II

103D CONGRESS

2D SESSION S. 2252

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 SENATE OF THE UNITED STATES

JUNE 30 (legislative day, JUNE 7), 1994

Mr. HATCH (for himself, Mr. INOUYE, Mr. MCCAIN, and Mr. BENNETT) introduced the following bill; which was read twice and referred to the Committee on Finance

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.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
2

•S 2252 IS

1 SECTION 1. SHORT TITLE.

2 This Act may be cited as the ‘‘Ute Indian Tax Status

3 Act’’.

4 SEC. 2. TAXES ON DISTRIBUTIONS.

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

6 868; 25 U.S.C. 677p) is amended to read as follows:

7 ‘‘SEC. 17. TAXES ON DISTRIBUTIONS.

8 ‘‘(a) DISTRIBUTION OF ASSETS.—

9 ‘‘(1) TAX STATUS.—Except as provided in para10 graph (2), the distribution of rents and royalties de11 rived from real estate, or the oil, gas, or mineral in12 terests contained therein, held in trust by the United

13 States made under the provisions of this Act, either

14 directly or through the Ute Distribution Corpora15 tion, to the mixed-blood members of the tribe, their

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

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

18 any Federal or State income tax.

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

20 Any cash distribution made under this Act that con21 sists of a share of any interest earned on funds de22 posited in the Treasury of the United States shall

23 not by virtue of this Act be exempt from individual

24 income tax in the hands of the recipients for the

25 year in which paid.

26 ‘‘(3) REAL PROPERTY.—
3

•S 2252 IS

1 ‘‘(A) INITIAL 7-YEAR PERIOD.—

2 ‘‘(i) Subject to clause (ii), real prop3 erty distributed to the mixed-blood mem4 bers of the tribe pursuant to this Act shall

5 be exempt from property taxes for a period

6 of 7 years commencing August 27, 1954.

7 ‘‘(ii) The tax exemption provided for

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

9 distributee parts with title to the real prop10 erty, either by deed, descent, succession,

11 foreclosure of mortgage, sheriff’s sale, or

12 other conveyance. A conveyance under the

13 preceding sentence does not include a

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

15 similar encumbrance.

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

17 income derived therefrom, distributed to the

18 mixed-blood members of the tribe, their heirs

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

20 27, 1961, be subject to the same taxes, Federal

21 and State, as in the case of non-Indians.

22 ‘‘(4) TAX STATUS FOR THE UTE DISTRIBUTION

23 CORPORATION.—
4

•S 2252 IS

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

2 Corporation shall not be subject to Federal or

3 State corporate income taxes.

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

5 purpose of this section, the term ‘Ute Distribu6 tion Corporation’ includes any successor to such

7 corporation, organized by the mixed-blood mem8 bers of the tribe to—

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

10 unadjudicated or unliquidated claims

11 against the United States; and

12 ‘‘(ii) distribute to mixed-blood mem13 bers of the tribe, their Ute Indian heirs, or

14 their Ute Indian legatees, income derived

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

16 other assets not susceptible to equitable

17 and practicable distribution.

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

19 loss for income tax purposes for real property dis20 tributed under this Act shall be the fair market

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

22 such real property was transferred by the United

23 States pursuant to this Act.

24 ‘‘(b) REFUNDS.—

25 ‘‘(1) IN GENERAL.—
5

•S 2252 IS

1 ‘‘(A) UNLIQUIDATED CLAIMS.—An unliqui2 dated claim against the United States shall in3 clude any Federal income tax, penalty, or inter4 est paid by the mixed-blood members of the

5 tribe, their Ute Indian heirs, or Ute Indian

6 legatees, with respect to distributions of income

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

8 all other assets not susceptible to equitable dis9 tribution, received by such members, heirs, or

10 legatees after August 27, 1961, pursuant to the

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

12 U.S.C. 677p).

13 ‘‘(B) EXCEPTION.—Cash distributions con14 sisting of a share of any interest earned on

15 funds deposited in the Treasury of the United

16 States shall not constitute an unliquidated

17 claim for the purposes of this subsection.

18 ‘‘(2) PROCEDURE.—A claim described in para19 graph (1) shall be payable in full by the United

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

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

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

23 Internal Revenue Code of 1986.

24 ‘‘(3) WAIVER OF LIMITATIONS.—
6

•S 2252 IS

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

2 Act of August 27, 1954, the Internal Revenue

3 Code of 1986, or other Federal law relating

4 to—

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

6 refund;

7 ‘‘(ii) the amounts refundable pursuant

8 to claims or suits for refund; or

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

10 penalty, and interest refundable,

11 is waived to the extent necessary to refund pur12 suant to this section any income tax, penalty, or

13 interest paid after August 27, 1961.

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

15 this subsection shall include interest calculated

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

17 interest was paid to the Federal Government, at

18 the interest rate applicable to refunds of Fed19 eral income taxes on the date of enactment of

20 this Act.’’.

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