[House Report 104-681]
[From the U.S. Government Publishing Office]



104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 2d Session                                                     104-681
_______________________________________________________________________


 
REPEAL OF PROHIBITION ON FEDERAL EMPLOYEES CONTRACTING OR TRADING WITH 
                                INDIANS

                                _______
                                

 July 17, 1996.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Hyde, from the Committee on the Judiciary, submitted the following

                              R E P O R T

                        [To accompany H.R. 3215]

      [Including cost estimate of the Congressional Budget Office]

  The Committee on the Judiciary, to whom was referred the bill 
(H.R. 3215) to amend title 18, United States Code, to repeal 
the provision relating to Federal employees contracting or 
trading with Indians, having considered the same, report 
favorably thereon without amendment and recommend that the bill 
do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     1
Background and Need for Legislation..............................     2
Hearings.........................................................     2
Committee Consideration..........................................     2
Vote of the Committee............................................     2
Committee Oversight Findings.....................................     3
Committee on Government Reform and Oversight Findings............     3
New Budget Authority and Tax Expenditures........................     3
Congressional Budget Office Estimate.............................     3
Inflationary Impact Statement....................................     4
Section-by-Section Analysis......................................     4
Changes in Existing Law Made by the Bill as Reported.............     4

                          Purpose and Summary

    H.R. 3215 repeals 18 U.S.C. 437. Section 437 prohibits 
employees of the Bureau of Indian Affairs and the Indian Health 
Service from entering into contracts with Indians for the 
purchase, transportation, or delivery of goods or supplies for 
any Indian. It further prohibits these employees from engaging 
in any purchase or sale of services or property from or to any 
Indian. Because these provisions prohibit any of these 
transactions in any case in which the employee appears to 
benefit, they effectively bar any such transaction with the 
family of the employee. A violation of this section is 
punishable by a fine or imprisonment of up to six months.

                Background and Need for the Legislation

    Section 437, first passed in the 1800s, was meant to 
prevent federal employees who are involved in administering 
programs to help Indians from taking advantage of the Indians 
they were supposed to be helping. While it was well-intentioned 
when passed, today it is outdated and no longer necessary. In 
addition, the section has the perverse effect of making it 
harder for the Indian Health Service to recruit and retain good 
medical employees for remote reservations because those 
employees' spouses are prohibited from trading with the local 
Indians.
    Similar legislation passed the Senate on October 31, 1995 
as part of a broader package of technical amendments to laws 
relating to Indians (S. 325). The package passed by unanimous 
consent. The Department of Interior, of which the Bureau of 
Indian Affairs is a part, testified in favor of the repeal of 
section 437 at hearings on S. 325. The Committee is informed 
that the Department of Health and Human Services, which 
includes the Indian Health Service, is also in favor of repeal 
of section 437. The Committee is also informed that the Navajo 
Nation and the Hopi Tribe are in favor of this legislation. The 
Committee does not have any reason to believe that any other 
Indian groups oppose this bill.

                                Hearings

    The Committee held no hearings on H.R. 3215, because it was 
viewed as noncontroversial and received broad bipartisan 
support.

                        Committee Consideration

    On July, 16, 1996, the full Committee met in open session 
and ordered reported favorably the bill H.R. 3215 without 
amendment, by a vote of 25 to 0, a quorum being present.

                         Vote of the Committee

    The motion to report favorably H.R. 3215 without amendment. 
The motion was agreed to by a rollcall vote of 25 to 0.

                                                                        
                                                                        
                AYES                                 NAYS               
                                                                        
Mr. Hyde                                                                
Mr. Moorhead                                                            
Mr. McCollum                                                            
Mr. Gekas                                                               
Mr. Coble                                                               
Mr. Smith of Texas                                                      
Mr. Schiff                                                              
Mr. Canady                                                              
Mr. Goodlatte                                                           
Mr. Buyer                                                               
Mr. Hoke                                                                
Mr. Bono                                                                
Mr. Heineman                                                            
Mr. Conyers                                                             
Mrs. Schroeder                                                          
Mr. Frank                                                               
Mr. Boucher                                                             
Mr. Reed                                                                
Mr. Nadler                                                              
Mr. Scott                                                               
Mr. Watt                                                                
Mr. Becerra                                                             
Ms. Lofgren                                                             
Ms. Jackson Lee                                                         
Ms. Waters                                                              
                                                                        

                      Committee Oversight Findings

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives, the Committee reports 
that the findings and recommendations of the Committee, based 
on oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

         Committee on Government Reform and Oversight Findings

    No findings or recommendations of the Committee on 
Government Reform and Oversight were received as referred to in 
clause 2(l)(3)(D) of rule XI of the Rules of the House of 
Representatives.

               New Budget Authority and Tax Expenditures

    Clause 2(l)(3)(B) of House rule XI is inapplicable because 
this legislation does not provide new budgetary authority or 
increased tax expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 2(l)(3)(C) of rule XI of the 
Rules of the House of Representatives, the Committee sets 
forth, with respect to the bill, H.R. 3215, the following 
estimate and comparison prepared by the Director of the 
Congressional Budget Office under section 403 of the 
Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 17, 1996.
Hon. Henry J. Hyde,
Chairman, Committee on the Judiciary, House of Representatives, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 3215, a bill to amend Title 18, United States 
Code, to repeal the provision relating to federal employees 
contracting or trading with Indians, as ordered reported by the 
House Committee on the Judiciary on July 16, 1996. CBO 
estimates that enacting this bill would have no significant 
impact on the federal budget. The bill also would not impose 
any private-sector or intergovernmental mandates as defined in 
Public Law 104-4 and would not impose costs on state, local, or 
tribal governments. Enacting H.R. 3215 would not affect direct 
spending or receipts; therefore, pay-as-you-go procedures would 
not apply.
    H.R. 3215 would repeal Section 437 of Title 18 of the 
United States Code. Section 437 prohibits any employee of the 
Bureau of Indian Affairs or the Indian Health Service from 
purchasing any service or any real or personal property from 
any person of Native American descent.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Rachel 
Robertson.
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                     Inflationary Impact Statement

    Pursuant to clause 2(l)(4) of rule XI of the Rules of the 
House of Representatives, the Committee estimates that H.R. 
3215 will have no significant inflationary impact on prices and 
costs in the national economy.

                      Section-by-Section Analysis

    Section 1. Section 1 provides the operative language 
repealing 18 U.S.C. 437 and the corresponding table of sections 
in the United States Code.
    Section 2. Section 2 provides that the repeal will take 
effect on the date of enactment and that it will apply to any 
contract or purchase occurring on or after the date of 
enactment.

         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 and existing law in 
which no change is proposed is shown in roman):

               CHAPTER 23 OF TITLE 18, UNITED STATES CODE

                         CHAPTER 23--CONTRACTS

Sec.
431.  Contracts by Member of Congress.
     * * * * * * *
[437.  Federal employees contracting or trading with Indians.]
     * * * * * * *

[Sec. 437. Federal employees contracting or trading with Indians

  [(a) Except as provided in subsection (b), whoever, being an 
officer, employee, or agent of the Bureau of Indian Affairs or 
the Indian Health Service has (other than as a lawful 
representative of the United States) any interest, in such 
officer, employee, or agent's name, or in the name of another 
person where such officer, employee, or agent benefits or 
appears to benefit from such interest--
          [(1) in any contract made or under negotiation with 
        any Indian, for the purchase or transportation or 
        delivery of goods or supplies for any Indian, or
          [(2) in any purchase or sale of any service or real 
        or personal property (or any interest therein) from or 
        to any Indian, or
colludes with any person attempting to obtain any such 
contract, purchase, or sale, shall be fined not more than 
$5,000 or imprisoned not more than six months or both, and 
shall be removed from office, notwithstanding any other 
provision of law concerning termination from Federal 
employment.
  [(b)(1) Notwithstanding the provisions of subsection (a) and 
in accordance with paragraph (2) of this subsection, the 
President or his designee may prescribe rules and regulations 
under which any officer, employee, or agent of the Bureau of 
Indian Affairs or of the Indian Health Service may purchase 
from or sell to any Indian any service or any real or personal 
property or any interest therein.
  [(2) No rule or regulation prescribed pursuant to paragraph 
(1) of this subsection shall permit any officer, employee, or 
agent referred to in that paragraph--
          [(A) to make any purchase from or sale to an Indian 
        of any real or personal property (or any interest 
        therein) for the purpose of commercially selling, 
        reselling, trading, or bartering such property; or
          [(B) to have any interest in any purchase or sale 
        involving property or funds which are either held in 
        trust by the United States for Indians or which are 
        purchased, sold, utilized, or received in connection 
        with a contract or grant to an Indian from the Bureau 
        of Indian Affairs or the Indian Health Service, if such 
        officer, employee, or agent is employed in the office 
        or installation of such Bureau or Service which 
        recommends, approves, executes, or administers such 
        transaction, grant, or contract on behalf of the United 
        States: Provided, That such officer, employee, or agent 
        may have such an interest if such purchase or sale is 
        approved by the Secretary of the Interior in the case 
        of a Bureau of Indian Affairs officer, employee, or 
        agent, or by the Secretary of Health, Education, and 
        Welfare in the case of an Indian Health Service 
        officer, employee, or agent, or a designee of such 
        Secretary who is not employed at such office or 
        installation: Provided further, That (1) any such 
        designee may not be a relative by blood or marriage of 
        the officer, employee, or agent engaging in such 
        purchase or sale; (2) with respect to purchases or 
        sales by any officer, employee, or agent employed at 
        the reservation, agency, or service unit level, such 
        designee must be employed at not less than one grade 
        level higher than such officer, employee, or agent at 
        the Washington, District of Columbia, central office or 
        at an area office installation other than that with 
        authority over such reservation, agency, or service 
        unit; (3) with respect to purchases or sales by any 
        officer, employee, or agent employed at the area office 
        level, such designee must be employed at not less than 
        one grade level higher than such officer, employee, or 
        agent at the Washington, District of Columbia, central 
        office; and (4) the Secretary must approve purchases or 
        sales by any officer, employee, or agent employed at 
        the Washington, District of Columbia, central office; 
        or
          [(C) to acquire any interest in property held in 
        trust, or subject to restriction against alienation 
        imposed, by the United States unless the conveyance or 
        granting of such interest in such property is otherwise 
        authorized by law.
  [(c) Except as provided in subsection (b)(2), nothing 
contained in this section shall be construed as preventing any 
officer, employee, or agent of the Bureau of Indian Affairs or 
the Indian Health Service who is an Indian, of whatever degree 
of Indian blood, from obtaining or receiving any benefit or 
benefits made available to Indians generally or to any member 
of his or her particular tribe, under any Act of Congress, nor 
to prevent any such officer, employee, or agent who is an 
Indian from being a member of or receiving benefits by reason 
of his or her membership in any Indian tribe, corporation, or 
cooperative association organized by Indians, when authorized 
under such rules and regulations as the Secretary of the 
Interior or the Secretary of Health, Education, and Welfare, or 
their designee shall prescribe.
  [(d) For purposes of this section, the term ``Indian'' means 
any member of an Indian tribe recognized as eligible for the 
services provided by the Bureau of Indian Affairs who is 
residing on a Federal Indian Reservation, on land held in trust 
by the United States for Indians, or on land subject to a 
restriction against alienation imposed by the United States. 
The term shall also include any such tribe and any Indian owned 
or controlled organization located on such a reservation or 
land.
  [(e) For purposes of this section, the term ``Bureau of 
Indian Affairs'' means the Bureau of Indian Affairs and the 
Office of the Assistant Secretary for Indian Affairs, both in 
the Department of the Interior.]
          * * * * * * *