[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.

                                
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