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[Senate Report 108-17]
[From the U.S. Government Publishing Office]

108th Congress                                                   Report
                                 SENATE
 1st Session                                                     108-17

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PROVIDING FOR THE USE AND DISTRIBUTION OF CERTAIN FUNDS AWARDED TO THE 
   GILA RIVER PIMA-MARICOPA INDIAN COMMUNITY, AND FOR OTHER PURPOSES

                                _______
                                

                 March 10, 2003.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                         [To accompany S. 162]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 162) 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 without amendment and recommends that 
the bill do pass.

                                PURPOSE

    The purpose of S. 162 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 certified 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. 162 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. 162 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. 162 has become one of the 
Community's highest priorities.

                          LEGISLATIVE HISTORY

    S. 162 was introduced on January 15, 2003, 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. 162 is the Gila River Indian Community Judgment Fund 
Distribution Act of 2003. 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 ``Community-
owned 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 potentially could have included revenues derived by the 
Community from taxable gaming activities. The Department was 
concerned that under the terms of S. 162 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 non-exempt 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 capital 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, deceased 
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 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 Community-owned 
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 incompetent 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 Gila River Indian 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 capita 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--Waiver of 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. 162 was amended 
to remove provisions pertaining to waivers of repayment for two 
other tribes in order to have the terms of S. 162 pertain only 
to the Gila River Indian Community.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

    The Committee on Indian Affairs, in an open business 
session on February 26, 2003, ordered S. 162 to be reported 
favorably to the Senate.

                   COST AND BUDGETARY CONSIDERATIONS

    On February 28, 2003, the cost estimate of the 
Congressional Budget Office was received and a copy of that 
estimate follows:

                                     U.S. Congress,
                               Congressional Budget Office,
                                 Washington, DC, February 28, 2003.
Hon. Ben Nighthorse Campbell,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 162, the Gila River 
Indian Community Judgment Fund Distribution Act of 2003.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Julie 
Middleton.
            Sincerely,
                                       Douglas Holtz-Eakin,
                                                          Director.
    Enclosure.

S. 162--Gila River Indian Community Judgment Fund Distribution Act of 
        2003

    S. 162 would waive the repayment of expert assistance loans 
made to the Gila River Indian Community. Currently, the tribe 
owes the Department of the Interior about $700,000 in principal 
and interest on loans provided to pay the expenses of expert 
witnesses in the tribe's claims against the federal government. 
CBO estimates that enacting this provision would increase 
direct spending by about $700,000 over the next couple of years 
when the government would otherwise receive this repayment.
    S. 162 also would establish procedures for the distribution 
of about $7 million in judgment awards held in a trust fund on 
behalf of the members of the Gila River Indian Community. Under 
current law, the funds cannot be spent or distributed by the 
tribes until the Congress approves a plan to allocate the 
funds. The trust fund is held and managed in a fiduciary 
capacity by the federal government on behalf of the tribe and 
is treated in the budget as a nonfederal entity. As a result, 
outlays were recorded on the budget when the judgments were 
awarded to the tribe and paid into those funds, and there is no 
budgetary impact when the money is distributed to the 
individual members of the tribe. Therefore, CBO estimates that 
enacting this provision would have no effect on the federal 
budget.
    S. 162 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. 
Enacting S. 162 would benefit the Gila River Indian Community 
by providing for the distribution of judgment funds.
    The CBO staff contact for this estimate is Julie Middleton. 
This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                        EXECUTIVE COMMUNICATIONS

    There are no executive communications received on this 
legislation.

                    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. 162 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. 162 effects no changes in existing law.

                                
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