79–006

106TH CONGRESS REPORT " ! HOUSE OF REPRESENTATIVES 2d Session 106–501

INDIAN TRIBAL ECONOMIC DEVELOPMENT AND CONTRACT

ENCOURAGEMENT ACT OF 1999

FEBRUARY 29, 2000.—Committed to the Committee of the Whole House on the State

of the Union and ordered to be printed

Mr. YOUNG of Alaska, from the Committee on Resources,

submitted the following

R E P O R T

[To accompany S. 613]

[Including cost estimate of the Congressional Budget Office]

The Committee on Resources, to whom was referred the bill (S.

613) to encourage Indian economic development, to provide for the

disclosure of Indian tribal sovereign immunity in contracts involving Indian tribes, 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 S. 613 is to encourage Indian economic development, to provide for the disclosure of Indian tribal sovereignty immunity in contracts involving Indian tribes, and for other purposes.

BACKGROUND AND NEED FOR LEGISLATION

S. 613, the proposed Indian Tribal Economic Development and

Contract Encouragement Act of 1999, would amend existing law to

provide that no agreement or contract with an Indian tribe that encumbers Indian lands for a period of seven or more years shall be

valid unless that agreement or contract is approved by the Secretary of the Interior. The bill also provides that the Secretary

shall issue regulations for identifying the types of agreements or

contracts not covered by the aforementioned requirement.

Section 81 of Title 25 of the United States Code, enacted in 1872,

is intended to protect Indians from improvident contracts and is

concerned primarily with federal control over contracts between In-
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dians tribes or individual Indians and non-Indians. Over the decades many provisions of this law have come to be antiquated and

unnecessary. In 1958 Congress amended Section 81 to remove the

requirement that all such contracts be executed in the presence of

a judge. In 1982 Congress amended Section 81 as it related to management agreements. In 1990 Congress amended Section 81 as it

related to reservation-wide plebiscites and exempted Self-Governance tribes from Section 81.

S. 613 eliminates a major portion of federal control exercised pursuant to Section 81 by making federal approval only applicable to

certain contracts having a life of seven or more years. In addition,

S. 613 amends Section 16 of the Indian Reorganization Act of 1934

(25 U.S.C. 476) by removing the requirement that the choice of

counsel and the fixing of fees by a Tribe shall be subject to the approval of the Secretary of the Interior.

COMMITTEE ACTION

S. 613 was introduced on March 15, 1999, by Senator Ben

Nighthorse Campbell (R–CO). The bill, as amended, was passed by

the Senate on September 15, 1999, by unanimous consent, and referred to the Committee on Resources. On February 16, 2000, the

Resources Committee met to consider the bill. No amendments

were offered and the bill was ordered favorably reported to the

House of Representatives by voice vote.

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 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. Government Reform Oversight Findings. Under clause 3(c)(4)

of rule XIII of the Rules of the House of Representatives, the Committee has received no report of oversight findings and rec-
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ommendations from the Committee on Government Reform on this

bill.

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:

U.S. CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, February 29, 2000.

Hon. DON YOUNG,

Chairman, Committee on Resources,

House of Representatives, Washington, DC.

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for S. 613, the Indian Tribal Economic Development and Contract Encouragement Act of 1999.

If you wish further details on this estimate, we will be pleased

to provide them. The CBO staff contacts are Lanette Keith (for federal costs), and Marjorie Miller (for the state, local, and tribal impact).

Sincerely,

BARRY B. ANDERSON

(For Dan L. Crippen, Director).

Enclosure.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

S. 613—Indian Tribal Economic Development and Contract Encouragement Act of 1999

Summary: Based on information from the Department of the Interior (DOI) and the Bureau of Indian Affairs (BIA), CBO estimates

that implementing S. 613 would reduce discretionary costs for BIA

by a total of about $2 million over the 2001–2005 period. The act

would not affect direct spending or receipts; therefore, pay-as-yougo procedures would apply. S. 613 contains an intergovernmental

mandate as defined in the Unfunded Mandates Reform Act

(UMRA), but CBO estimates that this mandate would not impose

minimal costs that would be far below the threshold established by

that act ($55 million in 2000). Further, S. 613 would reduce the

costs of an existing mandate, more than offsetting any new mandate costs. This legislation contains no new private-sector mandates as defined in UMRA.

S. 613 would amend current law (25 U.S.C. 81) to remove certain

restrictions on contracts between Indian tribes and other parties.

This provision, known as section 81, requires DOI’s approval of all

contracts involving payments between non-Indians and Indians for

services relative to Indian lands. Under current law, any contract

that is subject to this provision and which is not approved by DOI

can be declared null and void. As amended by S. 613, section 81

would only require approval of contracts that encumber Indian

lands for a period of at least seven years. S. 613 would prohibit

DOI from approving contracts that neither provide for remedies in

the case of a breach of contract nor explicitly disclose or waive an
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Indian tribe’s right to assert sovereign immunity as a defense in

an action brought against it. In addition, the act would amend the

Indian Reorganization Act to remove a requirement that a tribe’s

choice of legal counsel and the fees to be paid to such counsel be

subject to DOI approval.

Estimated cost to the Federal Government: Based on information

from DOI and BIA, CBO expects that S. 613 would reduce the

number of contracts the department has to review each year. CBO

estimates that implementing this legislation would reduce costs for

BIA by between $300,000 and $400,000 in each of fiscal years 2001

through 2005. Any reduction in total BIA spending would be subject to appropriate action.

Pay-as-you-go considerations: None.

Estimated impact on state, local, and tribal governments: Section

81 currently imposes a mandate on tribes to submit certain contracts for approval by the Secretary of the Interior. S. 613 would

greatly reduce the number of contracts requiring approval, thus reducing the cost to tribes of the existing mandate. But under this

legislation, a tribe entering into a covered contract would have to

include a specific statement regarding its sovereign immunity. This

is an additional enforceable duty imposed on tribes, and so would

constitute an intergovernmental mandate under UMRA. The cost of

this mandate would be minimal, however. It would not affect the

rights of either party under such contracts, but would only require

that these rights be explicitly stated.

Estimated impact on the private sector: S. 613 contains no new

private-sector mandates as defined in UMRA.

Previous CBO estimate: On July 9, 1999, CBO prepared a cost

estimate for S. 613 as ordered reported by the Senate Committee

on Indian Affairs on June 16, 1999. Our cost estimates for these

two versions of the legislation are the same.

Estimate prepared by: Federal Costs: Lanette Keith; Impact on

State, Local, and Tribal Governments: Marjorie Miller.

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

COMPLIANCE WITH PUBLIC LAW 104–4

This bill contains no unfunded mandates.

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):

SECTION 2103 OF THE REVISED STATUTES

øSEC. 2103. No agreement shall be made by any person with any

tribe of Indians, or individual Indians not citizens of the United
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States, for the payment or delivery of any money or other thing of

value, in present or in prospective, or for the granting or procuring

any privilege to him, or any other person in consideration of services for said Indians relative to their lands, or to any claims growing out of, or in reference to, annuities, installments, or other moneys, claims, demands, or thing, under laws or treaties with the

United States, or official acts of any officers thereof, or in any way

connected with or due from the United States, unless such contract

or agreement be executed and approved as follows:

øFirst. Such agreement shall be in writing, and a duplicate of it

delivered to each party.

øSecond. It shall bear the approval of the Secretary of the Interior and the Commissioner of Indian Affairs indorsed upon it.

øThird. It shall contain the names of all parties in interest, their

residence and occupation; and if made with a tribe, by their tribal

authorities, the scope of authority and the reason for exercising

that authority, shall be given specifically.

øFourth. It shall state the time when and place where made, the

particular purpose for which made, the special thing or things to

be done under it, and, if for the collection of money, the basis of

the claim, the source from which it is to be collected, the disposition to be made of it when collected, the amount or rate per centum

of the fee in all cases; and if any contingent matter or condition

constitutes a part of the contract or agreement, it shall be specifically set forth.

øFifth. It shall have a fixed limited time to run, which shall be

distinctly stated.

øAll contracts or agreements made in violation of this section

shall be null and void, and all money or other thing of value paid

to any person by any Indian or tribe, or any one else, for or on his

or their behalf, on account of such services, in excess of the amount

approved by the Commissioner and Secretary for such services,

may be recovered by suit in the name of the United States in any

court of the United States, regardless of the amount in controversy;

and one-half thereof shall be paid to the person suing for the same,

and the other half shall be paid into the Treasury for the use of

the Indian or tribe by or for whom it was so paid.¿

SEC. 2103. (a) In this section:

(1) The term ‘‘Indian lands’’ means lands the title to which

is held by the United States in trust for an Indian tribe or

lands the title to which is held by an Indian tribe subject to a

restriction by the United States against alienation.

(2) The term ‘‘Indian tribe’’ has the meaning given that term

in section 4(e) of the Indian Self-Determination and Education

Assistance Act (25 U.S.C. 450b(e)).

(3) The term ‘‘Secretary’’ means the Secretary of the Interior.

(b) No agreement or contract with an Indian tribe that encumbers

Indian lands for a period of 7 or more years shall be valid unless

that agreement or contract bears the approval of the Secretary of the

Interior or a designee of the Secretary.

(c) Subsection (b) shall not apply to any agreement or contract

that the Secretary (or a designee of the Secretary) determines is not

covered under that subsection.
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(d) The Secretary (or a designee of the Secretary) shall refuse to

approve an agreement or contract that is covered under subsection

(b) if the Secretary (or a designee of the Secretary) determines that

the agreement or contract—

(1) violates Federal law; or

(2) does not include a provision that—

(A) provides for remedies in the case of a breach of the

agreement or contract;

(B) references a tribal code, ordinance, or ruling of a

court of competent jurisdiction that discloses the right of

the Indian tribe to assert sovereign immunity as a defense

in an action brought against the Indian tribe; or

(C) includes an express waiver of the right of the Indian

tribe to assert sovereign immunity as a defense in an action

brought against the Indian tribe (including a waiver that

limits the nature of relief that may be provided or the jurisdiction of a court with respect to such an action).

(e) Not later than 180 days after the date of enactment of the Indian Tribal Economic Development and Contract Encouragement

Act of 2000, the Secretary shall issue regulations for identifying

types of agreements or contracts that are not covered under subsection (b).

(f) Nothing in this section shall be construed to—

(1) require the Secretary to approve a contract for legal services by an attorney;

(2) amend or repeal the authority of the National Indian

Gaming Commission under the Indian Gaming Regulatory Act

(25 U.S.C. 2701 et seq.); or

(3) alter or amend any ordinance, resolution, or charter of an

Indian tribe that requires approval by the Secretary of any action by that Indian tribe.

SECTION 16 OF THE ACT OF JUNE 19, 1934

SEC. 16. (a) * * *

* * * * * * *

(e) In addition to all powers vested in any Indian tribe or tribal

council by existing law, the constitution adopted by said tribe shall

also vest in such tribe or its tribal council the following rights and

powers: To employ legal counselø, the choice of counsel and fixing

of fees to be subject to the approval of the Secretary¿; to prevent

the sale, disposition, lease, or encumbrance of tribal lands, interests in lands, or other tribal assets without the consent of the tribe;

and to negotiate with the Federal, State, and local governments.

The Secretary shall advise such tribe or its tribal council of all appropriation estimates or Federal projects for the benefit of the tribe

prior to the submission of such estimates to the Office of Management and Budget and the Congress.

* * * * * * *

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