```

[Senate Report 109-291]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 531
109th Congress                                                   Report
                                 SENATE
 2d Session                                                     109-291

======================================================================

 
  AMENDING THE SHIVWITS BAND OF THE PAIUTE INDIAN TRIBE OF UTAH WATER 
 RIGHTS SETTLEMENT ACT TO ESTABLISH AN ACQUISITION FUND FOR THE WATER 
                 RIGHTS AND HABITAT ACQUISITION PROGRAM

                                _______
                                

                 July 24, 2006.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 3501]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 3501) to amend the Shivwits Band of the Paiute Indian 
Tribe of Utah Water Rights Settlement Act to establish an 
acquisition fund for the water rights and habitat acquisition 
program, having considered the same, reports favorably thereon 
without amendment and recommends that the bill do pass.

                                Purpose

    The bill to amend the Shivwits Band of the Paiute Indian 
Tribe of Utah Water Rights Settlement Act, P.L. 106-263 (114 
Stat. 737, August 18, 2000), corrects deficient language in 
Section 10(f) of the Settlement Act. Section 10(f) authorized 
$3 million to be placed in a trust fund to implement a water 
rights and habitat acquisition program for the Santa Clara 
river basin in Utah but the language was insufficient to 
accomplish the intent of the provision. S. 3501 corrects the 
language deficiency, allowing Department of the Interior to 
establish the trust fund.

                               Background

    The Shivwits Band of the Paiute Indian Tribe of Utah Water 
Rights Settlement Act, P.L. 106-263 (114 Stat. 737, August 18, 
2000), ratified a negotiated settlement of the Shivwits Band of 
Paiute Indians' claims to water rights in the Santa Clara 
River. Section 10(f) of the Act authorized the Secretary of the 
Interior to establish a water rights and habitat acquisition 
program in the Virgin River Basin primarily for the benefit of 
native plant and animal species in the Santa Clara River Basin 
listed under the Endangered Species Act and secondarily for the 
benefit of listed species in the Virgin River Basin. However, 
when the Department of the Interior attempted to implement the 
provision in Section 10(f), to deposit and maintain the $3.0 
million in an interest bearing account, the Department of 
Treasury advised the Department of the Interior that the 
language in Section 10(f) was insufficient for this purpose. 
The Department of the Interior, based on guidance from the 
Department of Treasury, provided proposed legislation to 
correct the deficiency in the original statutory language.
    The Committee received communication from the Department of 
the Interior, dated May 10, 2005, on Senate Bill 536. S. 536, 
the Native American Omnibus Act of 2005 contained separate 
provisions dealing with a variety of topics related to Indians 
or Indian tribes. The Department included a request to 
introduce legislation for Shivwits as an additional technical 
correction.

                          Legislative History

    S. 3501 was introduced on June 13, 2006, by Senator McCain 
and was referred to the Committee on Indian Affairs. On June 
22, 2006, S. 3501 was unanimously passed out of the Committee 
and ordered reported without amendment.

            Committee Recommendation and Tabulation of Vote

    On June 22, 2006, the Committee, in an open business 
session, considered S. 3501. By a unanimous voice vote, the 
Committee ordered the bill reported favorably to the full 
Senate with the recommendation that the bill do pass.

                      Section-by-Section Analysis

Section 1

    This section amends section 10(f) of the Shivwits Band of 
the Paiute Indian Tribe of Utah Water Rights Settlement Act, 
P.L. 106-263 (114 Stat. 737, August 18, 2000). This amendment 
adds a new subsection (g) that establishes the Acquisition 
Fund, specifies the type of investments that may be made, and 
requires any income from the investments be credited to the 
Acquisition Fund.

                   Cost and Budgetary Considerations

    The Congressional Budget Office cost estimate for S. 3501 
is set forth below:

S. 3501--A bill to amend the Shivwits Band of the Paiute Indian Tribe 
        of Utah Water Rights Settlement Act to establish an acquisition 
        fund for the water rights and habitat acquisition program

    S. 3501 would amend the Shivwits Band of the Paiute Indian 
Tribe of Utah Water Rights Settlement Act to establish a 
special fund for the water rights and habitat acquisition 
program created by that act. The acquisition program would use 
the resources in the special fund for the conservation and 
recovery of native plant or animal species in the Santa Clara 
River Basin. The bill would appropriate $3 million to the new 
special fund. (Under current law, that amount is authorized to 
be appropriated to obtain water rights and real property.) As a 
result, CBO estimates that S. 3501 would increase direct 
spending by $3 million over the 2007-2016 period.
    S. 3501 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.
    The CBO staff contact for this estimate is Gregory Waring. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

               Regulatory and Paperwork Impact Statement

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill to 
evaluate the regulatory and paperwork impact that would be 
incurred in carrying out the bill. The Committee has concluded 
that the regulatory and paperwork impact should be minimal.

                        Executive Communications

    The Committee has not received official executive 
communications on S. 3501.

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                     Washington, DC., May 10, 2005.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: This letter sets forth the views of the 
Department of the Interior on S. 536, a bill ``to make 
technical corrections to laws relating to Native Americans, and 
for other purposes.'' We support the enactment of S. 536 as 
ordered reported by the Senate Committee on Indian Affairs on 
March 9, 2005. However, the Department suggests the following 
amendments be made to the bill.

Section 101. Indian Financing Act amendments

    Section 101 of the bill would amend the Indian Financing 
Act of 1974 with the intent of expediting the implementation of 
a secondary market for loans guaranteed under the Bureau of 
Indian Affairs Loan Guaranty Program. We request the following 
amendment be made to this section which will allow Indian and 
non-Indian lenders to loan money to Indian-owned businesses. 
This will allow the Bureau of Indian Affairs (BIA) to provide 
financial assistance to a broader number of American Indians 
and Alaska Natives.
    We suggest that Section 101(d) be amended to read:
    (d) Loans Ineligible for Guaranty or Insurance.--Section 
206 of the Indian Financing Act of 1974 (25 U.S.C. 1486) is 
amend by inserting ``(not including an eligible Community 
Development Finance Institution)'' after ``Government''.
    The Administration has some additional concerns regarding 
compensation of secondary market fiscal agents and funding for 
the cost of administering the secondary market, which we look 
forward to discussing with the Committee.

Section 104. Indian Pueblo Land Act amendments

    Section 104 provides for the Indian Pueblo Land Act 
amendments to clarify criminal jurisdiction with the exterior 
boundaries of the Pueblo owned land grants. Criminal 
jurisdiction within the Pueblo grants has long been a problem 
for many of the Pueblos, the counties and cities in which they 
are located, and the U.S. Attorney's office. We support the 
legislative attempt to clarify the jurisdictional issues. 
However, we suggest sections 20(b) and (c) be amended because 
it does not precisely track the allocation of jurisdiction 
applicable in Indian country generally under the Indian Civil 
Rights Act (ICRA). The ICRA recognizes the inherent 
jurisdiction of tribes over any person who is an ``Indian.'' 
This definition would ensure that Pueblo would have 
jurisdiction over certain persons who are not enrolled members 
of a tribe, such as minor children who have not yet been 
enrolled as a member.
    In subsection (b) by adding a ``,'' after Pueblo and by 
striking ``of another Indian tribe'' and inserting in lieu 
thereof ``non-member Indian''.
    In subsection (d) by striking ``a member of an Indian 
tribe'' and inserting in lieu thereof ``an Indian''.

Section 105. Prairie Island Land Conveyance

    Section 105 would take land including all improvements, 
cultural resources, and sites on the land, into trust for the 
Prairie Island Indian Community. We suggest striking the words 
``all improvements'' from Sec. 105(a) so it reads as follows:
    (a) In General.--The Secretary of the Army shall convey all 
right, title, and interest of the United States in and to the 
land described in subsection (b), including cultural resources, 
and sites on the land, subject to the flowage and sloughing 
easement described in subsection (d) and to the conditions 
stated in subsection (f), to the Secretary, to be--* * *
    The Department feels this change is necessary to address 
any uncertainty about the Government having a fiduciary 
obligation to repair and maintain any acquired improvements.
    In addition, section 105 would require a boundary survey to 
be conducted no later than 5 years after the date of 
conveyance. The boundary survey should be required prior to the 
conveyance, to avoid any disputes or the need for corrections 
after the conveyance has occurred.

Section 106. Binding arbitration for Gila River Indian Community 
        reservation contracts

    This section would provide the Gila River Indian Community 
the authority to enter into binding arbitration agreements for 
any lease or contract the tribe may enter into affecting the 
tribe's land. We want to make it clear that it is our view that 
this section would not require the United States to enter into 
binding arbitration or waive the sovereign immunity of the 
United States.

Section 111. Indian Arts and Crafts

    The Department requests that the amendments to the Indian 
Arts and Crafts Act (Act) include a provision authorizing the 
Indian Arts and Craft Board (Board) to recommend the Secretary 
impose administrative fines for violations of the Act. 
Administrative fines would be imposed for those violations that 
would not otherwise be serious enough to warrant a full civil 
or criminal action being pursued by the United States Attorney 
General. Many other federal agencies, including those within 
the Department, have the authority to levy administrative 
fines. Granting the Board similar authority would allow it to 
take action in meritorious cases for which the Attorney General 
is unlikely to devote resources.
    In addition, the Department requests that any amounts 
recovered as a result of an administrative fine or civil 
action, after making reimbursements contemplated in this 
section, be paid to the Indian Arts and Crafts Board for 
statutorily mandated nonenforcement activities such as 
trademark protection and the promotion of authentic Indian Arts 
and Crafts.
    The Department supports extending investigative authority 
to other federal law enforcement agencies. To facilitate the 
usefulness of that, we suggest the Committee clarify a 
potential jurisdictional issue that may arise. Specifically, 
BIA law enforcement may not investigate outside of Indian 
country. When off reservation, the Officer may only ``observe'' 
a violation rather than continue his investigation without 
contacting the appropriate federal enforcement agency, in most 
cases the FBI. The investigating officer should be granted the 
authority to be able to cross jurisdictions for the express 
purpose of enforcing the Indian Arts and Crafts Act. For 
example, BIA law enforcement officers should be granted the 
authority to specifically investigate violations of the Indian 
Arts and Crafts Act outside of Indian country. The Department 
will work with the Department of Justice on this expansion of 
jurisdictional authority.
    Section 111(b)(7) states in part that the Department shall 
promulgate regulations which includes a definition of ``Indian 
product'' and ``examples of each Indian product''. The 
regulations currently provide such a list. Therefore, this 
provision should be deleted. However if this provision remains, 
the phrase ``examples of each Indian product'' should be 
amended to ``examples of Indian products'' so that the 
published list does not become an exclusive list that courts 
interpret as precluding action for items that may not be 
specifically included on the list. In addition, the Department 
is concerned that the amended definitions do not include a 
definition for ``product of a particular Indian tribe or Indian 
arts and crafts organization.'' Excluding products of a 
particular Indian tribe or Indian arts and crafts organization 
could potentially remove the right of a tribe to protect their 
cultural heritage by using their tribal name in the description 
of a particular art or craft work for which their Tribe 
specializes in or is particularly known for.
    The Department requests an additional conforming amendment 
be made to the Indian Arts and Crafts Act. The trademark 
provision, section 102 of the Act, permits the Board to 
register any trademark owned by the Government in the U.S. 
Patent and Trademark Office (USPTO) without charge and assign 
it and the goodwill associated with it to an individual Indian 
or Indian tribe without charge. The Act, however, does not 
permit the board to register trademarks owned by individual 
Indian artists, artisans, tribes, and businesses for arts and 
crafts marketing purposes. Under the Lanham Act, the party 
registering the trademark must also own the mark. Therefore, if 
the Board attempted to register a trademark owned, for example, 
by a Navajo tribal arts and crafts enterprise, the application 
would be denied. Therefore, the word ``government'' should be 
struck in order to allow the Board to act as an agent and file 
without charge trademark registration applications with the 
USPTO for trademarks that are owned by an individual Indian, 
Indian tribe, or Indian arts and crafts organization.
    Finally, the Department of Justice advises that there may 
be constitutional concerns with section 111(b), which would 
amend section 6 of the Act by defining the term ``Indian 
tribe'' to include ``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.'' 
Section 111(c) would add the same definition to 18 U.S.C. 
1159(c). Under the Constitution, only the federal government 
has authority to recognize Indian tribes. See, e.g., McClanahan 
v. Arizona State Tax Comm'n, 411 U.S. 164, 172 n.7 (1973) 
(source of Federal authority over Indian matters ``derives from 
Federal responsibility for regulating commerce with Indian 
tribes and for treaty making''). In the absence of such federal 
recognition, the term ``Indian tribe'' might be viewed as a 
racial classification subject to strict scrutiny under Adarand 
Constructors, Inc. v. Pena, 515 U.S. 200, 235 (1995), rather 
than the more deferential review accorded to classifications 
based on membership in a federally recognized Indian tribe 
under Morton v. Mancari, 417 U.S. 535 (1974). The part of this 
definition relating to recognition by state entities should be 
deleted.

Section 114. Research and educational activities

    Section 114 would add an additional authorized use of funds 
(research and educational activities relating to Native 
Hawaiian law) to the Education for Native Hawaiians program, 
which is administered by the Department of Education. The 
Department of Education objects to this amendment. The purpose 
of the program should continue to be to strengthen educational 
programs and services for Native Hawaiians (pre-K through 
postsecondary), in order to raise the educational achievement 
of that population. This additional authorized activity, 
research on Native Hawaiian law, would be for a different 
purpose and thus has the potential to dilute the impact of the 
program. Moreover, the Department of Education has already 
received earmarked funding, through the fiscal year 2005 
omnibus appropriations act, to establish a center of education 
in Native Hawaiian law at the University of Hawaii. The 
proposed amendment to allow for the support of research and 
education in Native Hawaiian law would, in other words, be 
enacted after the appropriation of funding for such research 
and education (and most likely after the Department of 
Education has made a grant for the new center). Therefore, this 
provision is unnecessary.

Section 121. Definition of Indian student count

    Section 121 amends the definition of ``Indian student 
count'' used in the formula by which the Department of 
Education calculates awards to tribally-controlled 
postsecondary vocational and technical institutions under the 
Carl D. Perkins Vocational and Technical Education Act. 
Education has advised that it is developing the Indian student 
count data needed to calculate the FY 2005 awards, and is 
concerned that if the definitional changes were to go into 
effect in FY 2005, they would likely delay the FY 2005 grants. 
In order to prevent any the disruption of the award of these 
grants, Education recommends that section 121 be amended to 
clarify that its definition changes would take effect beginning 
in FY 2006.

Section 122. Native Nations leadership, management, and policy

    Section 122 would amend the Morris K. Udall Scholarship and 
Excellence in National Environmental and Native American Public 
Policy Act of 1992 (20 U.S.C. 5602). The Department of Justice 
advises that there may be constitutional concerns with the 
amendment to the Morris K. Udall Scholarship Act of 1992, 20 
U.S.C. 5605(a)(1). The amendment to subparagraph (C) would 
permit awards to members of state-recognized tribes. As stated 
above, Department of Justice is concerned that this may be 
viewed as a racial classification subject to strict scrutiny 
under Adarand Constructors, Inc. v. Pena, 515 U.S. 200, 235 
(1995), rather than the more deferential review accorded to 
classifications based on membership in a federally recognized 
Indian tribe under Morton v. Mancari, 417 U.S. 535 (1974). 
Therefore, the Department of Justice recommends that Section 
122(c)(C)(iii) be deleted.

Section 132. Border preparedness on Indian land

    Section 132 would amend Subtitle D of Title IV of the 
Homeland Security Act of 2002 (6 U.S.C. 251 et seq.) by adding 
a new Section 447 entitled ``Border Preparedness Pilot Program 
on Indian Land.'' The Department of the Interior supports the 
amendments outlined in the new Section 447. By specifically 
including Indian tribes, it enhances their ability to protect 
the border integrity of the United States. However, the 
Department of Homeland Security recommends the following 
amendments:
    Proposed section 447(a)(2): The Department of Homeland 
Security believes that the proposed definition of Indian tribe 
would preclude the participation of Alaska Native 
organizations. Therefore, the Department of Homeland Security 
recommends amending the definition to read as follows:
    (2) INDIAN TRIBE.--The term `Indian tribe' means all Indian 
entities listed in the Federal Register list of Indian entities 
recognized as eligible to receive services from the United 
States, published pursuant to section 104 of the Federally 
Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a-l).
    Proposed Section 447(b) and (c)(1): The Department of 
Homeland Security conducts preparedness programs, such as the 
proposed pilot program, through its Office of Domestic 
Preparedness. To ensure that the tribes are treated equitably 
and provided access to the full range of preparedness programs, 
the Department of Homeland Security recommends that the matter 
preceding paragraph (1) of subsection (b) be amended by 
striking ``Under Secretary for Board and Transportation 
Security'' and inserting ``Office of Domestic Preparedness''. 
The Department of Homeland Security recommends that a similar 
amendment be made to proposed section (c)(1).
    Finally, to clarify jurisdiction, the Department of 
Homeland Security recommends that proposed section 447 be 
amended by redesignating proposed subsection (e) as proposed 
subsection (f); and after proposed subsection (d), by inserting 
the following new subsection:
    ``(e) LIMITATION.--Nothing in this section shall be 
construed as a grant of statutory authority to an Indian tribe, 
tribal organization, or tribal government to exercise any 
authority vested in the Secretary of Homeland Security or 
enforce any customs, immigration, or maritime law.''

    Title II--Other Amendments to Laws Relating to Native Americans

Section 211. Navajo Health Contracting

    Section 211 would require that the Navajo Health 
Foundation/Sage Memorial Hospital at Ganado, AZ, be considered 
a tribal contractor under the Indian Self-Determination and 
Education Assistance Act (ISDEAA) for purposes of extending 
Federal Tort Claims Act (FTCA) coverage to contract employees, 
to provide access to the Federal sources of supply, and to make 
patient records eligible for storage by Federal Records Centers 
to the same extent and in the same manner as other Department 
of Health and Human Services patient records.
    If enacted, this section would allow Navajo Nation Health 
Foundation (NHF) access to these services and benefits. This 
access to benefits and services would continue until such time 
as the NHF's current funding is adjusted by Congress to allow 
them to fully negotiate a contract under ISDEAA. This provision 
would establish a precedent for tribes/tribal organizations 
seeking to negotiate an ISDEAA contract to seek legislative 
authorization to select certain provisions in the ISDEAA that 
would be applied to them until such time as they are able to 
complete all requirements required in the ISDEAA.
    The Department of Health and Human Services is concerned 
that this provision circumvents the contracting requirements of 
the ISDEAA and selectively makes provisions applicable to the 
Navajo Health Foundation. In addition, the Department of 
Justice is concerned with selectively extending FTCA coverage 
to entities that do not meet the full set of requirements under 
the ISDEAA. For these reasons, the Department of Health and 
Human Services and Department of Justice recommend that section 
211 be deleted.

Section 221. Probate Reform

    The Department recommends some additional amendments be 
made to the American Indian Probate Reform Act (AIPRA). We 
recommend adding a new subsection (g) to section 221 that would 
delete the paragraph in AIPRA regarding Family Cemetery Plots. 
The Department does not hold or manage any cemetery plots in 
trust status. Therefore, they would not be subject to the 
Department's probate procedures. Family cemetery plot probate 
issues fall outside the jurisdiction of the federal government.
    (g) RULE OF CONSTRUCTION.--subsection (i) of Section 207 of 
the Indian Land Consolidation Act (25 U.S.C. 2206) (as amended 
by section 3(d) of the American Indian Probate Reform Act of 
2004 (Public Law 108-374) is amended by striking paragraph (7).
    In addition, we request the following technical amendments 
be included in this section:
     Under Partition of highly fractionated Indian 
lands, section 2204(d)(2)(I)(iii)(IV)(aa) should be amended by 
striking ``less'' and inserting in lieu thereof ``more''.
     Under Descent and distribution, estate planning--
           section 2206(f)(2)(A) should be amended 
        by striking ``advise''
           section 2206(f)(2)(B) should be amended 
        by striking ``among'' and inserting in lieu thereof 
        ``as authorized by the Secretary for'' general rules 
        governing probate, section 2206(k)(2)(A)(ii)(I) should 
        be amended by striking ``date of enactment'' and 
        inserting in lieu thereof ``effective date''.

Additional amendments

    The Department also suggests additional amendments be added 
to S. 536. We recommend the following two amendments to the 
Shivwits Water Rights Settlement and the Individuals with 
Disabilities Education Act be added to the end of Title II. We 
also recommend two new titles be added to the bill that would 
provide a technical correction to address the decisions in 
Youpee v. Babbitt and DuMarce v. Norton and give the Secretary 
the authority to address unclaimed property.

Subtitle D--Shivwits water rights settlement

    Section 10 of P.L. 106-263 authorizes a water rights and 
habitat acquisition program for the Santa Clara and Virgin 
Rivers as a safety net to address environmental consequences of 
the water settlement agreement that may not have been evident 
at the time of enactment. Congress appropriated the $3.0 
million authorized to be appropriated by Section 10. When the 
Department attempted to implement the provision in Section 10, 
which was intended to maintain the $3.0 in an interest bearing 
account, the Treasury Department advised that the language in 
Section 10 was insufficient for this purpose. Based on guidance 
from the Treasury Department, the proposed technical amendment 
was developed to correct the deficiency in the original 
statutory language.
    Section 10 of the Shivwits Band of the Paiute Indian Tribe 
of Utah Water Rights Settlement Act of August 18, 2000, Public 
Law 106-263 (114 Stat.737), is amended by:
    (1) Deleting the second sentence in subsection 10(f) (114 
Stat. 744) which reads: ``The Secretary is authorized to 
deposit and maintain this appropriation in an interest bearing 
account, said interest to be used for the purposes of this 
section.''
    (2) Adding the following subsection 10(g):
    ``(g) ESTABLISHMENT OF ACQUISITION FUND.--There is 
established in the Treasury of the United States a fund to be 
known as the Santa Clara Water Rights and Habitat Acquisition 
Fund (hereinafter called the ``Acquisition Fund''). The 
Secretary shall deposit into the Acquisition Fund the funds 
appropriated pursuant to subsection (f). The Acquisition Fund 
principal and any income thereon shall be managed in accordance 
with this section 10.''
    (3) Adding the following subsection 10(h):
    ``(h) INVESTMENT OF ACQUISITION FUND.--The Secretary of the 
Interior may request the Secretary of the Treasury to invest 
such portion of the Acquisition Fund as is not, in the 
Secretary of the Interior's judgment, required to meet the 
current needs of the fund. Such investments shall be made by 
the Secretary of the Treasury in public debt securities with 
maturities suitable to the needs of the fund, as determined by 
the Secretary of the Interior, and bearing interest at a rate 
determined by the Secretary of the Treasury, taking into 
consideration current market yields on outstanding marketable 
obligations of the United States of comparable maturity.''

Subtitle E--Individuals with Disabilities Education Improvement Act

    Section 611(e)(1)(A) of, the Individuals with Disabilities 
Education Act (IDEA), as amended by Public Law 108-446, the 
Individuals with Disabilities Education Improvement Act of 2004 
allows states and outlying areas to reserve money for state 
administrative purposes, but omitted language allowing the 
Secretary of the Interior to reserve money for state 
administrative purposes. While arguably the Department of 
Education can permit this use of funds in regulations, the 
support for this use would be more clearly supported if it were 
included in the statute. The suggested addition to section 
611(e)(1)(A) provided below, would clarify that the Secretary 
of the Interior is not barred from reserving a portion of the 
Special Education, Part B dollars, for administrative costs, 
similar to all states and outlying areas that also receive 
these dollars.
    In addition, section 611(h)(1)(A), now imposes statutory 
deadlines as to when the Department of the Interior is to 
distribute the IDEA Part B dollars they receive. This provision 
is unlike any requirement imposed on any state or outlying 
area. This provision requires the Secretary of the Interior to 
distribute these dollars without first determining what the 
need is at each school, or without looking first to the dollars 
appropriated to the Department of the Interior for special 
education services. Therefore, the Department of the Interior 
will no longer be able to the use the individual need of each 
student as the basis for the distribution of the Part B dollars 
or ensure that funding given to the schools is being used 
properly. Therefore, the Department recommends the deletion of 
section 611(h)(1)(A)(i) and (ii), which would allow the 
Secretary of the Interior to distribute IDEA Part B dollars 
based on student need and removes the distribution dates.
    Section 611 of the Individuals with Disabilities Education 
Act is amended by:
    (1) Adding subsection (iii) to section 611(e)(1)(A):
    ``(iii) The Secretary of the Interior may reserve for each 
fiscal year not more than 5 percent of the amount the 
Department of the Interior receives under (h)(1)(A) for the 
fiscal year or $800,000 (adjusted in accordance with 
subparagraph B), whichever is greater.''
    (2) Deleting in section 611(h)(1)(A) the following 
sentence: ``Of the amounts described in the preceding 
sentence--(i) 80 percent shall be allocated to such schools by 
July 1 of that fiscal year; and (ii) 20 percent shall be 
allocated to such schools by September 30 of that fiscal 
year.''

Youpee and Sisseton-Wahpeton

    A new title should be added to S. 536 that would provide a 
technical correction to address the decisions in Youpee v. 
Babbitt and DuMarce v. Norton. The United States Supreme Court 
in Youpee held the escheat provision of the Indian Land 
Consolidation Act as unconstitutional. In DuMarce, the District 
Court for the District of South Dakota found unconstitutional a 
statute under which any interest of less than two and a half 
acres would automatically escheat to the Sisseton Wahpeton 
Sioux Tribe. As a result of these two decisions, the Department 
is faced with having to revest interests that escheated under 
both statutes back to the rightful heir. We request that a new 
title be added declaring that any interest that escheated 
pursuant to these Acts be vested in the tribe to which they 
escheated unless they have been revested in the name of the 
heirs of the allottee by the Secretary since the escheatment. 
The provision should provide that the escheat of those 
interests to the tribes involved a taking by the United States 
and should provide compensation to the heirs of those escheated 
interests.

Unclaimed property

    Under state law, a state may sell or auction off certain 
personal property that has not been claimed by an owner within 
a certain amount of time, usually within 5 years. This is not 
the case with inactive Individual Indian Money accounts or real 
property interests. Often times the whereabouts of account 
owners are unknown to the Department because account holders do 
not respond to our requests for address information and our 
repeated attempts to locate them have been unsuccessful. This 
may be because the small amount in their account does not make 
such effort worthwhile. However, the Department must account 
for every interest regardless of size and we do not have the 
authority to stop administering accounts where whereabouts of 
the owner are unknown. We must have the authority to close 
these small accounts and restore economic value to the assets 
if the owner does not claim their interest within a certain 
amount of time. If the owner does not come forward, the revenue 
generated from the interest should be held in a general holding 
account against which claims could be made in the future if the 
owner's whereabouts become known or used to further the 
fractionation program.

Conclusion

    The Department looks forward to working with the Committee 
on addressing the above issues. The Office of Management and 
Budget has advised that there is no objection to the 
presentation of this report from the standpoint of the 
Administration's program.
            Sincerely,
                                                Matt Eames,
         Director, Office of Congressional and Legislative Affairs.

                        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 
the bill S. 3501, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new language to be added in italic, existing law to 
which no change is proposed is shown in roman):

                   PUBLIC LAW 106-263; 114 STAT. 744

SEC. 10. WATER RIGHTS AND HABITAT ACQUISITION PROGRAM.

           *       *       *       *       *       *       *

    (f) Authorization.--There is authorized to be appropriated 
from the Land and Water Conservation Fund for fiscal years 
prior to the fiscal year of 2004, a total of $3,000,000 for the 
water rights and habitat acquisition program authorized in this 
section. [The Secretary is authorized to deposit and maintain 
this appropriation in an interest bearing account, said 
interest to be used for the purposes of this section.] The 
funds authorized to be appropriated by this section shall not 
be in lieu of or supersede any other commitments by Federal, 
State, or local agencies. The funds appropriated pursuant to 
this section shall be available until expended, and shall not 
be expended for the purpose set forth in subsection (a)(2) 
until the Secretary has evaluated the effectiveness of the 
instream flow required and provided by the Santa Clara Project 
Agreement, and has assured that the appropriations authorized 
in this section are first made available for the purpose set 
forth in subsection (a)(1).
    ``(g) Acquisition Fund.--
          ``(1) Establishment.--There is established in the 
        Treasury of the United States a fund to be known as the 
        `Santa Clara Water Rights and Habitat Acquisition Fund' 
        (referred to in this section as the `Acquisition 
        Fund'), consisting of--
                  ``(A) such amounts as are appropriated to the 
                Acquisition Fund under paragraph (2); and
                  ``(B) any income earned on investment of 
                amounts in the Acquisition Fund under paragraph 
                (4).
          ``(2) Transfers to acquisition fund.--There are 
        appropriated to the Acquisition Fund amounts equivalent 
        to amounts made available under subsection (f).
          ``(3) Expenditures from acquisition fund.--On request 
        by the Secretary, the Secretary of the Treasury shall 
        transfer from the Acquisition Fund to the Secretary 
        such amounts as the Secretary determines to be 
        necessary to carry out this section.
          ``(4) Investment of amounts.--
                  ``(A) In general.--On request by the 
                Secretary, the Secretary of the Treasury shall 
                invest such portion of the Acquisition Fund as 
                is not, in the judgment of the Secretary, 
                required to meet current withdrawals.
                  ``(B) Obligations.--Investments may be made 
                only in public debt securities with maturities 
                suitable to the needs of the Acquisition Fund, 
                as determined by the Secretary, that bear 
                interest at a rate determined by the Secretary 
                of the Treasury, taking into consideration 
                current market yields on outstanding marketable 
                obligations of the United States of comparable 
                maturity.
                  ``(C) Acquisition of obligations.--For the 
                purpose of investments under subparagraph (A), 
                obligations may be acquired--
                          ``(i) on original issue at the issue 
                        price; or
                          ``(ii) by purchase of outstanding 
                        obligations at the market price.
                  ``(D) Sale of obligations.--Any obligation 
                acquired by the Acquisition Fund may be sold by 
                the Secretary of the Treasury at the market 
                price.
                  ``(E) Credits to acquisition fund.--The 
                income on, and the proceeds from the sale or 
                redemption of, any obligations held in the 
                Acquisition Fund shall be credited to, and form 
                a part of, the Acquisition Fund.
          ``(5) Transfers of amounts.--
                  ``(A) In general.--The amounts required to be 
                transferred to the Acquisition Fund under this 
                subsection shall be transferred at least 
                monthly from the general fund of the Treasury 
                to the Acquisition Fund on the basis of 
                estimates made by the Secretary of the 
                Treasury.
                  ``(B) Adjustments.--Proper adjustment shall 
                be made in amounts subsequently transferred to 
                the extent prior estimates were in excess of or 
                less than the amounts required to be 
                transferred.
          ``(6) Management.--The Acquisition Fund (including 
        the principal of the Acquisition Fund and any interest 
        generated on that principal) shall be managed in 
        accordance with this section.''.

                                  

```