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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
[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
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
(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
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
(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
(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
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
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.
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
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.
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
CHANGES IN EXISTING LAW
If enacted, this bill would make no changes in existing
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
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
Ben Ray Lujan.