[House Report 105-242]
[From the U.S. Government Publishing Office]
105th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 105-242
_______________________________________________________________________
MISSISSIPPI SIOUX TRIBES JUDGMENT FUND DISTRIBUTION ACT OF 1997
_______
September 3, 1997.--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
[To accompany H.R. 976]
[Including cost estimate of the Congressional Budget Office]
The Committee on Resources, to whom was referred the bill
(H.R. 976) to provide for the disposition of certain funds
appropriated to pay judgment in favor of the Mississippi Sioux
Indians, 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 is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Mississippi Sioux Tribes Judgment
Fund Distribution Act of 1997''.
SEC. 2. DEFINITIONS.
For purposes of this Act, the following definitions shall apply:
(1) Covered indian tribe.--The term ``covered Indian tribe''
means an Indian tribe listed in section 4(a).
(2) Secretary.--The term ``Secretary'' means the Secretary of
the Interior.
(3) Trial governing body.--The term ``tribal governing body''
means the duly elected governing body of a covered Indian
tribe.
SEC. 3. DISTRIBUTION TO, AND USE OF CERTAIN FUNDS BY, THE SISSETON AND
WAHPETON TRIBES OF SIOUX INDIANS.
Notwithstanding any other provision of law, including Public Law
92-555 (25 U.S.C. 1300d et seq.), any funds made available by
appropriations under chapter II of Public Law 90-352 (82 Stat. 239) to
the Sisseton and Wahpeton Tribes of Sioux Indians to pay a judgment in
favor of the Tribes in Indian Claims Commission dockets numbered 142
and 359, including interest, after payment of attorney fees and other
expenses, that, as of the date of enactment of this Act, have not been
distributed, shall be distributed and used in accordance with this Act.
SEC. 4 DISTRIBUTION OF FUNDS TO TRIBES.
(a) In General.--Subject to section 5, as soon as practicable after
the date that is 1 year after the date of enactment of this Act, the
Secretary shall distribute an aggregate amount, equal to the funds
described in section 3 reduced by $1,469,831.50, as follows:
(1) 28.9276 percent of such amount shall be distributed to
the tribal governing body of the Spirit Lake Tribe of North
Dakota.
(2) 57.3145 percent of such amount shall be distributed to
the tribal governing body of the Sisseton and Wahpeton Sioux
Tribe of South Dakota.
(3) 13.7579 percent of such amount shall be distributed to
the tribal governing body of the Assiniboine and Sioux Tribes
of the Fort Peck Reservation in Montana, as designated under
subsection (b).
(b) Tribal Governing Body of Assiniboine and Sioux Tribes of Fort
Peck Reservation.--For purposes of making distributions of funds
pursuant to this Act, this Sisseton and Wahpeton Sioux Council of the
Assiniboine and Sioux Tribes shall act as the governing body of the
Assiniboine and Sioux Tribes of the Fort Peck Reservation.
SEC. 5. ESTABLISHMENT OF TRIBAL TRUST FUNDS.
(a) In General.--As a condition to receiving funds distributed
under section 4, each tribal governing body referred to in section 4(a)
shall establish a trust fund for the benefit of the covered Indian
tribe under the jurisdiction of that tribal governing body, consisting
of--
(1) amounts deposited into the trust fund; and
(2) any interest and investment income that accrues from
investments made from amounts deposited into the trust fund.
(b) Trustee.--Each tribal governing body that establishes a trust
fund under this section shall--
(1) serve as the trustee of the trust fund; and
(2) administer the trust fund in accordance with section 6.
SEC. 6. USE OF DISTRIBUTED FUNDS.
(a) Prohibition.--No funds distributed to a covered Indian tribe
under section 4 may be used to make per capita payments to members of
the covered Indian Tribe.
(b) Purposes.--The funds distributed under section 4 may be used by
a tribal governing body referred to in section 4(a) only for the
purpose of making investments or expenditures that the tribal governing
body determines to be reasonably related to--
(1) economic development that is beneficial to the covered
Indian tribe;
(2) the development of resources of the covered Indian tribe;
or
(3) the development of a program that is beneficial to
members of the covered Indian tribe, including educational and
social welfare programs.
(c) Audits.--
(1) In general.--The Secretary shall conduct an annual audit
to determine whether each tribal governing body referred to in
section 4(a) is managing the trust fund established by the
tribal governing body under section 5 in accordance with the
requirements of this section.
(2) Action by the secretary.--
(A) In general.--If, on the basis of an audit
conducted under paragraph (1), the Secretary determines
that a covered Indian tribe is not managing the trust
fund established by the tribal governing body under
section 5 in accordance with the requirement of this
section, the Secretary shall require the covered Indian
tribe to take remedial action to achieve compliance.
(B) Appointment of independent trustee.--If, after a
reasonable period of time specified by the Secretary, a
covered Indian tribe does not take remedial action
under subparagraph (A), the Secretary, in consultation
with the tribal governing body of the covered Indian
Tribe, shall appoint an independent trustee to manage
the trust fund established by the tribal governing body
under section 5.
SEC. 7. EFFECT OF PAYMENTS TO COVERED INDIAN TRIBES ON BENEFITS.
(a) In General.--A payment made to a covered Indian tribe or an
individual under this Act shall not--
(1) for purposes of determining the eligibility for a Federal
service or program of a covered Indian tribe, household, or
individual, be treated as income or resources; or
(2) otherwise result in the reduction or denial of any
service or program to which, pursuant to Federal law (including
the Social Security Act (42 U.S.C. 301 et seq.)), the covered
Indian tribe, household, or individual would otherwise be
entitled.
SEC. 8. DISTRIBUTION OF FUNDS TO LINEAL DESCENDANTS.
Not later than 1 year after the date of enactment of this Act, of
the funds described in section 3, the Secretary shall, in the manner
prescribed in section 202(c) of Public Law 92-555 (25 U.S.C. 1300d-
4(c)), distribute an amount equal to $1,469,831.50 to the lineal
descendants of the Sisseton and Wahpeton Tribes of Sioux Indians.
PURPOSE OF THE BILL
The purpose of H.R. 976 is to provide for the disposition
of certain funds appropriated to pay a judgment in favor of the
Mississippi Sioux Indians.
BACKGROUND AND NEED FOR LEGISLATION
In 1967, the Indian Claims Commission, in the case of
Sisseton and Wahpeton Bands or Tribes, et al. v. United States,
18 Ind. Cl. Comm. 477 (July 25, 1967), entered a judgment in
favor of the claimants for tribal lands allegedly taken by the
United States in violation of certain treaty commitments made
to the Sisseton and Wahpeton Bands or Tribes of Sioux Indians.
The claims were prosecuted solely by the Sisseton-Wahpeton
Sioux Tribe of the Lake Traverse Indian Reservation and the
Devils Lake Sioux Tribe (now known as the Spirit Lake Tribe) of
the Devils Lake Sioux Indian Reservation. However, the Sioux
Tribes or Bands of the Fort Peck Indian Reservation who were
descendant entities of the treaty tribes were joined as
petitioning parties just prior to final judgment with the
stipulation that whether the Fort Peck Sioux would be entitled
to share in the judgment funds would be subject to the
determination of the Secretary of the Interior and Congress.
When legislation was proposed to provide for distribution
of the award, the Department of the Interior took the position
that the Sisseton-Wahpeton Sioux, the Devils Lake Sioux, and
the Assiniboine-Sioux Tribes were ethnohistorically and
politically representative of a portion of the aggrieved
aboriginal bands. Because of historical events, however, the
Department also recommended participation of descendants who
were not enrolled with these successor tribes.
The historical events referred to by the Department are set
forth in a letter dated November 4, 1971, from the Assistant
Secretary of the Interior to the Chairman of the House
Committee on Interior and Insular Affairs on H.R. 6067 and
related House bills (92nd Congress). These events relate to the
Sioux uprising known as the ``Minnesota Outbreak'' of 1862. The
military suppression of the Sioux in 1862-3 forced the
dispersal of the aboriginal Upper Sioux Bands. The Interior
report states that a majority of these persons became members
of the three named modern-day successor entities; other joined
tribes on other reservations; and in some cases the dispersed
Sioux never tried to qualify for tribal membership and have not
been reservation residents. The Sisseton-Wahpeton Sioux Tribe,
the Spirit Lake Tribe, and the Sisseton-Wahpeton Sioux element
of the Assiniboine and Sioux Tribes contend that the Interior
Department report to Congress on H.R. 6067 is factually
inaccurate in certain important respects and assert
Constitutional restrictions on the power of Congress to provide
for distribution of these judgment funds to non-tribal member
descendants based on those facts.
The 1972 act
Legislation was introduced in both Houses of Congress in
the 91st Congress with differing proposals for distribution.
The Senate bill would have limited participation in the award
to persons of one-quarter degree or more Sisseton and Wahpeton
Sioux blood; the Housebill would have apportioned the award on
the basis of descendancy without regard to tribal enrollment or degree
of Sisseton and Wahpeton blood.
A compromise was reached in the 92nd Congress with
enactment of Public Law 92-555 (Act of October 25, 1972; 86
Stat. 1168) which provided for apportionment of the funds
between the three successor tribes and the unenrolled
descendants. While each of the three successor tribes limited
enrollment to persons with specific degrees of Sisseton and
Wahpeton bloodquantum, no blood quantum was fixed for persons
under the descendancy class.
The 1972 Act provided for distribution on the following
basis:
Tribe or group Percentage
Devils Lake Sioux Tribe of N.D.......................... 21.6892
Sisseton-Wahpeton Sioux of S.D.......................... 42.9730
Assiniboine and Sioux of Montana........................ 10.3153
All other Sisseton and Wahpeton Sioux descendants....... 25.0225
The Devils Lake Sioux Tribe and the Sisseton-Wahpeton Sioux
Tribe received full distribution of their respective shares in
1974 and the Assiniboine-Sioux Tribe of Fort Peck received a
partial distribution of its share in 1979. In each case most of
the funds were distributed per capita to the tribal members as
follows:
Apr. 18, 1974--Sisseton-Wahpeton Sioux Tribe--6,006
$376.77................................... $2,262,880.62
Dec. 16, 1974--Devils Lake Sioux Tribe--2,187
$559.61............................................. 1,223,867.07
May 1, 1979--Ft. Peck (partial)--3,602 $185.00 666,370.00
Subsequent to the partial payment to the Fort Peck group,
34 additional members were determined to be eligible. As of
March 13, 1986, $194,646.85 remained in the escrow account for
that group.
The lineal descendants' share of the funds has remained
undistributed since enactment of the 1972 Act. The Department
of the Interior indicates that this descendancy share is now in
excess of $14 million. In 1979, the Department sent 1,935
lineal descendants a letter acknowledging their eligibility to
participate in the award. Following the 1979 mailing to
potential descendants distributees, the Department's computer
files were destroyed and the Department has had to rebuild the
files from previous hard copy.
In April 1987, the Sisseton-Wahpeton Sioux Tribe, the
Devils Lake Sioux Tribe and the Sisseton-Wahpeton Sioux Council
of the Assiniboine and Sioux Tribes of the Fort Peck Indian
Reservation filed suit in federal district court in Great
Falls, Montana, challenging the Constitutionality of portions
of the 1972 Act that provided for the distribution of the
judgmentfund awarded in 1967 to these tribes by the Indian
Claims Commission. As stated above, that Act provided for the
distribution of approximately 25 percent of the fund to lineal
descendants ofthe Sisseton and Wahpeton Mississippi Sioux
Tribe--i.e. persons who could prove Sisseton-Wahpeton Mississippi Sioux
lineal ancestry but who were not members of any of the three tribes.
The tribes oppose any distribution of funds to lineal
descendants. It is principally the Constitutionality of the
portions of the 1972 Act relating to those individuals that has
been the issue in their past and present litigation.
The tribes' first lawsuit
In their complaints as originally filed in 1987, the tribes
claimed that: (1) granting to non-tribal individuals a portion
of the funds that had vested in the tribes when the United
States paid the Indian Claims Commission judgment deprived the
tribes of their property without due process of law in
violation of the Fifth Amendment; (2) granting a
disproportionate percentage of the judgment to lineal
descendants was arbitrary and capricious and, accordingly,
violated the tribes' rights to due process of law and to the
equal protection of the law as guaranteed by the Fifth
Amendment; (3) taking funds that had vested in the tribes by
judgment and contract took private property for public use
without just compensation in violation of the Just Compensation
Clause of the Fifth Amendment; and (4) the 1972 Act breached
the United States' trust responsibility to the tribes to manage
the tribe's property in a manner that would protect the
property and promote the interest of the tribes.
The federal district court in Montana ruled that the six-
year statute of limitations in 28 U.S.C. Section 2401(a)
applied to these claims. Thus, since the claims were not filed
within six years of the enactment of the 1972 Act, the Court
dismissed them. The District Court did note, however, that the
``Tribes complaint raises serious questions which warrant
litigation'' In particular, the Court concluded that if, as
alleged by the tribes, ``the individual lineal descendants were
not parties'' to the settlement with the United States
incorporated in the final decree of the Indian Claims
Commission, ``the Distribution Act of October 24, 1972, may
well constitute a deprivation of the `property' rights of the
Sioux Tribes, in violation of the proscription of the fifth
amendment.''
The United States Court of Appeals for the Ninth Circuit
affirmed the District Court's dismissal of the claims as barred
by the statute of limitations. It, too,observed that the
``Tribe's substantive claims appear to have some merit; they
assert that at no time prior to or including the entry of the
final judgment of [the Indian Claims Commission] did the United
States represent that non-members would have a right to any
portion of the judgment funds, and that in approving the
settlement, none of the tribes understood that lineal
descendants would be sharing in the distribution of the
judgment fund.'' The Ninth Circuit ruled that if the tribes
amended their complaint to allege that no persons on the lineal
descendancy distribution roll have a Sisseton-Wahpeton Sioux
lineal ancestor or that only an exceptionally small number of
such persons have a Sisseton-Wahpeton Sioux lineal ancestor,
the complaint would state valid Constitutional and legal claims
not barred by any statute of limitations.
In 1990, the District Court permitted the tribes to amend
their complaint to allege that an exceptionally small number of
persons on the lineal descendancy distribution roll have
aSisseton-Wahpeton Sioux lineal ancestor. The tribes based this claim
on a letter dated May 12, 1971, from the Assistant Secretary of the
Interior to the Chairman of the Senate Committee on Interior and
Insular Affairs on S. 1462 (92nd Congress) expressing the Department of
the Interior's agreement with the provisions in the bill requiring that
``the individual, to participate, must be able to trace lineal descent
from members of the aboriginal bands.''
Although the tribes offered undisputed evidence that only
65 persons on the lineal descendancy roll traced lineal
ancestry to a member of the Sisseton and Wahpeton Mississippi
Sioux Tribe, the District Court dismissed the tribes' claims
finding that the 1972 Act only required that the name of ``a
lineal ancestor appears on any available records and rolls
acceptable to the Secretary'' even if such rolls do not
identify a lineal ancestor who was a member of the Sisseton and
Wahpeton Mississippi Sioux Tribe. On appeal, the Ninth Circuit
affirmed.
The tribes' second lawsuit
In 1996, the tribes filed a new Constitutional challenge to
the 1972 Act in federal district court in Washington, D.C. This
challenge, based on a 1995 United States Supreme Court
decision, claimed that by retroactively reopening and revising
the Indian Claims Commission judgment awarded to the tribes,
the Act was beyond the power of Congress, that is, the Act
violated the separation of powers doctrine. Without addressing
the merits, the District Court dismissed this case on res
judicata grounds ruling that the tribes should have brought
this claim as part of their original suit in 1987. The tribes
have an appeal pending.
Prior legislation
In 1986, the Senate Select Committee on Indian Affairs
favorably reported a bill eliminating any lineal descendancy
distribution and directing that the undistributed funds be
distributed to the three Sisseton and Wahpeton federally
recognized tribes. In a letter dated September 10, 1986, from
the Assistant Secretary of the Interior to the Chairman of the
Senate Select Committee on Indian Affairs on S. 2118 (99th
Congress), the Department of the Interior supported this bill:
As a general rule, we believe that each distribution of
Indian judgment funds should benefit the aggrieved historic
tribe for which the award was made. If the historic tribe is no
longer in existence, we believe that judgment funds should be
programmed, to the greatest extent possible, to the present-day
successor tribe(s) to the historic tribe. We believe that the
fact situation addressed by S. 2118 meets this policy objective
because the three tribes named in the bill include nearly
12,000 of the approximately 14,000 identified lineal
descendants.
We believe that where tribes constantly decapitalize
themselves through per capita payment policies, we see little
growth and development of tribal economies. We are therefore
committed to the concept that judgment funds should be
maintained whenever possible as a capital pool for individual
tribes to invest. We believe that our policy enhances the
objective of tribal self-determination and reflects the basic
intent of Congress in the Act of October 19, 1973 (87 Stat.
466; 25 U.S.C. 1401 et seq.).
In 1992, Congress passed legislation amending the 1972 Act
to permit the tribes to litigate those causes of action that
the District Court in Montana and the Ninth Circuit held were
barred by 28 U.S.C. Section 2401(a) as well as any other claims
asserting that the 1972 Act is unconstitutional or invalid
under law. This legislation also authorized the Attorney
General to settle any action that may be brought by the tribes
challenging the Constitutionality of the 1972 Act. At a hearing
before the Senate Select Committee on Indian Affairs on S. 1705
(102nd Congress), the Department of the Interior opposed the
bill ``because the Congress validly provided for the
distribution of the funds in the [1972 Act.'' President George
Bush vetoed this legislation citing, among other things, ``the
long-standing policy of the executive branch * * * against ad
hoc statute of limitations waivers and similar special relief
bills'' and the desirability of avoiding additional litigation
with the three tribes on the issues barred by the statute of
limitations. President Bush also expressed concern that the
House Committee on Interior and Insular Affairs had never held
hearings on the legislation.
In 1992, after the veto, Congress passed legislation
amending the 1972 Act to authorize the Attorney General ``to
negotiate and settle any action that may be or has been brought
to contest the constitutionality or validity under law of the
distribution to all other Sisseton and Wahpeton Sioux provided
for in section 202 of this Act.'' This enactment is now
codified at 25 U.S.C. Section 1300d-10.
Need for legislation
Since enactment of the 1992 legislation authorizing the
Attorney General to negotiate with the tribes for a settlement
of their litigation, the tribes and the Congressional
delegations from both North Dakota and South Dakota have
attempted to secure Department of Justice participation in
settlement negotiations. The Department has refused to
negotiate on the ground that, in the absence of legislation
directly amending and altering the lineal descendancy
distribution plan set forth in section 202 of Public Law 92-
555, it has no authority to settle with the tribes on terms
that differ from the distribution established in that section.
H.R. 976 amends the distribution plan set forth in Section
202 of Public Law 92-555 by directing that $1,469,831.50 be
distributed to the lineal descendants. This amount is the
result of multiplying the percentage (25.0225%) of the Indian
Claims Commission judgment apportioned to lineal descendants
under the 1972 Act by the total amount of the judgment
($5,874,039.50). H.R. 976 directs that the remainder of the
undistributed funds apportioned to lineal descendants under
Section 202 of Public Law 92-555 be distributed to the three
federally recognized successor tribes to the Sisseton and
Wahpeton Mississippi Sioux Tribe. This distribution change is
consistent with the judgment fund distribution policy announced
by the Department of the Interior in its letter supporting the
1986 legislation. This policy is sound and, since 1986, the
Department has continued to endorse this policy.
In opposing enactment of H.R. 976, the Department expressed
several concerns. One concern was that H.R. 976 could create a
takings claim by the lineal descendants under the Just
Compensation Clause of the Fifth Amendment. In addressing this
same issue in connection with the 1986 legislation, the
Department, in a letter dated September 10, 1986, from the
Assistant Secretary of the Interior to the Chairman of the
Senate Select Committee on Indian Affairs on S. 2118 (99th
Congress), stated:
We do not believe that any rights have vested and
understand that the Department of Justice has supported
this view. Moreover, under Delaware Tribal Business
Committee v. Weeks, 430 U.S. 73 (1977), it clear that
the judgment funds at issue are tribal property in
which individuals, as such, do not have an interest.
The manner in which Congress decides to program a
judgment award will generally not be disturbed by the
courts provided that the legislative judgment can be
tied rationally to the fulfillment of the unique
Federal obligation to Indians. We further note that
Weeks strongly suggests that where funds have not
actually been paid out, Congress remains free to change
the distribution scheme (430 U.S. at 90). Here, the
Sisseton-Wahpeton lineal descendants' proportionate
share of the judgment funds has never been paid to
them.
In a letter dated April 17, 1986, from the Assistant
Attorney General to the Chairman of the Senate Select Committee
on Indian Affairs on S. 2118 (99th Congress), the Department of
Justice stated: ``We note that none of the judgment funds in
question has ever been paid to the Sisseton-Wahpeton lineal
descendants. United States v. Jim, supra [409 U.S. 80, 82
(1972), reh'g denied, 409 U.S. 1118 (1973)], indicates that
even actual payment of money under a distribution scheme does
not preclude an alteration of that scheme and that the
alteration still does not give rise to a Fifth Amendment
taking.''
In its testimony before the Committee on Resources on H.R.
976, the Department of the Interior acknowledged that Congress
has the power to change the distribution scheme in Public Law
92-555 and that the legal conclusions reached on the takings
question by both the Department of the Interior and the
Department of Justice in 1986 remain sound.
The Department of the Interior also expressed the concern
that H.R. 976 could be affected by the recent decision of the
Eighth Circuit in Loudner v. United States [108 F.3d 896 (8th
Cir. 1997)] and by the three tribes' ongoing litigation
challenging the Constitutionality of the lineal descendancy
distribution provisions of Public Law 92-555. Loudner may
result in increasing the number of lineal descendants. If that
occurs, the amount allocated in H.R. 976 for distribution to
lineal descendants will be distributed in equal amounts to all
lineal descendants. The outcome of Loudner will not affect this
amount or the amount that H.R. 976 apportions for distribution
to the three tribes.
The three tribes support enactment of H.R. 976 and have
testified that should this measure be enacted, they intend to
discontinue their pending litigation. Termination of the
tribes' litigation will save both the tribes and the federal
government substantial additional litigation costs.
The Committee believes that the change in the distribution
plan is fair to both the lineal descendants and the three
tribes. Although the lineal descendants do not have a vested
legal right to the funds apportioned to them by Public Law 92-
555, for 25 years they have had an expectation that a
distribution would be made to them. Although the policy of
Congress is to disapprove per capita distributions of judgment
funds wherever possible, fairness requires that such a
longstanding expectation should result in a per capita
distribution to these lineal descendants. Under H.R. 976, the
lineal descendants will still receive more than double the
amount distributed to members of the three tribes.
Fairness also requires that the three tribes receive the
present and future accumulated interest on the funds
apportioned to lineal descendants by Public Law 92-555. These
tribes are the successors-in-interest to the tribal entity that
owned the land, the taking of which is the basis for the Indian
Claims Commission award. Individual tribal members had no
ownership interest in these taken lands. Without the
participation of the lineal descendants, the tribes litigated
the Indian Claims Commission action against the United States.
The Commission judgment was based on a compromise settlement
agreement with the United States. The Commission required that
the tribes approve the settlement agreement. When Federal
Government officials explained the terms of the settlement to
the three tribes, no mention was made that lineal descendants,
not members of the tribes, would be entitled to any portion of
the judgment fund. Only tribal members voted to approve the
settlement agreement, and they did so with the understanding
that the tribes and their members would receive all of the
judgment fund. The Commission judgment was entered in favor of
the tribes and also did not indicate that nonmember lineal
descendants would have a right to a distribution of any portion
of the judgment fund.
The distribution authorized by Public Law 92-555 will also
result in the lineal descendants receiving more than 18 times
the amount of money distributed to the tribes and their members
in the 1970s. In addition, dispersal of the judgment funds in a
way that will likely have a short-term impact on individuals
and no potential for long-term beneficial impacts on any tribal
community should be limited. H.R. 976 requires the tribes to
use the distributed funds for economic and resource development
and for education, social welfare and other programs beneficial
to tribal members. The distributed funds used for these
purposes will have long-term impacts beneficial to the
Sisseton-Wahpeton Sioux communities as a whole. This advances
the policy of Congress to assist tribes in achieving self-
determination and economic self-sufficiency.
Committee amendment
The Committee recommends one amendment to the bill as
introduced. The amendment would delete subsection 7(b), which
provides that ``a payment made to a covered Indian tribe or
individual under this Act shall not be subject to any Federal
or State income tax.'' This language is unnecessary. Indian
tribes are not taxable entities for either federal or state
income tax purposes. Individual Indian judgment payments have
historically been tax free where the amount of the judgment
funds was calculated on the basis of the value of the lost
capital asset at the time of its loss. The language is also
unnecessary because it largely duplicates Section 304 of Public
Law 92-555 (25 U.S.C. Section 1300d-8).
section-by-section analysis
Section 1. Short title
Section 1 cites the short title of the bill as the
``Mississippi Sioux Tribes Judgment Fund Distribution Act of
1997.''
Section 2. Definitions
Section 2 defines the terms ``covered Indian tribe,''
``Secretary,'' and ``tribal governing body'' for purposes of
this Act.
Section 3. Distribution to, and use of certain funds by, the Sisseton
and Wahpeton Tribes of Sioux Indians
Section 3 supersedes that section of Public Law 92-555
which provided for distribution to the lineal descendants, and
provides that their share shall be distributed in accordance
with the provisions of this Act.
Section 4. Distribution of funds to tribes
Section 4, after reducing the undistributed amount of the
judgment fund by $1,469,831.50, gives the percentages of the
remaining funds that are to be apportioned to the governing
bodies of the three tribes.
Section 5. Establishment of tribal trust funds
Section 5 requires each of the three tribes to establish
and administer a trust fund into which each tribe must deposit
the funds it receives under this Act together with any interest
and investment income that accrues from investments made from
amounts deposited into the trust fund.
Section 6. Use of distributed funds
Subsection (a) of Section 6 prohibits the three tribes from
making any per capita payments to tribal members from the funds
received under this Act. Subsection (b) provides that the funds
received under this Act may only be used for making investments
or expenditures reasonably related to tribal economic and
resource development and the development of educational,
welfare and other programs beneficial to tribal members.
Subsection (c) requires the Secretary to annually audit each
tribe's management of the trust fund established under Section
5.
Section 7. Effect of payments to covered Indian tribes on benefits
Section 7 provides that for purposes of receiving federal
benefits and services, payments received by any of the three
tribes or by any individual under this Act shall not be treated
as income or resources or be a basis for reducing or denying
any federal service or program.
Section 8. Distribution of funds to lineal descendants
Section 8 requires that within one-year after the date of
enactment of this Act, the Secretary distribute $1,469,831.50
to lineal descendants of the Sisseton and Wahpeton Mississippi
Sioux Tribe. This section supersedes that section of Public Law
92-555 which provided for distribution to the lineal
descendants.
committee action
H.R. 976 was introduced on March 6, 1997, by Congressman
Rick Hill (R-MT), and cosponsored by Congressman John R. Thune
(R-SD) and Congressman Earl Pomeroy (D-ND). The bill was
referred to the Committee on Resources. On June 24, 1997, the
full Committee on Resources held a hearing on H.R. 976, where
the Administration testified in opposition to the bill. On July
16, 1997, the full Committee on Resources met to consider H.R.
976. An amendment to delete an unnecessary provision relating
to the tax treatment of payments made pursuant to this Act was
offered by Congressman Hill, and adopted by voice vote. The
bill as amended was then ordered favorably reported to the
House of Representatives by voice vote.
committee oversight findings and recommendations
With respect to the requirements of clause 2(l)(3) of rule
XI of the Rules of the House of Representatives, and clause
2(b)(l) of rule X of the Rules of the House of Representatives,
the Committee on Resources' oversight findings and
recommendations are reflected in the body of this report.
constitutional authority statement
Article I, section 8 of the Constitution of the United
States grants Congress the authority to enact H.R. 976.
cost of the legislation
Clause 7(a) 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. 976. 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
U.S. Congress,
Congressional Budget Office,
Washington, DC., August 22, 1997.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 976, the
Mississippi Sioux Tribes Judgment Fund Distribution Act of
1997.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Lisa H.
Daley (for federal costs), and Marjorie Miller (for the impact
on state, local, and tribal governments).
Sincerely,
Paul Van de Water
(for June E. O'Neill, Director).
Enclosure.
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.
976 does not contain any new budget authority, credit
authority, or an increase or decrease in revenues or tax
expenditures. The Congressional Budget Office estimates that
enactment of H.R. 976 would affect direct spending, but that
this would be offset by a reduction in outlays, resultingin no
net cost to the federal government.
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. 976.
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. 976
from the Director of the Congressional Budget Office.
congressional budget office cost estimate
H.R. 976--Mississippi Sioux Tribes Judgment Fund Distribution Act of
1997
Summary: H.R. 976 would direct the Secretary of the
Interior to distribute previously appropriated funds, plus
accrued interest, to certain tribal governing bodies and
individuals as payment of a judgment in favor of the
Mississippi Sioux tribes. Various legal challenges make it
unlikely that the funds would be disbursed within the next
several years under current law. Hence, enacting this bill
would result in payments being made in the near term that
otherwise would be made at some point in the future. The bill
also requires the establishment of trust funds for the tribal
distributions and prescribes purposes for which those funds can
be spent.
CBO estimates that enacting H.R. 976 would affect direct
spending over the 1998-2007 period, but would result in no net
cost to the federal government over time. We estimate that
direct spending would increase by a total of about $16 million
over fiscal years 1998 and 1999 and that this spending would be
offset by a reduction in outlays of at least that amount
sometime thereafter. Because H.R. 976 would affect direct
spending, pay-as-you-go procedures would apply.
H.R. 976 contains an intergovernmental mandate, as defined
in the Unfunded Mandates Reform Act of 1995 (UMRA), which would
affect tribal governments. CBO estimates that complying with
this mandate would entail no net costs. Further, this bill
would confer substantial benefits on tribal governments. This
bill would impose no new private-sector mandates as defined in
UMRA.
Estimated cost to the Federal Government: For the purposes
of this estimate, we assume the bill will be enacted by October
1, 1997. CBO estimates that enacting H.R. 976 would have no
significant impact on discretionary spending but would affect
direct spending over the 1998-2007 period.
This bill would require that $1.47 million, which was
appropriated in 1968 for the judgment, be distributed to the
lineal descendants of the Sisseton and Wahpeton Tribe of Sioux
Indians within one year after enactment of this bill. As soon
as practicable thereafter, the interest that has accrued on the
initial appropriation would be distributed to the governing
bodies of the Spirit Lake Sioux Tribe of North Dakota, the
Sisseton and Wahpeton Sioux Tribe of South Dakota, and the
Assiniboine and Sioux Tribes of the Fort Peck Reservation in
Montana. For the purposes of this estimate, CBO assumes that
the Secretary would disburse the $1.47 million to the lineal
descendants in fiscal year 1998. We estimate that the Secretary
would pay $14.8 million in accrued interest to the three tribal
governments in the following year. This estimate assumes that
interest would continue to accrue until the final distribution.
The direct spending in 1998 and 1999 would be offset by a
reduction in outlays of at least the same amount at some point
in the future. Based on information provided by the Bureau of
Indian Affairs and the Department of Justice, CBO expects that
the two court cases currently delaying the payments would not
be resolved until sometime after fiscal year 1999. Through we
have no basis for knowing when the court cases will be
resolved, the resulting payments would equal at least the
amount that would be paid under this legislation, plus accrued
interest. For the purposes of this estimate, we have assumed
that, under current law, these payments to the Mississippi
Sioux tribes and lineal descendants would be made in 2002. The
resulting budgetary effects are shown in the following table.
[By fiscal year, in millions of dollars]
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002
----------------------------------------------------------------------------------------------------------------
Spending under current law: \1\
Estimated budget authority..................................... ....... ....... ....... ....... 20
Estimated outlays.............................................. ....... ....... ....... ....... 20
Proposed changes:
Estimated budget authority..................................... ....... 1 15 ....... -20
Estimated outlays.............................................. ....... 1 15 ....... -20
Spending under H.R. 976:
Estimated budget authority..................................... ....... 1 15 ....... .......
Estimated outlays.............................................. ....... 1 15 ....... .......
----------------------------------------------------------------------------------------------------------------
\1\ CBO cannot predict precisely when the payments would be made under current law because the timing depends on
judicial proceedings. This table illustrates the budgetary effects that would occur assuming the payments were
made in fiscal hear 2002.
The costs of this legislation fall within budget function
450 (community and regional development).
Pay-as-you-go considerations: The Balanced Budget and
Emergency Deficit Control Act of 1985 specifies pay-as-you-go
procedures for legislation affecting direct spending or
receipts through fiscal year 2006. As shown above, CBO
estimates that enacting H.R. 976 would increase direct spending
by $1.47 million in fiscal year 1998 and $14.8 million in
fiscal year 1999, which would be offset by a reduction in
direct spending of $20.4 million in 2002.
Estimated impact on State, local, and tribal governments:
H.R. 976 contains an intergovernmental mandate as defined in
UMRA, but CBO estimates that complying with this mandate would
entail no net costs. The bill would place requirements upon the
affected tribes specifying how judgment funds must be used.
Funds distributed to the tribes would have to be placed in
trust funds with the tribal governing bodies service as
trustees. These funds could not be used to make per capita
payments to tribal members, but rather would be used for tribal
programs. While these duties would be mandates, any costs would
be more than offset by the funds that tribes would receive as a
result of the bill.
The most significant impact of this bill on tribal
governments would be the benefit conferred by the bill's
proposed distribution of judgment funds. Under current law, the
Mississippi Sioux Tribes would receive no additional funds
under these judgments. The funds due to the tribes under the
distribution plan originally approved by the Congress have
already been paid. The remaining funds were to be paid to
lineal descendants of the Sisseton and Wahpeton Tribes. Under
the earlier plan, these individuals were to have received about
$1.47 million. Those funds have not yet been paid because of
ongoing litigation and, with accrued interest, currently amount
to about $14 million. This bill would establish a revised
distribution plan under which the descendants would receive
only the original principal amount and the tribes would receive
the accumulated interest.
Estimated impact on the private sector: H.R. 976 would
impose no new private-sector mandates as defined in UMRA.
Estimate prepared by: Federal Costs: Lisa H. Daley. Impact
on State, Local, and Tribal Governments: Marjorie Miller.
Estimate approved by: Robert A. Sunshine, Deputy Assistant
Director for budget Analysis.
compliance with public law 104-4
According to the Congressional Budget Office, H.R. 976
contains an intergovernmental mandate by placing requirements
on the affected Indian tribes specifying how the judgment funds
must be used, but complying with this mandate would entail no
net costs and therefore the mandate is not an unfunded one.
changes in existing law
If enacted, H.R. 976 would make no changes in existing law.