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                                                    Calendar No. 650
115th Congress      }                         {             Report
                                 SENATE
 2d Session         }                         {              115-363

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



 
  AN ACT TO REPEAL SECTION 2141 OF THE REVISED STATUTES TO REMOVE THE 
      PROHIBITION ON CERTAIN ALCOHOL MANUFACTURING ON INDIAN LANDS

                                _______
                                

               November 14, 2018.--Ordered to be printed

                                _______
                                

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

                              R E P O R T

                        [To accompany H.R. 5317]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Indian Affairs, to which was referred the 
bill (H.R. 5317) to repeal section 2141 of the Revised Statutes 
to remove the prohibition on certain alcohol manufacturing on 
Indian lands, having considered the same, reports favorably 
thereon without amendment and recommends the bill do pass.

                                PURPOSE

    The purpose of H.R. 5317 is to repeal section 2141 of the 
Revised Statutes to remove the prohibition on certain alcohol 
manufacturing on Indian lands.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 5317, repeals an 1834 federal law prohibiting the 
establishment and operation of alcohol distilleries in Indian 
Country.\1\ The 1834 law was one of the Indian Trade and 
Intercourse Acts enacted in the 18th and 19th centuries. The 
purpose of these laws were to regulate non-Indian interaction 
with individual Indians and Indian tribes on tribal lands. 
While the operation of the Indian Trade and Intercourse Acts 
have been repealed or superseded by subsequent laws, several of 
them--including 25 U.S.C. Sec.  251--remain in effect today.
---------------------------------------------------------------------------
    \1\25 U.S.C. Sec.  251.
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    The Indian Trade and Intercourse Act, passed in 1834, 
requires the federal government to impose restrictions on the 
sale, exchange, or barter of spirituous liquors to Indians in 
Indian country.\2\ The Act provides that if any person 
constructs, or continues, a distillery for the manufacturing of 
ardent spirits in Indian country, the penalty shall be $1,000, 
and the Superintendent of Indian Affairs shall destroy the 
distillery.\3\
---------------------------------------------------------------------------
    \2\See An Act to Regulate Trade and Intercourse with Indian Tribes 
and to Preserve Peace on the Frontier, ch. 161, Sec.  21, 4 Stat. 732 
(1834).
    \3\Id.
---------------------------------------------------------------------------
    Most of the 1834 law remained in effect until 1953, when 
Congress passed An Act to Eliminate Certain Discriminatory 
Legislation against Indians in the United States.\4\ Under the 
1953 law, the production and distribution of liquor is 
permitted in Indian Country, subject to the laws of the 
applicable State and Tribal ordinances.
---------------------------------------------------------------------------
    \4\See An Act to Eliminate Certain Discriminatory Legislation 
against Indians in the United States, Pub. L. No. 83-277, 67 Stat. 586 
(1953).
---------------------------------------------------------------------------
    Because the 1834 law remains in effect, it is uncertain 
whether the Federal Government will take enforcement action in 
Indian Country. This uncertainty has stymied investment in 
Tribal businesses. Preventing a Tribe from lawfully 
constructing and operating a distillery on its reservation does 
not comport with modern-day policies of promoting self-
determination and economic development in Indian Country.
    The bill is supported by the Confederated Tribes of the 
Chehalis Reservation (Tribe) which plans to construct and 
operate a distillery on Tribal land. According to the Tribe, 
the project--part of a larger brewery, distillery, and 
educational project--will be wholly tribally-owned and 
operated, with net profits going to Tribal governmental 
operations.

                                SUMMARY

    The bill, H.R. 5317, repeals Section 2141 of 25 U.S.C. 251.

                          LEGISLATIVE HISTORY

    The bill, H.R. 5317, was introduced by Representative Jamie 
Herrera Beutler on March 15, 2018. The House Natural Resources 
Committee held a hearing on H.R. 5317 on April 26, 2018. Then-
Acting Deputy Bureau of Indian Affairs Director Darryl LaCounte 
from the Department of the Interior, and Chairman Harry 
Pickernell Sr. of the Confederated Tribes of the Chehalis 
Reservation provided testimony in support of the bill.
    H.R. 5317 was reported favorably by the House Committee on 
Natural Resources on May 24, 2018. Prior to reaching the House 
floor, Section 2 was incorporated into the text to clarify that 
the repeal has no effect on State or Federal taxation, and does 
not enlarge, diminish, or otherwise affect a State's ability to 
regulate the importation and sale of alcoholic beverages, 
including State authority over the manufacture, distribution, 
transportation, or sale of intoxicating liquors.
    On September 12, 2018, H.R. 5317, passed the House of 
Representatives favorably, with an amendment, and the bill was 
referred to the Senate Committee on Indian Affairs. On October 
3, 2018, The Committee on Indian Affairs reported H.R. 5317 
favorably without amendment.
    Senator Cantwell, along with Senators Murray and Moran, 
introduced an identical bill, S. 3060, on June 13, 2018. On 
July 18, 2018, the Committee held a legislative hearing on the 
bill. No further action was taken on S. 3060.

                SECTION-BY-SECTION ANALYSIS (AS AMENDED)

Section 1. Repeal of prohibition on certain alcohol manufacturing on 
        Indian lands

    Section 1 provides for a full repeal of the prohibition on 
certain alcohol manufacturing on Indian lands. As such, Section 
1 repeals Section 2141 of the Revised Statutes (i.e. 25 U.S.C. 
251).

Section 2. No effect on taxation or state authority to regulate alcohol 
        within State borders

    Section 2 (a) makes clear that the bill does not have any 
impact on State and Federal taxation authority.
    Section 2 (b) makes clear that the bill does not impact the 
State's authority to regulate alcohol sales within the State's 
borders.

                   COST AND BUDGETARY CONSIDERATIONS

    The following cost estimate, as provided by the 
Congressional Budget Office, October 12, 2018, was prepared for 
H.R. 5317:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 12, 2018.
Hon. John Hoeven,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5317, an act to 
repeal section 2141 of the Revised Statutes to remove the 
prohibition on certain alcohol manufacturing on Indian lands.
    H.R. 5317 would repeal a law enacted in 1834 that prohibits 
the establishment of a distillery on Indian lands. Using 
information from the Bureau of Indian Affairs, CBO expects 
there would be minimal administrative costs associated with 
implementing the act.
    Enacting H.R. 5317 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply. CBO 
estimates that enacting H.R. 5317 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2029.
    H.R. 5317 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    On May 22, 2018, CBO transmitted an estimate of H.R. 5317, 
a bill to repeal section 2141 of the Revised Statutes to remove 
the prohibition on certain alcohol manufacturing on Indian 
lands, as ordered reported by the House Committee on Natural 
Resources on May 8, 2018. The two versions of H.R. 5317 are 
similar and CBO's estimates of their budgetary effects are the 
same.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Robert Reese.
            Sincerely,
                                                Keith Hall,
                                                          Director.
    Enclosure.

               REGULATORY AND PAPERWORK IMPACT STATEMENT

    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 
carrying out the bill. The Committee believes that H.R. 5317 
will have minimal impact on regulatory or paperwork 
requirements.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no communications from the 
Executive Branch regarding H.R. 5317.

                        CHANGES IN EXISTING LAW

    In accordance with Committee Rules, subsection 12 of rule 
XXVI of the Standing Rules of the Senate is waived.

                                  [all]