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113th Congress                                            Rept. 113-625
                        HOUSE OF REPRESENTATIVES
 2d Session                                                      Part 1

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



 
              GRAND PORTAGE BAND PER CAPITA ADJUSTMENT ACT

                                _______
                                

 November 17, 2014.--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. 3608]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Natural Resources, to whom was referred 
the bill (H.R. 3608) to amend the Act of October 19, 1973, 
concerning taxable income to members of the Grand Portage Band 
of Lake Superior Chippewa Indians, having considered the same, 
report favorably thereon without amendment and recommend that 
the bill do pass.

                          Purpose of the Bill

    The purpose of H.R. 3608 is to amend the Act of October 19, 
1973, concerning taxable income to members of the Grand Portage 
Band of Lake Superior Chippewa Indians.

                  Background and Need for Legislation

    H.R. 3608 would provide that certain funds paid by the 
State of Minnesota and held by the United States in trust for 
the Grand Portage Band of Lake Superior Chippewa Indians shall 
be exempt from federal and state taxation. Such funds stem from 
a treaty-related settlement agreement between the Band and the 
State of Minnesota. The bill further provides that such funds 
shall not be counted against the Band members' eligibility for 
federal financial assistance, unless the funds are distributed 
to them on a per capita basis in an amount exceeding $2,000.
    The Grand Portage Band is one of five constituent bands of 
Indians comprising the greater Minnesota Chippewa Tribe. The 
Minnesota Chippewa Tribe and each of its five bands are 
federally-recognized tribes. The Grand Portage Band has a 
50,000-acre reservation of densely forested lands in the 
extreme northeastern region of Minnesota, bounded by Canada, 
Lake Superior, and the Grand Portage State Forest.
    The Band is a party to an 1854 treaty under which its 
members retained certain hunting and fishing rights in lands 
ceded by the tribe. Pursuant to a 1988 settlement with the 
State of Minnesota over state regulation of Indian fishing 
rights in the 1854 treaty area, the Grand Portage Band and Bois 
Forte Band of Chippewa Indians (another one of the five bands) 
agreed to restrict their members from exercising their fishing 
rights in exchange for certain payments from Minnesota. 
According to the Department of the Interior, the State annually 
pays the Grand Portage Band $1.6 million pursuant to this 
agreement.
    In 1999, during the 106th Congress, Senator Paul Wellstone 
(D-MN) introduced S. 1838 to make the State settlement payments 
to the two bands non-taxable.
    In 2000, Senator Ben Nighthorse Campbell (R-CO), the 
Chairman of the Indian Affairs Committee, introduced S. 3010, 
an omnibus technical amendments bill that included the tax 
exemption language for both bands. That committee reported S. 
3010 with an amendment that removed the Grand Portage Band from 
the tax exemption provision. The Senate Committee report 
accompanying the bill offers no explanation for the deletion of 
the Grand Portage Band provisions.
    The tax exemption for the Bois Forte Band was eventually 
included in an omnibus Indian bill introduced by Congressman 
John Thune (H.R. 5528), and enacted as the Omnibus Indian 
Advancement Act (Public Law 106-568).
    As a practical matter, it is unclear whether the Internal 
Revenue Service (IRS) is enforcing any taxation of payments 
received by the Band's members from the State of Minnesota 
pursuant to the fishing rights settlement. By letter dated 
November 15, 2013, the Chief of Staff of the Joint Committee on 
Taxation responded to a letter the author of H.R. 3608 had sent 
seeking an analysis of the effect of H.R. 3608 on revenues. The 
Joint Committee staff member estimated that the proposal would 
have no net effect in light of guidelines the IRS normally 
follows concerning Settlement payments made to members of the 
Band. The letter notes, however, that the IRS does not consider 
its guidelines to be precedential.
    The Natural Resources Committee may not be suited to 
analyzing the revenue effects of the H.R. 3608. With this in 
mind, it should be noted that the bill has been additionally 
referred to the Committee on Ways and Means and the Committee 
on the Judiciary. Both of these committees have agreed to be 
discharged from further consideration of the bill.
    On July 29, 2014, the Subcommittee on Indian and Alaska 
Native Affairs of the Committee on Natural Resources held a 
hearing on H.R. 3608. No objections to the bill were heard and 
the Department of the Interior expressed support for enactment 
of the legislation.
    H.R. 3608 amends 25 U.S.C. 1407(4) and provides the Grand 
Portage Band with the same tax and federal financial assistance 
eligibility benefits provided to the Bois Forte Band under 
Public Law 106-568. Under this bill, a member of the Band does 
not have to count as income payments received pursuant to the 
settlement between the Band and the State under which the Band 
forgoes certain fishing activities. In addition, such income 
shall not count against the individual's eligibility for 
certain federal financial assistance as long as it does not 
need exceed $2,000.

                            Committee Action

    H.R. 3608 was introduced on November 21, 2013, by 
Congressman Richard Nolan (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. The bill was 
also referred to the Committees on Ways and Means and the 
Judiciary. On July 29, 2014, the Subcommittee held a hearing on 
the bill. On September 18, 2014, the Full Natural Resources 
Committee met to consider the bill. The Subcommittee on Indian 
and Alaska Native Affairs was discharged by unanimous consent. 
No amendments were offered and the bill was 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. After consulting with the 
Congressional Budget Office and the Committee on Ways and 
Means, the Committee has concluded that enactment of the bill 
will have no significant effect on direct spending or revenue, 
and will not otherwise have a significant effect on the federal 
budget.
    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 is to amend the Act of October 19, 1973, 
concerning taxable income to members of the Grand Portage Band 
of Lake Superior Chippewa Indians.

                           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.

                       Compliance With H. Res. 5

    Directed Rule Making. The Chairman does not believe that 
this bill directs any executive branch official to conduct any 
specific rule-making proceedings.
    Duplication of Existing Programs. This bill does not 
establish or reauthorize a program of the federal government 
known to be duplicative of another program. Such program was 
not included in any report from the Government Accountability 
Office to Congress pursuant to section 21 of Public Law 111-139 
or identified in the most recent Catalog of Federal Domestic 
Assistance published pursuant to the Federal Program 
Information Act (Public Law 95-220, as amended by Public Law 
98-169) as relating to other programs.

                Preemption of State, Local or Tribal Law

    This bill is not intended to preempt any State, local or 
tribal law.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, 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):

                SECTION 7 OF THE ACT OF OCTOBER 19, 1973


AN ACT To provide for the use or distribution of funds appropriated in 
 satisfaction of certain judgments of the Indian Claims Commission and 
              the Court of Claims, and for other purposes

  Sec. 7. None of the funds which--
          (1) are distributed per capita or held in trust 
        pursuant to a plan approved under the provisions of 
        this Act, or
          (2) on the date of enactment of this Act, are to be 
        distributed per capita or are held in trust pursuant to 
        a plan approved by the Congress prior to the date of 
        enactment of this Act,
          (3) were distributed pursuant to a plan approved by 
        Congress after December 31, 1981 but prior to the date 
        of enactment of this Act, and any purchases made with 
        such funds, or
          (4) are paid by the State of Minnesota to the Bois 
        Forte Band of Chippewa Indians [pursuant to the 
        agreements of such Band] or the Grand Portage Band of 
        Lake Superior Chippewa Indians, or both, pursuant to 
        the agreements of each Band to voluntarily restrict 
        tribal rights to hunt and fish in territory cede under 
        the Treaty of September 30, 1854 (10 Stat. 1109), 
        including all interest accrued on such funds during any 
        period in which such funds are held in a minor's trust,
including all interest and investment income accrued thereon 
while such funds are so held in trust, shall be subject to 
Federal or State income taxes, nor shall such funds nor their 
availability be considered as income or resources nor otherwise 
utilized as the basis for denying or reducing the financial 
assistance or other benefits to which such household or member 
would otherwise be entitled under the Social Security Act or, 
except for per capita shares in excess of $2,000, any Federal 
or federally assisted program.