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                                                       Calendar No. 573
104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-361
_______________________________________________________________________


 
TO ACCEPT THE REQUEST OF THE PRAIRIE ISLAND INDIAN COMMUNITY TO REVOKE 
 THEIR CHARTER OF INCORPORATION ISSUED UNDER THE INDIAN REORGANIZATION 
                                  ACT

                                _______
                                

               September 3, 1996.--Ordered to be printed

_______________________________________________________________________


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

                              R E P O R T

                        [To accompany H.R. 3068]

    The Committee on Indian Affairs to which was referred the 
bill (H.R. 3068) to accept the request of the Prairie Island 
Indian Community to revoke their charter of incorporation 
issued under the Indian Reorganization Act, having considered 
the same, reports favorably thereon with an amendment in the 
nature of a substitute and recommends that the bill as amended 
do pass.

                                Purpose

    The purpose of H.R. 3068 is to accept the request of the 
Prairie Island Indian Community of Minnesota to revoke the 
Federal charter of incorporation issued to the Community 
pursuant to the Indian Reorganization Act of 1934.

                               Background

    The Prairie Island Indian Community is organized under a 
Constitution and Bylaws adopted by the Community in 1936 
pursuant to section 16 of the Indian Reorganization Act of 1934 
(IRA) (25 U.S.C. 476). Article V of the Prairie Island 
Constitution, which enumerates the powers of the Community's 
Council, includes a provision that allows the Council to manage 
economic affairs and enterprises in accordance with the terms 
of a charter which may be issued to the Community by the 
Secretary of the Interior pursuant to section 17 of the IRA. In 
1937, the Secretary issued such a Federal charter to the 
Community.
    Since the 1930's, the Prairie Island Community has relied 
upon the authorities of its Constitution and Bylaws for the 
operation of its government and for the operation of its 
business enterprises. Article V of the Constitution 
specifically provides authority for the Community to regulate 
the conduct of trade and the use and disposal of property on 
the reservation, as well as to charter subordinate 
organizations for economic purposes and to regulate the 
activities of such organizations.
    The Community has come to view the 1937 charter, which 
hasn't been amended since it was issued, as outdated, 
cumbersome, and unnecessary to their efforts to operate 
successful business enterprises and become economically self-
sufficient. Some charter provisions, such as one that precludes 
the Community from contracting for amounts in excess of $100 
without approval by the Secretary of the Interior, are seen as 
particularly paternalistic and inappropriate for effective 
management of tribal resources. Accordingly, the Community has 
requested that the charter be revoked.
    H.R. 3068 accepts the request of the Prairie Island Indian 
Community that its Federal charter of incorporation be revoked 
and declares the charter to be revoked. Legislation is needed 
because Amendment 10 of the charter states that the charter can 
be revoked only by an Act of Congress.

                          Substitute Amendment

    The Committee on Indian Affairs adopted an amendment in the 
nature of a substitute to H.R. 3068, offered by Senator McCain, 
that retains the unamended text of H.R. 3068, as passed by the 
House of Representatives, and adds two new sections that extend 
the deadlines for completion of two Indian water rights 
settlements enacted by the Congress in 1992.
    The first new section extends until December 31, 1998, the 
deadline for completion of all requirements necessary to effect 
the Jicarilla Apache Tribe Water Rights Settlement Act of 1992. 
The availability to the Tribe of settlement funds and water 
from two Federal water projects in New Mexico is contingent 
upon dismissal of actions by the Tribe against the United 
States in Federal courts and a waiver of the Tribe's reserved 
water rights claims in general stream adjudications in state 
courts involving claims to the waters of the San Juan River and 
its tributaries and the Rio Chama and its tributaries. The 1992 
Act requires partial final decrees agreed to by the United 
States, the Tribe, and the State of New Mexico to be entered 
into by December 31, 1996. However, this deadline cannot be 
met, due primarily to unforeseen delays in the necessary state 
court proceedings to consider the settlement. Accordingly, the 
Tribe, the State of New Mexico, and the Administration support 
an extension of the 1992 Act's deadline in order to preserve 
the benefits of the settlement to all parties.
    The second new section extends until June 30, 1997, the 
deadline for completion of all requirements necessary to effect 
the San Carlos Apache Tribe Water Rights Settlement Act of 
1992. This extension is intended to provide the Tribe and the 
Phelps Dodge Corporation, and the Tribe and the city of Globe, 
Arizona, additional time to reach bilateral agreements that 
would be included as part of the overall Settlement Agreement 
that the Congress ratified in the 1992 Act. The relatively 
short time period is intended to ensure that the parties remain 
diligent in pursuing a final resolution of the issues between 
them. The Tribe, Phelps Dodge, Globe, and all other parties to 
the settlement, including the Administration, support this 
extension. The Committee recognizes that, in the event 
agreements are reached within the time provided by the 
amendment, an additional extension of time will be needed for 
the Arizona courts to consider the settlement in the context of 
the ongoing general stream adjudication of the waters of the 
Gila River basin.

                          Legislative History

    H.R. 3068 was introduced on March 12, 1996, by 
Representative Gil Gutknecht (R-MN). On May 16, the Committee 
on Resources reported H.R. 3068 favorably, by voice vote, after 
the bill was discharged from the Subcommittee on Native 
American and Insular Affairs. The House of Representatives 
passed H.R. 3068 by voice vote on May 23, 1996. In the Senate, 
the bill was referred to the Committee on Indian Affairs.

            Committee Recommendation and Tabulation of Vote

    On July 24, 1996, the Committee on Indian Affairs, in an 
open business session, considered H.R. 3068 and ordered it 
reported with an amendment in the nature of a substitute, with 
a recommendation that the bill be passed.

                      Section-by-Section Analysis

    Section 1. This section states that the request of the 
Prairie Island Indian Community to surrender the charter of 
incorporation issued to that Community on July 23, 1937, 
pursuant to the Indian Reorganization Act of 1934, is accepted 
and the charter is revoked.
    Section 2. This section extends by two years the time 
deadline for completion of the Jicarilla Apache Tribe Water 
Rights Settlement Act (P.L. 102-441; 106 Stat. 2241), from 
December 31, 1996, to December 31, 1998.
    Section 3. This section extends by six months the time 
deadline for completion of the San Carlos Apache Tribe Water 
Rights Settlement Act (title XXXVII of P.L. 102-575; 106 Stat. 
4752), from December 31, 1996, to June 30, 1997.

                    Cost and Budgetary Consideration

    The cost and budgetary impact of H.R. 3068, as evaluated by 
the Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, August 5, 1996.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 3068, an act to accept the request of the Prairie 
Island Indian Community to revoke their charter of 
incorporation issued under the Indian Reorganization Act, as 
ordered reported by the Senate Committee on Indian Affairs on 
July 24, 1996. CBO estimates that enacting this legislation 
would result in $6 million in federal outlays that might not 
occur under current law.
    Section 1 of H.R. 3068 would revoke the charter of 
incorporation issued to the Prairie Island Indian Community of 
Minnesota in 1937. Revoking the charter would not deny federal 
recognition to the tribe; instead, this action would make 
tribal management of its enterprises less cumbersome. Section 1 
is identical to H.R. 3068, as passed by the House of 
Representatives on May 22, 1996.
    Section 2 would amend the Jicarilla Apache Tribe Water 
Rights Settlement Act to extend the deadline for completing the 
settlement among the Jicarilla Apache tribe, the state of New 
Mexico, and the federal government by two years, to December 
31, 1998. Extending the deadline would likely result in the 
expenditure of $6 million in funds that have already been 
appropriated for the tribe but that would probably not be spent 
under current law. Because the deadline would be extended by 
two years, CBO expects that those funds would be spent in 
fiscal year 1999 or later.
    Section 3 would amend the San Carlos Apache Tribe Water 
Rights Settlement Act of 1992 to extend the deadline for 
completing this settlement agreement by six months, to June 30, 
1997. Implementing section 3 would impose no extra costs on the 
federal government. In this case, CBO expects that the funds 
previously appropriated for the tribe's use after completion of 
the settlement will be spend in any event.
    H.R. 3068 contains no private-sector or intergovernmental 
mandates as defined in the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4) and would impose no costs on state, local, 
or tribal governments. Any costs resulting from the two 
settlement agreements affected by this legislation would be 
incurred voluntarily by state, local, and tribal governments as 
parties to those agreements.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Rachel 
Robertson (for federal costs), and Marjorie Miller (for the 
state, local, and tribal impact).
            Sincerely,
                                              James L. Blum
                                   (For June E. O'Neill, Director).

                      Regulatory 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. 3068 
will have no regulatory or paperwork impact.

                        Executive Communications

    Reports from the Department of the Interior regarding H.R. 
3068 and the extensions to the statutory deadlines for 
completing the Jicarilla Apache Tribe Water Rights Settlement 
Act and the San Carlos Apache Tribe Water Rights Settlement Act 
are set forth below:

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                     Washington, DC, July 24, 1996.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: I am pleased to transmit our report on 
the Department of the Interior's views in support of H.R. 3068, 
a bill to accept the request of the Prairie Island Indian 
Community to revoke their charter of incorporation issued under 
the Indian Reorganization Act of 1934.
    Tribal Charters of Incorporation issued under Section 17 of 
the Indian Reorganization Act (IRA) were intended to allow 
tribes to engage in economic activity in a corporate form. The 
Prairie Island Indian Community was issued their Section 17 
charter of incorporation in 1937. Although usual corporate 
powers are conferred by this charter, many actions are made 
subject to the approval of the Secretary of the Interior. In 
this era, when the United States Government is moving toward 
tribal self-determination and self-governance, the high degree 
of Secretarial oversight is no longer practical for the 
Community's existence.
    Our records do not contain any documentation indicating 
that this charter was ever used by the Prairie Island Indian 
Community to conduct any of its business activity. The 
Community decided instead to conduct its business operations 
through its tribal governing body which is organized under 
Section 16 of the Indian Reorganization Act. However, there are 
disadvantages to managing businesses under this structure.
    We ask that you move swiftly to pass H.R. 3068, which we 
feel will provide the Prairie Island Indian Community with the 
ability to protect their sovereign status. The revocation of 
the 1937 charter will allow for implementation of a new, modern 
charter, which will allow the Community to become more 
responsive to its business concerns, would accomplish the goal 
of promoting tribal self-determination, and would not be 
inconsistent with the initial or current purposes of the Indian 
Reorganization Act.
    Thank you for the opportunity to submit this report in 
support of H.R. 3068. Should you have further questions, please 
contact me.
            Sincerely,
                                               Ada E. Deer,
                               Assistant Secretary--Indian Affairs.
                                ------                                

                   U.S. Department of the Interior,
                                   Office of the Secretary,
                                     Washington, DC, July 17, 1996.
Hon. John McCain,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: Thank you for your letter of July 3, 
1996 in which you request a report on the proposed amendment to 
extend the statutory deadlines for completing the Jicarilla 
Apache Tribe Water Rights Settlement Act (Public Law 102-441) 
and the San Carlos Apache Tribe Water Rights Settlement Act 
(title XXXVII of Public Law 102-575), to December 31, 1998 as 
the current deadline for each settlement is December 31, 1996.
    The Bureau of Indian Affairs supports the Committee's 
efforts to extend these statutory deadlines for completing the 
activities associated with the Jicarilla Apache Tribe Water 
Rights Settlement Act and the San Carlos Apache Tribe Water 
Rights Settlement Act to December 31, 1998.
    We understand that an extension is necessary in order to 
preserve the substantial settlement benefits for both tribes 
and the respective non-Indian parties. We are confident that 
the extension will permit completion of all negotiations and 
court actions.
    The Office of Management and Budget has advised that it has 
no objection to the presentation of the report from the 
standpoint of the Administration's program.
            Sincerely,
                                       Michael J. Anderson,
            (For Ada E. Deer, Assistant Secretary--Indian Affairs).

                        Changes in Existing Law

    In compliance with subsection 12 of rule XXIV of the 
Standing Rules of the Senate, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

       Jicarilla Apache Tribe Water Rights Settlement Act of 1992

          * * * * * * *

                             106 Stat. 2241

    Sec. 8(e)
          ``(3) If the two partial final decrees specified in 
        paragraph (1)(B) are not entered by [December 31, 1996] 
        December 31, 1998, the Fund shall be terminated, and 
        amounts contributed to the Fund by the United States, 
        shall be deposited in the general fund of the 
        Treasury.''

      San Carlos Apache Tribe Water Rights Settlement Act of 1992

          * * * * * * *

                             106 Stat. 4752

    Sec. 3711
    ``(b) Conditions.--(1) If the actions described in 
paragraphs (1), (2), (3), (4), (5), (6), and (7) of subsection 
(a) of this section have not occurred by [December 31, 1996] 
June 30, 1997, subsections (c) and (d) of section 3704, 
subsections (a) and (b), of section 3705, section 3706, 
subsections (a)(2), (c), (d), and (f) of section 3707, 
subsections (b) and (c) of section 3708, and subsections (a), 
(b), (c), (d), (e), (g), (h), (j), and (l) of section 3710 of 
this title, together with any contracts entered into pursuant 
to any such section or subsection, shall not be effective on 
and after the date of enactment of this title, and any funds 
appropriated pursuant to section 3707(c), and remaining 
unobligated and unexpended on the date of the enactment of this 
title, shall immediately revert to the Treasury, as general 
revenues, and any funds appropriated by the State of Arizona 
pursuant to the Agreement, and remaining unobligated and 
unexpended on the date of the enactment of this title, shall 
immediately revert to the State of Arizona.''