[House Report 111-397]
[From the U.S. Government Publishing Office]
111th Congress Rept. 111-397
HOUSE OF REPRESENTATIVES
2d Session Part 1
======================================================================
INDIAN ARTS AND CRAFTS AMENDMENTS ACT OF 2009
_______
January 15, 2010.--Ordered to be printed
_______
Mr. Rahall, from the Committee on Natural Resources, submitted the
following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany H.R. 725]
[Including cost estimate of the Congressional Budget Office]
The Committee on Natural Resources, to whom was referred the
bill (H.R. 725) to protect Indian arts and crafts through the
improvement of applicable criminal proceedings, and for other
purposes, having considered the same, report favorably thereon
without amendment and recommend that the bill do pass.
Purpose of the Bill
The purpose of H.R. 725 is to protect Indian arts and
crafts through the improvement of applicable criminal
proceedings, and for other purposes.
Background and Need for Legislation
In 1935, Congress enacted legislation to establish the
Indian Arts and Crafts Board (49 Stat. 891). The Indian Arts
and Crafts Board, an agency within the U.S. Department of the
Interior, is responsible for promoting the development of
American Indian and Alaska Native arts and crafts, improving
the economic status of members of Indian tribes, and helping to
develop and expand marketing opportunities for arts and crafts
produced by American Indians and Alaska Natives.
The 1935 legislation adopted criminal penalties for selling
goods with the misrepresentation that they were Indian
produced. This provision, currently located in section 1159 of
title 18, U.S. Code, set fines not to exceed $500 or
imprisonment not to exceed six months, or both. Although this
law was in effect for many years, it provided no meaningful
deterrent to those who misrepresented imitation arts and crafts
as Indian produced. In addition, ``willful'' intent was
required to be proved, therefore, very little enforcement took
place.
In response to growing problem of products misrepresented
or erroneously represented as produced by Indians, Congress
passed the Indian Arts and Crafts Act of 1990 (Public Law 101-
644). This Act is essentially a truth-in-advertising law that
prohibits misrepresentation in the marketing of Indian arts and
crafts products within the United States. The law makes it
illegal to offer, display for sale, or sell, any art or craft
product in a manner that falsely suggests it is Indian
produced, an Indian product, or the product of a particular
Indian or Indian Tribe or Indian arts and crafts organization.
Under the Act, an Indian is defined as a member of any
federally or State recognized Indian Tribe, or an individual
certified as an Indian artisan by an Indian Tribe. The law
covers all Indian and Indian-style traditional and contemporary
arts and crafts produced after 1935. Some traditional items
frequently copied by non-Indians include Indian-style jewelry,
pottery, baskets, carved stone fetishes, woven rugs, kachina
dolls, and clothing.
Despite these efforts, information from the Department of
Justice indicates that very few cases relating to the sale of
counterfeit Indian goods are investigated each year. A recent
Wall Street Journal article referred to a ``tsunami of cheap
imported jewelry--designed to look like authentic Native
American art--is flooding the Southwest United States''. The
New Mexico State Attorney General's Office has stated that at
least 50 percent of the Indian jewelry on the New Mexico market
is misrepresented in some way. The Indian Arts and Crafts
Association reports that some of the fake Indian arts and
crafts are ``virtually indistinguishable'' and that counterfeit
Indian products have become ``more sophisticated,'' estimating
that nationally, as much as 75% of the roughly $1 billion of
jewelry, pottery, rugs and other merchandise sold every year as
authentic is not.
H.R. 725 seeks to address this continuing problem by
strengthening the penalties associated with misrepresentation
of Indian produced goods, and by empowering federal, tribal and
local authorities to undertake investigations and enforcement.
A Senate companion bill (S. 151) passed the Senate on July 24,
2009.
Committee Action
H.R. 725 was introduced on January 27, 2009 by
Representative Ed Pastor (D-AZ). The bill was referred to the
Committee on Natural Resources, and in addition to the
Committee on the Judiciary. On December 2, 2009, the full
Committee held a hearing on the bill.
On December 16, 2009 the full Natural Resources Committee
met to consider H.R. 725. The bill was ordered favorably
reported to the House of Representatives by voice vote.
Section-by-Section Analysis
Section 1. Short title
This section provides that this Act may be cited as the
``Indian Arts and Crafts Amendments Act of 2009.''
Section 2. Indian arts and crafts
Subsection 2(a) amends Section 5 of the Act entitled ``An
Act to promote the development of Indian arts and crafts and to
create a board to assist therein, and for other purposes,'' (25
U.S.C. 305d) to authorize any federal law enforcement officer
to conduct investigations of an offense involving the sale of
any good that is misrepresented as an Indian produced good or
product that occurs within the jurisdiction of the United
States. Under current law, only employees of the Federal Bureau
of Investigation (FBI) are authorized to conduct such
investigations.
This subsection also provides that the Indian Arts and
Crafts Board (the Board) may refer an alleged offense to any
federal law enforcement officer for appropriate investigation.
Further, it permits a federal law enforcement officer to
investigate an alleged offense regardless of whether such
officer receives a referral from the Board.
Subsection 2(a) further provides that the findings of an
investigation of an alleged offense shall be submitted to a
federal or state prosecuting authority; or to the Board. H.R.
725 provides that the Board may, upon receiving the findings of
such an investigation, recommend to the Attorney General that
criminal proceedings be initiated and provide such support to
the Attorney General relating to the criminal proceedings as
the Attorney General determines to be appropriate. This
subsection also authorizes the Board to recommend that the
Attorney General initiate a civil action.
Subsection 2(b) amends 25 U.S.C. 305e to specify the
persons who may initiate civil actions for misrepresentation of
Indian produced goods. These include the Attorney General, an
Indian tribe, an Indian, or an Indian arts and crafts
organization. The subsection makes further amendments regarding
the disposition of amounts recovered in a civil action under
this section.
Section 3. Misrepresentation of Indian produced goods and products
This section amends Section 1159 of title 18, United States
Code, to clarify penalties resulting from violation of the Act.
Under current law, the maximum penalties are the same for all
offenders, regardless of the value of the goods. This section
provides that, for goods that are offered or displayed for sale
at a total price of $1,000 or more, a first time violation by
an individual will result in a fine of not more than $250,000,
imprisonment for not more than 5 years, or both.
In the case where a violator is other than an individual,
(such as a company, group, or organization), this section
provides that the violator shall be fined not more than
$1,000,000 for a first time violation. If the applicable goods
are offered or displayed for sale at a total price of less than
$1,000, an individual shall be fined not more than $25,000,
imprisoned for not more than one year, or both, for the first
violation. A violator who is other than an individual shall be
fined not more than $100,000. For subsequent violations an
individual may be fined, or imprisoned for not more than 15
years, or both. For a person other than an individual, the bill
provides that for a subsequent violation they shall be fined
not more than $5,000,000.
Committee Oversight Findings and Recommendations
Regarding clause 2(b)(1) of rule X and clause 3(c)(1) of
rule XIII of the Rules of the House of Representatives, the
Committee on Natural 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 this bill.
Compliance With House Rule XIII
1. Cost of Legislation. Clause 3(d)(2) 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 this bill. However, clause 3(d)(3)(B)
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 402 of the
Congressional Budget Act of 1974.
2. Congressional Budget Act. As required by clause 3(c)(2)
of rule XIII of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, this
bill does not contain any new budget authority, spending
authority, credit authority, or an increase or decrease in
revenues or tax expenditures.
3. General Performance Goals and Objectives. As required by
clause 3(c)(4) of rule XIII, the general performance goal or
objective of this bill is to protect Indian arts and crafts
through the improvement of applicable criminal proceedings, and
for other purposes.
4. Congressional Budget Office Cost Estimate. Under clause
3(c)(3) of rule XIII 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 this bill from the Director of the Congressional Budget
Office:
H.R. 725--Indian Arts and Crafts Amendments Act of 2009
H.R. 725 would allow any federal law enforcement officer to
investigate the sale of counterfeit Indian art products. Under
current law, only employees of the Federal Bureau of
Investigation are authorized to conduct such investigations.
Information from the Department of Justice (DOJ) indicates that
very few cases relating to the sale of counterfeit Indian goods
are investigated each year. CBO estimates that the cost of
implementing H.R. 725 would not be significant because we
expect that it would not appreciably change the workload of
federal law enforcement officers or DOJ attorneys who would
prosecute the cases.
H.R. 725 also would reduce the maximum penalties for
offenders who market or sell counterfeit items priced at less
than $1,000. Under current law, the maximum penalties are the
same for all offenders, regardless of the price of the goods.
Criminal fines are recorded as revenues, deposited into the
Crime Victims Fund, and later spent. CBO estimates that
enacting H.R. 725 could reduce the amount of revenues deposited
into the fund and direct spending from that fund, but any such
effects would be insignificant given the small number of cases
involved.
H.R. 725 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
On May 5, 2009, CBO transmitted a cost estimate for S. 151,
the Indian Arts and Crafts Amendments Act of 2009, as ordered
reported by the Senate Committee on Indian Affairs on April 30,
2009. The House and Senate versions of the legislation are very
similar, and the CBO cost estimates are the same.
The CBO staff contact for this estimate is Jeff LaFave. The
estimate was approved by Theresa Gullo, Deputy Assistant
Director for Budget Analysis.
Compliance With Public Law 104-4
This bill contains no unfunded mandates.
Earmark Statement
H.R. 725 does not contain any congressional earmarks,
limited tax benefits, or limited tariff benefits as defined in
clause 9 of rule XXI.
Preemption of State, Local or Tribal Law
This bill is not intended to preempt any State, local or
tribal law.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
ACT OF AUGUST 27, 1935
AN ACT To promote the development of Indian arts and crafts and to
create a board to assist therein, and for other purposes.
* * * * * * *
[Sec. 5. (a) The Board may receive complaints of violations
of section 1159 of title 18, United States Code, and refer
complaints of such violations to the Federal Bureau of
Investigation for appropriate investigation. After reviewing
the investigation report, the Board may recommend to the
Attorney General of the United States that criminal proceedings
be instituted under that section.
[(b) The Board may recommend that the Secretary of the
Interior refer the matter to the Attorney General for civil
action under section 6.]
SEC. 5. CRIMINAL PROCEEDINGS; CIVIL ACTIONS.
(a) Definition of Federal Law Enforcement Officer.--In this
section, the term ``Federal law enforcement officer'' includes
a Federal law enforcement officer (as defined in section 115(c)
of title 18, United States Code).
(b) Authority To Conduct Investigations.--Any Federal law
enforcement officer shall have the authority to conduct an
investigation relating to an alleged violation of this Act
occurring within the jurisdiction of the United States.
(c) Criminal Proceedings.--
(1) Investigation.--
(A) In general.--The Board may refer an
alleged violation of section 1159 of title 18,
United States Code, to any Federal law
enforcement officer for appropriate
investigation.
(B) Referral not required.--A Federal law
enforcement officer may investigate an alleged
violation of section 1159 of that title
regardless of whether the Federal law
enforcement officer receives a referral under
subparagraph (A).
(2) Findings.--The findings of an investigation of an
alleged violation of section 1159 of title 18, United
States Code, by any Federal department or agency under
paragraph (1)(A) shall be submitted, as appropriate,
to--
(A) a Federal or State prosecuting authority;
or
(B) the Board.
(3) Recommendations.--On receiving the findings of an
investigation under paragraph (2), the Board may--
(A) recommend to the Attorney General that
criminal proceedings be initiated under section
1159 of title 18, United States Code; and
(B) provide such support to the Attorney
General relating to the criminal proceedings as
the Attorney General determines to be
appropriate.
(d) Civil Actions.--In lieu of, or in addition to, any
criminal proceeding under subsection (c), the Board may
recommend that the Attorney General initiate a civil action
under section 6.
Sec. 6.
(a) Definitions.--In this section:
(1) Indian.--The term ``Indian'' means an individual
that--
(A) is a member of an Indian tribe; or
(B) is certified as an Indian artisan by an
Indian tribe.
(2) Indian product.--The term ``Indian product'' has
the meaning given the term in any regulation
promulgated by the Secretary.
(3) Indian tribe.--
(A) In general.--The term ``Indian tribe''
has the meaning given the term in section 4 of
the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b).
(B) Inclusion.--The term ``Indian tribe''
includes, for purposes of this section only, an
Indian group that has been formally recognized
as an Indian tribe by--
(i) a State legislature;
(ii) a State commission; or
(iii) another similar organization
vested with State legislative tribal
recognition authority.
(4) Secretary.--The term ``Secretary'' means the
Secretary of the Interior.
[(a)] (b) A person specified in [subsection (c)] subsection
(d) may, in a civil action in a court of competent
jurisdiction, bring an action against a person who, directly or
indirectly, offers or displays for sale or sells a good, with
or without a Government trademark, in a manner that falsely
suggests it is Indian produced, an Indian product, or the
product of a particular Indian or Indian tribe or Indian arts
and crafts organization, resident within the United States,
to--
(1) * * *
* * * * * * *
[(b)] (c) In addition to the relief specified in [subsection
(a)] subsection (b), the court may award punitive damages and
the costs of [suit] the civil action and a reasonable
attorney's fee.
[(c)(1) A civil action under subsection (a) may be
commenced--
[(A) by the Attorney General of the United States
upon request of the Secretary of the Interior on behalf
of an Indian who is a member of an Indian tribe or on
behalf of an Indian tribe or Indian arts and crafts
organization;
[(B) by an Indian tribe on behalf of itself, an
Indian who is a member of the tribe, or on behalf of an
Indian arts and crafts organization; or
[(C) by an Indian arts and crafts organization on
behalf of itself, or by an Indian on behalf of himself
or herself.
[(2) Any amount recovered pursuant to this section shall be
paid to the individual Indian, Indian tribe, or Indian arts and
crafts organization, except that--
[(A) in the case of paragraph (1)(A), the Attorney
General may deduct from the amount recovered--
[(i) the amount for the costs of suit and
reasonable attorney's fees awarded pursuant to
subsection (b) and deposit the amount of such
costs and fees as a reimbursement credited to
appropriations currently available to the
Attorney General at the time of receipt of the
amount recovered; and
[(ii) the amount for the costs of
investigation awarded pursuant to subsection
(b) and reimburse the Board the amount of such
costs incurred as a direct result of Board
activities in the suit; and
[(B) in the case of paragraph (1)(B), the amount
recovered for the costs of suit and reasonable
attorney's fees pursuant to subsection (b) may be
deducted from the total amount awarded under subsection
(a)(2).
[(d) As used in this section--
[(1) the term ``Indian'' means any individual who is
a member of an Indian tribe; or for the purposes of
this section is certified as an Indian artisan by an
Indian tribe;
[(2) subject to subsection (f), the terms ``Indian
product'' and ``product of a particular Indian tribe or
Indian arts and crafts organization'' has the meaning
given such term in regulations which may be promulgated
by the Secretary of the Interior;
[(3) the term ``Indian tribe'' means--
[(A) any Indian tribe, band, nation, Alaska
Native village, or other organized group or
community which is recognized as eligible for
the special programs and services provided by
the United States to Indians because of their
status as Indians; or
[(B) any Indian group that has been formally
recognized as an Indian tribe by a State
legislature or by a State commission or similar
organization legislatively vested with State
tribal recognition authority; and
[(4) the term ``Indian arts and crafts organization''
means any legally established arts and crafts marketing
organization composed of members of Indian tribes.]
(d) Persons That May Initiate Civil Actions.--
(1) In general.--A civil action under subsection (b)
may be initiated by--
(A) the Attorney General, at the request of
the Secretary acting on behalf of--
(i) an Indian tribe;
(ii) an Indian; or
(iii) an Indian arts and crafts
organization;
(B) an Indian tribe, acting on behalf of--
(i) the Indian tribe;
(ii) a member of that Indian tribe;
or
(iii) an Indian arts and crafts
organization;
(C) an Indian; or
(D) an Indian arts and crafts organization.
(2) Disposition of amounts recovered.--
(A) In general.--Except as provided in
subparagraph (B), an amount recovered in a
civil action under this section shall be paid
to the Indian tribe, the Indian, or the Indian
arts and crafts organization on the behalf of
which the civil action was initiated.
(B) Exceptions.--
(i) Attorney general.--In the case of
a civil action initiated under
paragraph (1)(A), the Attorney General
may deduct from the amount--
(I) the amount of the cost of
the civil action and reasonable
attorney's fees awarded under
subsection (c), to be deposited
in the Treasury and credited to
appropriations available to the
Attorney General on the date on
which the amount is recovered;
and
(II) the amount of the costs
of investigation awarded under
subsection (c), to reimburse
the Board for the activities of
the Board relating to the civil
action.
(ii) Indian tribe.--In the case of a
civil action initiated under paragraph
(1)(B), the Indian tribe may deduct
from the amount--
(I) the amount of the cost of
the civil action; and
(II) reasonable attorney's
fees.
[(e) In the event that] (e) Savings Provision.--If any
provision of this section is held invalid, it is the intent of
Congress that the remaining provisions of this section shall
continue in full force and effect.
* * * * * * *
----------
TITLE 18, UNITED STATES CODE
PART I--CRIMES
* * * * * * *
CHAPTER 53--INDIANS
* * * * * * *
Sec. 1159. Misrepresentation of Indian produced goods and products
(a) * * *
[(b) Whoever knowingly violates subsection (a) shall--
[(1) in the case of a first violation, if an
individual, be fined not more than $250,000 or
imprisoned not more than five years, or both, and, if a
person other than an individual, be fined not more than
$1,000,000; and
[(2) in the case of subsequent violations, if an
individual, be fined not more than $1,000,000 or
imprisoned not more than fifteen years, or both, and,
if a person other than an individual, be fined not more
than $5,000,000.]
(b) Penalty.--Any person that knowingly violates subsection
(a) shall--
(1) in the case of a first violation by that person--
(A) if the applicable goods are offered or
displayed for sale at a total price of $1,000
or more, or if the applicable goods are sold
for a total price of $1,000 or more--
(i) in the case of an individual, be
fined not more than $250,000,
imprisoned for not more than 5 years,
or both; and
(ii) in the case of a person other
than an individual, be fined not more
than $1,000,000; and
(B) if the applicable goods are offered or
displayed for sale at a total price of less
than $1,000, or if the applicable goods are
sold for a total price of less than $1,000--
(i) in the case of an individual, be
fined not more than $25,000, imprisoned
for not more than 1 year, or both; and
(ii) in the case of a person other
than an individual, be fined not more
than $100,000; and
(2) in the case of a subsequent violation by that
person, regardless of the amount for which any good is
offered or displayed for sale or sold--
(A) in the case of an individual, be fined
under this title, imprisoned for not more than
15 years, or both; and
(B) in the case of a person other than an
individual, be fined not more than $5,000,000.
(c) As used in this section--
(1) * * *
* * * * * * *
[(3) the term ``Indian tribe'' means--
[(A) any Indian tribe, band, nation, Alaska
Native village, or other organized group or
community which is recognized as eligible for
the special programs and services provided by
the United States to Indians because of their
status as Indians; or
[(B) any Indian group that has been formally
recognized as an Indian tribe by a State
legislature or by a State commission or similar
organization legislatively vested with State
tribal recognition authority; and]
(3) the term ``Indian tribe''--
(A) has the meaning given the term in section
4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b); and
(B) includes, for purposes of this section
only, an Indian group that has been formally
recognized as an Indian tribe by--
(i) a State legislature;
(ii) a State commission; or
(iii) another similar organization
vested with State legislative tribal
recognition authority; and
* * * * * * *
ADDITIONAL VIEWS
H.R. 725 amends the Indian Arts and Crafts Act primarily to
enable any law enforcement official to investigate and
prosecute violations of the Act. Under existing law, the Act is
generally enforced when the Indian Arts and Crafts Board refers
complaints to the Federal Bureau of Investigation (FBI) for
investigation, or when the FBI on its own initiative launches
an investigation. Other law offices generally do not
investigate violations of the Act, and the FBI's resources
clearly must be prioritized with arts and crafts crime being
secondary to such duties as investigating major crimes and
terrorism threats.
After the legislative hearing on H.R. 725 within the
Natural Resources Committee, it became clear that the Bureau of
Indian Affairs' Office of Law Enforcement is contemplated to be
the primary agency to investigate and enforce violations of the
Act. To add clarity to the intent of H.R. 725, and to ensure
that law enforcement officers without suitable background or
experience in dealing with Indian tribes or with artists or
counterfeit arts and crafts, do not become primary enforcers of
this Act, it should be made clear through an amendment to H.R.
725 or through appropriate communications with the
Administration that only qualified agencies, such as the BIA,
are expected to have primary enforcement of this law. As
currently drafted, H.R. 725 grants explicit authority to ``any
Federal law enforcement officer'' to enforce the Act. This is
an overly broad grant of authority. Clarification, either
through amendment or administrative act, is needed as arts and
crafts enforcement should not be a burden placed on ``any
Federal law enforcement officer,'' such as the Secret Service,
the U.S. Capitol Police, or the many other law enforcement
agencies with no duties related to arts and crafts.
Doc Hastings.