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Statistics and Facts about OST
The Department of the Interior is responsible for managing over 56 million acres of land for over 384,000 Individual Indian Money (IIM) accounts and about 2,700 tribal accounts (over 250 tribes). There is nothing comparable to this in the commercial trust sector. Beyond size, there are a number of additional factors that make the Indian trust a unique management challenge:
- Unlike most commercial trusts, there was no trust document that created the Indian trust and articulated the fiduciary duties incumbent on the federal government in managing that trust. Instead the Indian trust gradually evolved from a series of Congressional actions—beginning with the General Allotment Act of 1887 (“Dawes Act”)—and subsequent policy changes. This unusual history created uncertainties about how the trust was to be managed, and about the very nature of the Indian trust: was it more like a common law trust or more like a government program? These ambiguities were gradually, if incompletely, resolved by case law, then finally by enactment of the American Indian Trust Fund Management Reform Act of 1994. Even now, and despite legislative clarifications, the courts still wrestle with the issue of whether the Indian trust is governed by the Administrative Procedures Act (like other federal government programs) or by the common law of trusts.
- The Indian trust operates under unique probate and title change requirements, and the sovereignty of the beneficiary community frequently influences management decisions.
- Unlike the commercial trust environment, where accounts and underlying trust assets must remain economically viable and productive or face liquidation under the common law of trusts, a large number of small accounts exist within the Indian trust. As of the end of fiscal year 2009, nearly 131,600 IIM accounts have balances of less than $15 with no activity for 18 months. In fact, most Indian trust accounts would fall below the minimal threshold for commercial trust accounts. In many cases the value of an Indian trust account is less than the cost of its administration, and the cultural heritage associated with the land held in trust is sometimes more important to the beneficiary than its monetary worth.
- The Indian fiduciary trust does not charge for services to manage the natural resources of the trust or investment of trust funds. Virtually 100 percent of the income is returned to tribes and individuals. In fiscal year 2009, the trust produced approximately $864 million in combined tribal and individual revenues. Most of the revenue was produced by a very small percentage of accounts. Over 73,000 of the nearly 384,000 open IIM accounts in the system receive less than $10 per year.
- Trust agreements or trust documents do not exist for each tribal account or each IIM account, which in a commercial trust would provide specific guidance in management of the trust assets.
- By law, the Indian trust is limited to investments in government or government-backed securities, which decreases risk but also limits the potential for growth.
On trust lands, the Department manages over 100,000 leases. It also manages approximately $3.5 billion in trust funds. For fiscal year 2009, funds from leases, use permits, land sales and income from financial assets, totaling approximately $298 million, were collected for about 384,000 open IIM accounts. Approximately $566 million was collected in fiscal year 2009 for about 2,700 tribal accounts (for over 250 tribes).
There are currently 153,950* individual Indian allotments and more than 4.5 million fractionated interests.
*As of 11/17/09
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