 4.304 of the preliminary draft) have been moved to sections 30.260 through 30.274. The Department also added a few sections under the “Renunciation of Interests” and “Summary Probate Proceedings” subheadings for clarity.

The Department and tribal commenters identified potential confusion regarding references to “allocated market value,” “estimated market value,” and “appraised market value.” The Department has addressed this issue by deleting references to “allocated” and “estimated” market value and replaced them with “appraised” market value.

Several tribal commenters noted that while the preliminary drafts established timelines for filing an appeal, they did not impose any timelines on OHA to act. For example, several tribal commenters suggested placing a deadline on OHA for designating a case as appropriate for summary or formal hearing and assigning a case to a judge 10 days after receiving the file from BIA. Other tribal commenters suggested imposing a timeframe on notifying

potential heirs that a probate case has been assigned to a judge. Another tribal commenter recommended setting time periods for holding the hearing and issuing a final decision in a probate case. The Department has determined that, given the variation in complexity and resources available, establishing set timelines for judges would not be feasible.

Definitions:

In response to tribal comments, the Department modified the current definition of “interested parties” to ensure that tribes and co-owners with the option to purchase are included in the definition. Several tribal commenters were concerned that the definition in the preliminary draft was too narrow, and would not provide notice to persons with an interest. The revised definition includes tribes and persons with the option to purchase at probate and all co-owners. (See proposed section 30.102).

Additionally, the Department revised several definitions included in the preliminary draft to ensure consistency with AIPRA and 25 CFR part 15. The Department amended the definition of “child” to include adopted children, in response to tribal comments that biological and adopted children should be treated equally in the distribution of property at probate. The Department also amended other terms for precision: for example, it changed “trust financial assets” and “cash assets” to “trust personalty” to encompass both cash and securities; it changed “beneficiaries” to “devisees,” which is a more precise term including only those who receive under a will; it revised the definitions for “per stirpes” and “de novo” for clarity; and it deleted the placeholders for definitions for “residing on” and “pretermitted spouse,” having determined that meanings for these terms are subject to judicial determination based on fact-specific circumstances.

Commencement of Probate Proceedings:

The Department clarified in section 30.114 that OHA will provide notice of the formal or summary probate proceeding and eliminated the requirement for BIA to notify potential heirs and devisees when it forwards the probate file to OHA for consideration because sufficient notice is provided by OHA upon designation of the case for a formal or summary probate proceeding.

Judicial Authority:

The Department amended section 4.220 of the preliminary draft, relating to the judge's general authority. It is now designated as section 30.120. In proposed subsection (f), the Department clarifies that the probate decision and order, not the terms of the sale, determine how the sale at probate and distribution of interests will occur. The Department also clarifies in proposed subsection (i) that the judge first determines whether the tribe has jurisdiction over the trust or restricted property at issue.

The Department clarified the standard against which a judge may determine a person to be dead based upon an extended unexplained absence. The revisions require credible evidence to establish, by a clear and convincing standard, that the person has had no known contact with any person or entity during the six-year period preceding the hearing. (See proposed section 30.124).

Claims:

Tribal commenters pointed out that deadlines for filing claims were both unclear and potentially conflicting. The Department significantly amended the provisions related to deadlines for filing claims to simplify the deadline and make consistent with 25 CFR part 15. The deadlines established in the preliminary draft complicated the matter of determining timeliness of claims and introduced both factual and legal issues, including choice of law issues, to determine when the creditor was chargeable with notice. Additionally, the preliminary draft continued the current requirement that the creditor file with BIA rather than OHA. This requirement is no longer appropriate since BIA no longer conducts any probate hearings. For this reason, the Department is allowing filing of claims with BIA while the probate file is being prepared, or with the OHA once the probate file has been transferred to the OHA. The Department has also clarified what must be included in a claim and eliminated the requirement for filing in triplicate. Additionally, the Department deleted the section related to priority and general claims (what had been sections 4.245 and 4.248 in the preliminary draft).

Settlement and Consolidation Agreements:

The Department placed provisions relating to settlement agreements with those relating to consolidation agreements. Revisions to the sections on consolidation agreements now specify that there are two types of consolidation agreements, one including only property in the estate, and another including both property in the estate and other property already owned by the heirs or devisees. The Department added a section allowing parties to a settlement or consolidation agreement the ability to waive valuation of trust property, given that the parties to the agreement may have non-economic reasons for entering into the agreement.

Purchase at Probate:

The Department clarified provisions relating to purchase at probate and clarified that, in accordance with AIPRA, an appraisal must be completed to determine market value. The Department also clarified provisions relating to renunciations to clarify who may receive a renounced interest in trust or restricted land, and who may receive a renounced interest in trust personalty. The Department also changed the previous provision that had stated the renunciation would not be valid if the designated recipient of a renounced interest refused to take the interest. Instead, this provision now states that the renounced interest will pass to the heirs of the decedent as if the person renouncing the interest had predeceased the decedent.

Summary Probate Proceedings:

The Department clarified what summary probate proceedings are and simplified the criteria for when a summary probate proceeding is appropriate (i.e., when the estate is “cash only” and the estate's value does not exceed $5,000 on the date of death). The Department deletes references to consolidation agreements and purchases at probate with regard to summary probate proceedings because such agreements would not apply to a cash-only estate.

Formal Probate Proceedings:

In response to tribal concerns regarding notice of a tribe's right to purchase, the Department amended section 4.337 of the preliminary draft to require notice to the tribe of probates of estates with trust or restricted land under the tribe's jurisdiction (see proposed section 30.213).

The Department has deleted the question related to the judge's authority to require a person to appear at a hearing (section 4.334 of the preliminary draft) because, while the judge does have this authority, the judge's subpoena authority is broader than the question and answer indicates. The section related to notice of a requirement to appear at a hearing has also been deleted to avoid confusion.

With regard to contests of self-proved wills, the Department has added a provision allowing the judge to order the deposition of a witness at a location reasonably near the witness's residence, where no attesting witness resides near the place of the hearing.

The Department has also clarified that the official record of the probate case and decisions contain settlement agreements, consolidation agreements, renunciations and acceptances of renounced property, and additional items where interests are sold at probate.

Miscellaneous:

The section addressing the rights of inheritance of someone who kills the decedent has been revised to comply with AIPRA. The Department also clarifies that a judge may allow fees for attorneys representing interested parties, but not creditors and that a judge may order the payment of fees to a guardian ad litem.

Distribution Table—43 CFR Part 4, Subpart D

The following distribution table indicates where each of the current regulatory sections in 43 CFR part 4, subpart D, is located in the proposed 43 CFR part 30 and in proposed revisions to 43 CFR part 4.

Current

citation

New citation

Title

Remarks

4.200

30.100

How do I use this subpart?

Adds updated references.

30.101

Will the Secretary probate all the land or assets in an estate?

New section.

4.201

30.102

What terms do I need to know?

Adds definitions for “BLM,” “consolidation agreement,” “directional disclaimer,” “probate staff,” “purchase option.” Replaces “deciding official” with “judge.” Deletes definition of “solicitor.”

4.210, 4.211

30.110

When does OHA commence a probate case?

Plain language.

30.111

How does OHA commence a probate case?

Plain language.

30.112

What must a complete probate file contain?

Plain language.

30.113

What will OHA do if it receives an incomplete probate file?

Adds that OHA may issue a subpoena for the missing information or proceed with a hearing.

30.114

What notice of the probate case will OHA send me?

Adds that OHA will provide notice upon receipt of the probate file.

30.115

Can I review the probate file?

New section.

4.202

30.120

What authority does the judge have in a probate case?

Deletes criteria for when a formal hearing is necessary. Adds new categories of authority.

30.121

May a judge appoint a master in a probate case?

New section. Allows judge to appoint masters.

30.122

Is the judge required to accept the master's recommended decision?

New section.

4.206

30.123

Will the judge determine matters of status and nationality?

Plain language.

4.204, 4.203

30.124

Can a judge find a person to be dead by reason of unexplained absence?

Establishes standard for finding that any person is dead.

4.205

30.154

What happens when a person dies without a will and has no heirs?

Incorporates AIPRA references.

4.242

30.125

May a judge reopen a probate case to correct errors and omissions?

Plain language. Identifies circumstances in which judge may reopen probate case.

30.130

When must a judge or attorney decision maker (ADM) recuse himself or herself from a probate case?

New section.

30.131

Where may a judge or ADM seek guidance on recusal?

New section.

30.132

May an interested party to a probate proceeding excuse a judge from hearing a case?

New section.

30.133

May an interested party to a probate proceeding request that a judge recuse?

New section.

30.134

What must the judge consider when deciding whether to recuse?

New section.

30.135

What action will the judge take after deciding to recuse himself or herself?

New section.

30.136

How will the case proceed once the judge has recused?

New section.

30.137

Can I appeal the judge's recusal decision?

New section.

30.138

When can I appeal the judge's recusal decision?

New section.

4.250(a)

30.140

When must I file a claim against the probate estate?

Amends deadline for filing claims.

4.250(c)

30.141

How must I file a creditor claim against the probate estate?

Eliminates requirement for triplicate filing. Clarifies what must be included in the affidavit and itemized statement.

4.250(b)

30.142

Will a judge authorize payment of a claim from the trust estate where the decedent's non-trust estate may be available?

Plain language.

4.250(d)-(f)

30.143

Are there any categories of claims that may not be allowed?

Adds category for claims attributable to payments for general assistance, welfare, or similar assistance.

4.251(a)

30.144

May the judge authorize payment of the costs of administering the estate?

Plain language.

4.251(b)

What are priority claims the deciding official may authorize payment for?

Deleted.

4.251(c)

When may the deciding official authorize payment of general claims?

Deleted.

4.251(d)

30.145

When can a judge reduce or disallow a claim?

Plain language.

4.251(e)-(g)

30.147

What happens if there is not enough money in the IIM account to pay all the claims?

Plain language.

4.251(h)

30.148

Will interest or penalties charged against claims after the date of death be paid?

Plain language.

4.252

30.146

What property is subject to claims?

Plain language.

4.207

30.150

If the interested parties agree to settle matters among themselves, what does the judge do?

Plain language. Deletes reference to liability for irrigation construction and operation costs. Deletes provisions regarding preparation, deliverance, and approval of deeds.

30.151

May the devisees or eligible heirs in a probate proceeding consolidate their interests?

New section. Adds AIPRA provisions allowing for consolidation agreements.

30.152

May the parties to a settlement agreement or consolidation agreement waive valuation of the trust property?

New section.

30.153

Is an order approving a consolidation agreement or settlement agreement considered a partition or sale transaction?

New section. Clarifies basis and procedures for approval of consolidation agreements.

30.160

What can be purchased at probate?

New section. Incorporates provisions for purchase at probate.

30.161

Who can purchase at probate?

New section. Incorporates definition for eligible purchaser.

30.162

Does property purchased at probate remain in trust or restricted status?

New section.

30.163

Is consent required for a purchase at probate?

New section. Adds provisions describing when consent of an heir or devisee is required for a purchase at probate.

30.164

What must I do to purchase at probate?

New section. Adds provisions describing procedure for requesting a purchase at probate.

30.165

Who will OHA notify of a request to purchase at probate?

New section. Adds provisions for notification by OHA and required contents of the notice.

30.166

What will the notice of the request to purchase at probate include?

New section.

30.167

How does OHA decide whether to grant a request to purchase at probate?

New section.

30.168

What will the judge consider in determining the market value of an interest?

New section. Clarifies that a judge must base the market value on an appraisal that meets certain standards.

30.169

If I do not agree with the appraised market value, what can I do?

New section. Establishes process for challenging appraisal.

30.170

What happens when OHA grants a request to purchase at probate?

New section. Clarifies the procedures for notifying the successful bidder and finalizing the sale.

30.171

When must the successful bidder pay for the interest purchased?

New section.

30.172

What happens after the successful bidder submits payment?

New section.

30.173

What happens to the money from the sale?

New section. Clarifies that the Department will distribute the money from the sale to the appropriate heirs, devisees, and/or spouse.

30.174

What happens if the successful bidder does not pay within 30 days?

New section. Clarifies that the sale will be cancelled if the successful bidder fails to pay the bid within 30 days.

4.208

30.180

May I give up an inherited interest in trust or restricted property or trust personalty?

Plain language.

30.181

How do I renounce an inherited interest?

Plain language.

30.182

Who may receive a renounced interest in trust or restricted land?

New section.

30.183

Who may receive a renounced interest of less than 5 percent in trust or restricted land?

New section.

30.184

Who may receive a renounced interest in trust personalty?

New section.

30.185

Can my designated recipient refuse to accept the interest?

New section.

30.186

Are renunciations that predate the American Indian Probate Reform Act of 2004 valid?

New section.

4.208(c)

30.187

May I revoke my renunciation?

Plain language.

4.208(b)

30.188

Does a renounced interest vest in the person who renounced it?

Plain language.

4.212

30.200

What is a summary probate proceeding?

Deletes provision stating that Federal law or tribal code may prevent summary processing.

30.202

May I request a summary probate proceeding be replaced by a formal proceeding?

Changes time period for filing a request for formal hearing from 60 days to 30 days.

30.201

What does a notice of a summary probate proceeding contain?

New section.

4.213

Deleted.

4.214

30.203

What must a summary probate decision contain?

Adds provisions regarding renunciation. Deletes provisions regarding dower, curtesy, and homestead, and requirement to attach certified inventory of trust or restricted lands. Changes time in which decision will become final from 60 days to 30 days.

4.215(a)-(c)

30.204

How do I seek review of a summary probate proceeding?

Changes time period for filing request for de novo review from 60-day period to 30-day period.

4.215(d)

Deleted. Provision had allowed persons to request de novo review after expiration of time period for filing request under certain circumstances.

4.215(e)

30.205

What happens after I file a request for a de novo review?

Plain language.

30.206

What happens if nobody files for a de novo review?

New section. Establishes what happens at expiration of 30-day period for filing de novo review.

4.216

30.210

How will I receive notice of the formal probate proceeding?

Adds locations for posting. Deletes provision establishing that interested parties living near posting will be bound by decision.

30.213

What notice to a tribe is required in a formal probate proceeding?

Expands notice to tribes where there is a statutory option to purchase to provide notice to tribe of every formal probate proceeding involving trust or restricted land over which the tribe has jurisdiction.

30.211

Will the notice be published in a newspaper?

New section.

30.212

Can I waive notice of the hearing, the time limits, or form of notice?

New section.

4.217

30.214

What must a notice of hearing contain?

Plain language. Adds provisions regarding consolidation and renunciation.

4.220(a), (c)

30.215

How can I obtain documentation related to the probate proceeding?

Plain language. Adds provisions.

4.221(a)-(c)

30.216

How does an interested party obtain permission to take depositions?

Plain language.

4.221(d)-(g)

30.217

How is a deposition taken?

Plain language.

4.221(h)

30.218

How may the transcript of a deposition be used?

Plain language.

30.219

Who pays for the costs of taking a deposition?

New section.

4.222

30.220

How does an interested party obtain written interrogatories and admission of facts and documents?

Plain language. Deletes provision regarding cross-interrogatories.

4.223

30.221

May the judge limit the time, place, and scope of discovery?

Plain language.

4.224

30.222

What happens if a party fails to comply with discovery?

Provides that the judge may draw inferences adverse to the claims of the party who failed to comply with the discovery request.

4.225

30.223

What is a prehearing conference?

Plain language.

4.230

30.224

Can a judge compel a witness to appear and testify at a hearing?

Establishes procedure for requesting a subpoena.

4.231

30.225

Are probate hearings open to the public?

Clarifies that probate hearings are open to public. Establishes that the judge may seal the record or transcript of sequestered hearings.

30.226

Must testimony in a probate proceeding be under oath or affirmation?

Plain language.

30.227

Is a record made of formal probate hearings?

Plain language.

4.232

30.228

What evidence is admissible at a probate hearing?

Clarifies evidentiary admissibility matters.

4.233(a)-(b)

30.229

Is testimony required for self-proved wills or codicils?

Moves affidavit language to 25 CFR part 15. Adds that judge may order deposition of available attesting witnesses at location reasonably near residence of witness.

4.233(c)

30.230

What if approval of the self-proved will, codicil or revocation is contested?

Plain language.

4.234

30.231

Who pays witnesses’ costs?

Plain language.

4.235

30.232

May a judge schedule a supplemental hearing?

Plain language.

4.236(a)

30.233

What will the official record of the probate case contain?

Plain language.

4.236(b)

30.234

What will the judge do with the original record?

Plain language.

30.235

What happens if a hearing transcript has not been prepared?

Plain language.

4.240(a)

30.236

What will the judge's decision in a formal probate hearing contain?

Specifies what decision will contain in intestate case and in testate case. Adds provisions for renunciations, consolidation and settlement agreements, and purchases at probate.

4.240(b)

30.237

What notice of the decision will the judge provide?

Changes time period from 60 to 30 days.

4.241(a)

30.238

May I file a petition for rehearing if I disagree with the judge's decision in the formal probate hearing?

Changes time period for filing petition from 60 to 30 days. Requires judge to forward copy of petition to affected agencies.

4.241(b)

30.239

Does any distribution of the estate occur while a petition for rehearing is pending?

Plain language.

4.241(c)-(e)

30.240

How will the judge address a petition for rehearing?

Plain language.

4.241(f)

30.241

Can I submit another petition for rehearing?

Clarifies that judge's jurisdiction over case ends upon final disposition of petition for rehearing, except for reopening.

4.241(g)-(h)

Deleted.

30.242

When does the judge's decision on a petition for rehearing become final?

New section. Establishes that decision does not become final for 30 days.

4.242

30.243

Can a closed probate case be reopened?

Changes time for filing petition and measures from date error was discovered. Clarifies standard for reopening.

30.244

How will the judge address my petition for reopening?

Plain language.

30.245

What happens if the judge reopens the case?

Eliminates 75-day period for not distributing.

4.242(h)-(i)

Deleted.

30.246

When will the decision on reopening become final?

New section.

4.261

30.250

When does the anti-lapse provision apply?

Plain language.

4.262

30.251

What happens if an heir or devisee knowingly participates in the willful and unlawful killing of the decedent?

Changed from “feloniously taking a testator's life” to comply with AIPRA language. Expands to apply to intestate succession. Establishes that person will be treated as if predeceased.

4.270

Deleted.

4.271

30.126

What happens if property was omitted from the inventory of the estate?

Plain language.

4.272

30.127

What happens if property was improperly included in the inventory of the estate?

Plain language.

4.273

Deleted.

4.281

30.252

Can a judge allow fees for attorneys representing interested parties?

Plain language. Allows fees for all interested parties, except creditors.

4.282

30.253

How must minors or other legal incompetents be represented?

Plain language.

4.300(a)

30.260

What land is subject to a tribal purchase option at probate?

Plain language.

4.300(b)-(d)

30.261

What determinations with regard to a tribal purchase option will a judge make?

Plain language.

4.301

30.262

When will BIA furnish a valuation of a decedent's interests?

Plain language.

4.302(a)

30.263

When is a final decision issued?

Plain language.

4.302(b)

30.264

When may a tribe exercise its statutory option to purchase?

Plain language.

30.265

How does a tribe exercise its statutory option to purchase?

Plain language.

4.303

30.266

May a surviving spouse reserve a life estate when a tribe exercises its statutory option to purchase?

Plain language.

4.304

30.267

What if I disagree with the probate decision regarding tribal purchase option?

Plain language.

4.305(a)

30.268

May I demand a hearing regarding the tribal option to purchase decision?

Plain language.

4.305(b)

30.269

What notice of the hearing will the judge provide?

Plain language.

4.305(c)-(d)

30.270

How will the hearing be conducted?

Plain language.

4.306

30.271

How must the tribe pay for the interests it purchases?

Plain language.

4.307(a)

30.272

What are the Superintendent's duties upon payment by the tribe?

Plain language.

4.307(b)

30.273

What action will the judge take to record title?

Plain language.

4.308

30.274

What happens to income from land interests during pendency of the probate?

Plain language.

4.320(a)

4.320

Who may appeal a judge's order on petition for rehearing or reopening?

Plain language.

4.320 (b)(1)-(3)

4.321

How to appeal a judge's order on petition for rehearing or reopening or regarding purchase of interests in a deceased Indian's trust estate.

Plain language.

4.322

What an appeal must contain.

Plain language.

4.320(c)

4.323

Service of the notice of appeal.

Plain language.

4.320(d)

4.324

Record on appeal.

Plain language.

4.321

4.325

Docketing the appeal.

Plain language.

4.322

4.326

Disposition of the record.

Plain language.

V. Public Comments

During the period prior to this publication, from December 27, 2005 to March 31, 2006, the Department received correspondence (e-mails, letters, and faxes) from tribes and individual Indians. Of these, the majority addressed at least one of the regulations being proposed today. The remaining addressed only those regulations that were part of the December 27, 2005 package sent to the tribes, but are not part of this proposed rule. The Department has stored these comments so that it can review them when it addresses those remaining regulations.

These comments raised several issues that the Department considered in preparing the drafts for publication as a proposed rule. A summary of those issues that were considered in developing the proposed regulatory language is provided under a subheading “changes to preliminary drafts” under the discussion of each part in the Part-by-Part Analysis. There will also be a 60-day public comment period following this publication. Subsection B provides directions for submitting written comments and information on upcoming tribal consultations addressing this rulemaking.

A. Comments Received Prior to This Publication

The Department provided tribal leaders with preliminary drafts of this proposed rule in December 2005 and requested comment by the end of March 2006. Additionally, the Department held two pre-publication tribal consultation sessions in February 2006 and March 2006 to obtain input on the preliminary drafts.

As previously mentioned, the Department received an overwhelming number of comments during the Albuquerque tribal consultation regarding the volume of regulatory text and number of preliminary draft regulations. In response to these comments, the Department has decided to first focus on those regulations required for, or closely related to, implementation of AIPRA. These regulations are being published today. These regulations are a priority for the Department because they are necessary to implement AIPRA, which became fully effective on June 20, 2006. The remaining regulations that were distributed as preliminary drafts will be re-examined and consulted on at a future date.

Issues raised during tribal consultations and in the time leading up to publication of this proposed rule that are specific to one or more regulations or regulatory sections are addressed in the Part-by-Part Analysis, below.

B. Directions for Submitting Comments

The regulatory amendments proposed in this rulemaking include substantive changes streamlining and standardizing Department procedures to better serve beneficiaries and incorporating statutory law. The amendments also include revisions that are simply administrative in nature, including changes to better meet plain language requirements, defining acronyms, and updating personnel and agency titles. Both tribal and non-tribal members of the public are invited to make substantive comment on any of these changes, whether they be with respect to substantive or administrative changes.

Two copies of written comments should be submitted to the address indicated in the

ADDRESSES

section of this notice. Comments may also be telefaxed to (202) 208-5320 or submitted by electronic mail (“email”) to

Michele_F_Singer@ios.doi.gov.

For comments submitted electronically, please include the number 1076-AE59 in the subject line of the message. All comments received will be available for public inspection at the Department of the Interior, 1849 C Street, NW., Washington, DC 20240. All written comments received by the date indicated in the

DATES

section of this notice and all other relevant information in the record will be carefully assessed and fully considered prior to publication of the final rule. Any information considered to be confidential by the commenter must be so identified and submitted in writing. The Department of the Interior reserves the right to determine the confidential status of the information and to treat it according to our determination (see 10 CFR 1004.11).

The Department has scheduled an additional consultation meeting in Rapid City, South Dakota on July 27, 2006, from 8 a.m. to 5 p.m., at the Best Western Ramkota Hotel and Conference Center. The Department also plans to host two additional consultation meetings in Billings, Montana on August 8, 2006, from 8 a.m. to 5 p.m., at the Sheraton Billings Hotel and in Minneapolis, Minnesota on August 10, 2006, from 8 a.m. to 5 p.m., at the Ramada Mall of America. All tribal and non-tribal persons interested in this rulemaking are encouraged to participate in these consultations.

VI. Procedural Requirements

A. Regulatory Planning and Review (Executive Order 12866)

Executive Order 12866 (58 FR 51735, October 4, 1993) requires Federal agencies taking regulatory actions to determine whether that action is “significant.” Agencies must submit regulatory actions that qualify as “significant” to the U.S. Office of Management and Budget (OMB) for review, assess the costs and benefits of the regulatory action, and fulfill other requirements of the Executive Order. A “significant regulatory action” is one that is likely to result in a rule that may meet one of the following four criteria:

(1) Have an annual effect on the economy of $100 million or more or adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of the recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

OMB has determined that the rule is not a significant rule under Executive Order 12866 because it is not likely to result in a rule that will meet any of the four criteria.

(1) The rule will not have an annual effect on the economy of $100 million or more or adversely affect, in a material way, the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities.

This rule will not have an annual effect on the economy of $100 million or more, as described below. The following discussion individually addresses each Code of Federal Regulations (CFR) part and significant changes within each part, where appropriate. Within the discussion of each CFR part is a brief statement of the major changes, the baseline (i.e., the current state of affairs), an analysis of the economic effect of the change in comparison to the baseline alternative, and a brief conclusion.

25 CFR Part 15

This part governs the processing of probate estates by BIA. Amendments will ensure that the BIA compiles

sufficient information into the probate file so that when BIA passes the probate file on to OHA, OHA can properly administer the probate estate. The baseline for this analysis is the existing part 15, which does not incorporate requirements for certain items of information to be included in the probate file.

The Secretary has sole statutory authority to probate Indian estates. 25 U.S.C. 372;

First Moon

v.

White Tail & United States

, 270 U.S. 243, 46 S. Ct. 246, 70 L. Ed. 565;

United States

v.

Bowling

, 256 U.S. 484, 41 S. Ct. 561, 65 L. Ed. 1054;

Lane

v.

United States

, 241 U.S. 201, 36 S. Ct. 599, 60 L. Ed. 956;

Hallowell

v.

Commons

, 239 U.S. 506, 36 S. Ct. 202, 60 L. Ed. 409.

Bertrand

v.

Doyle

, 36 F.2d 351 (10th Cir. 1929). As such, it is imperative that the Secretary have all the information necessary to properly determine the heirs and distribute estate assets. The alternative to these amendments (i.e., the baseline) would deprive OHA of the information it needs to accurately identify what property is part of the estate, who the heirs and devisees are, and how the property should be distributed among the heirs and devisees. The recently enacted AIPRA amendments to ILCA, 25 U.S.C. 2201

et seq.

, affects the determination of how property should be distributed among the heirs and beneficiaries by allowing certain persons to purchase interests in property at probate and consolidation agreements, and affecting who can inherit a small fractional interest. AIPRA therefore directly affects the determinations that OHA will make and requires additional information to be included in the probate file.

The primary benefit of the amendments is that they ensure that OHA will have the information it needs in the probate file to adjudicate Indian estates. Because this part addresses only internal processes, and does not impose any enforceable obligation on persons outside the BIA, there is no effect to the outside economy. Amendments to this part focus on the BIA's procedures in compiling a complete probate file, and addressing what should be included in that file. No economic impact is associated with these internal processes.

25 CFR Part 150

The revised Part 150 provides clarification of the LTRO's procedures and increases the ability of the LTRO to provide services and products to Indians, tribes, and the public. Specifically, the amendments describe the LTRO process for receiving and recording title instruments, clarify what services and products LTRO provides, and clarify what documents qualify as title instruments. Currently, the regulations do not clearly define the procedures, products, and services of the LTRO. Finally, the amendments provide a schedule of fees for non-probate LTRO products and services that will be charged.

Those parts of the regulation that describe the processes, services, and products of the LTRO will have no effect on the economy. The amendments that establish fees for LTRO services and products are comparable to those fees charged by local governments for the comparable services and products. These amendments merely redistribute the costs by requiring fees normally paid for by the public at large to be borne by the individuals, other than the excepted categories of individuals, directly benefiting from the service or product. Therefore the effect, if any, on the economy resulting from these amendments is minimal.

For these reasons, the amendments to part 150 will not have an effect on the economy.

25 CFR Part 152

Amendments to this part reorganize subparts and sections within subparts for clarity. Procedures for each of the following conveyances are now clarified:

• Allowing for conveyances at less than fair market value under certain circumstances (see § 152.109);

• Tribal option to purchase where land is proposed to be conveyed in unrestricted fee (see § 152.206);

• Conveyances of fractional interests without tribal consent under certain circumstances. Also, tribal options to purchase interests being sold, gifted or exchanged by individual Indians where the tribe has enacted a law that imposes such a requirement (see § 152.209);

• Tribal tract purchases of fractional interests of non-consenting owners (see Subpart D at § 152.302); and

• Eligibility for conveying trust and restricted land (see § 152.203). Additionally, the amendments implement ILCA policy goals and AIPRA provisions allowing for:

• Conveyances in accordance with tribal land consolidation plans (see subpart B at § 152.101);

• Consolidation of highly fractionated tracts by purchase of interests at fair market value (see subpart E at § 152.401); and

• Partition of fractionated lands to unitize interests (see subpart F at § 152.501).

The amendments also detail eligibility for conveying trust and restricted land, conveying trust and restricted land at less than fair market value, the attachment and removal of Indian Land Consolidation Program liens, and the procedures for mortgages and deeds of trust.

The baseline for this analysis is the current part 152, which does not incorporate AIPRA's provisions advancing consolidation goals. The current part 152 allows for partition of inherited allotments but does not extend partition to other tracts of trust or restricted land or tracts in which fractional interests are held in unrestricted fee status.

a. Tribal Land Consolidation Plans

Amendments to part 152 add provisions regarding tribal land consolidation plans by providing that the Secretary will approve only: (1) Those exchanges and negotiated sales of tribal land that are made pursuant to an approved land consolidation plan and in which the tribe receives at least 90% of the fair market value or greater; and (2) those exchanges made in the absence of a land consolidation plan in which the tribe receives the fair market value or greater. Part 152 restricts the tribe's use of consideration received from negotiated sales and exchanges in accordance with a tribal land consolidation plan to the purchase of other lands as described in the tribal consolidation plan.

These changes from the existing regulation will assist tribes in reducing fractionation and strengthening their land base. A tribal consolidation plan must include the following elements: a description of the land; maps depicting the land to be conveyed and interests to be purchased; an explanation of how the plan will reduce fractionation; and an appropriate tribal authorization. The cost to the tribe of putting together a tribal consolidation plan is estimated to be $2,500. The Secretary is encouraging all Federally recognized tribes to prepare a tribal land consolidation plan. Thus, the total cost resulting from the plan requirement for each of the 562 tribes will be $1.4 million. However, tribes will likely prepare and submit the plans over a period of at least ten years, resulting in an annual cost to tribes of $140,000. This cost is slightly overestimated because some tribes already have a land consolidation plan.

b. Tribal Option To Purchase Where Land Is Conveyed in Unrestricted Fee

The amendments grant tribes the opportunity to purchase trust or restricted lands being proposed for transfer out of trust or to unrestricted status. The benefit of this provision is that it strengthens tribal land holdings.

There are no apparent costs related to this option, as the grantor will receive consideration for the interest being conveyed. Additionally, an exception is provided for those instances where the interest is part of a family farm.

c. Consent for Conveyances

The amendments provide that an owner may convey his or her fractional interest without the consent of co-owners and that owners of 100% of the interests in a tract do not need the consent of the tribe. These provisions grant individuals the right to control conveyances of their interests. The benefit of these provisions includes strengthening individual Indians' abilities to convey and consolidate fractional interests. The co-owners share in this benefit. Additionally, marketability of the land interests is increased with removal of the consent requirement. There is no cost to these provisions because the land remains in trust status.

These amendments also require tribal consent for conveyance of a fractional interest where the tribe has an approved tribal probate code restricting the inheritance rights of the grantee. This provision strengthens tribal control over land within its jurisdiction. No apparent costs are associated with this provision.

d. Tribal Tract Purchases

The tribal tract purchase amendments implement provisions of AIPRA authorizing the Secretary to convey the fractional interests of any non-consenting trust and restricted owners to a tribe, where the tribe owns at least 50% of the trust or restricted interests in the tract or has obtained the consent of the owners of at least 50% of such interests.

These provisions increase tribes' ability to obtain and consolidate fractional interests. Ultimately, this will grant the tribes more economic power through land holdings. Additionally, individual interests held in trust and restricted status are subject to restrictions on transfer. The cost of restricting free transfer without the approval of the Secretary or tribe affects the value of the interest. The value of land is not affected by the percentage of consent required, except to the degree that the time in which transfer occurs may be lessened by reducing the percentage required, thus increasing marketability.

e. Consolidation by Sale of Highly Fractionated Tracts

Consolidation by sale applies to trust and restricted lands, on or off reservation, that are highly fractionated parcels. In order to consolidate by sale, an eligible applicant must obtain certain consents including consent of the owners of at least 50% of the undivided interests in the parcel. Consolidation of highly fractionated parcels by sale will increase individual Indians’ and tribal land holdings, providing them with greater economic power and use of land. As stated above, individual interests held in trust and restricted status are subject to restrictions on transfer. The cost of restricting free transfer without the approval of the Secretary or tribe affects the value of the interest. The value of land is not affected by the percentage of consent required, except to the degree that the time in which transfer occurs may be lessened by reducing the percentage required, thus increasing marketability.

Allowing consolidation by sale is expected to reduce the proportion of highly fractionated interests. The cumulative transfers of property achieved via consolidation by sale is not expected to impact the economy. However, economic benefits are expected to accrue by allowing owners greater economic power and control of the use of their land.

f. Partition in Kind

This subpart authorizes the Secretary to subdivide trust and restricted land with multiple owners into smaller tracts in which the interests of the owners are unified or consolidated, where the owners have been unable to accomplish such a partition in kind by exchange of deeds. Any owner of a fractional interest may apply to the Secretary for a partition. This new subpart will provide owners with greater control over their land; there is no apparent effect on the economy.

g. Eligibility for Conveying and Receiving Individually Owned Interests in Trust or Restricted Status

The amendments clarify that individual Indians (or their guardians, etc.) may convey lands and that only tribes, individual Indians, and other co-owners in trust or restricted status may acquire individually owned trust or restricted land. This clarification is made to ensure that individual Indians without a tribal land base are permitted to convey and receive interests in trust or restricted status. This provision will have no economic effect.

h. Conveyance of Individually Owned Interests at Less than Fair Market Value

The amendments remove restrictions on conveying individually owned interests at less than fair market value, as long as the grantor is provided with information regarding the fair market value. This will increase the ability of individuals to sell their land as they choose. Additionally, these amendments make land interests more marketable by reducing the restrictions on transfer. The cost of obtaining information on fair market value was already required, so the amendments add no new costs.

i. Attachment and Removal of Indian Land Consolidation Program Liens

These amendments implement AIPRA provisions regarding the Indian Land Consolidation program liens, in which a lien in the amount of the purchase price attaches to income derived from any interest purchased through the Indian Land Consolidation Program. This provision has no apparent costs as the lien is removed upon satisfaction.

j. Mortgages and Deeds of Trust

These amendments detail existing procedures by which the Secretary approves mortgages or deeds of trust encumbering individually owned land, where all of the trust or restricted interests in a tract are being encumbered and made subject to foreclosure or sale in the event of a default on the loan being secured by the approved document. There is no quantifiable effect on the economy because the title remains in trust even if foreclosure occurs.

Cumulatively, part 152 will not have a significant or quantifiable effect on the economy.

25 CFR Part 179

Amendments to part 179 make two primary changes with potential to affect the economy:

• Incorporates AIPRA's requirement that life estates after June 20, 2006, will be “without regard to waste,” meaning that the life tenant is now entitled to receipt of all income—including rents and profits, such as contract bonuses and royalties, and the interest on invested principal—from the land. However, the testator can still specify in the conveyance document distributions to the life tenant and remaindermen different from those established by AIPRA.

• Changes the discount rate to make it consistent with the Internal Revenue Service's valuations of life estate, which will generally provide the remaindermen with more value than under the current 6% discount rate.

The existing part 179 provides that the life tenant will have the rights to all rents and profit, as income, from the estate, but did not provide that such rights were “without regard to waste.”

Therefore, the existing part 179 required the life tenant to ensure that it did not diminish the estates of the remainderman in its pursuit of rents and profits. Additionally, the existing part 179 required contract bonuses to be split one-half each to the life tenant and remainderman, whereas now the life tenant is entitled to the full amount of the contract bonus.

The first primary change to part 179 is necessary to reflect the AIPRA section establishing that life estates will be determined “without regard to waste,” meaning that the life estate holder is entitled to the receipt of all income, including bonuses and royalties, from such land, to the exclusion of remaindermen.

See

25 U.S.C. 2201(10), 2205(a)(3), 2206(a)(2). These amendments comply with the provisions of AIPRA with respect to life estates after June 20, 2006. The testator can still specify in the conveyance document distributions to the life tenant and remaindermen different from those established by AIPRA. There is no change with respect to life estates created before June 20, 2006.

Amendments to the discount rate make the rate consistent with the Internal Revenue Service's valuations of life estate, which will generally provide the remaindermen with more value than under the current 6% discount rate.

The cost of amendments incorporating “without regard to waste” provisions could be a deferred value of the remaindermen's estate. However, amendments to the discount rate will generally provide remaindermen with more value. These amendments may affect the timing of the distribution of the value of the land between life tenants and remaindermen, but will not affect the economy as a whole.

For these reasons, part 179 will not have a measurable effect on the economy.

43 CFR Parts 4 and 30

Most amendments to 43 CFR part 4 (including those incorporated in the new part 30) are amendments to the existing 43 CFR 4 subpart D, relating to the administration of probate estates. The amendments add provisions to establish procedures for renouncing an interest, consolidating interests by agreement, requesting and conducting a purchase at probate, determining fair market value, requesting disqualification of a judge, and standardizing the time periods for filing requests for de novo review and rehearing to 30, rather than 60, days.

The existing 43 CFR part 4 does not contain any of the methods for acquiring interests at probate that have recently been established by AIPRA. Additionally, the current time period for filing requests for de novo review and rehearing is 60 days.

Neither the existing part 4 nor the amendments to part 4 affect the economy. Because these provisions relate to the adjudication of probate estates and will not affect the amount of money and property within each estate that is distributed, nor the number of estates that must be probated, they have no effect on the economy. For these reasons, amendments to 43 CFR part 4, subpart D, and the new 43 CFR part 30 will not affect the economy.

New 25 CFR Part 18 (Tribal Probate Codes)

The new CFR part addressing tribal probate codes implements provisions of ILCA that allow any tribe to adopt a tribal probate code to govern descent and distribution of trust and restricted lands within its reservation or otherwise subject to its jurisdiction. 25 U.S.C. 2005(a). ILCA provides that the tribe must submit the tribal probate code to the Secretary for review and that the Secretary may not approve tribal probate codes that contain certain provisions.

The baseline is the absence of regulations governing tribal probate codes. While the ILCA statute had established requirements for a tribal probate code and the basics of the submission and approval process since 1983, there have been no implementing regulations. With AIPRA, a new uniform probate code will govern descent and distribution of trust and restricted property. This may prompt some tribes prepare one and may prompt tribes that already have a tribal probate code to amend it in light of AIPRA.

AIPRA will govern the descent and distribution of trust and restricted property owned by a deceased Indian in the absence of a will. In the alternative, approved tribal probate codes will also govern the distribution of trust property, but will not directly affect the economy. These regulations, which implement statutory provisions for Secretarial approval of tribal probate codes, do not affect the economy because tribes were already authorized to establish tribal probate codes and statutorily required to submit such codes to the Secretary for approval.

For these reasons, the proposed new CFR part, 25 CFR part 18, will not affect the economy.

(2) This rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency.

Implementation of this rule will not create any serious inconsistencies or otherwise interfere with an action taken or planned by another agency because the Department is the only agency with authority for handling Indian trust management issues. Additionally, this rule will standardize processes within the Department, to guard against internal inconsistencies.

(3) This rule will not materially alter the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of the recipients thereof.

(a) The revisions 25 CFR part 15 address what must be included in a probate package and describe how to file a claim against an estate, but do not address entitlements, grants, user fees, or loan programs. Therefore, revisions to part 15 have no budgetary effects and do not affect the rights or obligations of any recipients.

(b) The revisions to 43 CFR part 4 (including those incorporated into the new 43 CFR part 30) address the procedures for adjudicating a probate case and the rights of individual Indians with respect to a given probate case. The revisions do not address entitlements, grants, user fees, or loan programs.

(c) In 25 CFR part 150, the rule establishes user fees for services and products provided by LTRO. The Secretary had the right to charge fees under the prior regulation, but the revised part 150 describes the Secretary's intent to begin charging fees to persons who are not excepted. Under 25 U.S.C. 14b, the Secretary may order that such funds be directed to the appropriation account for LTRO. Because the categories of persons who are exempt from the fees is so large, the budgetary impact of the revised part 150 will be minimal.

(d) In 25 CFR part 152, the rule implements AIPRA provisions to allow for consolidation of highly fractionated lands, purchase of interests at fair market value, and consolidation agreements. These provisions broaden tribes’ rights to acquire interests through tribal tract purchases. Where interests are acquired at the fair market value, the Secretary may contribute money from the Acquisition Fund. ILCA established the Acquisition Fund, authorizing the Secretary to disburse appropriations to acquire fractional interests at fair market value and to collect all revenues from the lease, permit, or sale of resources from acquired interests or paid by Indian landowners. By broadening tribes’ rights to acquire interests into trust, revisions to part 152 may increase use of Acquisition Funds.

Additionally, subpart K of part 152 allows for the partition of lands into smaller parcels where the interests are unified. Under ILCA, grants are available to successful bidders for partitions; however, the amendments do not affect the grants. Because conveyance of trust and restricted interests is generally voluntary, these amendments do not involve entitlements, grants, user fees, or loan programs, and therefore do not affect the budget of the Department or the rights and obligations of recipients.

(e) In 25 CFR part 179, the respective rights of a life estate tenant and remaindermen are changed, as of June 20, 2006. This change entitles the life tenant to receipt of all income—including rents and profits, such as contract bonuses and royalties—from the land. However, the testator can still specify in the conveyance document distributions to the life tenant and remaindermen different from those established by AIPRA. The Department anticipates that this change in rights will not impact the budget.

(f) The new regulation addressing tribal probate codes will not materially alter the Department's budget because the regulation merely implements the existing statutory requirement for Departmental review of tribal probate codes; nor does the regulation affect the rights and obligations of recipients, as tribes’ probate codes were already subject to Departmental review.

(4) This rule does not raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Most of the regulatory changes directly implement statutory provisions and court orders that require certain action to meet Indian trust management responsibilities. Specifically, the rule implements requirements of AIPRA, the Trust Fund Management Reform Act of 1994 and court orders. The legal and policy issues related with this rulemaking have been the subject of legislation, judicial action, and consultations with tribes. They have been thoroughly discussed through the process of developing and implementing the Fiduciary Trust Model, discussed in the “History of the Rule” section of the preamble.

Thus, the impact of the rule is confined to the Federal Government, individual Indians, and tribes and does not impose a compliance burden on the economy generally. Accordingly, this rule is not a “significant regulatory action” from an economic standpoint, nor does it otherwise create any inconsistencies or budgetary impacts to any other agency or Federal program.

B. The Regulatory Flexibility Act

The Regulatory Flexibility Act (5 U.S.C. 601

et seq.

), requires Federal agencies to conduct a regulatory flexibility analysis when publishing a notice of rulemaking for any proposed or final rule. The regulatory flexibility analysis determines whether the rule will have a significant economic effect on a substantial number of small entities (i.e., small businesses, small organizations, and small governmental jurisdictions). Indian tribes are not considered to be small entities for the purposes of the Act and, consequently, no regulatory flexibility analysis has been done to address the effects on Indian tribes.

Because the proposed rule is limited to probated estates, land, and assets within the United States and within tribal communities, it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of the U.S.-based enterprises to compete with foreign-based enterprises. Accordingly, this proposed rule will not have an economic impact on a substantial number of small entities and requires no regulatory flexibility analysis.

C. Small Business Regulatory Enforcement Fairness Act of 1996

The Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 804(2), sets criteria for determining whether a rule is “major.” A rule is “major” if OMB finds that the rule will result in: (1) An annual effect on the economy of $100 million or more; (2) a major increase in costs or prices for consumers, individual industries, Federal, state, or local government agencies, or geographic regions; or (3) significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of U.S.-based enterprises to compete with foreign-based enterprises.

The proposed rule is not “major” within the meaning of SBREFA because it is exclusively confined to the Federal Government, individual Indians, and tribes, but the proposed rule may require some limited additional expenditures by tribes, as discussed in subsection (h) of the procedural requirements (Paperwork Reduction Act) of this preamble.

However, the proposed rule will not result in the expenditure by State, local, or tribal governments, in the aggregate, or by the private sector of $100 million or more in any one year.

Because the proposed rule is limited to probated estates, land, and assets within the United States and within tribal communities, it will not have significant adverse effects on competition, employment, investment, productivity, innovation, or the ability of the U.S.-based enterprises to compete with foreign-based enterprises. Accordingly, this proposed rule will not have an economic impact on a substantial number of small entities and requires no regulatory flexibility analysis.

D. Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, requires Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. If the Federal agency promulgates a proposed or final rule with “Federal” mandates that may result in expenditures by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year, the Federal agency must prepare a written statement, including a cost-benefit analysis of the rule, under section 202 of the UMRA. The term “Federal mandate” means any provision in statute or regulation or any Federal court ruling that imposes “an enforceable duty” upon state, local, or tribal governments, and includes any condition of Federal assistance or a duty arising from participation in a voluntary Federal program that imposes such a duty.

The Department has determined that the rule does not contain a Federal mandate that may result in expenditures of $100 million or more for state, local, and tribal governments in the aggregate, or by the private sector in any one year. The following discussion addresses each CFR part individually to identify Federal mandates.

25 CFR Part 15

Most amendments to part 15 address the internal processes of the BIA (or tribe that has compacted or contracted to fulfill probate functions) in compiling probate files.

• Part 15 contains a mandate for tribal governments to provide information when necessary to complete a probate file. This provision is aimed at requiring tribes to provide information that is already readily available to them, such as family history data.

• Part 15 also contains a mandate for the public, presumably someone closely

associated with the decedent, to provide either a death certificate or other information regarding the death.

Subsection (h) of the procedural requirements (Paperwork Reduction Act) of this preamble states the expected increase in cost burden on tribal governments of these mandates, which is minimal. The opportunity for tribes to adopt their own tribal probate codes is voluntary and does not qualify as a Federal mandate.

25 CFR Part 150

The revised part 150 clarifies LTRO processes, services, and products. This part requires persons requesting LTRO services and products to provide certain information to allow the LTRO to identify the property for which the service or product is being requested. There is no mandate to obtain LTRO products or services, so the requirement to provide information in support of a request for products and services is not a Federal mandate.

25 CFR Part 152

Amendments to part 152 provide tribes and individual Indians with opportunities to convey and consolidate their interests in trust or restricted land. The opportunities to convey land interests are essentially a voluntary Federal program. Therefore, the requirement does not equate to a Federal mandate.

Part 152 requires applicants to include certain information in applications for acquisitions and conveyances that are available from the LTRO. Items required under part 152 that may be available from the LTRO include:

• Maps.

• Legal description of the land.

• Title status of other interests.

• Location of roads and rights of way.

• Location of the land with respect to other lands in which the applicant has a trust interest.

However, these items are available from sources other than LTRO, so these requirements do not require applicants to obtain products from the LTRO, and therefore do not translate into Federal mandates.

25 CFR Part 179

Amendments to part 179 do not impose any duties on persons outside the Department of the Interior.

43 CFR Parts 4 and 30

Amendments to 43 CFR part 4 (including those incorporated into the new 43 CFR part 30), related to adjudication of probate estates, clarify the process for renouncing an interest and allow consolidation agreements and purchases at probate. These opportunities are voluntary. The remainder of the amendments address OHA adjudication of probate estates and appeals. These amendments do not impose any Federal mandates on individual Indians, tribes, or others outside the Department of the Interior.

New 25 CFR Part 18 (Tribal Probate Codes)

The new CFR part addressing tribal probate codes implements statutory authority for preparing a tribal probate code and statutory requirements for Secretarial approval of tribal probate codes. Preparation of a tribal probate code is voluntary; therefore, this regulation does not impose any Federal mandates on tribes.

Section 205 of the UMRA requires the agency to identify and consider a reasonable number of regulatory alternatives to the rule and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The Department has determined that alternatives to this regulation are limited by practicality and feasibility, among other concerns, given that this regulation is the result of negotiated working group recommendations working within the confines of statutory and judicial mandates. For this reason, the primary alternative the Department examined was the baseline (i.e., the current CFR part or the absence of regulatory provisions, as appropriate). With respect to each proposed CFR part, the Department determined that the proposed language meets the objectives of the proposed rule.

Section 203 of the UMRA requires the agency to develop a small government agency plan before establishing any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments. The small government agency plan must include procedures for notifying potentially affected small governments, providing officials of affected small governments with the opportunity for meaningful and timely input in the development of regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. The Department has been operating under tribal consultation procedures that equate to a small government agency plan. The Department has developed these regulations in accordance with consultation procedures for notifying tribes, providing tribes with the opportunity for meaningful and timely input on the development of the regulation, and continues to inform, educate, and advise tribes on the contents of the regulation.

E. Governmental Actions and Interference With Constitutionally Protected Property Rights (Executive Order 12630)

This proposed rule does not have significant “takings” implications. A taking occurs when private property is taken for public use without just compensation or without due process of law. The proposed rule includes a few instances where property may be considered “taken;” however, just compensation is granted in each case. For example, 25 CFR part 152 allows a tribe to acquire land into trust status with the consent of only 50% of landowners, but must compensate all owners for their interests. Additionally, individual owners may preempt the tribe's right to purchase under certain circumstances. Additionally, for a consolidation by sale, the Secretary will seek only the consent of the tribe and of those owners who maintained a bona fide residence on the parcel or operated a bona fide farm, ranch or other business on the parcel for the preceding three years. Additional consent is required where any individual owner's undivided interest is worth more than $1,500 (i.e., consent of owners of at least 50% of the undivided ownership interest in the parcel). In each of these cases, even if an owner does not consent, the owner is provided with just compensation. The only other provisions of the proposed rule that may raise a question as to takings are those related to procedures for dealing with heirs or landowners whose whereabouts are unknown. However, in each of these cases, the proposed rule establishes the procedure to ensure that each individual whose whereabouts are unknown is afforded due process of law before being deprived of any specific real property interest.

F. Federalism (Executive Order 13132)

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), establishes certain requirements for Federal agencies issuing regulations, among other agency documents, that have “Federal implications.” A regulation has “Federal implications” when it has “substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.” Section 6 of the Executive Order prohibits any

agency from issuing a regulation that has Federal implications, imposes substantial direct compliance costs on state and local governments, and is not required by statute. Such a regulation may be issued only if the Federal Government provides the funds necessary to pay the direct compliance costs incurred by state and local governments, or the agency consults with state and local officials early in the process of developing the proposed regulation. Further, a Federal agency may issue a regulation that has federalism implications and preempts state law only if the agency consults with state and local officials early in the process of developing the proposed regulation.

This proposed rule does not have federalism implications because it pertains solely to Federal-tribal relations and will not interfere with the roles, rights, and responsibilities of the States. The proposed rule primarily provides means for improving the trust relationship between the Department and individual Indians by allowing the Department to better serve beneficiaries” interests. Additionally, the Federal government and the tribes have a government-to-government relationship that is independent of and does not affect the Federal government's relationship to the states or the balance of power and responsibilities among various levels of government. Therefore, in accordance with Executive Order 13132, it is determined that this proposed rule will not have sufficient federalism implications to warrant the preparation of a federalism assessment.

G. Civil Justice Reform (Executive Order 12988)

Executive Order 12988 (61 FR 4729, February 7, 1996), section 3(a), requires Federal agencies to adhere to the following requirements: (1) Eliminate drafting errors and ambiguity; (2) write regulations to minimize litigation; (3) provide a clear legal standard for effective conduct rather than a general standard and promote simplification and burden reduction. Section 3(b) specifically requires that executive agencies make every reasonable effort to ensure that the regulations: (1) Clearly specify any preemptive effect; (2) clearly specify any effect on existing Federal law or regulation; (3) provide a clear legal standard for affecting conduct while promoting simplification and burden reduction; (4) specify the retroactive effect, if any; (5) adequately define key terms; and (6) address other important issues clearly affecting clarity and general draftsmanship under any guidelines issued by the Attorney General. Section 3(c) of the Executive Order 12988 requires agencies to review regulations in light of the applicable standards in sections 3(a) and 3(b) to determine whether they are met or whether it is unreasonable to meet one or more of them.

The Department has determined that this proposed rule will not unduly burden the judicial system. Significant portions of the proposed rule will ensure that the judicial system is not overly burdened through the establishment of an administrative appeal process. For example, amendments to 43 CFR part 4, which describes administrative processes for challenging the outcome of a probate proceeding, will streamline the probate adjudication process. Additionally, the Department has determined that the proposed rule meets the applicable standards provided in sections 3(a) and 3(b) of Executive Order 12988. The Department has incorporated “plain language” approaches, as described in OMB's Writing User-Friendly Topics referred to in the

Federal Register

Document Drafting Handbook. Department attorneys provided input throughout the development and drafting of these regulations to provide clear legal standards, specify preemptive effects, specify the effect on existing Federal laws and regulations, and otherwise minimize the likelihood that litigation will result from an ambiguity in the regulations.

H. Paperwork Reduction Act

The Paperwork Reduction Act (PRA), 44 U.S.C. 3501

et seq.

, prohibits a Federal agency from conducting or sponsoring a collection of information that requires OMB approval, unless such approval has been obtained and the collection request displays a currently valid OMB control number. Nor is any person required to respond to an information collection request that has not complied with the PRA. In accordance with 44 U.S.C. 3507(d), BIA has submitted the information collection and recordkeeping requirements of this proposed rule to OMB for review and approval. Four CFR parts being proposed today contain information collection requests: 25 CFR parts 15, 18, 150 and 152. The following tables, by part, describe the information collection requirements in each section of the proposed rule and any changes from the current rule.

25 CFR Part 15

Title:

Probate of Indian Estates, Except for Members of the Five Civilized Tribes.

OMB Control Number:

1076-NEW.

Requested Expiration Date:

Three years from the approval date.

Summary:

This part contains the procedures that the Secretary of the Interior follows to initiate the probate of the trust estate of a deceased person for whom the Secretary holds an interest as trust or restricted property. The Secretary must perform the information collection requests in this part to obtain the information necessary to compile an accurate and complete probate file. This file will be forwarded to the Office of Hearings and Appeals (OHA) for disposition. Responses to these information collection requests are required to obtain benefits (e.g., make a claim against a probated estate) in accordance with the Secretary's sole statutory authority to probate estates (

see

25 U.S.C. 372).

Bureau Form Number:

None.

Frequency of Collection:

One per probate.

Description of Respondents:

Indians, businesses, and tribal authorities.

Total Annual Responses:

76,655.

Total Annual Burden Hours:

1,037,433.

The following is an explanation of the information collection requirements for 25 CFR part 15.

Section 15.4 What are the requirements for my will?

The proposed rule adds a requirement for a testator and witnesses self-proving a will, codicil, or revocation to file affidavits. The Department has estimated that approximately 1,000 testators will choose to “self-prove” their wills each year and that it will take approximately 0.5 hours to make the affidavit before an official authorized to administer oaths and to attach the affidavit to the will = 500 burden hours. This represents an increase of 500 burden hours due to program change with no annualized startup, or operations and maintenance costs.

Likewise, given that approximately 1,000 testators will choose to “self-prove” their wills each year, approximately 2,000 witnesses will be required to file supporting affidavits at 0.5 hours each = 1,000 burden hours. This represents an increase of 1,000 burden hours due to program change with no annualized startup, or operations and maintenance costs.

Section 15.104 Does BIA need a death certificate to prepare a probate file?

The proposed rule adds a requirement for persons unable to provide a death certificate to provide as much as they know about the deceased, including: The state, city, reservation, location, date, and cause of death, the last known

address of the deceased, and names and addresses of others who may have information about the deceased. If no death certificate exists, they must provide this information in an affidavit. This information will ensure that BIA has the information it needs regarding the identity of the deceased to collect documents for the probate file. The requirement already existed to provide a death certificate or, when unable to provide a death certificate because none existed, newspaper articles, obituary, or death notices and a church or court record.

The Department estimates that preparing the affidavit in lieu of providing a death certificate will impose an additional 1 hour burden per response to comply with this section. The existing estimated burden for locating and providing the death certificate is 4 hours per response. Assuming a respondent provides an affidavit in lieu of a death certificate only after spending the 4 hours searching unsuccessfully for the death certificate, 5 total burden hours per response are required to comply with this section. Assuming approximately 5,850 probates per year, the total burden will be 5,850 responses × 5 hours per response = 29,250 burden hours. This represents an increase of 5,850 hours due to a programmatic change, with no annualized startup, or operations and maintenance costs.

Section 15.105 What other documents does BIA need to prepare a probate file?

This section lists the items that BIA needs to prepare a probate file. The decedent's family and other knowledgeable members of the public are the most likely respondents for this information. The proposed rule adds several items of information that must be included in the probate file. These additional items are: (1) Adoption and guardianship papers concerning decedent's potential heirs or beneficiaries; (2) orders requiring payment of spousal support; (3) identification of person or entity to whom an interest is renounced; (4) court judgments regarding creditor claims; and (5) place of enrollment and tribal enrollment or census number of the decedent and potential heirs and beneficiaries.

The Department estimates that providing these documents will add approximately 1.25 hours to each response. Assuming 21,235 respondents annually × 45.5 hours to complete this section = 966,192.5 burden hours. This is an increase of approximately 26,543.75 hours due to a program change, with no annualized startup, or operations and maintenance costs.

Section 15.201 Can I get funds from the decedent's IIM account for funeral services?

There has been no change to the information collection requirements in this section. The Department estimates that there will be one request for funeral expenses per each of the estimated 5,850 probates per year, at an estimated 2 hours per response = 11,700 burden hours, with no annualized startup, or operations and maintenance costs.

Section 15.202 If the decedent owed me money, how do I file a claim against the estate?

The proposed rule adds a requirement that creditors provide information on their claims. Specifically, the rule requires creditors to file with the Secretary an affidavit and an itemized statement of the debt, including copies of any documents (such as signed notes, mortgages, account records, billing records, and journal entries) necessary to prove the indebtedness.

The Department estimates that, on average, approximately 6 creditor claims per probate estate will be filed and that it will take creditors approximately 0.5 hours to provide this information. The most recent Paperwork Reduction Act submission purported to assume that 6 claims per probate estate would be filed, but at 5,850 probates per year, the previous assumption of 127,410 respondents appears to be erroneous. Assuming 35,100 responses (6 claims per probate estate × 5,850 probate estates), the Department estimates the burden hours = 35,100 responses × 0.5 = 17,550 burden hours. This is a decrease of approximately 46,155 hours due to a program change, with no annualized startup, or operations and maintenance costs.

The proposed rule also adds a requirement for the person filing a claim against the estate to file an affidavit. The Department has determined that this does not qualify as “information” under 5 CFR 1320.3(h)(1) because it entails no burden other than that necessary to identify the claimant, the date, the claimant's address, and the nature of the instrument as a claim against the estate.

Section 15.403 What happens after the probate decision is made?

This section provides that a request for de novo review may be filed within 30 days of a probate decision. The information collection requirements that had been included in this section have been moved to 43 CFR 4, but are exempt under 5 CFR 1320.4(a)(2) beca

This text is long and has been trimmed here. Open the source document for the complete record.