[Congressional Record Volume 140, Number 105 (Wednesday, August 3, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: August 3, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
INTRODUCTION OF LEGISLATION GRANTING TAX BENEFITS TO THE CATAWBA INDIAN 
                        TRIBE OF SOUTH CAROLINA

                                 ______


                        HON. JOHN M. SPRATT, JR.

                           of south carolina

                    in the house of representatives

                       Wednesday, August 3, 1994

  Mr. SPRATT. Mr. Speaker, today I am reintroducing legislation which 
would grant several tax benefits to the Catawba Indian Tribe of South 
Carolina.
  These provisions were part of the settlement agreement we signed with 
the tribe and part of H.R. 2399, initial legislation restoring the 
Catawba Tribe. Unfortunately, the Ways and Means Committee insisted 
last year that we drop these tax provisions from the restoration bill 
before it became law. After consulting with the tribe, we decided to 
drop the provisions because we did not want this to stop settlement of 
the claim and the restoration of the tribe. But I assured the tribe at 
the time that I would work for passage of these tax provisions in 
separate legislation. Even though there has been no major tax bill 
since the Catawba restoration bill became law, I will work to have them 
included in the next tax bill which the Congress passes and sends to 
the President.
  Last year, after 4 years of long and arduous negotiations, Government 
and tribal negotiators settled a 150-year-old Catawba claim to 140,000 
acres of land in South Carolina. On October 27, 1993, President Clinton 
signed the Catawba Restoration Act into law. To reach an agreement, 
both sides had to make difficult concessions. In return for the tribe's 
willingness to relinquish its land claim, Federal, State, and local 
governments agreed to pay the tribe $50 million. Negotiators also 
agreed to the restoration of the Catawbas as a federally recognized 
tribe and agreed to the establishment of a Federal reservation in South 
Carolina. Part of the settlement agreement provided the Catawbas with 
various State and Federal tax benefits. Although the South Carolina 
State Legislature approved the State tax benefits pledged in the 
settlement agreement, Congress has not yet approved the Federal 
benefits. The purpose of this bill is to see those provisions become 
law. Let me review some of the provisions of the legislation:
  a. Involuntary Conversion.--In three other major Eastern Indian 
settlements, the Pequot, Rhode Island, and Maine settlements, Congress 
has authorized sales of land for the reservation to be treated as 
involuntary conversions. The Catawbas want the same treatment. They 
have concluded, and I agree, that it will be more difficult for them to 
purchase 3,000 acres in a densely populated and rapidly growing area 
unless they can offer the purchasers this tax deferral advantage.
  b. Per Capita Payments.--As partial compensation to tribal members, 
the Federal Government will be paying each member of the tribe 
approximately $5,000 in cash. The tribe quite correctly believes it 
would be unfair for the Federal Government, on the one hand to 
compensate Catawbas and then take some of the money back by taxing 
them. For the same reason, the bill would exempt from Federal estate 
taxes the undistributed share of any member in the Catawba Per Capita 
Payment Trust Fund.
  c. Settlement contributions.--The legislation provides that 
contributions by private parties to help settle the claim shall be 
treated either as a charitable deduction or a payment in settlement of 
litigation. Almost $3 million of the settlement money comes from 
private contributions and some of the private donors have conditioned 
their payment on their ability to deduct the contributions. Even though 
all contributions to the tribe will become tax deductible once the IRS 
grants the tribe tax-exempt status--and some payments are already tax 
deductible contributions in settlement of litigation--the IRS has not 
yet issued its ruling and enactment of this legislation might ensure a 
more speedy resolution of the tribe's status.
  f. Sale of Catawba Artifacts.--The bill would exempt income earned 
from the sale of tribal pottery from Federal income taxes.
  These tax provisions are consistent with several other Indian 
restoration bills and the cost to the Treasury is negligible. But the 
tribe believes, and I agree, that these provisions are important 
because they will help ensure that the tribe can become economically 
viable. I urge my colleagues to enact this bill into law.

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