Mixed-Blood Ute Indian Tax Status Act

Summary: Mixed-Blood Ute Indian Tax Status Act - Amends Federal law to exempt from Federal or State tax the distribution of rents and royalties from U.S. trust held real estate or related oil, gas, or mineral interests paid to mixed-blood members of the Ute Tribe, or their Ute heirs or legatees. 
Exempts the Ute Distribution Corporation from Federal and State corporate income taxes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Mixed-Blood Ute Indian Tax Status 
Act''.

SEC. 2. TAXES ON DISTRIBUTIONS.

    Section 17 of the Act of August 27, 1954 (68 Stat. 868; 25 U.S.C. 
677p) is amended to read as follows:

``SEC. 17. TAXES ON DISTRIBUTIONS.

    ``(a) Distribution of Assets.--
            ``(1) Tax status.--Except as provided in paragraph (2), the 
        distribution of rents and royalties derived from real estate, 
        or the oil, gas, or mineral interests contained therein, held 
        in trust by the United States made under the provisions of this 
        Act, either directly or through the Ute Distribution 
        Corporation, to the mixed-blood members of the tribe, their Ute 
        Indian heirs, or their Ute Indian legatees, shall not, at the 
        time of such distribution, be subject to any Federal or State 
        income tax.
            ``(2) Exception for cash distribution.--Any cash 
        distribution made under this Act that consists of a share of 
        any interest earned on funds deposited in the Treasury of the 
        United States shall not by virtue of this Act be exempt from 
        individual income tax in the hands of the recipients for the 
        year in which paid.
            ``(3) Real property.--
                    ``(A) Initial 7-year period.--
                            ``(i) Subject to clause (ii), real property 
                        distributed to the mixed-blood members of the 
                        tribe pursuant to this Act shall be exempt from 
                        property taxes for a period of 7 years 
                        commencing August 27, 1954.
                            ``(ii) The tax exemption provided for in 
                        clause (i) shall not apply if the original 
                        distributee parts with title to the real 
                        property, either by deed, descent, succession, 
                        foreclosure of mortgage, sheriff's sale, or 
                        other conveyance. A conveyance under the 
                        preceding sentence does not include a mortgage, 
                        hypothec, right-of-way, or other similar 
                        encumbrance.
                    ``(B) After 7 years.--Real property and income 
                derived therefrom, distributed to the mixed-blood 
                members of the tribe, their heirs and legatees, under 
                this Act, shall, after August 27, 1961, be subject to 
                the same taxes, Federal and State, as in the case of 
                non-Indians.
            ``(4) Tax status for the ute distribution corporation.--
                    ``(A) In general.--The Ute Distribution Corporation 
                shall not be subject to Federal or State corporate 
                income taxes.
                    ``(B) Successor corporation.--For the purpose of 
                this section, the term `Ute Distribution Corporation' 
                includes any successor to such corporation, organized 
                by the mixed-blood members of the tribe to--
                            ``(i) jointly manage, with the tribe, 
                        unadjudicated or unliquidated claims against 
                        the United States; and
                            ``(ii) distribute to mixed-blood members of 
                        the tribe, their Ute Indian heirs, or their Ute 
                        Indian legatees, income derived from oil, gas, 
                        and mineral rights, and all other assets not 
                        susceptible to equitable and practicable 
                        distribution.
            ``(5) Basis.--The basis for determining gain or loss for 
        income tax purposes for real property distributed under this 
        Act shall be the fair market value of the real property on the 
        date the title to such real property was transferred by the 
        United States pursuant to this Act.
    ``(b) Refunds.--
            ``(1) In general.--
                    ``(A) Unliquidated claims.--An unliquidated claim 
                against the United States shall include any Federal 
                income tax, penalty, or interest paid by the mixed-
                blood members of the tribe, their Ute Indian heirs, or 
                Ute Indian legatees, with respect to distributions of 
                income derived from oil, gas, and mineral rights, and 
                all other assets not susceptible to equitable 
                distribution, received by such members, heirs, or 
                legatees after August 27, 1961, pursuant to the Act of 
                August 27, 1954 (68 Stat. 868; 25 U.S.C. 677p).
                    ``(B) Exception.--Cash distributions consisting of 
                a share of any interest earned on funds deposited in 
                the Treasury of the United States shall not constitute 
                an unliquidated claim for the purposes of this 
                subsection.
            ``(2) Procedure.--A claim described in paragraph (1) shall 
        be payable in full by the United States to a mixed-blood member 
        of the tribe, a Ute Indian heir, or a Ute Indian legatee, upon 
        the filing of a claim or suit for refund under chapter 65 of 
        the Internal Revenue Code of 1986.
            ``(3) Waiver of limitations.--
                    ``(A) In general.--Any provision of the Act of 
                August 27, 1954, the Internal Revenue Code of 1986, or 
                other Federal law relating to--
                            ``(i) limitations on claims or suits for 
                        refund;
                            ``(ii) the amounts refundable pursuant to 
                        claims or suits for refund; or
                            ``(iii) any interest payable on any tax, 
                        penalty, and interest refundable,
                is waived to the extent necessary to refund pursuant to 
                this section any income tax, penalty, or interest paid 
                after August 27, 1961.
                    ``(B) Interest.--A refund pursuant to this 
                subsection shall include interest calculated from the 
                date that such income tax, penalty, or interest was 
                paid to the Federal Government, at the interest rate 
                applicable to refunds of Federal income taxes on the 
                date of enactment of this Act.''.