I

104TH CONGRESS

1ST SESSION H. R. 2239

To amend section 17 of the Act of August 27, 1954 (25 U.S.C. 677p),

relating to the distribution and taxation of assets and earnings, to

clarify that distributions of rents and royalties derived from assets held

in continued trust by the Government, and paid to the mixed-blood

members of the Ute Indian tribe, their Ute Indian heirs, or Ute Indian

legatees, are not subject to Federal or State taxation at the time of

distribution, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

AUGUST 4, 1995

Mr. ORTON introduced the following bill; which was referred to the Committee

on Resources, and in addition to the Committee on Ways and Means, for

a period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend section 17 of the Act of August 27, 1954 (25

U.S.C. 677p), relating to the distribution and taxation

of assets and earnings, to clarify that distributions of

rents and royalties derived from assets held in continued

trust by the Government, and paid to the mixed-blood

members of the Ute Indian tribe, their Ute Indian heirs,

or Ute Indian legatees, are not subject to Federal or

State taxation at the time of distribution, and for other

purposes.
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Mixed-Blood Ute In5 dian Tax Status Act’’.

6 SEC. 2. TAXES ON DISTRIBUTIONS.

7 Section 17 of the Act of August 27, 1954 (68 Stat.

8 868; 25 U.S.C. 677p) is amended to read as follows:

9 ‘‘SEC. 17. TAXES ON DISTRIBUTIONS.

10 ‘‘(a) DISTRIBUTION OF ASSETS.—

11 ‘‘(1) TAX STATUS.—Except as provided in para12 graph (2), the distribution of rents and royalties de13 rived from real estate, or the oil, gas, or mineral in14 terests contained therein, held in trust by the United

15 States made under the provisions of this Act, either

16 directly or through the Ute Distribution Corpora17 tion, to the mixed-blood members of the tribe, their

18 Ute Indian heirs, or their Ute Indian legatees, shall

19 not, at the time of such distribution, be subject to

20 any Federal or State income tax.

21 ‘‘(2) EXCEPTION FOR CASH DISTRIBUTION.—

22 Any cash distribution made under this Act that con23 sists of a share of any interest earned on funds de24 posited in the Treasury of the United States shall

25 not by virtue of this Act be exempt from individual
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1 income tax in the hands of the recipients for the

2 year in which paid.

3 ‘‘(3) REAL PROPERTY.—

4 ‘‘(A) INITIAL 7-YEAR PERIOD.—

5 ‘‘(i) Subject to clause (ii), real prop6 erty distributed to the mixed-blood mem7 bers of the tribe pursuant to this Act shall

8 be exempt from property taxes for a period

9 of 7 years commencing August 27, 1954.

10 ‘‘(ii) The tax exemption provided for

11 in clause (i) shall not apply if the original

12 distributee parts with title to the real prop13 erty, either by deed, descent, succession,

14 foreclosure of mortgage, sheriff’s sale, or

15 other conveyance. A conveyance under the

16 preceding sentence does not include a

17 mortgage, hypothec, right-of-way, or other

18 similar encumbrance.

19 ‘‘(B) AFTER 7 YEARS.—Real property and

20 income derived therefrom, distributed to the

21 mixed-blood members of the tribe, their heirs

22 and legatees, under this Act, shall, after August

23 27, 1961, be subject to the same taxes, Federal

24 and State, as in the case of non-Indians.
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1 ‘‘(4) TAX STATUS FOR THE UTE DISTRIBUTION

2 CORPORATION.—

3 ‘‘(A) IN GENERAL.—The Ute Distribution

4 Corporation shall not be subject to Federal or

5 State corporate income taxes.

6 ‘‘(B) SUCCESSOR CORPORATION.—For the

7 purpose of this section, the term ‘Ute Distribu8 tion Corporation’ includes any successor to such

9 corporation, organized by the mixed-blood mem10 bers of the tribe to—

11 ‘‘(i) jointly manage, with the tribe,

12 unadjudicated or unliquidated claims

13 against the United States; and

14 ‘‘(ii) distribute to mixed-blood mem15 bers of the tribe, their Ute Indian heirs, or

16 their Ute Indian legatees, income derived

17 from oil, gas, and mineral rights, and all

18 other assets not susceptible to equitable

19 and practicable distribution.

20 ‘‘(5) BASIS.—The basis for determining gain or

21 loss for income tax purposes for real property dis22 tributed under this Act shall be the fair market

23 value of the real property on the date the title to

24 such real property was transferred by the United

25 States pursuant to this Act.
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1 ‘‘(b) REFUNDS.—

2 ‘‘(1) IN GENERAL.—

3 ‘‘(A) UNLIQUIDATED CLAIMS.—An unliqui4 dated claim against the United States shall in5 clude any Federal income tax, penalty, or inter6 est paid by the mixed-blood members of the

7 tribe, their Ute Indian heirs, or Ute Indian

8 legatees, with respect to distributions of income

9 derived from oil, gas, and mineral rights, and

10 all other assets not susceptible to equitable dis11 tribution, received by such members, heirs, or

12 legatees after August 27, 1961, pursuant to the

13 Act of August 27, 1954 (68 Stat. 868; 25

14 U.S.C. 677p).

15 ‘‘(B) EXCEPTION.—Cash distributions con16 sisting of a share of any interest earned on

17 funds deposited in the Treasury of the United

18 States shall not constitute an unliquidated

19 claim for the purposes of this subsection.

20 ‘‘(2) PROCEDURE.—A claim described in para21 graph (1) shall be payable in full by the United

22 States to a mixed-blood member of the tribe, a Ute

23 Indian heir, or a Ute Indian legatee, upon the filing

24 of a claim or suit for refund under chapter 65 of the

25 Internal Revenue Code of 1986.
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1 ‘‘(3) WAIVER OF LIMITATIONS.—

2 ‘‘(A) IN GENERAL.—Any provision of the

3 Act of August 27, 1954, the Internal Revenue

4 Code of 1986, or other Federal law relating

5 to—

6 ‘‘(i) limitations on claims or suits for

7 refund;

8 ‘‘(ii) the amounts refundable pursuant

9 to claims or suits for refund; or

10 ‘‘(iii) any interest payable on any tax,

11 penalty, and interest refundable,

12 is waived to the extent necessary to refund pur13 suant to this section any income tax, penalty, or

14 interest paid after August 27, 1961.

15 ‘‘(B) INTEREST.—A refund pursuant to

16 this subsection shall include interest calculated

17 from the date that such income tax, penalty, or

18 interest was paid to the Federal Government, at

19 the interest rate applicable to refunds of Fed20 eral income taxes on the date of enactment of

21 this Act.’’.

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