[House Report 104-40]
[From the U.S. Government Publishing Office]



  

                                                                       
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                     104-40
_______________________________________________________________________


 
              SETTLEMENT COMMON STOCK OF COOK INLET REGION

_______________________________________________________________________


 February 21, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______


  Mr. Young of Alaska, from the Committee on Resources, submitted the 
                               following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 421]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Resources, to whom was referred the bill 
(H.R. 421) to amend the Alaska Native Claims Settlement Act to 
provide for the purchase of common stock of Cook Inlet Region, 
and for other purposes, having considered the same, report 
favorably thereon with an amendment and recommend that the bill 
as amended do pass.
    The amendment (stated in terms of the page and line numbers 
of the introduced bill) is as follows:
    Page 6, strike line 12 and all that follows through line 
17, and insert the following:

    ``(ii) Neither Cook Inlet Regional Corporation nor a member 
of the board of directors or officers of Cook Inlet Regional 
Corporation shall be liable for damages resulting

                          Purpose of the Bill

    The purpose of H.R. 421 is to amend the Alaska Native 
Claims Settlement Act to provide for the purchase of common 
stock of Cook Inlet Region, and for other purposes.

                  Background and Need for Legislation

    Congress enacted the Alaska Native Claims Settlement Act 
(ANCSA) in 1971 (Public Law 92-203) to address claims to lands 
in Alaska by its Eskimo, Indian and Aleut Native people. Lands 
and other benefits transferred to Alaska Natives under the Act 
were conveyed to thirteen corporations formed under the Act. 
Alaska Natives enrolled to each of these corporations were 
issued shares in the corporation. Cook Inlet Region, Inc. 
(CIRI) is one of the corporations formed under ANCSA and has 
approximately 6,262 Alaska Natives enrolled, each of whom were 
issued 100 shares of stock in CIRI as required under ANCSA.
    ANCSA stock (unlike most corporate stock) can not be sold, 
transferred or pledged by the owners of the shares. Instead 
transfers can only happen through inheritance or in limited 
cases by court decree. The ANCSA provisions restricting the 
sale of stock were put in place to protect Native shareholders 
from unscrupulous transactions, and to allow the corporations 
to grow and mature to provide long-lasting benefits to its 
shareholders.
    The original authors of ANCSA initially believed that a 
period of twenty years would be a sufficient amount of time for 
the restrictions on the sale of shareholder stock to remain in 
place. The restrictions originally were to expire on December 
31, 1991.
    As 1991 appropriated, bringing with it the impending change 
in the alienability of Native stock, the Alaska Native 
community grew concerned about the effect of the potential 
stock sale. The Alaska Federation of Natives, a statewide 
organization representing the State's 90,000 Alaska Natives, 
spearheaded a legislative initiative to address the 1991 stock 
sale issue. Many of the Native corporations, including CIRI, 
actively solicited their shareholders' views on this critical 
matter, through meetings, questionnaires, polling and formal 
votes. In 1987, Congress amended ANCSA to reform the mechanism 
governing stock sale restrictions in a fundamental way. Under 
the 1987 amendments, the restrictions on alienability continue 
automatically unless and until the shareholders of a Native 
corporation vote to remove them. The 1987 amendments also 
provided several procedural mechanisms to bring such a vote, 
including action by the corporate Board of Directors and 
petitions by shareholders.
    To date, no Native Corporation has sought to lift the 
alienability restrictions because Native shareholders continue 
to value Native ownership of the corporations and Native 
control of the lands and other assets held by them.
    CIRI has conducted a number of continuing surveys, focus 
groups and special shareholders' meetings to ascertain the 
views of its shareholders regarding the alienation restrictions 
on CIRI stock. Two results have consistently stood out in these 
assessments.
    First, the great majority of CIRI shareholders favor 
maintaining Native ownership and control of CIRI. These 
shareholders see economic benefits in the continuation of 
Native ownership, and also value the important cultural goals, 
values and activities of their ANCSA corporation.
    Second, a significant percentage, albeit a minority of 
shareholders, favor accessing some (or all) of the value of 
their CIRI stock through sale of that sock. These shareholders 
include elderly shareholders who have real current needs, yet 
doubt that the sale of stock will be available to them in their 
lifetimes; holders of small, fractional shares received through 
one or more cycles of inheritance; non-Natives who have 
acquired stock through inheritance but without attendant voting 
privileges; and shareholders who have few ties to the 
corporation or to Alaska (25 percent of CIRI shareholders live 
outside Alaska).
    Under current law, these two legitimate but conflicting 
concerns cannot be addressed, because lifting restriction on 
the sale of stock is an all or nothing proposition. To allow 
the minority of shareholders to exercise their desire to sell 
some or all of their stock, the majority of shareholders would 
have to sacrifice their important desire to maintain Native 
control and ownership to CIRI.
    CIRI believes this conflict will eventually leave the 
interests of the majority of its shareholders vulnerable to 
political instability. CIRI recognizes that responding to the 
desire of those shareholders who wish to sell CIRI stock is a 
legitimate corporate responsibility. More importantly, CIRI 
believes that there is a way to address the needs and desire of 
both groups of shareholders so that the sale of stock will not 
compromise the ``Nativeness'' of the company, and will not 
jeopardize the economic future of the company for those who 
choose not to sell. H.R. 421 authorizes a third option for 
CIRI. The Board of Directors of CIRI may propose an amendment 
to it's articles of incorporation which would authorize a 
board-approved plan allowing CIRI to purchase common stock from 
its shareholders on a voluntary basis. All stock would be 
immediately canceled by the corporation upon purchase. Approval 
of the amendment by the shareholders would require a 50-
percent-plus-one majority vote of all outstanding stock that 
carries voting rights. This option applies only to CIRI and 
does not apply to any other ANCSA corporation.

                            Committee Action

    H.R. 421 was introduced by Congressman Don Young of Alaska 
on January 4, 1995, and referred to the Committee on Resources. 
The bill was identical to H.R. 4665 introduced in the 103rd 
Congress, was the subject of hearings held by the Subcommittee 
on Oversight and Investigations of the Committee on Natural 
Resources on September 22, 1994, and part of a bill ordered 
reported by the Committee on Natural Resources on September 27, 
1994.
    On February 8, 1995, H.R. 421 was considered by the 
Committee on Resources. At that time, Congressman George Miller 
offered an amendment to clarify liability for the CIRI Board of 
Directors or corporate officers in relation to the sale of the 
CIRI stock. The amendment was adopted by voice vote. The 
Committee ordered the bill favorably reported, as amended by a 
voice vote, in the presence of a quorum.

                      Section-by-Section Analysis

    Section (1)(a) amends section 7(h) of ANCSA by inserting a 
new paragraph (4). New paragraph 4(A) defines ``Cook Inlet 
Regional Corporation''. New paragraph 4(B) of ANCSA allows 
CIRI, by amendment to its articles of incorporation, to 
purchase common stock from its shareholders. New Paragraph 4(C) 
allows the shareholders to sell their shares to CIRI. New 
paragraph 4(D) requires the prior approval of the CIRI Board of 
Directors before any sale or purchase of the shares. New 
paragraph 4(E) authorizes the Board of Directors to recognize 
the different rights that accrue to any class or series of 
shares of common stock.
    New paragraph 4(F) provides that any shareholder who 
accepts an offer shall receive consideration for his or her 
share of common stock and a security for the non-resident 
rights that attach to such share. New paragraph 4(G) authorizes 
the issuance of a non-voting security. New paragraph 4(H) 
provides that any shares purchased by the corporation shall be 
cancelled and provides how distributions shall be calculated. 
New paragraph 4(I) excludes certain persons from participating 
in an offer by the corporation to purchase shares. New 
paragraph 4(J)(i) provides that the Board of Directors may 
determine the terms of an offer to purchase shares and that in 
determining the terms of a purchase offer, CIRI can rely on the 
good faith opinion of any firm or member of a firm of 
investment bankers or valuation experts. New paragraph 4(J)(ii) 
provides that the CIRI Board of Directors and officers of CIRI 
cannot be held liable for damages resulting from an offer made 
in connection with the sale of any stock if the offer was made 
in good faith, in reliance on a good faith opinion of a 
recognized firm of investment bankers or valuation experts, and 
otherwise in accordance with paragraph (4). New paragraph 4(K) 
provides that consideration to purchase shares may be in the 
form of cash, securities, or a combination of cash and 
securities. New paragraph 4(L) provides that the sale of 
settlement common stock shall not diminish a shareholder's 
status as an Alaska Native for the purpose of qualifying for 
government programs and further provides that the proceeds from 
the sale of stock shall not be excluded in determining 
eligibility for any government needs-based program.
    Section 1(b) of H.R. 421 is a conforming amendment to 
section 8(c) of ANCSA which provides that ANCSA section 7(h)(4) 
shall not apply to village, urban and group corporations.

            Committee Oversight Findings and Recommendations

    Pursuant to clause 2(l)(3) of rule XI of the Rules of the 
House of Representatives and clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, the Committee's 
oversight findings and recommendations are reflected in the 
body of this report.

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that the 
enactment of H.R. 421 will have no significant inflationary 
impact on prices and costs in the operation of the national 
economy.

                        Cost of the Legislation

    Clause 7 of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 421. However, clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                     Compliance with house rule XI

    1. With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the Rules of the House of Representatives and 
section 308(a) of the Congressional Budget Act of 1974, H.R. 
421 does not contain any new budget authority, spending 
authority, credit authority, or an increase or decrease in 
revenues or tax expenditures.
    2. With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 421.
    3. With respect to the requirement of clause 2(l)(3)(C) of 
rule XI of the Rules of the House of Representatives and 
section 403 of the Congressional Budget Act of 1974, the 
Committee has received the following cost estimate for H.R. 421 
from the Director of the Congressional Budget Office:

               congressional budget office cost estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 15, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 421, a bill to amend the Alaska Native Claims 
Settlement Act to provide for the purchase of common stock of 
Cook Inlet Region, and for other purposes, as ordered reported 
by the House Committee on Resources on February 8, 1995.
    H.R. 421 would provide the Cook Inlet Regional Corporation 
in Alaska, one of twelve Nagtive corporations created by the 
Alaska Native Claims Settlement Act of 1971, additional 
flexibility in handling its corporate stock. Based on 
information provided to us by the Department of the Interior, 
we estimate that enactment of this bill would not affect the 
federal budget or the budgets of state or local governments. 
Because enactment of H.R. 421 would not affect direct spending 
or receipts, pay-as-you-go procedures would not apply to the 
bill.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Theresa 
Gullo.
            Sincerely,
                                    Robert D. Reischauer, Director.

                          Departmental Reports

    The Committee received a report on H.R. 421 from the 
Department of the Interior on February 8, 1995. No reports have 
been received on H.R. 421.

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                  Washington, DC, February 8, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: This is to provide views of this 
Department concerning two bills, which are expected to be 
marked up in the near future by your Committee. They are H.R. 
402, ``To amend the Alaska Native Claims Settlement Act, and 
for other purposes,'' and H.R. 421, ``To amend the Alaska 
Native Claims Settlement Act to provide for the purchase of 
common stock of Cook Inlet Region, Inc., and for other 
purposes.''
    These bills were considered in the 103rd Congress but were 
not passed. The bills represent areas where a great deal has 
already been accomplished through informal discussion and 
cooperative efforts of the Committee and the progress that has 
been shown in this legislation to date. While we do have some 
concerns with the bills, a substantial amount of agreement has 
been achieved on them through the cooperative efforts.

                                H.R. 402

    We will consider first H.R. 402. The bill would amend 
vaious provisions of the Alaska Native Claims Settlement Act 
(``ANCSA'') (43 U.S.C. Sec. 1601 et seq.) and would otherwise 
provide for certain conveyances of land or interests therein. 
We reported on the predecessor bill in the 103rd Congress, H.R. 
3612. Several of the provisions of the bill have been removed 
and are not included in H.R. 402 because agreement has been 
reached and/or because the Alaska Federation of Natives (AFN) 
has withdrawn them. Most of the provisions in H.R. 402 reflect 
suggestions this Department made to H.R. 3612.
    Comments are as follows:

Section 1. Ratification of certain Caswell Creek and Montana Creek 
        conveyance

    In 1974, Montana Creek Native Association, Inc. (MCNA) and 
Caswell Native Association, Inc. (CNA) withdrew their 
applications for village status then pending before the 
Department. Instead of applying for a withdrawal and selecting 
lands, the two groups and Cook Inlet Region, Inc. (CIRI) 
entered into an agreement. CIRI conveyed 11,520 acres to each 
group. Under the Department's regulations, each group would 
have been eligible for a maximum of 7,680 acres. CIRI has 
requested that the conveyances from it to the groups be 
ratified by Congress and that the groups' lands be treated as 
lands conveyed pursuant to ANCSA. This amendment would make the 
lands eligible for fire protection under section 22(e) of 
ANCSA, 43 U.S.C. Sec. 1621(e) and eligible for a land bank 
status under section 907 of the Alaska National Interest Lands 
Conservation Act (ANILCA) (43 U.S.C. Sec. 1636, as amended). 
The Department supports the ratification of CIRI's transfer. We 
note that two changes were made to the bill last year based on 
Interior's comments, and those changes have been retained in 
H.R. 402. They are included at page 2, lines 8-17.
    We do have an additional amendment which we believe is 
necessary in connection with the earlier changes. In the second 
sentence, page 2, the reference to section 14(h)(2) of ANCSA 
(43 U.S.C. Sec. 1613(h)(2)) should be deleted, and the 
reference to Sec. 1613(h)(2) in line 4 should be changed to 
simply Sec. 1601 et seq. The lands should be deemed as ANCSA 
conveyances in order to have all the protection of Sec. 21 of 
ANCSA (43 U.S.C. Sec. 1620) and Sec. 907 of ANLICA). Without 
the deletion, it could be argued that 23,000 acres must be 
deleted from lands available to other regions under 
Sec. 14(H)(8) of ANCSA (43 U.S.C. Sec. 1613(h)(8)), which would 
be inconsistent with the agreed goal of making these lands 
available to the other regions.

2. Mining claims after lands conveyed to Alaska regional corporation

    When lands were patented to the regional corporations under 
the provisions of ANCSA sections 11(a)(1), 11(a)(2) and 16, 
they were conveyed ``subject to valid existing rights.'' This 
included valid mining claims. Under the holding in Alaska 
Miners v. Andrus, 662 F.2d 577 (9th Cir. 1981), miners were not 
compelled to file for patent on such claims, but by failing to 
apply for a patent in the time permitted by ANCSA, mining 
claimants lost the right to obtain a patent to their mining 
claims from the federal government. Accordingly, BLM has taken 
the position that after the transfer of title it cannot accept 
FLPMA filings on such mining claims, nor has BLM been willing 
to accept annual rental payments. This has created confusion 
about mining regulatory authority over these mining claims.
    The purpose of this amendment is to clarify who has mining 
regulatory authority over these claims. Under the amendment, 
the regional corporations are explicitly given the authority to 
regulate the mining claims under the mining laws of the United 
States, as such laws are amended. Adoption of this legislation 
would have the desire effect of bringing clarity to the 
relationship between the miner/inholder and the Regional 
Corporation.
    The Department supports an amendment to ANILCA on this 
subject. We proposed substitute language last year to that 
which was proposed in H.R. 3612. That proposed substitute 
language, which more clearly gives management authority to the 
Regional Corporations, has now been adopted in H.R. 402. We 
endorse this section with the new language.

3. Settlement of claims arising from hazardous substance contamination 
        of transferred lands

    Native corporations have selected and the United States has 
conveyed lands which contain contaminants. The nature of the 
contamination may come in various forms including residue from 
abandoned upstream mining operations, and in many cases 
substances now considered contaminants were not so considered 
at the time of the transfer. AFN contends that it is unfair for 
the regional corporations to shoulder the entire burden of 
cleaning up contaminated sites where the contamination is not 
the fault of the Native corporations. However, we have 
insufficient information at this time to address this issue. We 
support the provision for a study to develop recommendations on 
how to deal with the problem. We appreciate that the current 
provision represents a substantial change from settlement 
provisions in earlier versions of the bill which we strongly 
opposed.
    While we support the basic terms of the section, we 
recommend refinements which we believe are important to the 
effectiveness of the provision. We believe the section should 
be consistent with terms in the Comprehensive Environmental 
Response, Compensation, and Liability Act (CERCLA) (42 U.S.C. 
Sec. 9601, et seq.). Two different terms are used in the 
operable portion of the study, ``contaminants'', which is 
defined in the proposed revision to ANCSA subsection 40(a)(1), 
and ``hazardous substances'', which is not defined. Since both 
terms are already defined and understood in environmental law, 
it make sense to adopt those definitions for both terms. 
Subsection (a)(1) should read:
          ``(1) The term ``contaminant'' means hazardous 
        substance(s), pollutants, or contaminants as defined in 
        Public Law 96-510, Title I, Sec. 101, Dec. 11, 1980, 94 
        Stat. 2767, as amended, 42 U.S.C. Sec. 9601 (14) and 
        (33).''
    Subsection (b) should be amended, for consistency and 
because the required report must address contaminants and not 
just hazardous substances, to replace the term ``hazardous 
substances'' on page 5, line 4, with the term ``contaminants.''
    We recommend the definition of term ``lands'' be deleted in 
section 40(a) on page 4. We believe it is unnecessary and 
potentially confusing because the word ``lands'' is fully 
described in subsection 40(b), and subsections 40(b) (1)-(4) 
refer back to that description through the use of the term 
``such lands''.
    Section (b)(2) should be amended by adding the word ``on'' 
after ``existing information''. This small but important word 
makes a big difference in terms of personnel time and money. 
With the word, the report is required to state where the 
information is located. Without the word, the statutory 
directive will be to list all available information in the 
report, wherever it may exist.
    Subsection (b)(2), page 5, line 12, should be amended by 
changing the term ``amelioration'' to ``remediation'', since 
``remediation'', like ``removal'', is a term used in CERCLA, 
while ``amelioration'' is not.

4. Authorization of appropriations for the purpose of implementing 
        required reconveyances

    ANCSA section 14(c) requires village corporations to 
reconvey certain land within their patented selections. The 
problems associated with the reconveyance of lands to 
individuals and municipalities within the village patents are 
complex and technically difficult.
    This proposed amendment would constitute an authorization 
for appropriations to provide technical assistance to villages 
for section 14(c) reconveyances.
    The Department notes that the provision has been amended 
substantially as suggested by the Department in its report of 
last year. It is our understanding that AFN concurs with these 
changes.

5. Native allotments

    Two native allotments in the National Petroleum Reserve--
Alaska (NPR-A), totalling less than 240 acres, are surrounded 
by lands conveyed to the village corporation of Nuiqsut. The 
subsurface estate under Nuiqsut village lands has been conveyed 
to Arctic Slope Regional Corporation (ASRC) pursuant to Section 
1431(o) of Alaska National Interest Lands Conservation Act. In 
the absence of this amendment, the United States is expected to 
own the oil and gas estate under the two allotments.
    This amendment would permit conveyance to ASRC of the 
federally owned oil and gas estate under the Native allotments 
for the purpose of consolidating subsurface interests in the 
area and eliminating isolated tracts of public land. Any oil 
and gas recoverable from the Native subsurface would, in all 
likelihood, have only a limited market in Nuiqsut. The lands 
have not been deemed valuable for coal. The State of Alaska has 
consented to the transfer of the reserved minerals to the 
Corporation. Furthermore, this amendment would not result in a 
net loss of subsurface estate to the United States. We support 
this technical amendment. As we suggested in our report of last 
year, the bill has been amended to delete the words ``a 
Village'' and substitute the word ``Kuukpik'' (the name of the 
ANCSA corporation at Nuiqsut) in the first sentence of proposed 
Section 1431(o)(5).

6. Report concerning open season for certain Native Alaskan veterans 
        for allotments

    The Alaska Native Allotment Act of 1906 was repealed by 
ANCSA on December 18, 1971. During 1970 and 1971, a concerted 
effort was made by the Bureau of Indian Affairs, Ruralcap and 
Alaska Legal Services to notify as many Alaskan Natives as 
possible of the upcoming repeal and the need to apply for an 
allotment. Individuals who were otherwise entitled to apply for 
an allotment but who were on active military duty during 1970 
and 1971 may have been deprived of an opportunity to apply for 
such allotments.
    We note that the bill has been amended from last year's 
bill to reduce the eligible parties and to provide for a report 
on the problem and suggested solutions. We believe this is far 
preferable to the original provision in earlier bills, and we 
support the provision. However we strongly recommend that the 
time for the report be extended to 12 months. We do not think 
it can be done in 6 months.

7. Transfer of Wrangell Institute

    The Wrangell Institute was originally withdrawn in 1956 for 
the administration of Native Affairs. That use terminated with 
the passage of ANCSA. The property was excessed by BIA to GSA 
in 1975 and subsequently 31 acres were transferred to the city 
of Wrangell. In 1977 CIRI requested that the remaining 140 
acres be made available for selection. CIRI was issued a 
revocable license on May 11, 1977. In August 1978, this land 
and the buildings thereon were the subject of an interim 
conveyance to CIRI.
    This amendment would cause ten acres of that conveyance 
together with the structures to be returned to the United 
States. The section would also hold CIRI harmless for any and 
all claims arising from either federal or CIRI ownership of the 
land prior to its return to the United States. CIRI is seeking 
a credit to its property account in the amount of $382,305, the 
estimated worth of the property. In addition to the costs of 
supplementing the CIRI property account, the U.S. would have to 
assume the liability for the clean up of the property which 
could include the destruction and removal of all buildings on 
the property which have deteriorated since the cessation of 
maintenance by CIRI.
    Asbestos products were properly used in construction of the 
buildings and were properly maintained at the time of 
conveyance; and this fact is not unique to CIRI. It is 
specifically the Department's position that the asbestos was 
not considered a pollutant at the time of transfer, and it was 
not friable. CIRI had the option of containing the asbestos as 
opposed to abandoning the building, but did not do so. It is 
our understanding that the asbestos became friable after the 
building was abandoned.
    Furthermore, CIRI had specifically requested that the 
property be made available for selection and had the fullest 
opportunity to evaluate the Wrangell property prior to 
selecting it, having held a revocable license to the property 
for over one year prior to conveyance, for this purpose.
    The Department cannot support the relief sought for CIRI. 
Under the facts we do not believe CIRI is entitled to the 
relief sought, and to do so would require relief for others 
similarly situated. We are not in a position to assume that 
very extensive liability at this time. It is the Department's 
understanding, for example, that there are over 200 other 
conveyed buildings which contained non-friable asbestos. We do 
not believe that as a matter of law the United States must 
reimburse CIRI for its investment or hold them harmless for the 
time of their ownership. Moreover, it is not feasible to 
reimburse all entities to whom the United States has conveyed 
buildings that contained non-friable asbestos or who may not be 
satisfied with their land. We do not support this amendment. It 
is our understanding that GSA also opposes this amendment for 
similar reasons.
    We have serious concerns with the section, both on the 
facts of the particular case, and because of the precedent it 
would set.
    Although we do not support section 7, the Department does 
support reviewing the Wrangell Institute situation in the 
context of the section 3 contamination study discussed earlier 
in these comments. The section 3 study will provide a 
comprehensive review of the problem of the presence of 
contaminants on conveyed lands. We believe that this is the 
more appropriate course of action under the circumstances, and 
it would place CIRI in the same position as other Alaska Native 
corporations with respect to consideration of the circumstances 
involving the presence of any contaminants, and identification 
of possible remedies.

8. Shishmaref Airport amendment

    This section of the bill would allow the Department of 
reacquire Shishmaref Airport, originally conveyed to the State 
of Alaska, and to immediately transfer it to the Shishmaref 
Native Corporation. The bill attempts to apportion fairly any 
potential liability for cleanup of hazardous or solid wastes on 
the property.
    We recommend the following amendment to section 8, 
beginning at line 13: delete all after ``airport.'' on line 13, 
through ``and,'' on line 15, and revise to read follows: ``* * 
* airport. The Administrator of the Federal Aviation 
Administration is hereby directed to exercise said reverter in 
Patent No. 1240529 in favor of the United States within 12 
months of the date of enactment of this section. Upon revesting 
of title, notwithstanding any other provision of law, the 
Secretary shall * * *.''
    This is a preferable means of executing the transfer, and 
the Secretary is not called upon to reacquire the land.
    With this amendment, the Department supports the section.
    With the amendments proposed above, including the deletion 
of section 7 as written, the Department supports the enactment 
of H.R. 402.

                                H.R. 421

    H.R. 421 would amend the Alaska Native Claims Settlement 
Act to provide for the purchase of common stock of the Cook 
Inlet Corporation.
    In 1971, the Alaska Native Claims Settlement Act (ANCSA) 
was enacted to settle and resolve the claims of Alaska Natives 
to most of the State of Alaska. The settlement recognized title 
to 44 million acres of land to be held for Native Corporations 
and approximately $1 billion in monetary compensation for the 
loss of the remaining lands. Under ANCSA, 12 geographic regions 
were created with five incorporators authorized under each 
region. Each regional corporation was formed under the laws of 
Alaska to conduct business for profit and was managed by a 
board of directors. Alaska Natives, living on the date of 
enactment, were issued stock in the corporations and the right 
to vote in elections for the board of directors and on other 
issues of importance to the stockholders.
    ANCSA provided that for a period of 20 years Native 
corporation stock could not be sold, transferred, pledged, 
subjected to a lien or judgment execution, assigned in present 
or future or otherwise alienated; and could only be transferred 
through inheritance or in limited cases of court decree. In 
1987, Congress amended the restrictions on stock sale, instead 
of expiring at the end of 20 years (1991), the stock 
restrictions on alienability would continue automatically until 
the shareholders of a Native corporations voted to remove them.
    H.R. 421 amends ANSCA, authorizing the Cook Inlet Regional 
Corporation, with approval of the shareholders, to offer 
shareholders a repurchase of corporation stock from those who 
want to sell their stock to the corporation.
    Our understanding is that the Cook Inlet Regional 
Corporation has conducted a poll of its shareholders and found 
them to be in favor of this action. Once legislation is passed, 
the bill provides that the issue will be put to a formal vote 
of the shareholders for their approval. In light of this, we 
have no objection to the passage of H.R. 421. We do have two 
recommendations, however.
    Paragraph (J)(ii) on page 6 would hold harmless any 
director of Cook Inlet Regional Corporation and any firm or 
member of a firm of investment bankers or valuation experts who 
assist in the determination of the terms of an offer to 
purchase, from damages for terms made in an offer. We are 
opposed to this provision. As to directors we do not believe 
that we should change through a federal act the terms of state 
law as to the standards of responsibility for directors of 
corporations, particularly as to Native corporations in which 
shareholders cannot as easily shed their interests as 
shareholders in most corporations can do. We should not weaken 
the protections afforded shareholders. Moreover, we fail to see 
the rationale for absolving bankers and valuation experts from 
responsibility for doing precisely what they are hired and well 
paid to do, and we believe this holds unnecessary risks to the 
shareholders.
    Paragraph (L) on page 7 provides that proceeds from sale of 
stock shall not be excluded from eligibility determinations for 
needs-based government programs. We approve of the provision, 
but would defer to the views of other agencies more directly 
affected. We recommend, however, the inclusion in line 13, 
after the word ``Proceeds'', the following, ``. . . in excess 
of $2,000 received by any individual stockholder . . . '' This 
would exclude from eligibility determinations the first $2,000 
received by a shareholder. The purpose of this provision is 
simply to clarify that the bill is consistent with the 
provision and policy enacted by the Congress in section 15 of 
the 1991 Amendments to section 29 of ANCSA (43 U.S.C. 1607(c)).
    This concludes our comments.
    The Office of Management and Budget advises that it has no 
objection to the presentation of this report from the 
standpoint of the Administration's program.
            Sincerely,
                           George T. Frampton, Jr.,
                                       Assistant Secretary,
                                       Fish and Wildlife and Parks.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

                  ALASKA NATIVE CLAIMS SETTLEMENT ACT

          * * * * * * *

                         regional corporations

    Sec. 7. (a) * * *
          * * * * * * *
    (h)(1) * * *
          * * * * * * *
    (4)(A) As used in this paragraph, the term ``Cook Inlet 
Regional Corporation'' means Cook Inlet Region, Incorporated.
    (B) The Cook Inlet Regional Corporation may, by an 
amendment to its articles of incorporation made in accordance 
with the voting standards under section 36(d)(1), purchase 
Settlement Common Stock of the Cook Inlet Regional Corporation 
and all rights associated with the stock from the shareholders 
of Cook Inlet Regional Corporation in accordance with any 
provisions included in the amendment that relate to the terms, 
procedures, number of offers to purchase, and timing of offers 
to purchase.
    (C) Subject to subparagraph (D), and notwithstanding 
paragraph (1)(B), the shareholders of Cook Inlet Regional 
Corporation may, in accordance with an amendment made pursuant 
to subparagraph (B), sell the Settlement Common Stock of the 
Cook Inlet Regional Corporation to itself.
    (D) No sale or purchase may be made pursuant to this 
paragraph without the prior approval of the board of directors 
of Cook Inlet Regional Corporation. Except as provided in 
subparagraph (E), each sale and purchase made under this 
paragraph shall be made pursuant to an offer made on the same 
terms to all holders of Settlement Common Stock of the Cook 
Inlet Regional Corporation.
    (E) To recognize the different rights that accrue to any 
class or series of shares of Settlement Common Stock owned by 
stockholders who are not residents of a Native village 
(referred to in this paragraph as ``non-village shares''), an 
amendment made pursuant to subparagraph (B) shall authorize the 
board of directors (at the option of the board) to offer to 
purchase--
          (i) the non-village shares, including the right to 
        share in distributions made to shareholders pursuant to 
        subsections (j) and (m) (referred to in this paragraph 
        as ``nonresident distribution rights''), at a price 
        that includes a premium, in addition to the amount that 
        is offered for the purchase of other village shares of 
        Settlement Common Stock of the Cook Inlet Regional 
        Corporation, that reflects the value of the nonresident 
        distribution rights; or
          (ii) non-village shares without the nonresident 
        distribution rights associated with the shares.
    (F) Any shareholder who accepts an offer made by the board 
of directors pursuant to subparagraph (E)(ii) shall receive, 
with respect to each non-village share sold by the shareholder 
to the Cook Inlet Regional Corporation--
          (i) the consideration for a share of Settlement 
        Common Stock offered to shareholders of village shares; 
        and
          (ii) a security for only the nonresident rights that 
        attach to such share that does not have attached voting 
        rights (referred to in this paragraph as a ``non-voting 
        security'').
    (G) An amendment made pursuant to subparagraph (B) shall 
authorize the issuance of a non-voting security that--
          (i) shall, for purposes of subsections (j) and (m), 
        be treated as a non-village share with respect to--
                  (I) computing distributions under such 
                subsections; and
                  (II) entitling the holder of the share to the 
                proportional share of the distributions made 
                under such subsections;
          (ii) may be sold to Cook Inlet Region, Inc.; and
          (iii) shall otherwise be subject to the restrictions 
        under paragraph (1)(B).
    (H) Any shares of Settlement Common Stock purchased 
pursuant to this paragraph shall be canceled on the conditions 
that--
          (i) non-village shares with the nonresident rights 
        that attach to such shares that are purchased pursuant 
        to this paragraph shall be considered to be--
                  (I) outstanding shares; and
                  (II) for the purposes of subsection (m), 
                shares of stock registered on the books of the 
                Cook Inlet Regional Corporation in the names of 
                nonresidents of villages;
          (ii) any amount of funds that would be distributable 
        with respect to non-village shares or non-voting 
        securities pursuant to subsection (j) or (m) shall be 
        distributed by Cook Inlet Regional Corporation to 
        itself; and
          (iii) village shares that are purchased pursuant to 
        this paragraph shall be considered to be--
                  (I) outstanding shares, and
                  (II) for the purposes of subsection (k) 
                shares of stock registered on the books of the 
                Cook Inlet Regional Corporation in the names of 
                the residents of villages.
    (I) Any offer to purchase Settlement Common Stock made 
pursuant to this paragraph shall exclude from the offer--
          (i) any share of Settlement Common Stock held, at the 
        time the offer is made, by an officer (including a 
        member of the board of directors) of Cook Inlet 
        Regional Corporation or a member of the immediate 
        family of the officer; and
          (ii) any share of Settlement Common Stock held by any 
        custodian, guardian, trustee, or attorney representing 
        a shareholder of Cook Inlet Regional Corporation in 
        fact or law, or any other similar person, entity, or 
        representative.
    (J)(i) The board of directors of Cook Inlet Regional 
Corporation, in determining the terms of an offer to purchase 
made under this paragraph, including the amount of any premium 
paid with respect to a non-village share, may rely upon the 
good faith opinion of a recognized firm of investment bankers 
or valuation experts.
    (ii) Neither Cook Inlet Regional Corporation nor a member 
of the board of directors or officers of Cook Inlet Regional 
Corporation shall be liable for damages resulting from terms 
made in an offer made in connection with any purchase of 
Settlement Common Stock if the offer was made--
          (I) in good faith;
          (II) in reliance on a determination made pursuant to 
        clause (i); and
          (III) otherwise in accordance with this paragraph.
    (K) The consideration given for the purchase of Settlement 
Common Stock made pursuant to an offer to purchase that 
provides for such consideration may be in the form of cash, 
securities, or a combination of cash and securities, as 
determined by the board of directors of Cook Inlet Regional 
Corporation, in a manner consistent with an amendment made 
pursuant to subparagraph (B).
    (L) Sale of Settlement Common Stock in accordance with this 
paragraph shall not diminish a shareholder's status as an 
Alaska Native or descendant of a Native for the purpose of 
qualifying for those programs, benefits and services or other 
rights or privileges set out for the benefit of Alaska Natives 
and Native Americans. Proceeds from the sale of Settlement 
Common Stock shall not be excluded in determining eligibility 
for any needs-based programs that may be provided by Federal, 
State or local agencies.
          * * * * * * *

                          village corporations

    Sec. 8. (a) * * *
          * * * * * * *
    (c) Applicability of Section 7.--The provisions of 
subsections (g), [(h)] (h) (other than paragraph (4)), and (o) 
of section 7 shall apply in all respects to Village 
Corporations, Urban Corporations, and Group Corporations.
          * * * * * * *
            ADDITIONAL VIEWS OF REPRESENTATIVE GEORGE MILLER

    This legislation could significantly impact 6,500 Alaska 
Native shareholders of the Cook Inlet Region, Inc. (CIRI) if 
the authority to buy-back shareholder stock is exercised.
    H.R. 421 would authorize CIRI's board of directors to 
propose a plan to purchase settlement common stock from 
shareholders of the corporation. CIRI's management argues that 
this is a preferable alternative to voting to remove all 
restrictions on selling CIRI stock, allowing CIRI to remain a 
Native-owned and controlled corporation while at the same time 
allowing some disgruntled shareholders to cash out.
    While I am not enthusiastic about H.R. 421, I did not 
oppose the legislation because: (1) there is no congressional 
mandate that CIRI amend its articles of incorporation or 
exercise authority to purchase stock from its shareholders; (2) 
the CIRI shareholders must vote to approve a buy-out plan 
adopted by the board; and (3) the buy-out option does not apply 
to any Alaska Native corporation other than CIRI.
    I'm concerned, however, that the bill favors the interests 
of CIRI management over the shareholders. As introduced, H.R. 
421 provided immunity from ``notwithstanding any other 
provision of law'' for CIRI, its board, and ``any firm or 
member of a firm of investment bankers or valuation experts'' 
involved an the offer to purchase shareholder stock if they act 
in ``good faith.''
    Clearly, terminating participation in the corporation 
established pursuant to the Alaska Native Claims Settlement Act 
would be a major decision for the CIRI shareholders. CIRI is 
among the most financially successful Alaska Native 
corporations, with real estate and other investments across the 
nation. Valuation of its assets for purposes of a shareholder 
buy-out could be a complex endeavor. At a minimum, each 
shareholder needs to know whether a stock buy-out offer 
reflects its full and fair value.
    To better protect the shareholder, I offered an amendment 
which was accepted by the Committee to eliminate the 
``notwithstanding any other provision of law'' language and 
also to delete the immunity from damages for outside investment 
bankers or valuation experts. As a matter of Federal law, the 
board and officers of CIRI may act in ``good faith'' reliance 
on advice from investment bankers or valuation experts. By 
eliminating the reference to ``notwithdtanding any other 
provision of law,'' the amendment assures that standards of 
care applicable under Alaska law will continue to apply to CIRI 
and its board's activities.
    In enacting H.R. 421, it is important to note that the 
Committee is not endorsing the adoption of any buy-out plan nor 
concluding that selling stock would be in the long-term best 
interests of CIRI or its shareholders.
                                                     George Miller.