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appeal of the findings of fact in terms of the value of the land or what was due them under the judgment of the Secretary of the Interior

Mr. LEE. You are suggesting that they may select the judicial procedure?

Senator COHEN. What I am suggesting is that any tribe would have to think very seriously about going before the Secretary of Interior, to pass to him, or whoever might occupy that office, the power to establish what the facts were or conclude what the facts were and to establish the size of the compensation, when in fact that is not a reviewable or appealable judgment. I would think that the tribes may very well, in all likelihood, in almost every case, elect to bypass the Secretary of the Interior.

Mr. LEE. Well, again, I would not necessarily agree with that because I think that because Interior does have a trust relationship, and the Indian tribes do deal with the Interior Department, BIA, in many, many other functions and responsibilities, that hopefully the same level of confidence would prevail as dealing with other matters.

Senator COHEN. In your bill, you provide for compensation for aboriginal title?

Mr. LEE. Yes, we do.

As you are aware, Mr. Chairman, in recent weeks there is a case that has come down indicating that that probably is not appropriate. I can not cite the precise case but my counsel tells me that in the last 3 or 4 weeks there has been a case that moves in the direction where that is not necessarily appropriate.

Senator COHEN. Tell me about the bond market and the real estate market in New York,

Mr. LEE. Mr. Chairman, fortunately, in the State of New York, we have not had the economic injury that occurred, for example, out in Cape Cod, in the Mashpee case. At this point, I think we can say with a reasonable level of confidence that the transferring of homes, or properties, other exchanges of property, has taken place normally. The FHA, the VA, other banking institutions, have been able to transfer property without difficulty. The bonding of sewer districts, water districts, other public buildings, has occurred under normalcy.

I made a very sincere and serious effort to communicate with the law community to advise potential purchasers of property that they may have a problem so that in the titles that are being transferred people would be aware of that.

We have learned, Mr. Chairman, as I am sure you may have in your Maine experience that the title insurance may not be that effective because the liabilities under these billions of dollars of potential claims, the title insurance companies may be grossly underfunded. And so one could question that title insurance means when they do not have the capability of covering it.

Senator COHEN. Have the tribes actually brought suit?

Mr. LEE. There is a suit in the Cayuga case. There is a suit in the Oneida case. There is a pending suit, or threatened suit, in the Mohawk case in the State of New York. And in the State of South Carolina, I believe Senator Thurmond's people actually are involved in a suit there.

Senator COHEN. Is it against the State? Is it against the Department of Interior? Who is it against ?

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Mr. LEE. The suit that is filed in New York State is not against the State of New York. Is it against private citizens and counties involved, as well as against some businesses.

Senator COHEN. In the State of Maine, we had a somewhat unique situation where the proceeding was to force the Department of the Interior and Justice Department to represent the tribes, but the suit was not actually filed against the State of Maine, but rather against the Federal Government, to proceed. And just that mere filing of the suit to force the Federal Government to proceed was enough to throw a cloud over the title of practically the entire State. Apparently you do not have that situation.

Mr. LEE. We do not have that situation.

Senator Cohen. Tell me about trespass damages. If you are talking about fair compensation that is required under the Constitution if you are going to extinguish a claim, they must be compensated within the confines of the Constitution or dictated by the Constitution with fair compensation.

Why would that not include consequentital damages or trespass damages?

Mr. LEE. Mr. Chairman, I am familiar with the principle, of course, of trespass compensation, but I would bring to your attention, and again I regret that I can not cite the precise case, but there has been a Federal case in recent weeks which indicates that compensation for trespass damages may be inappropriate, so it appears that some recent court decisions are beginning to move in the direction that many of us would like to see happen.

Senator COHEN. Are you aware that the Department of Justice or OMB has recommended that in any finding by the Court of Claims or the Secretary of the Interior that the State of New York or South Carolina would have to pay one-half of the damages assessed?

Mr. LEE. Mr. Chairman, I am cognizant of that, and in our extensive deliberations over the last 12 months, that has been a point of contention. Both Senator Thurmond, and Senator D'Amato and I are aware of that. I do not think that it is objectionable to any one of the three legislators involved, and I do not think it is necessarily a negative position by the States that may be involved here either.

Senator COHEN. So, you support that?

Mr. LEE. I have no qualms about that. I had a great deal of difficulty, very candidly, in getting Mr. Stockman to agree that the Federal Government should assume full responsibility as the bill is currently drafted, but I am sure that he will relent and gladly let the States pick up a portion of the liability if that should be the case. Senator COHEN. Senator Goldwater? Senator GOLDWATER. I have no questions. Senator COHEN. That is all I have.

Mr. LEE. If I may conclude, we think we have come down on the side of constitutionality, fairness, and equity, and a very significant point, sir, permanency. As you know, in so many of the negotiated settlements, Alaska being one example, where we thought that we had permanently resolved it through negotiated settlement, we have found that is not the case, and we think one of the major assets of this bill is that permanency is likely to be a concluding result.

I thank the chairman very much for this opportunity.

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Senator COHEN. Just one point, Congressman Lee. It may not be permanency because if in fact such a bill is passed by Congress, I am sure you will find that it will be challenged as far as its constitutionality. Through the court system, it may take you a number of months, and probably years, before the thing is finally resolved.

Mr. LEE. I concur but I have confidence in the Supreme Court that they would affirm the constitutionality and the permanency, sir.

Senator COHEN. Thank you very much, Congressman Lee.
Mr. LEE. Thank you, Mr. Chairman.

Senator Cohen. We are still awaiting the arrival of Senator Thurmond and Senator D'Amato, but in the meantime, I think we will proceed with our other witnesses, Ms. Dinkins and Mr. Coldiron from the Departments of Justice and Interior.

STATEMENT OF WILLIAM H. COLDIRON, SOLICITOR, DEPARTMENT

OF THE INTERIOR

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Mr. COLDIRON. Thank you, Mr. Chairman.

I am William H. Coldiron, Solicitor of the Department of the Interior. Ms. Carol Dinkins, Assistant Attorney General for the Land and Natural Resources Division, will speak for the Department of Justice on the legal technicalities.

We want to thank you for the opportunity to testify on S. 2084, the Ancient Indian Land Claims Settlement Act of 1982. This bill is intended to achieve a legislative solution to complex, costly and damaging litigation resulting from the alleged violations of the Trade and Intercourse Act of 1790. That act, which is now codified in a slightly revised version in 25 U.S.C. 177, renders ineffective any transfer of interests in land from Indians to non-Indians regardless of the amount of compensation received, unless Congress has ratified the conveyance.

Since the chairman is obviously very familiar with not only the provisions of this bill but the background which led to it, I think that I will omit those parts of my statement which go through that and Ms. Dinkins will review those technically, and in keeping with the chairman's admonition to be brief, we will omit that.

I do want to say though that the administration favors negotiated settlement wherever that is possible. The enactment of this legislation would not in any way detract from our position that negotiation is much better than litigation.

The administration would like to propose some amendments to this bill and I would like to outline those. I would also like to submit my statement for the record.

Chitimacha representatives have met with administration representatives to discuss the possibility of resolving their claims on a basis consistent with administration policy. We believe negotiations may prove fruitful. Over the weeks ahead, we will be earnestly pursuing them with all interested parties.

Senator Cohen. Thank you. Your statement will be included in the record, Mr. Coldiron.

Mr. COLDIRON. Thank you very much.
[The prepared statement follows:]

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PREPARED STATEMENT OF WILLIAM H. COLDIRON, SOLICITOR, U.S. DEPARTMENT OF

THE INTERIOR

Thank you for the opportunity to testify on S. 2084, the “Ancient Indian Land Claims Settlement Act of 1982." This bill is intended to achieve a legislative solution to complex, costly and damaging litigation resulting from the alleged violations of the Trade and Intercourse Act of 1790. That Act, which is now codified in a slightly revised version at 25 U.S.C. 177, renders ineffective any transfer of interests in land from Indians to non-Indians, regardless of the amount of compensation received, unless Congress has ratified the conveyance.

In essence, S. 2084 would achieve a legislative solution to ongoing and potential litigation over the disputed land in New York and South Carolina by extinguishing tribal claims based on both recognized and aboriginal title. This would be accomplished through Congressional ratification of any pre-1912 transfer of land by Indian tribes as of the date of transfer and by the extinguishment of any claims for damages from trespass or mesne profits based on those transfers. At the same time, the Secretary of the Interior would be authorized to enter into settlement agreements with the tribes to provide monetary compensation for the loss of the tribes' right to sue the present landowners. Compensation would be based on the difference between the fair market value of the land and natural resources at the time of the transfer and the price that the Indians actually received. If the settlement negotiations prove unsuccessful, the tribe would be entitled to sue the United States in the Court of Claims and, if successful, would be compensated on the same formula.

I want to emphasize that this bill is an even-handed attempt to provide relief to both sides of an ancient and intractable controversy. The lands at issue were transferred by Indian tribes to the states of New York and South Carolina many years ago. Since that time thousands of innocent persons have purchased land in good faith, building homes, businesses and lives in total unawareness of any cloud on their title. On the other side are the descendents of the Indians who originally transferred the land.

By the Trade and Intercourse Act, Congress required Congressional ratification of the transfers before the transfers could become effective and to insure the fairness of the terms. This did not take place, leaving open the possibility that the tribes may have been mislead or coerced into unfair transactions. As we survey the situation now, in 1982, we see potential injustice on each side innocent land owners on the one hand, descendents of Indians, denied the protection of the law on the other.

We believe the bill provides a basis for resolving this problem-not perfect justice for all in this imperfect world but a realistic and even-handed effort to provide redress for all. In essence the bill protects the innocent landowners in their peaceful, enjoyment of the land while compensating the Indian tribes for the transfers to the extent the original terms were unfair.

Ordinarily we prefer to see disputes such as these ended through negotiations resulting in fair, reasonable and affordable settlements. Instead, the parties have proceeded with litigation and no fruitful settlement discussions have de veloped to our knowledge. A legislative solution is far preferable to burdensome, protracted, and perhaps ultimately inconclusive litigation. The magnitude of these claims is evident given their size, the nature of the legal issues involved, and the nearly two hundred years that have intervened, in some cases, since the original land transfers. It was established that litigation of the comparable dispute in the State of Maine which was settled through legislation, enacted in 1980, would have taken between 5 and 15 years. During the litigation the land title of the affected land owners would be clouded, their ability to obtain title insurance or sell their property would be harmed and sale of municipal bonds would be hampered; the affected communities would be severely disrupted.

Of course, the Administration's support for this bill does not preclude the parties from working toward an equiptable and afforded settlement. If, before the enactment of this bill, the parties make rapid and real progress toward such a settlement we would wholeheartedly cooperate. However, we do not think it would be appropriate to delay a legislative solution to these disputes while awaiting the uncertainty of settlement negotiations.

Although the Administration supports the basic concept of S. 2084, and regards such a solution as constitutional, we believe that a number of modifications to the bill are necessary in order to obtain a more workable and equitable resolution of these disputes. I will briefly summarize the most significant changes proposed by the Administration.

1. CONTRIBUTION BY STATES Under S. 2084, the entire cost of ending the litigation against the states and private landowners and compensating the tribes is paid by the Federal Government-even though the United States has not in any way been involved in the transactions in question. While the United States is willing to contribute financially to a resolution of these claims, and will bear the litigation burden in the Court of Claims, participation from the affected states must also be part of the solution. We suggest, therefore, that the bill be amended to provide that extinguishment of aboriginal title and ratification of sales of recognized title would be conditioned on the execution of a contract between the Secretary of the Interior and the affected state, providing for the reimbursement of the United States for one-half of the liability resulting from claims under the Act.

2. ABORIGINAL TITLE

S. 2084 creates a cause of action to recover the difference, plus interest, between the fair market value of the land and natural resources at the time of transfer and the price actually received. This formula would apply to land held by aboriginal title as well as recognized title, although the interest on aboriginal title would be two percent and the interest on recognized title would be five percent.

As Assistant Attorney General Carol Dinkins will testify in greater detail later, the Administration believes that while there may be a constitutional obligation to compensate for retroactive ratification of transfers of recognized title, there is no such requirement with respect to aboriginal title. More importantly, the complexities of determining the extent and nature of centuries old aboriginal claims, never defined by statute, treaty or title would lead to unwieldy litigation with little probability of reaching a prompt conclusion. Moreover, pay. ing interest on these claims would depart from previous legislative policy such as the Indian Claims Commission Act and would establish a vague but expensive precedent for the future.

3. SCOPE In our view, the approach of the bill should be applied to all similar Indian land claims in other states. The Trade and Intercourse Act claims in the Eastern states are in many respects unique and involve a singular balance of equities. Indeed, the Eastern land claims themselves are different from one another and should be individually evaluated. Nevertheless, the Administration urges the Committee to consider expanding the approach of this legislation to include Trade and Intercourse Act claims in states which request such.

In addition to these changes, a number of other modifications are desirable in order to insure that the process of resolving these claims can be accomplished expeditiously and fairly. For example, it is important to insure that retroactive validation of these sales does not create valid title of frivolous or ineffective transactions and to insure that the Act does not interfere with the law of adverse possession in the affected state.

We would also note that under section 5(e) of the bill, land acquired by a tribe in lieu of monetary compensation would be subject to state and local taxes and would not be held in trust by the United States. We note that if a tribe had acquired land through litigation or had retained ownership, the land would be held in trust and would not be taxable. The traditional policy of preventing any possibility of selling or forfeiting Indian land should also be considered in review of this bill.

We would be glad to work with this Committee and interested parties including the affected Indian tribes on this legislation.

Thank you.

Mr. COLDIRON. The first amendment we would like to propose is contribution by the State. Under S. 2084, the entire cost of ending the litigation against the States and private landowners and compensating the tribes is to be paid for by the Federal Government, even though the United States has not in any way been involved in the transactions in question.

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