19–010

Calendar No. 635

107TH CONGRESS REPORT

2d Session " ! SENATE 107–298

PROVIDING FOR THE USE AND DISTRIBUTION OF CERTAIN

FUNDS AWARDED TO THE GILA RIVER PIMA-MARICOPA

INDIAN COMMUNITY, AND FOR OTHER PURPOSES

OCTOBER 4, 2002.—Ordered to be printed

Mr. INOUYE, from the Committee on Indian Affairs,

submitted the following

R E P O R T

[To accompany S. 2799]

The Committee on Indian Affairs, to which was referred the bill

(S. 2799) to provide for the use and distribution of certain funds

awarded to the Gila River Pima-Maricopa Indian Community, and

for other purposes, having considered the same, reports favorably

thereon with an amendment and recommends that the bill (as

amended) do pass.

PURPOSE

The purpose of S. 2799 is to authorize the Gila River Indian Community to distribute a $7 million judgment award to eligible

Community members as required by the Indian Tribal Judgment

Funds Use or Distribution Act and to waive the repayment of expert assistance loans made by the Department of the Interior to

the Community.

BACKGROUND AND NEED

In 1951, the Gila River Indian Community filed a complaint before the Indian Claims Commission asserting a claim for the failure

of the United States to protect the Community’s use of water from

the Gila and Salt Rivers. In 1972 and 1982, the Indian Claims

Commission and U.S. Court of Claims found the United States liable to the Community regarding the claims made in the final two

dockets of the litigation, Dockets 236–C and 236–D, respectively. In

1999, the Community agreed to a monetary settlement in the

amount of $7 million. Final judgment was entered against the

United States in that amount, and the Department of Treasury cer-
2

tified the payment of $7 million, less attorneys fees, to be deposited

in a trust account on behalf of the Community, which is currently

being managed by the Office of Trust Funds Management at the

Department of Interior.

S. 2799 is the final step in resolving litigation that began in 1951

and this legislation represents the product of close consultation between the Community and the Bureau of Indian Affairs regarding

the structure and content of the distribution plan. The per capita

distribution authorized in S. 2799 would result in a distribution of

approximately $400 per eligible tribal member. The Community

has experienced delays in finalizing the enrollment data and establishing the distribution plan set forth in the bill. Passage of S. 2799

has become one of the Community’s highest priorities.

LEGISLATIVE HISTORY

S. 2799 was introduced on July 25, 2002 by Senator McCain and

was referred to the Committee on Indian Affairs.

SECTION-BY-SECTION ANALYSIS

Sec. 1. Short Title; Table of Contents. The short title of S. 2799

is the ‘‘Gila River Indian Community Judgment Fund Distribution

Act of 2002’’. The bill is divided into three titles preceded by a findings and definition section.

Sec. 2. Findings. There are 8 separate findings in the bill. These

findings recite the history of the water claims brought by the Gila

River Pima-Maricopa Indian Community against the United States

on August 8, 1951 before the Indian Claims Commission in Gila

River Pima-Maricopa Indian Community v. United States. These

findings also describe the history of the claim, the establishment of

liability against the United States on claims 236–C (1972) and

236–D (1982), the Community’s settlement of dockets number 236– C and 236–D for a total of $7,000,000 (April 27, 1999), the entry of a final judgment of $7,000,000 against the United States (May

3, 1999), and the certification of $7,000,000 payment, less attorney

fees, and establishment of a trust account for the Community managed by the Department of Interior (October 6, 1999). The findings

conclude by reciting that the Secretary is required to submit a use

and distribution plan to Congress for approval before funds can be

distributed to individual Indians.

Sec. 3. Definitions. The bill defines ‘‘adult’’, ‘‘community’’, ‘‘Community owned funds’’, ‘‘IIM account’’, ‘‘judgment funds’’, ‘‘legally incompetent individual’’, ‘‘minor’’, ‘‘payment roll’’, and ‘‘Secretary’’. The definition of ‘‘Community-owned funds’’ has been amended

and narrowed by the Committee from the original version of the

bill as introduced to include revenues held by the Community that

are derived from trust resources and which qualify for an exemption under section 7 or 8 of the Indian Tribal Judgment Funds Use

or Distribution Act (25 U.S.C. 1407, 1408). These ‘‘Communityowned funds’’ are the basis for per capital payments under the Act

to adults and for transfer in trust to the Secretary for minors, deceased beneficiaries and incompetent individuals who are eligible

for payment but who have not been listed on the final roll.

The Department of the Interior raised concerns about the former

definition of ‘‘Community-owned funds’’ because it included revenues derived from ‘‘Community-owned enterprises’’ which poten-
3

tially could have included revenues derived by the Community

from taxable gaming activities. The Department was concerned

that under the terms of S. 2799 the Secretary is required to hold

these gaming revenues in a tax exempt trust account which later

was to be paid to individual Indians on a per capita basis. The Department was also concerned that the mixing of exempt and nonexempt funds could change the status of these per capita funds

from exempt to non-exempt, thus making them taxable to the recipient. The Committee intends to make clear that these funds are

eligible to be exempt from taxation by amending and narrowing the

definition of ‘‘community owned funds’’ to include only those funds

derived from sources already exempt from taxation.

TITLE I—GILA RIVER JUDGMENT FUND DISTRIBUTION

Section 101: Distribution of judgment funds

(a) Per Capita Payments. Section (a) authorizes the distribution

of the judgment fund amount, less attorneys fees and litigation expenses, including all accrued interest, to all eligible enrolled members of the Community on a per capita basis.

(b) Preparation of Payment Roll. Requires the Community to prepare the payment roll of eligible enrolled members according to

specific criteria, and includes a description of individuals who shall

be deemed ineligible to receive per capita payments.

(c) Notice to the Secretary. Requires the Community to notify the

Secretary of Interior of the total number of individuals eligible to

share in the per capita distribution after the Community’s preparation of the payment roll, and requires that such data be broken

down into subdivisions reflecting the number of individuals falling

within the following categories: eligible adult members, decreased

individuals, legally incompetent individuals, and minors.

(d) Information Provided to the Secretary. Requires the Community to provide the Secretary of Interior with information necessary

to allow the Secretary to establish estate accounts for deceased individuals and Individual Indian Money (IIM) accounts for legally

incompetent individuals and minors.

(e) Disbursement of Funds. Requires the Secretary to disburse to

the Community those funds necessary to make the per capita payments, not later than 30 days after the payment roll has been approved by the Community and the Community has reconciled the

number of shares that belong in each payment category. Provides

that once the funds are disbursed to the Community, the Community shall be responsible for administering and distributing the

funds.

(f) Shares of Deceased Individuals. Requires the Secretary of Interior to distribute per capita shares of deceased individuals to

their heirs and legatees in accordance with existing regulations.

Where there are no heirs, provides that funds revert to the Community and shall be deposited in the Community’s general fund.

(g) Shares of Legally Incompetent Individuals. Requires the Secretary of Interior to deposit shares of legally incompetent individuals into supervised IIM accounts to be administered pursuant to

existing regulations.

(h) Shares of Minors. Requires the Secretary of Interior to deposit shares of minors into supervised IIM accounts and requires
4

the Secretary to hold these funds in trust until the minor attains

the age of 18 years. Provides that section 3(b)(3) of the Indian Tribal Judgment Funds Distribution Act does not apply, the effect of

which is to prevent parents and guardians of minors from being

able to receive any judgment funds on behalf of minors before they

reach the age of 18 years.

(i) Payment of Eligible Individuals Not Listed on Payment Roll.

Provides that individuals not listed on the payment roll but eligible

for payment may be paid from any residual principal or interest

fund remaining after the Community has made its per capita distribution and established its trust accounts. If insufficient judgment funds remain to cover the cost of payments, the Community

is authorized to use Community-owned funds as defined by section

3(3) of the bill to make these payments. In the case of minors, legally incompetent individuals, and deceased individuals, the Secretary of Interior is authorized to accept and deposit Communityowned funds into an IIM or estate account established for a minor,

legal incompetent or deceased beneficiary eligible to receive payment but not listed on the payment roll. Provides that the Secretary shall invest these trust funds pursuant to existing law.

As indicated in the discussion under Section 3 ‘‘definitions’’, the

Committee has amended the definition of ‘‘Community-owned

funds’’ under section 3(3)(B) so that payments under this section

may only be made by the Community with funds derived from trust

resources which qualify for tax exempt status under 25 U.S.C.

§§ 1407 and 1408.

(j) Use of Residual Funds. Allows for the transfer of residual

funds from the Department of Interior to the general fund of the

Community if the governing body of the Community makes such a

request of the Secretary and adopts a tribal council resolution reaffirming its desire to have these residual funds transferred. The

bill as introduced was amended to require the Community council

to enact a tribal resolution manifesting its intention to have these

residual funds transferred into the general fund of the Community.

(k) Reversion of Per Capita Shares to Tribal Ownership. Enables

the transfer of funds held in trust and the interest accrued thereon

by the Secretary to the Community if the per capita share is unclaimed for a minimum period of 6 years. A new section was added

to clarify that a minimum of six years must pass before the Community may request that these unclaimed funds be transferred into

the general fund of the Community.

Section (k) ‘‘Non-applicability of Certain Law’’ was deleted because that section was rendered superfluous by the changes adopted to the definition of ‘‘Community-owned funds’’ under section

3(3)(b).

Sec. 102. Responsibility of Secretary; applicable law

(a) Responsibility for Funds. Provides that after disbursement of

funds by the Community to eligible adult living members as provided under section 101(e)(1), the Secretary shall no longer have

trust responsibility for those judgment funds.

(b) Deceased and Legally Incompetent Individuals. Provides that

Secretary shall continue to have a trust responsibility for funds retained in accounts for deceased beneficiaries and legally incom-
5

petent individuals until the date on which those funds are disbursed under the Act.

(c) Applicability of other Law. Provides that pursuant to sections

7 and 8 of the Indian Tribal Judgment Funds Use or Distribution

Act, that all funds distributed under the Act, including all interest

and investment income thereon, shall be considered tax-exempt income to individual recipients.

TITLE II—CONDITIONS RELATING TO COMMUNITY

JUDGMENT FUND PLANS

Section 201. Amendment to plan for use and distribution of judgment funds awarded in Docket 228

(a) Definition of Plan. ‘‘Plan’’ means the plan for the use and distribution of judgment funds awarded to the Community in Docket

No. 228 as modified by Public Law 99–493 (100 Stat.1241).

(b) Conditions. Adds conditions providing that section 3(b)(3) of

the Indian Tribal Judgment Funds Use and Distribution Act shall

not apply to minors’ per capita shares held by the Secretary under

the plan (effect is to prevent shares from being distributed to parents and guardians of minors prior to age 18), mandates the Secretary hold the minors’ per capital shares in trust until age 18 is

attained by the minor, mandates the Secretary not disburse judgment funds or interest earned until the age 18 years is attained by

the minor, and mandates that upon the Community’s request, any

residual principal and interest funds remaining after the Community has declared the per capita payments have been completed

shall be distributed to the Community and deposited into the Community’s general fund.

Section 202. Plan for use and distribution of judgment funds

awarded in Docket 236–N

(a) Definition of Plan. ‘‘Plan’’ means the plan for the use and distribution of judgment funds awarded to the Community in Docket

No. 236–N of the United States Court of Federal Claims (59 Fed.

Reg. 31092 (June 16, 1994)).

(b) Conditions. Adds conditions to require amendments to the

plan to authorize disbursement of residual principal and interest to

the Community. Adds further conditions providing that the provisions of the Indian Tribal Judgment Funds Act permitting payment

to parents and legal guardians of minors shall not be applicable,

and requires the Secretary to hold these minors’ shares in trust

until these minors attain the age of 18 years.

TITLE III—EXPERT ASSISTANCE LOANS

Section 301. Waives repayment by the Gila River Indian Community of expert assistance loans made by the Department of Interior

to the Community. This section of S. 2799 was amended to remove

provisions pertaining to waivers of repayment for two other tribes

in order to have the terms of S. 2799 pertain only to the Gila River

Indian Community.
6

COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

The Committee on Indian Affairs, in an open business session on

October 1, 2002, ordered S. 2799 as amended, to be reported favorably to the Senate.

COST AND BUDGETARY CONSIDERATIONS

At the time of filing this report, the cost estimate of the Congressional Budget Office on S. 2799 has not yet been received. Compliance with Senate Rule XXVI, paragraph 11(a) is therefore impracticable at this time.

EXECUTIVE COMMUNICATIONS

The position of the Administration on S. 2799 has not been received.

REGULATORY AND PAPERWORK IMPACT

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 implementing the bill. The Committee finds that S. 2799 will not require

the promulgation of regulations so the regulatory and paperwork

impact should be minimal.

CHANGES IN EXISTING LAW

In compliance with subsection 12 of rule XXVI of the Standing

Rules of the Senate, changes in existing law made by a bill are required to be set forth in the accompanying committee report. S.

2799 effects no changes in existing law.

Æ