[Senate Report 105-349]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 658
105th Congress                                                   Report
                                 SENATE

 2d Session                                                     105-349
_______________________________________________________________________


 
TO REMOVE THE RESTRICTION ON THE DISTRIBUTION OF CERTAIN REVENUES FROM 
THE MINERAL SPRINGS PARCEL TO CERTAIN MEMBERS OF THE AGUA CALIENTE BAND 
                          OF CAHUILLA INDIANS

                                _______
                                

               September 28, 1998.--Ordered to be printed

_______________________________________________________________________


   Mr. Campbell, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 700]

    The Committee on Indian Affairs to which was referred the 
bill (H.R. 700) to remove the restrictions on the distribution 
of certain revenues from the Mineral Springs parcel to certain 
members of the Agua Caliente Band of Cahuilla Indians, having 
considered the same, reports favorably thereon with an 
amendment, in the nature of a substitute, and recommends that 
the bill (as amended) do pass.

                                Purpose

    The purpose of H.R. 700 is to amend the Agua Caliente 
Equalization Act of 1959 (P.L. 86-339) to remove a provision of 
that Act that restricts the distribution of any net revenues 
from a tribally-owned tract of land known as ``Parcel B'' to 85 
allottees or their heirs. Removal of this restriction will 
enable the Agua Caliente Band of Cahuilla Indians of California 
to make future distributions of net tribal revenues from Parcel 
B, or from any other source of tribal revenue, in equal amounts 
to all members of the Band.

                          Background and Need

    The need for H.R. 700 stems from the long and contentious 
process through which the United States sought to allot to 
individual Indians the Palm Springs Reservation that was 
established for the Agua Caliente Band pursuant to the Mission 
Indian Relief Act of 1891 (26 Stat. 712). Part of this 
reservation is located in the heart of the City of Palm 
Springs, and the remainder consists of checkerboarded alternate 
sections that surround the city and extend into the Santa Rosa 
Mountains.
    The 1891 Act, as well as the Act of March 2, 1917 (39 Stat. 
969, 976), provided authority and direction to the Secretary of 
the Interior to allot Palm Springs Reservation land to 
individual Indians for agricultural and grazing purposes. 
Allotments were limited to a total of 160 acres. To prevent any 
one person from selecting a disproportionate part of the most 
valuable land, selections were required to be in three parts: 
an A selection consisting of a 2-acre town lot; a B selection 
consisting of 5 acres of irrigable land; and a C selection 
consisting of 40 acres of dry land.
    Following the initial allotments of Palm Springs 
Reservation land in 1923, disputes arose over the validity of 
various allotment selections and over the relative value of the 
initial and subsequent allotments. These disputes resulted in 
extensive litigation that was not concluded until 1956, when 
the Ninth Circuit Court of Appeals in United States v. Pierce, 
235 F. 2nd 885 (9th Cir. 1956) affirmed the trial court in 
Segundo et al. v. United States, 23 F. Supp. 554 (1954).\1\ A 
key issue in the case was a request by the plaintiffs for a 
declaratory judgment that, as a matter of law, they were 
entitled to equalization of the value of their allotments. On 
this issue, the trial court entered a judgment as follows:
---------------------------------------------------------------------------
    \1\ For a description of the litigation, see H. Rpt. 86-903, pp. 
4-6.
---------------------------------------------------------------------------
    ``* * * plaintiffs are entitled to, and shall have allotted 
to them, their just and equitable share of the tribal lands; 
and each plaintiff entitled to make further selections for 
allotments may make and file such selections from any and all 
lands of said reservation available for allotment, and 
defendant United States of America shall allot to each such 
plaintiff total lands of approximately equal value to the lands 
allotted to each other member of said band of Indians, so that 
when the allotment and equalization process is completed each 
qualified plaintiff will have been allotted land of as nearly 
equal value as practicable to the land allotted to each of the 
other members of said band. * * * The Court hereby retains 
jurisdiction of this action and the parties thereto and the 
subject matters thereof, for the purpose of effectuating its 
judgment and decree in all respects, including the rights of 
the plaintiffs * * * (3) to make further selections for the 
purpose of equalizing the values of the lands allotted to 
plaintiffs with the lands allotted to the several members of 
the band.'' \2\
---------------------------------------------------------------------------
    \2\ Ibid.
---------------------------------------------------------------------------
    This part of the judgment was affirmed by the court of 
appeals in Pierce in the following language: ``while we think 
equalizing would best be left to the Indian Service, we hold 
that the court can and should proceed to do it unless the court 
is assured that the Service will proceed with diligence''.
    Pursuant to the court's holding, the Secretary of the 
Interior in June, 1957, submitted legislation to the Congress 
that would have put all of the Band's assets in the hands of a 
tribal corporation or trustee and distributed income on an 
equalized basis, but the Congress found the proposal 
unacceptable. In March, 1959, Representative D.S. Saund (D-CA) 
introduced H.R. 5557. This bill provided for closing the roll 
of Band members who were entitled to allotments and for most of 
the Band's remaining assets to be distributed to members who 
had not received an allotment. At the Band's request, the bill 
set aside as ``tribal reserves'' a church and a cemetery; four 
mountain canyon areas of historical and cultural significance 
to the Band, and the Mineral Springs area, which consisted of 
2.77 acres with a spring (Parcel A) and 6 adjacent acres that 
were under a lease and a lease option for a hotel development 
(parcel B).
    At hearings before the House Committee on Interior and 
Insular Affairs in June and July of 1959, the witness for the 
Department of the Interior (hereinafter ``the Department'') 
testified in support of H.R. 5557, with a notable exception. 
Although the Department agreed that Parcel A had religious 
significance to the Band and should not be allotted, the 
Department strongly favored allotting Parcel B, which then was 
the site of some soon-to-be-demolished administration buildings 
and a commercial parking lot. The Department argued for 
allotting Parcel B on the grounds that it would be not only 
unfair to the allottees with the lower-valued allotments to 
withhold from the equalization process any substantial part of 
the Band's assets, but also that to do so would be inconsistent 
with the court's directive to raise the value of the Agua 
Caliente allotments to the highest value possible.
    In August, 1959, Representative Saund introduced H.R. 8587. 
This bill, which was very similar to H.R. 5557, embodied an 
agreement between Representative Saund, the Band and the 
Department that excluded Parcel B from allotment and added a 
provision which required that any net revenue from Parcel B 
would be distributed only to members of the Band who were 
entitled to equalization allotments. Later in August, the House 
Committee on Interior and Insular Affairs considered and 
reported H.R. 8587 after rejecting a proposed Department 
amendment that would have provided for the sale of parcel B. In 
September, the House passed H.R. 8587 without amendment, as did 
the Senate. On September 21, 1959, President Eisenhower signed 
the legislation, entitled ``The Agua Caliente Equalization Act 
(ACEA), into law.
    On March 2, 1960, the Secretary published regulations in 
the Federal Register that set forth procedures for the 
equalization of allotments on the Agua Caliente Reservation. 
Using appraisals conducted in 1957 and 1958 that valued the 
allotments of 104 living allotees at between $74,500 and 
$629,000, the Department proceeded to allot 23,660 acres of 
property of the Band valued at $12,800,000. This property was 
allotted to the 85 members of the Band whose allotments were 
the lowest valued allotments. As a result, these 85 allotments 
were ``equalized'' at a value of $335,000 each. The other 19 
allottees whose allotments were valued above $335,000 received 
no additional value from the equalization process. Of these 19, 
mine had allotments ranging in value from $335,000 to $400,000; 
six were valued between $400,000 and $500,000; one was valued 
at $510,000; and three were valued between $600,000 and 
$629,000. In December, 1961, the Department declared that the 
equalization process had been completed, with all of the Band's 
members having allotments valued at a minimum $335,000.\3\
---------------------------------------------------------------------------
    \3\ Letter of December 6, 1961 from Leonard Hill, Area Director, 
Bureau of Indian Affairs, to the Regional Solicitor, Department of the 
Interior.
---------------------------------------------------------------------------
    Part 124.9 of the March 2, 1960, regulation provided for 
``Disposition of Income from Parcel B'' and stated that such 
income ``shall be deposited in the Treasury of the United 
States in a special account. Such fund may be used for the 
payment of administrative expenses of the Band.'' In April, 
1960, the Band sought to clarify that, consistent with its 
agreement with the Department of the Interior and Congressman 
Saund prior to introduction of H.R. 8587, the term 
``administrative expenses'' was meant to include tribal 
improvement projects designed to develop the tribal 
reserves.\4\ On July 22, 1960, the Department published notice 
of an amendment to 25 CFR 124.9 that ``is necessary to restate 
the purposes for which the fund referred to in the first 
sentence of the section may be used. The present language 
places restrictions on the use of the fund which are not 
intended''. The amendment stated, in pertinent part, that 
``Such fund may be used for such purposes as may be designated 
by the governing body of the Band and approved by the 
Secretary, except that such fund may be distributed only to 
those enrolled members who are entitled to an equalization 
allotment. * * *''
---------------------------------------------------------------------------
    \4\ Letter of April 13, 1960, from Eileen Miguel to Congressman 
D.S. Saund.
---------------------------------------------------------------------------
    From 1959 to the present, there have been no per capita 
distributions of any revenues from the account set up under 25 
CFR 124.9 to receive Parcel B revenues. At the Committee's 
July, 1998, hearing on H.R. 700, Agua Caliente Tribal Chairman 
Richard M. Milanovich testified that until 1995, the revenue 
from economic activity on Parcel B was insufficient to meet the 
operating requirements of the tribal government, and that since 
1995, any revenues from Parcel B activity have been designated 
for use only to meet tribal government purposes. Deputy 
Assistant Secretary of the Interior Michael J. Anderson 
testified that the total administrative revenues that may have 
been expended from the account amounts to about $50,000 over 
the last 37 years. The Committee is unaware of any evidence or 
allegation that the Secretary approved any expenditure from 
this account for any purposes that was not duly designated by 
the governing body of the Band and approved by the Secretary as 
required by the amended regulations.
    On March 16, 1983, the Secretary published notice in the 
Federal Register rescinding the regulations governing the 
equalization of allotments on the Agua Caliente Reservation. 
The notice stated that ``the purpose of the law upon which this 
part is based has been accomplished. In line with 25 U.S.C. 
953(c),\5\ the purpose of the Act was achieved on October 5, 
1961, when Secretarial approval was granted to the schedule of 
equalization allotments. For this reason these regulations are 
no longer needed.'' The Federal Register notice was consistent 
with section 7 of the ACEA, which states that ``allotment in 
accordance with the provisions of this subchapter shall be 
deemed complete and full equalization of allotments on the Agua 
Caliente Reservation.'' \6\
---------------------------------------------------------------------------
    \5\ Section 953(c) provided the authority for the equalization for 
living members by allotment without regard to acreage limitations.
    \6\ 25 U.S.C. 957.
---------------------------------------------------------------------------
    In 1990, the Agua Caliente Band requested clarification 
from the Department of the Interior as to whether the 
restriction on net revenues set forth in 25 U.S.C. 953(b) was 
still in effect, notwithstanding the rescission of the 
equalization regulations in 1983. The request was prompted by 
the facts that the ACEA is silent with respect to the duration 
of the right set forth in section 953(b), and the legislative 
history of the ACEA is devoid of any mention or discussion of 
the intent of Congress as to the duration of section 953(c). In 
a July 29, 1992, opinion by the Acting Regional Solicitor, 
Interior Deputy Solicitor Martin J. Suuberg wrote that ``the 
lack of any limitations leaves the proviso requirement of 
indefinite duration. The restrictions last as long as 25 U.S.C. 
953(b) exists without amendment'' \7\.
---------------------------------------------------------------------------
    \7\ Memorandum of July 29, 1992, page 2.
---------------------------------------------------------------------------
    In the mid-1990's, the Band established a gaming enterprise 
on Parcel B. Unless the restriction in section 953(b) is 
removed, the Band can distribute revenues from this enterprise 
only to the 85 allottees or their heirs whose allotments were 
equalized pursuant to the ACEA. The restriction thus would 
preclude a substantial number of the Band's current membership 
of more than 340 members from receiving any distribution of net 
revenues derived from Parcel B. These allottees and their 
heirs, whose allotments were valued at more than $335,000 in 
1960 and who did not receive any additional value as a result 
of the equalization process under the ACEA, are for that reason 
only barred from receiving any share of revenue from what is 
not the principal source of the Band's income. The Band 
represents that it regards such an outcome as discriminatory 
and unfair, particularly to those members of the Band who were 
born after 1959 and were not eligible either for allotments or 
equalization, and certain to create unnecessary divisions and 
animosities among the Band's membership. To avoid such an 
outcome and to be able to share its Parcel B revenues with all 
of its members, the Agua Caliente Band has not made any per 
capita distributions of Parcel B revenue and has requested that 
the Congress repeal 25 U.S.C. 953(b).

                          Legislative History

    In the 104th Congress, Representative Sonny Bono (R-CA) 
introduced H.R. 3408, a bill that provided for the repeal of 
section 953(b) and for a one-time payment of $22,000 to each of 
the Band members or their heirs entitled to equalization under 
the ACEA. The bill further provided that, with repeal, any 
future distributions of net tribal revenues from Parcel B or 
revenues from any other tribal property would be made equally 
to all members of the Band. The House passed H.R. 3408, but the 
Senate failed to take up the bill prior to adjournment of the 
104th Congress.
    In February, 1997, Representative Bono introduced H.R. 700, 
which also would repeal section 953(b). In June, 1997, the 
House Resources Committee held a hearing at which 
Administration and Band witnesses testified in support of the 
bill. No witness testified on behalf of the allottees or their 
heirs who were the intended beneficiaries of section 953(b). 
The Resources Committee subsequently amended H.R. 700 to 
condition the repeal of section 953(b) upon the Band's payment 
of the $22,000 amount to the allottees and their heirs who were 
entitled to equalization under the 1959 Act. On September 8, 
1997, the House passed H.R. 700, as amended.
    On July 8th, 1998, the Committee on Indian Affairs held a 
meeting on H.R. 700. Witnesses for the Administration and for 
the Agua Caliente Band testified in favor of an amendment-in-
the-nature-of-a-substitute to H.R. 700 proposed by the Band. 
The Committee also received oral and written testimony on 
behalf of five individual Indians (four of whom are Band 
members), who are allottees or heirs of allottees who were 
among the intended beneficiaries of section 953(b), and who are 
opposed to the bill and to the proposed substitute. The 
Committee also received a letter of support from the House 
sponsors of H.R. 700, Representatives Mary Bono (R-CA) and Dale 
Kildee (D-MI).

            Committee Recommendation and Tabulation of Vote

    The Committee on Indian Affairs, in an open businesses 
session on July 13, 1998, adopted an amendment-in-the-nature-
of-a-substitute to H.R. 700 by voice vote and ordered the bill, 
as amended, reported favorably to the Senate.

                          Substitute Amendment

    H.R. 700 as passed by the House of Representatives consists 
of one section comprised of two subsections. Subsection (a) 
would amend the ACEA of 1959 by striking the restriction on 
distribution of revenues from Parcel B that is set forth in 25 
U.S.C. 953(b). Subsection (b) would condition the effectiveness 
of the amendment in subsection (a) on the payment of a lump sum 
of money to each of the 85 allottees or their heirs who are 
entitled to distribution of net revenues from Parcel B under 25 
U.S.C. 953(b).
    The substitute amendment adopted by the Committee on Indian 
Affairs includes the language of subsection (a) of the House-
passed version of H.R. 700 but omits the language of subsection 
(b) that conditions the removal of 25 U.S.C. 953(b) upon a 
payment by the Band. The substitute amendment adds nine 
findings, deems the equalization contemplated by section 7 of 
the ACEA to have been completed, and deems that with the 
completion of such equalization the entitlement of holders of 
equalized allotments to net revenues from Parcel B expired as 
of March 31, 1983, the date that the Department's equalization 
regulations were rescinded. To ensure nondiscriminatory 
treatment to all members of the Band with respect to any 
distribution of tribal revenues, the amendment requires the 
Band to make and future per capita distributions of tribal 
revenue in equal amounts to all members of the Band.

                              Explanation

    As part of its consideration of H.R. 700, the Committee 
reviewed the legislative history of the ACEA, particularly with 
respect to the intent of Congress regarding the ACEA and 
section 953(b) in particular. None of the relevant documents 
reviewed by the Committee, nor testimony from any witness 
provided any specific statement or reference regarding the 
intended duration of section 953(b). This lack of any record of 
intent, together with the passage of nearly 37 years since the 
Department of the Interior completed the equalization of the 
Band's allotments, made it necessary and appropriate for the 
Committee to consider section 953(b) in the context of the 
legislative history of the ACEA and subsequent history. In the 
following paragraphs detailing that consideration, except for 
references to court decisions, certain words and phrases have 
been italicized for emphasis.
    Regarding the purposes of the ACEA, the House and Senate 
Committee reports on H.R. 8587 use nearly identical language to 
explain the bill. Both note that the Segundo and Pierce rulings 
regarding equalization of the Agua Caliente allotments posed 
serious administrative problems:

          to equalize the value of all allotments with the most 
        valuable tract chosen by any one single allottee would 
        more than exhaust the lands available. The prevailing 
        limitation on the amount of land an allottee might take 
        (160 acres regardless of value), the requirement that 
        each allottee be permitted to select his own lands in 
        the first instance, and attempts to provide each 
        allottee with an equal basic allotment of city land (2 
        acres), irrigable land (5 acres) and dry land (40 
        acres), though judicially approved, made complete 
        equalization virtually impossible.\8\
---------------------------------------------------------------------------
    \8\ S. Rept. 86-866, p.2; H. Rept. 86-903, p.2.

    Having described complete equalization as ``virtually 
impossible,'' both reports went on to describe ``the problem'' 
which the legislation was intended to address as ``to find an 
effective way of securing a reasonable degree of equalization 
without disturbing those allotments that havealready been made, 
without putting an impossible administrative burden on the Secretary of 
the Interior and without breaking up certain tribal holdings that it 
wishes to keep intact or that are in public use as a complete bloc.'' 
Both reports cite ``the only feasible route'' for accomplishing these 
objectives as that provided in H.R. 8587, ``which will supplement and, 
in some respects, supersede existing law by providing that the roll of 
those entitled to allotments shall be closed; that most of the 
remaining assets of the tribe shall be distributed to those who have 
not already received an allotment at values determined by appraisals 
that have already been made; that certain lands shall be reserved for 
tribal use with a provision, applicable to certain of those lands, that 
any distribution of the income derived from them shall be made only to 
those who are entitled to equalization under the bill; and that cash 
shall be paid to a few prospective allottees whose land is occupied by, 
and will probably have to be sold for, the Palm Springs airport''.
    With respect to section 953(b), the House and Senate 
committee reports on H.R. 8587 contain only the following 
identical explanatory language in the Sectional Analysis:

          The Mineral Springs site is divided into two parcels, 
        one of which is reserved for the tribe in all respects, 
        the second to a more limited degree. The first of these 
        parcels is under lease to a private business which also 
        has, in effect, an option on the second. The committee 
        was advised that it would be impossible for the 
        prospective lessee to proceed with his plans with 
        respect to the second parcel if title to it is broken 
        up among individual allottees. The bill provides, 
        however, that any net rents, profits, or other revenues 
        derived from this parcel shall, if distributed, be 
        distributed only to those enrolled members who are 
        entitled to equalization allotments. The importance of 
        this restriction is evident from the fact that the 
        parcel is estimated to be worth $5,000 per allottee.

    The reports each note that Parcel B had been appraised at a 
value of $400,000. Thus, the statement as to the parcel's value 
of $5,000 to each allottee evidently was arrived at by dividing 
$400,000 by 80, which was an estimate of the number of 
allottees whose allotments would be subject to equalization. 
This statement in the reports is the only reference anywhere in 
the legislative history of H.R. 8587 that suggests a value in 
connection with section 953(b). Absent any other relevant 
explanatory statements or statutory language, the Committee 
finds that this statement alone cannot be reasonably 
interpreted as a clear statement by the Committees that section 
953(b) was intended to ensure or guarantee each allottee would 
receive $5,000 or any other specific amount of money.
    It is clear that whatever value section 953(b) might 
ultimately provide to its intended beneficiaries was dependent 
on factors beyond the authority or control of the Congress, 
such as when, how, and even whether Parcel B would be 
developed, and whether such development that did occur would 
generate gross revenues sufficient not only to cover the Band's 
administrative expenses but also to leave ``net'' revenues to 
distribute to equalized allottees. As indicated in the report 
language quoted above, the Committees were at the time aware 
only of plans of a prospective lessee, a private business, to 
develop Parcel B.
    That the Committees regarded the benefits to be realized 
from section 953(b) as speculative can be reasonably inferred 
by the report language which refers to ``revenues derived from 
this second parcel (Parcel B) shall, if distributed, be 
distributed only to those enrolled members who are entitled to 
equalization allotments''. It can further be reasonably 
inferred that the Committees and the Congress simply did not 
know whether or not section 953(b) would result in any 
distributions of net revenues from Parcel B. This may be one 
reason why section 7 of the ACEA does not include any reference 
to the distribution of any amount of net revenues pursuant to 
section 953(b) as a requirement for achieving full 
equalization. Section 7 states only that ``allotments in 
accordance with the provisions of this subchapter shall be 
deemed complete and full equalization of allotments on the Agua 
Caliente Reservation''.
    It is also clear that, by enacting the ACEA, the Congress 
did not intend to guarantee that allottees who would be 
entitled to equalization of their allotments would be entitled 
to allotments of any specific minimum value. Both committee 
reports include the text of an April 17, 1959, letter from 
Roger Ernst, Assistant Secretary of the Interior, to 
Representative Wayne Aspinall, Chairman of the House Committee 
on Interior and Insular Affairs, which states:

          It is assumed that this acreage and valuation, if 
        distributed to the lower valued living allottees would 
        enable us to achieve an equalization value of 
        approximately $350,000 for approximately 80 
        individuals. These estimates are, of course, subject to 
        change by virtue of deaths, the addition of newborn 
        children, and the selection of allotments for the five 
        newborn unallotted children who are now living.

    The Committee notes that the $350,000 figure put forward by 
the Department was an estimate that was subject to a final 
determination as to how many allottees would be entitled to 
equalization. It is clear that the Department and the Congress 
understood that the subsequent changes in the ACEA that 
reserved Parcel B from allotment and added section 953(b) would 
also affect the ultimate equalization amount. Taken together, 
these changes resulted in the final equalization amount being 
less than the Department's initial estimate. However, this 
reduction was of an estimated, not a guaranteed, amount, and it 
applied equally to the allotments of all of the allottees 
entitled to equalization. Similarly, the lack of any 
distribution of any net revenues from Parcel B was experienced 
equally by all of the allottees and their heirs who were 
entitled to equalization.
    When the Department of the Interior completed the allotment 
of all 23,660 acres of the Band's unreserved property in 1961, 
a little more than a year after enactment of the ACEA, every 
member of the Band held an allotment valued at a minimum of 
$355,000. That 19 of the 104 allotments of living Band members 
had values in excess of $355,000 was consistent with the 
recognition by the Congress that factors limiting the Band's 
assets available for allotment ``made complete equalization 
virtually impossible.'' It is therefore reasonable for the 
Committee to conclude that the equalization process set forth 
by the ACEA indeed fulfilled the expressed intent of Congress 
to secure ``a reasonable degree of equalization without 
disturbing those allotments that have already been made, 
without putting an impossible administrative burden on the 
Secretary of the Interior and without breaking up certain 
tribal holdings that it wishes to keep intact or that are in 
public use in a complete bloc.''
    The Committee recognizes that the adoption by the Congress 
of section 953(b) in conjunction with the designation of Parcel 
B as a tribal reserve may have created expectations among 
holders of equalized allotments that they would receive 
distributions of some unspecified amounts of revenue at some 
date in the future. However, the Committee finds no evidence in 
the legislative history of the ACEA to indicate any intent by 
the Congress to provide a guarantee or assurance that any such 
distributions would occur, nor is there any evidence to suggest 
that the entitlement to receive distributions of Parcel B 
revenues was intended to be perpetual. The fact that no such 
distributions occurred over the course of the first 23 years 
after enactment of the ACEA or, indeed, in the intervening 
years, does not serve to transform these expectations into 
interests that require compensation by the Congress or by the 
Band. The Committee observes that, to the extent that revenues 
from Parcel B constituted part of the Band's budget approved by 
the Secretary for expenditure on behalf of all members of the 
Band, the holders of equalized allotments received benefit from 
those revenues as a result of their membership in the Band.
    The Committee concurs with the view of the Department, as 
expressed in the Executive Communication printed in this 
report, that the entitlement to net revenues from Parcel B set 
forth in 25 U.S.C. 953(b) constitutes an inchoate interest 
which, in the absence of any per capita distribution of revenue 
from Parcel B, at no time ripened into a vested interest.
    The Committee observes that Federal Indian policy in 1959, 
as expressed by Congress in adopting H. Con. Res. 108 in 1953, 
was to terminate the Federal Government's trust relationship 
with tribes. More than 25 years ago, the Congress abandoned the 
termination policy in favor of a policy of Indian self-
determination that continues to be the policy of the United 
States. This policy emphasizes tribal economic self-sufficiency 
and strengthening the government-to-government relationship 
between tribes and the United States. Consistent with that 
policy, the Committee and the Congress encourage tribes in 
their efforts to develop their respective trust assets to 
advance and enhance the well-being of all of their members.
    By acting to reserve Parcel B from allotment under the 
ACEA, the Agua Caliente Band was able to retain for the benefit 
of all its members property which in 1959 constituted less than 
one percent of the Band's trust land base and about three 
percent of its value. By restricting the distribution of only 
net revenues from Parcel B to those Band members whose 
allotments were subject to equalization, the Congress 
recognized the Band's desire and intent, first, to use some if 
not all of whatever revenues were derived from Parcel B for the 
benefit of all Band members.
    In adopting H.R. 700, as amended, the Committee concurs 
with the Band that the effect of the restriction on Parcel B 
revenues under present circumstances would not result in any 
additional ``equalization'' as that term was understood in 
1959. Rather, it would result in significantly unequal 
distribution of Band revenue by precluding a significant 
portion of the 340-plus members of the Band, many of whom were 
born after 1959 and thus are not entitled to an allotment or 
equalization, from sharing directly in any of the revenue from 
what has become the Band's principal source of tribal income. 
Such a result would be not only inequitable and contrary to the 
wishes of a majority of the Band as expressed by resolution of 
its governing body, but also contrary to the purposes of 
current Federal Indian policy. The Committee notes that the 
Band has represented to the Committee that the overwhelming 
majority of Band members, including those who are entitled to 
receive net Parcel B revenue under existing law, support repeal 
of 25 U.S.C. 953(b).
    The purpose of the substitute amendment to H.R. 700 is, in 
effect, to adjust and update the concept of equalization to the 
changes in the Band's circumstances and Federal policy since 
the enactment of the ACEA in 1959. With enactment of the 
substitute, every member of the Band, whether he or she was a 
member or an heir of a member whose allotment was equalized 
pursuant to the ACEA, or whether he or she was born after the 
ACEA was enacted and thus is ineligible for an allotment or 
equalization or net revenue from Parcel B, will be on an equal 
footing with all other Band members with respect to per capita 
distributions from all sources of revenue available to the 
Band, including all of the lands designated as ``tribal 
reserves'' by the ACEA. Heirs or descendents of heirs of 
members whose allotments were equalized, but who are not 
members themselves because they do not qualify for membership 
in the Band under the terms of the Band's constitution, would 
in no way be precluded from sharing in distributions by gift or 
inheritance.

                      Section-by-Section Analysis

Section 1--Findings

    The first finding is that the Agua Caliente Equalization 
Act of 1959 (ACEA) was intended to provide for a reasonable 
degree of equalization of the value of allotments made to 
members of the Agua Caliente Band of Cahuilla Indians;
    The second finding is that the ACEA was enacted in response 
to the litigation in the case of Segundo, et al v. United 
States, 123 F. Supp 554 (1954);
    The third finding states that the Segundo case was appealed 
under the case name United States v. Pierce, 235 F. 2d 885 
(1956) and that case affirmed the entitlement of certain 
members of the Band to allotments of approximately equal value 
to lands allotted to other members of the Band;
    The fourth finding states that (A) to achieve the 
equalization referred to in the third finding, section 3 of the 
ACEA provided for the allotment or sale of all remaining tribal 
lands, with the exception of several specifically designated 
parcels, including 2 parcels in the Mineral Springs area known 
as parcel A and parcel B; that (B) section 3 of the Act 
restricted the distribution of any net rents, profits, or other 
revenues derived from parcel B to members of the Band and their 
heirs entitled to equalization of the value of the allotments 
of those members; that (C) from 1959 through 1984, each annual 
budget of the Band, as approved by the Bureau of Indian 
Affairs, provided for the expenditure of all revenues derived 
from both parcel A and parcel B solely for tribal governmental 
purposes; and (D) that as a result of the annual budgets 
referred to in (C), no net revenues from parcel B were 
available for distribution to tribal members entitled to 
equalization under section 3 of the Act referred to in the 
first finding;
    The fifth finding states that by letter of December 6, 
1961, the Director of the Sacramento Area Office of the Bureau 
of Indian Affairs (BIA) informed the regional solicitor of the 
BIA that the equalization of allotments on the Agua Caliente 
Reservation with respect to those members of the Band who were 
eligible for equalization had been completed using all 
available excess tribal land consistent with the decree of the 
court in Segundo and with the ACEA;
    The sixth finding states that in 1968 the files of the 
Department of the Interior with respect to the Pierce case, the 
closure of which was contingent upon completion of the 
equalization program, were retired to the Federal Record 
Center, where they were destroyed;
    The seventh finding states that on March 16, 1983, the 
Secretary of the Interior published notice in the Federal 
Register that full equalization had been achieved within the 
meaning of section 7 of the Act (25 U.S.C. 957).
    The eighth finding cites the full text of Section 7 of the 
ACEA as follows: ``Allotments in accordance with the provisions 
of this subchapter shall be deemed complete and full 
equalization of allotments on the Agua Caliente Reservation''; 
and,
    The ninth finding states that the regulations governing the 
equalization of allotments under the ACEA were rescinded by the 
Secretary of the Interior effective March 31, 1983.

Section 2--Definitions

    This section provides definitions of the terms ``Band,'' 
``Parcel B'', and ``Secretary''.

Section 3--Equalization of allotments

    Subsection (a) of this section states that the full 
equalization of allotments within the meaning of section 7 of 
the ACEA is deemed to have been completed.
    Subsection (b) of this section states that by reason of the 
achievement of the full equalization of allotments described in 
subsection (a), the entitlement of holders of equalized 
allotments to distribution of net revenues from parcel B under 
section 3(b) of the ACEA, shall be deemed to have expired.

Section 4--Removal of restriction

    Subsection (a) of this section amends the ACEA by striking 
the language in section 3(b) of that Act which restricts the 
distribution of any net revenues from parcel B to holders of 
equalized allotments and their heirs.
    Subsection (b) states that the amendment made by subsection 
(a) of this section shall apply if this section had been 
enacted on March 31, 1983.
    This provision is intended to make the repeal of section 
953(b) of Title 25, United States Code coincident with the date 
of repeal of the regulations promulgated by the Secretary of 
the Interior in 1960 to implement the provisions of the ACEA. 
Absent any evidence of Congressional intent with respect to the 
duration of the entitlement set forth in section 953(b), the 
Committee finds it reasonable and appropriate to deem that 
entitlement to have expired upon the same date that the 
Secretary published notice that the purpose of the equalization 
process established pursuant to the ACEA had been accomplished.
    Subsection (c) provides that any per capita distribution of 
tribal revenues of the Band that the Band may make after the 
date of enactment of this Act shall be made to all members of 
the Band in equal amounts.
    The Committee intends and understands this subsection to 
mean that any per capita distribution by the Agua Caliente Band 
after the date of enactment of this Act of any revenue derived 
from the lands designated in section 953(b) of Title 25, United 
States Code, as tribal reserves, or from any other source, 
shall be made to all members of the Band in equal amounts.

                   Cost and Budgetary Considerations

    The cost estimate for H.R. 700, as amended, as provided by 
the Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 22, 1998.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 700, an act to 
remove the restriction on the distribution of certain revenues 
from the Mineral Springs parcel to certain members of the Agua 
Caliente Band of Cahuilla Indians.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Kristen 
Layman.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

               congressional budget office cost estimate

H.R. 700--An act to remove the restriction on the distribution of 
        certain revenues from the Mineral Springs parcel to certain 
        members of the Agua Caliente Band of Cahuilla Indians

    H.R. 700 would remove a restriction on the distribution of 
revenues generated by the Mineral Springs parcel of land to 
certain members of the Agua Caliente Band of Cahuilla Indians. 
CBO estimates that enacting H.R. 700 would have no impact on 
the federal budget because the funds and revenues that the bill 
would affect are nonfederal moneys. Because H.R. 700 would not 
affect direct spending or receipts, pay-as-you-go procedures 
would not apply.
    H.R. 700 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments. 
Enacting H.R. 700 would allow the band to use the revenues 
derived from the Mineral Springs parcel to fund tribal 
programs.
    The CBO staff contact is Kristen Layman. This estimate was 
approved by Paul N. Van de Water, Assistant Director for Budget 
Analysis.

                      Regulatory Impact Statement

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires each report accompanying a bill to evaluate the 
regulatory and paperwork impact that would be incurred in 
carrying out the bill H.R. 700, as amended. The Committee finds 
that the regulatory impact of H.R. 700, as amended, will be 
minimal.

                        Executive Communications

    The Committee received the statement of Michael J. 
Anderson, Deputy Assistant Secretary for Indian Affairs, 
Department of the Interior, on July 8, 1998, and a letter dated 
August 28, 1998, from Acting Assistant Secretary of the 
Interior Linda L. Richardson to Chairman Campbell, regarding 
H.R. 700.

Statement of Michael J. Anderson, Deputy Assistant Secretary for Indian 
                                Affairs

    Good morning, Mr. Chairman and members of the Committee. 
Thank you for the opportunity to present the views of the 
Department of the Interior on H.R. 700, a bill to remove the 
restriction on the distribution of revenues from the Mineral 
Springs parcel B to certain members of the Agua Caliente Band 
of Cahuilla Indians. The Department supports enactment of this 
bill.
    In 1959, Congress determined that a true equalization of 
allotments to the Agua Caliente Band could not be made due to 
the issuance of some high value allotments and the Band's 
interest in having a tribal reserve. (S. Rep. No. 866, 86th 
Cong., 1st Sess. 2, 1959; H.R. Rep. No. 903, 86th Cong., 1st 
Sess. 2, 1959). To address the discrepancy in the value of the 
allotted lands, Congress limited any distribution of the 
revenues and profits of ``parcel B'' of the Mineral Springs lot 
to those enrolled members and their heirs who were entitled to 
an equalization allotment on the date of the Act (September 21, 
1959). Congress did not mandate that the Tribe make a 
distribution to those eligible for equalization under the Act, 
however, and to this date, the Tribe has made no distribution 
of funds from the revenues of parcel B.
    In implementing the Act, the Department determined that a 
value of $335,000 was the correct equalization amount. In 1961, 
the Secretary of the Interior approved a schedule of 
equalization allotments for the 85 members of the Agua Caliente 
Band who were entitled to receive such an allotment. The 
individuals received land or cash or both to reach the 
determined equalization value of $335,000. In 1983, the 
Secretary rescinded the regulations governing the equalization 
of allotments under the Act since the requirements of the Act 
had been met and the regulations were no longer necessary.
    The Department believes that all of the members of the Agua 
Caliente Band who were entitled to receive an equalization 
allotment have received such an allotment and that the purposes 
of the 1959 Act--to equalize the value to the extent 
practicable of all allotments issued as of September 21, 1959, 
to the Band--have been met. Since the purposes of the Act have 
been fulfilled, the restrictions on the distribution of 
revenues from parcel B are no longer necessary. In fact, these 
restrictions have hampered the Tribe's ability to provide 
assistance to members of the Band who would benefit from a 
distribution. The administration supports the Senate 
Committee's amendment to H.R. 700 that would enable the Tribe 
to make per capita distributions to all members of the Tribe.
    As we stated before the House Committee on Resources in 
June of 1997, the Department continues to rely upon the legal 
analysis made by the Justice Department on the version of this 
bill that was passed by the House during the 104th Congress, 
then numbered H.R. 3804. In that analysis, the Department of 
Justice found that the bill would eliminate an inchoate 
interest in real property that has not ripened into a vested 
interest. Furthermore, the Department based its analysis on the 
following: (1) the 1959 Act does not require that the Band 
distribute revenues derived from parcel B; (2) the distribution 
provision is more in the nature of a government benefit, and 
nothing in the 1959 Act suggests that Congress intended to 
create an interest independent of Congress' continuing 
authority to alter that benefit to address the needs of the 
Tribe and individual allottees in furtherance of the federal 
trust responsibility to Indians; (3) the Band, by not making a 
distribution over the past 39 years, has not independently 
created an interest in such a distribution; and (4) the bill 
merely expands the number of tribal members who are eligible 
for a distribution of the revenues from parcel B and, as such, 
falls within Congress' broad authority to expand the 
beneficiaries of allotment schemes.
    This concludes my prepared statement. I will be happy to 
answer any questions the Committee may have.
                                ------                                

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                   Washington, DC, August 28, 1998.
Hon. Ben Nighthorse Campbell,
U.S. Senate,
Washington, DC.
    Dear Senator Campbell: Thank you for your letter dated June 
18, 1998, requesting the Department's view on H.R. 700. The 
legislation would remove the restriction on the distribution of 
certain revenues from the Mineral Springs parcel to certain 
members of the Aqua Caliente Band of Cahuilla Indians.
    As stated at the hearing before the Senate Committee on 
Indian Affairs on July 8, 1998, the Department of the Interior 
supports enactment of the legislation. The Department is of the 
opinion that all members of the Agua Caliente Band who were 
entitled to receive an equalization allotment have received 
such an allotment and that the purposed of the 1959 Act have 
been met.
    We appreciate your interest in Indian affairs and trust 
that this information will be beneficial to you.
            Sincerely,
                                       Linda L. Richardson,
                        Acting Assistant Secretary--Indian Affairs.

                        Changes in Existing Law

    In compliance with subsection 12 of the XXVI of the 
Standing Rules of the Senate, the Committee states that 
enactment of H.R. 700, as amended, will result in the following 
amendment to P.L. 86-339, (25 U.S.C. 951 et seq.). Deletions 
are in brackets; new material is in italic.
    (b) Lands not subject to allotment; distribution of 
revenues from Mineral Springs parcel.
    In no event shall the following tribal lands be subject to 
allotment, and they shall henceforth be set apart and 
designated as tribal reserves for the benefit and use of the 
band:
    Cemetery numbered 1, block 235, section 14, township 4 
south, range 4 east.
    Cemetery numbered 2, as now constituted pursuant to 
secretarial order, comprising approximately two acres.
    Roman Catholic Church, as now constituted pursuant to 
secretarial order, comprising approximately two acres.
    Mineral Springs, lots 3a, 4a, 13, and 14, section 14, 
township 4 south, range 4 east[:]. [Provided, That not 
distribution to member of the band of the net rents, profits, 
and other revenues derived from that portion of these lands 
which is designated as ``parcel B'' in the supplement dated 
September 8, 1958, to the lease by and between the Agua 
Caliente Band of Mission Indians and Palm Springs Spa dated 
January 21, 1958, or of the net income derived from the 
investment of such net rents, profits, and other revenues or 
from the sale of said lands or of assets purchased with the net 
rents, profits, and other revenues aforesaid or with the net 
income from the investment thereof shall be made except to 
those enrolled members who are entitled to an equalization 
allotment or to a cash payment in satisfaction thereof under 
this subchapter or, in the case of such a member who died after 
September 21, 1959, to those entitled to participate in his 
estate, and any such distribution shall be per capita to living 
enrolled members and per stirpes to participants in the estates 
of a deceased member.]
    San Andreas Canyon, west half southeast quarter, southeast 
quarter, southeast quarter section 3, township 5 south, range 4 
east.
    Palm Canyon, south half and south half north half section 
14, township 5 south, range 4 east; all section 24, township 5 
south, range 4 east.
    Tahquitz Canyon, southwest quarter section 22, township 4 
south, range 4 east; north half section 28, township 4 south, 
range 4 east.
    Murray Canyon, east half section 10, township 5 south, 
range 4 east.

                                
