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112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     112-501

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



 
    MINNESOTA CHIPPEWA TRIBE JUDGMENT FUND DISTRIBUTION ACT OF 2012

                                _______
                                

  May 30, 2012.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. Hastings of Washington, from the Committee on Natural Resources, 
                        submitted the following

                              R E P O R T

                             together with

                            ADDITIONAL VIEWS

                        [To accompany H.R. 1272]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 1272) to provide for the use and distribution of 
the funds awarded to the Minnesota Chippewa Tribe, et al., by 
the United States Court of Federal Claims in Docket Numbers 19 
and 188, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Minnesota Chippewa Tribe Judgment Fund 
Distribution Act of 2012''.

SEC. 2. FINDINGS.

  Congress finds the following:
          (1) On January 22, 1948, the Minnesota Chippewa Tribe, 
        representing all Chippewa bands in Minnesota except the Red 
        Lake Band, filed a claim before the Indian Claims Commission in 
        Docket No. 19 for an accounting of all funds received and 
        expended pursuant to the Act of January 14, 1889, 25 Stat. 642, 
        and amendatory acts (hereinafter referred to as the Nelson 
        Act).
          (2) On August 2, 1951, the Minnesota Chippewa Tribe, 
        representing all Chippewa bands in Minnesota except the Red 
        Lake Band, filed a number of claims before the Indian Claims 
        Commission in Docket No. 188 for an accounting of the 
        Government's obligation to each of the member bands of the 
        Minnesota Chippewa Tribe under various statutes and treaties 
        that are not covered by the Nelson Act of January 14, 1889.
          (3) On May 17, 1999, a Joint Motion for Findings in Aid of 
        Settlement of the claims in Docket No. 19 and 188 was filed 
        before the Court.
          (4) The terms of the settlement were approved by the Court 
        and the final judgment was entered on May 26, 1999.
          (5) On June 22, 1999, $20,000,000 was transferred to the 
        Department of the Interior and deposited into a trust fund 
        account established for the beneficiaries of the funds awarded 
        in Docket No. 19 and 188.
          (6) Pursuant to the Indian Tribal Judgment Funds Use or 
        Distribution Act (25 U.S.C. 1401 et seq.), Congress must act to 
        authorize the use or distribution of the judgment funds.
          (7) On October 1, 2009, the Minnesota Chippewa Tribal 
        Executive Committee passed Resolution 146-09, approving a plan 
        to distribute the judgment funds and requesting that the United 
        States Congress act to distribute the judgment funds in the 
        manner described by the plan.

SEC. 3. DEFINITIONS.

  For the purpose of this Act:
          (1) Available funds.--The term ``available funds'' means the 
        funds awarded to the Minnesota Chippewa Tribe and interest 
        earned and received on those funds, less the funds used for 
        payments authorized under section 4.
          (2) Bands.--The term ``Bands'' means the Bois Forte Band, 
        Fond du Lac Band, Grand Portage Band, Leech Lake Band, Mille 
        Lacs Band, and White Earth Band.
          (3) Judgment funds.--The term ``judgment funds'' means the 
        funds awarded on May 26, 1999, to the Minnesota Chippewa Tribe 
        by the Court of Federal Claims in Docket No. 19 and 188.
          (4) Minnesota chippewa tribe.--The term ``Minnesota Chippewa 
        Tribe'' means the Minnesota Chippewa Tribe, Minnesota, composed 
        of the Bois Forte Band, Fond du Lac Band, Grand Portage Band, 
        Leech Lake Band, Mille Lacs Band, and White Earth Band. It does 
        not include Red Lake Band of Chippewa Indians, Minnesota.
          (5) Secretary.--The term ``Secretary'' means the Secretary of 
        the Interior.

SEC. 4. LOAN REIMBURSEMENTS TO MINNESOTA CHIPPEWA TRIBE.

  (a) In General.--The Secretary is authorized to reimburse the 
Minnesota Chippewa Tribe the amount of funds, plus interest earned to 
the date of reimbursement, that the Minnesota Chippewa Tribe 
contributed for payment of attorneys' fees and litigation expenses 
associated with the litigation of Docket No. 19 and 188 before the U.S. 
Court of Federal Claims and the distribution of judgment funds.
  (b) Claims.--The Minnesota Chippewa Tribe's claim for reimbursement 
of funds expended shall be--
          (1) presented to the Secretary not later than 90 days after 
        the date of enactment of this Act;
          (2) certified by the Minnesota Chippewa Tribe as being 
        unreimbursed to the Minnesota Chippewa Tribe from other funding 
        sources;
          (3) paid with interest calculated at the rate of 6.0 percent 
        per annum, simple interest, from the date the funds were 
        expended to the date the funds are reimbursed to the Minnesota 
        Chippewa Tribe; and
          (4) paid from the judgment funds prior to the division of the 
        funds under section 5.

SEC. 5. DIVISION OF JUDGMENT FUNDS.

  (a) Membership Rolls.--Not later than 90 days after the date of the 
enactment of this Act, the Minnesota Chippewa Tribe shall submit to the 
Secretary updated membership rolls for each Band, which shall include 
all enrolled members the date of the enactment of this Act.
  (b) Divisions.--After all funds have been reimbursed under section 4, 
and the membership rolls have been updated under subsection (a), the 
Secretary shall--
          (1) set aside for each Band a portion of the available 
        judgment funds equivalent to $300 for each member enrolled 
        within each Band; and
          (2) after the funds are set aside in accordance with 
        paragraph (1), divide 100 percent of the remaining funds into 
        equal shares for each Band.
  (c) Separate Accounts.--The Secretary shall--
          (1) deposit all funds described in subsection (b)(1) into a 
        ``Per Capita'' account for each Band; and
          (2) deposit all funds described in subsection (b)(2) into an 
        ``Equal Shares'' account for each Band.
  (d) Withdrawal of Funds.--After the Secretary deposits the available 
funds into the accounts described in subsection (c), a Band may 
withdraw all or part of the monies in its account.
  (e) Disbursement of Per Capita Payments.--All funds described in 
subsection (b)(1) shall be used by each Band only for the purposes of 
distributing one $300 payment to each individual member of the Band. 
Each Band may--
          (1) distribute the $300 payment to the parents or legal 
        guardians on behalf of each dependent Band member instead of 
        distributing such $300 payment to the dependent Band member; or
          (2) deposit into a trust account the $300 payment to each 
        dependent Band member for the benefit of such dependent Band 
        member, to be distributed under the terms of such trust.
  (f) Distribution of Unclaimed Payments.--One year after the funds 
described in subsection (b)(1) are made available to the Bands, all 
unclaimed payments described in subsection (e) shall be returned to the 
Secretary, who shall divide these funds into equal shares for each 
Band, and deposit the divided shares into the accounts described in 
subsection (c)(2) for the use of each Band.
  (g) Liability.--If a Band exercises the right to withdraw monies from 
its accounts, the Secretary shall not retain liability for the 
expenditure or investment of the monies after each withdrawal.

SEC. 6. GENERAL PROVISIONS.

  (a) Previous Obligations.--Funds disbursed under this Act shall not 
be liable for the payment of previously contracted obligations of any 
recipient as provided in Public Law 98-64 (25 U.S.C. 117b(a)).
  (b) Indian Judgment Funds Distribution Act.--All funds distributed 
under this Act are subject to the provisions in the Indian Judgment 
Funds Distribution Act (25 U.S.C. 1407).

                          PURPOSE OF THE BILL

    The purpose of H.R. 1272, as ordered reported, is to 
provide for the use and distribution of the funds awarded to 
the Minnesota Chippewa Tribe, et al., by the United States 
Court of Federal Claims in Docket Numbers 19 and 188.

                  BACKGROUND AND NEED FOR LEGISLATION

    On January 22, 1948, and August 2, 1951, the Minnesota 
Chippewa Tribe, representing all Chippewa Bands in Minnesota 
except for the Red Lake Band, filed a number of claims before 
the Indian Claims Commission. These claims (later referred to 
as Docket Numbers 19 and 188) are related to various accounting 
obligations of the federal government pursuant to the Nelson 
Act and various treaties that are not covered by the Nelson 
Act. The Minnesota Chippewa Tribe filed these claims against 
the federal government alleging that the six bands were not 
adequately compensated for lands ceded under the Nelson Act and 
for improper timber valuations. All six bands equally shared 
the risk and expense of prosecuting the cases. The United 
States Court of Federal Claims awarded a $20 million settlement 
for Docket Nos. 19 and 188. These funds have been held in trust 
since June 22, 1999, and with interest they total $28.5 
million.

Nelson Act of 1889

    The Nelson Act was established to provide a way for the 
federal government to negotiate with the Chippewa Indians of 
Minnesota to obtain land cessions for certain lands that had 
been reserved for them under various treaties. After land 
surveys and valuations had been completed, tribal lands were 
then ceded to the United States and those ceded lands were 
opened for settlement under the homestead laws (usually sold at 
public auctions). The money received from the land sales was 
then deposited into the United States Treasury for the benefit 
of the Chippewa Indians of Minnesota.

Minnesota Chippewa Tribe/Tribal Executive Committee

    The Minnesota Chippewa Tribe is a federally recognized 
Indian tribe, organized under the Indian Reorganization Act of 
1934, and is comprised of six member reservations (Bois Forte, 
Fond du Lac, Grand Portage, Leech Lake, Mille Lacs, and White 
Earth). The governing body for the Tribe is the Minnesota 
Chippewa Tribal Executive Committee which has the authority to 
allocate the proceeds of the judgment funds, according to their 
Constitution.
    On October 27, 1997, the Tribal Executive Committee 
authorized a referendum to its tribal members seeking approval 
of the $20 million settlement (see Resolution 01-99). Then on 
September 9, 1999, the Tribal Executive Committee passed a 
resolution (see Resolution 40-00) that allocated each member 
band an equal share of the judgment funds. However, Leech Lake 
opposed this resolution and its formula.

Indian Tribal Judgment Funds Use or Distribution Act

    This Act, first enacted on October 19, 1973, sets forth a 
convoluted procedure to handle the distribution of settlement 
funds where more than one tribe is involved and the parties do 
not agree on a distribution formula. The Bureau of Indian 
Affairs (BIA) was tasked with executing the responsibilities of 
the Act. On June 6, 2001, the BIA issued a Results of Research 
Report on the Judgment in Favor of the Minnesota Chippewa 
Tribe, et al., v. United States, Dockets 19 and 188 (Report). 
The Report ``recommended an alternative distribution that would 
acknowledge the losses suffered by each of the Bands. Under the 
proposal, 35 percent of the fund would have been distributed to 
each of the bands in proportion to their losses. The remaining 
65 percent would have been distributed to each of the bands in 
proportion to their current tribal enrollment.''
    After discussing this Report with the Tribal Executive 
Committee and the Bands' representatives, the BIA sent the 
Tribal Executive Committee a draft legislative proposal for the 
division of judgment funds on November 25, 2005. However, the 
Tribal Executive Committee was firm in its opposition to any 
legislative proposal that did not split the funds evenly. On 
May 1, 2006, Chairman Norman Deschampe of the Grand Portage 
Reservation Tribal Council sent a letter to the BIA requesting 
that the Department forego any recommendations to Congress.
    However, as noted earlier, the BIA has a responsibility to 
prepare and submit to Congress a plan for the use and 
distribution of judgment funds awarded by the Indian Claims 
Commission or the United States Court of Federal Claims. It was 
not until April 26, 2007, that the BIA sent a letter to then-
Speaker of the House of Representatives Nancy Pelosi with draft 
legislation to disburse the settlement funds. The draft bill 
would have divided the funds on a per-capita basis, as 
recommended in the 2001 Report by the BIA. However, on May 22, 
2008, the BIA sent a letter to the then-Chairman of the Natural 
Resources Committee, Nick Rahall, withdrawing its support of 
the draft bill that was sent on April 26, 2007.
    In the 110th Congress, two bills, H.R. 2306 and H.R. 3699, 
were introduced to provide for a distribution of the Minnesota 
Chippewa funds. H.R. 2306 (Collin Peterson, D-MN) would have 
distributed the funds on a per-capita basis. H.R. 3699 (James 
Oberstar, D-MN) would have split the funds evenly among the six 
bands. A hearing was held on both bills with the Bush 
Administration supporting H.R. 2306. No further action was 
taken on either bill.
    In the 112th Congress, on March 1, 2012, a legislative 
hearing was held on H.R. 1272. Witnesses included Congressmen 
Peterson and Chip Cravaack (R-MN), the Director of the Bureau 
of Indian Affairs, the President of the Minnesota Chippewa 
Tribe, the Chairwoman of the White Earth Band, the Chief 
Executive of the Mille Lacs Band, and the Chairman of the Leech 
Lake Band of Ojibwe.
    The Department of the Interior supports H.R. 1272 because 
the bill ``respects the decisions of the governing body of the 
Minnesota Chippewa Tribe.'' However, it should be noted that 
H.R. 1272 does not have unanimous support among the six member 
bands. As noted above, the Leech Lake Band of Ojibwe expressed 
its opposition to the distribution plan.

Leech Lake Band

    The Leech Lake Band of Ojibwe is a sovereign tribe and is 
one of six bands which make up the Minnesota Chippewa Tribe. 
Leech Lake Band opposes H.R. 1272 because it alleges more 
actual damages (land and timer sold improperly or taken and 
mismanaged) were suffered on its reservation as a result of the 
Nelson Act than the reservations for the other five bands. 
Therefore, Leech Lake does not agree with H.R. 1272 providing 
of per-capita payments for all the bands' members and then 
evenly splitting the difference among the bands.
    During Full Committee consideration of the bill, the 
Committee adopted an amendment offered by Congressman Don Young 
(R-AK) that would clarify: (1) that parents or legal guardians 
can accept per capita payments on behalf of dependents; and (2) 
the liability of the Secretary of the Interior once a Band 
withdraws such funds. These amendments were suggested by the 
Department of the Interior in its oral and written remarks.

                            COMMITTEE ACTION

    H.R. 1272 was introduced on March 30, 2011, by Congressman 
Collin Peterson (D-MN). The bill was referred to the Committee 
on Natural Resources, and within the Committee to the 
Subcommittee on Indian and Alaska Native Affairs. On March 1, 
2012, the Subcommittee held a hearing on the bill. On April 25, 
2012, the Full Natural Resources Committee met to consider the 
bill. The Subcommittee on Indian and Alaska Native Affairs was 
discharged by unanimous consent. Congressman Don Young (R-AK) 
offered en bloc amendment designated #1 to the bill; the 
amendment was approved by unanimous consent. The bill, as 
amended, was then adopted and ordered favorably reported to the 
House of Representatives by unanimous consent.

            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 Natural Resources' oversight findings and 
recommendations are reflected in the body of this report.

                    COMPLIANCE WITH HOUSE RULE XIII

    1. Cost of Legislation. Clause 3(d)(1) 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)(2)(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. 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:

H.R. 1272--Minnesota Chippewa Tribe Judgment Fund Distribution Act of 
        2012

    H.R. 1272 would authorize the Secretary of the Interior to 
disburse amounts held in trust for the Minnesota Chippewa 
Tribe. In 1999, a $20 million settlement was transferred from 
the Treasury's Judgment Fund to the Department of the Interior 
(DOI) and held in trust for the Minnesota Chippewa Tribe 
pending legislation to release the funds. Under the Indian 
Tribal Judgment Funds Use or Distribution Act of 1973, if the 
Secretary of the Interior cannot obtain consent from the tribal 
governing body concerning the distribution of an award within 
180 days after the funds have been appropriated, legislation is 
required to authorize the distribution of such funds. In fiscal 
year 2010, the Chippewa's Tribal Executive Council (TEC) 
approved a resolution describing how to distribute the 
settlement amount among the bands of the Tribe and individuals. 
Though the federal government transferred ownership of the 
funds to the Tribe when the funds were expended from the 
Judgment Fund, the federal government has retained fiduciary 
responsibility over the amounts until they are distributed. The 
bill would make the disbursement of the funds contingent on the 
Tribe submitting updated membership rolls.
    Based on information provided by DOI, CBO estimates that 
implementing H.R. 1272 would have no significant cost to 
distribute the settlement funds. The settlement amount was 
considered a federal expenditure when it was transferred from 
the Judgment Fund to DOI because the Tribe received ownership 
of the funds. Therefore, the ultimate distribution of the 
settlement and accrued interest is not a budgetary outlay of 
the federal government. CBO estimates that the total amount to 
be distributed under the bill would be about $29 million, which 
includes the $20 million settlement and about $9 million in 
accrued interest payments. Enacting H.R. 1272 would not affect 
direct spending or revenues; therefore, pay-as-you-go 
procedures do not apply.
    H.R. 1272 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act. 
Enacting the bill would benefit the Minnesota Chippewa Tribe.
    The CBO staff contact for this estimate is Martin von 
Gnechten. The estimate was approved by Theresa Gullo, Deputy 
Assistant Director for Budget Analysis.
    2. Section 308(a) of 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. General Performance Goals and Objectives. As required by 
clause 3(c)(4) of rule XIII, the general performance goal or 
objective of this bill, as ordered reported, is to provide for 
the use and distribution of the funds awarded to the Minnesota 
Chippewa Tribe, et al., by the United States Court of Federal 
Claims in Docket Numbers 19 and 188.

                           EARMARK STATEMENT

    This bill does not contain any Congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined 
under clause 9(e), 9(f), and 9(g) of rule XXI of the Rules of 
the House of Representatives.

                    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

    If enacted, this bill would make no changes in existing 
law.

                            ADDITIONAL VIEWS

    I write to express my concerns as well as those of the 
Leech Lake Band of Ojibwe, with regard to the distribution plan 
proposed in H.R. 1272.
    Congress enacted the Indian Tribal Judgment Fund Use or 
Distribution Act (``Judgment Fund Act'' or ``the Act''), 25 
U.S.C. 1401 et seq., to establish an administrative process to 
determine a formula for the division of settlements approved by 
the U.S. Court of Federal Claims that involve two or more 
tribal beneficiaries. The Judgment Fund Act directs the Bureau 
of Indian Affairs (``BIA'') to prepare a distribution plan for 
such settlements. In preparation of the plan, the BIA must use 
the ``legal, financial and other expertise of the Department'' 
and examine the ``needs and desires of any groups or 
individuals who are in a minority position, but who are also 
entitled to receive such funds,'' among other factors. Under 
the Act, the plan must provide that not less than 20 percent of 
the settlement funds be set aside for the educational and 
economic development purposes of the beneficiary tribes.
    The BIA, acting pursuant to the Judgment Fund Act, 
conducted ``research necessary to identify the present-day 
beneficiaries of the funds awarded by the U.S. Court of Federal 
Claims in Minnesota Chippewa Tribe, et al., v. United States, 
Dockets 19 and 188.'' The BIA's Report reviewed the long 
history of the underlying legal claims that are the subject of 
the settlement funds that would be impacted by H.R. 1272. The 
BIA stated that ``[w]e do not find any compelling reasons to 
support a six-way split of the fund. . . .'' However, H.R. 1272 
would distribute nearly half of the settlement funds in this 
manner.
    The concern raised by H.R. 1272 is that Congress will 
simply stamp its approval on the distribution of a federal 
court settlement when a group of tribal governments enters into 
an agreement over the objection of a minority tribe that may 
have a majority interest in the proceeds of the settlement.
    Members of the Subcommittee on Indian and Alaska Native 
Affairs raised a number of questions during the March 1, 2012 
legislative hearing on H.R. 1272. The BIA was unable to answer 
many of those questions.
    The example of a recent congressionally approved tribal 
water rights settlement was raised at the hearing. The 
settlement involved the water rights of four pueblos in the 
State of New Mexico. The approved legislation distributed the 
settlement based on damages of priority water rights. Thus, 
each of the Pueblos was compensated based on their prior rights 
and how those rights were damaged. In our hearing on H.R. 1272 
on March 1, 2012 the BIA was asked, ``Does the Secretary 
believe the plan proposed in H.R. 1272 is equitable?'' The BIA 
responded, ``This is an agreement that was reached by the MCI 
and we're trying to support that decision.'' When later asked 
``In the future if we have disputes and the tribes get together 
you're going to support that?'' The BIA representative 
responded ``I don't know if I have a good answer.''
    Members of the Subcommittee acknowledged that this is a 
complex issue. To gain a better understanding, the BIA was 
asked an additional series of questions: When the Department of 
the Interior considers settlements, does it consider damages? 
Should congress consider damages? Can the Department give 
direction on this? Are damages one of the main criteria in 
distributing court settlement funds? Congress enacted the White 
Earth Lands Settlement Act in 1985, which involved losses that 
occurred under the Nelson Act. How was that compensation 
distributed? Was it based on damages? The BIA responded, ``I 
don't have answer, but will get you an answer.'' To my 
knowledge, these questions have not been answered.
    In sum, while I acknowledge that MCT, as a whole, and the 
Committee on Natural Resources have come to an agreement on 
this longstanding legal claim, I am concerned that the Leech 
Lake band will be unfairly impacted as a result of this 
approval. Indeed, time has come to distribute the proceeds of 
the settlement, but at the very least the payments should 
reflect the damages incurred by individual parties to the 
settlement.
                                                     Ben Ray Lujan.