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I1nittb &>tatt~ &>tnatt
MEMORANDUM
SENATOR:
This is the analysis
the ~lliite House provided
two weeks ago.
Jim
�THE WHITE HOUSE
WASHINGTON
June 13, 1980
Dear Jim:
Enclosed is a document prepared within
the Administration which addresses the
principal features of the proposed Maine
Indian legislation. Please note that
this document neither endorses nor rejects
the bill generally or any of its provisions;
rather it is an attempt to identify issues
which must be addressed as the bill is
considered.
Senior Associate Counsel
to the President
Mr. James W. Case
Legislative Director for
The Honorable George J. Mitchell
United States Senate
Washington, D.C.
20510
�·June 9, 1980
Issues Involving the Proposed
"Maine Indian Claims Settlement Act of 1980"
I.
Level of Federal Funding
II.
Status of the Houlton Band of the Maliseet Indians
III. Changes in Existing Federal Indian Policy Proposed by the
Settlement
•
f
�1 ,
I,
Level of Federal Funding
--The $81.5 Dillion in new budget authority authorized by the settl ement
far exceeds the $37 million in new Federal funding approved by the
Administration for settling Maine land claims.
--Funding difference stems from differing amounts of land contained in
the settlement and the average per-acre valuation of the land:
Tribes/State:
300,000 acres x $18l.66/acre
$54.5 M
Administration: 100,000 acres x $IOO/acre
-$10.0 M
$44.5 M
--Major uncertainty exists concerning ~ffect on Federal programs of the
settlement provisions that (1) treat the tribes in Indian Territory as
municipalities under State law -- a rare status for tribes within the
United States;l/ (2) require the Federal Government to disregard settlement
payments to the tribes, or any State payments to them, when determining
individual or tribal eligibility for Federal financial assistance, and
(3) provide general tribal and individual eligibility for State
financial assistance programs on the same basis as other municipalities
and persons, but Federal payments to the tribes or individual Indians
for substantially similar purposes shall be deducted from the amount
of State funding provided.
· Could the tribes as municipalities receive more Federal funding than
would be the case today where they are treated only as tribes?
· If the State could withdraw all health care funding for its Indian
citizens in anticipation of Indian Health Service (IHS) aid, the incremental cost for the IHS is estimated at about $1 million per year in
~1aine, and $285 million per year if this provision establishes a
nationwide precedent.
Federal fupding would supplant State funds in other programs as well, although no estimates of cost are available. The legislative history for
some programs like employment and training under CETA or public school
assistance under the Johnson - 0 t~1alley Act indicates a clear Congressional intent to prevent States from supplanti~g their o\~ funds with
Federal dollars.
· Effect of the settlement on general revenue sharing is uncertain. Clarification is needed concerning whether the tribes should be ·regarded as tribal entities, local governments, or both, for revenue sharing purposes.
--The settlement would expand Federal tax law to treat as "involuntary
conversions", and therefore subject to capital gains deferral, the sale
of private land to the t-1aine Indians pursuant to the settlement, if the
proceeds froe the sale are used to buy similar land within two years
after the year of sale (3 years for business property). The estimated Federal tax loss would be $15 million. Existing Fede~al tax
law allows involuntary conversions if the sales:stem from Federal
or State condemnation -- not private la\vsuits or out-of-court settlements. Enactment of this provision would set a precedent for other
Indian claim settlements as well as for a gen~ral expansion of tax deferrals
for real estate.
1/ The sett 1ement defines "Indian Terri tory" in ~Iaine as the current Passamaquoddy
and PenoQscot reservations plus the first 300,000 acres of land · acquired by the
U.S'.I for the tribes in designated, unincorporated areas of the State.
�II.
St atus of the Houlton Band of M lis eet Indians
a
Various settlement provis i ons raise m jor questions:
a
--Does the Band meet the standard criteria for a Federally
recognized tribe?
--What is the number and location of Band members?
is that the Band numbers about 350 persons.)
(The present estimate
--Does the Band have a credible land claim pending? (Very little historical
or anthropological data is currently available to the Federal Government
on this issue.)
--What status for the Band does the settlement envisage? (The
State act does not give "municipal" status to the Band nor recognize any power or authority of the Band; however, the proposed
Federal act "recognizes" the band, and does not specifically revoke
concomitant tribal power.) Further, what is the relationship between
the Band and the Federal Government under the settlement? The Band
would be eligible for financial benefits to which other tribes may be
entitled, but their lands would not be subject to any restrictions on
alienation. The nature of the Federal "trust responsibility" over such
lands is unclear, since the u.S. might not have any authority with respect
to their disposition.
--Although Congress has the authority to recognize the Band as a tribe,
it would be contrary to positions taken by the u.S. in Federal court
for the Executive Branch to take a .position on the Band's status as a
tribe without the Band proceeding through the recently initiated Federal
Acknowledgement Project administered by Interior. This project was implemente~ to enable Indian groups to establish their entitlement to a
government to government relationship with the U.S.
":
•
I
..-
�3.
III.
Changes in Existing Federal Indian Policy Pr opos ed by the Settleme nt
1. State civil and criminal jurisdiction over Indians and Indian
Land -- Sec. 6(a)
Assumption by the State of Maine of jurisdiction over civil and
criminal actions by or against Indians in Indian country is similar
to the existing situatiori in certain other States as authorized by
Federal law, but the provision
--although containing some protections, lacks the same protections for
trust land and federally guaranteed water, hunting, . trapping or fishing
rights as contained in existing Federal law -- 2S USC l321(b) and 1322(b),
--covers lands and other natural resources owned by the United
States, for its own use and not held in trust.
--leaves in doubt whether the Houlton Band retains any civil or
criminal jurisdiction.
2. Waiver of sovereign immunity -- Sec. 6(c)
This provision would \'laive sovereign immunity for the Houl ton Band and the
corresponding waiver for the Passamaquoddy and Penobscot tribes when they
act in a proprietary function.
-- Although Congress has the authority to waive a tribe's sovereign
i8ffiunity, it has done it only occasionally and then usually in a
limited fashion, and
-- the provision needs clarification to determine what types of tribal
business;are covered for the Passamaquoddy and Penobscots.
3. Payment of money judgments from tribal trust fund income -- Sec. 6(c)
This provision allows persons with unpaid final, money judgments
against the Passamaquoddy or Penobscot tribes to obtain payment from the
Secretary of the Interior, using income from the proposed tribal trus~
funds. The provision
~ -is
unique in regard to Federal Indian law,
--imposes an administrative burden on Interior to assess money judgment
claims and defend litigation, and
--creates ambiguity because the Secretary is required by an earlier
provision to make avaiiable to the tribes their trust fund income
"without any deductions".
l,
4. Congressional consent to amendments made to t~e State law implementing
the settlement
Sec. 6(d)
This provision is an apparent attempt to authorize unilateral State
changes to the State and Federal laws implementing the settlement.
�4.
--111e provI sIon is un iq ue bec aus e it \\'ould (1llow th e Federal
act and Un i t ed St a t es int e r ests re ga rd i ng th e s e ttl ement to
be amend ed by subsequent St a t e amendments.
"
- -In addition, should a Fed eral act ratify an ambiguous State
act in a blanket manner?
5.
Full faith and credit for tribal judici a l proceedings--Sec. 6 (f)
Pursuant to this provision, the United States, every State, every
U.S. territory, and every Indian tribe shall give full faith and
credit to the judicial proceedings of the Passamaquoddy and Penobscot
tribes, but,
--under recent Federal case law, full faith and credit is not given
to tribal court proceedings by Federal courts, although "comity"
pl ® a role,
ys
--the United States would be treating the judicial proceedings of
the two Maine tribes differently from those of. all other tribes,
and
--the provision would require Federal courts to recognize tribal
adjudications even if they violate the Indian Bill of Rights,
since Federal courts do not have jurisdiction to review tribal
government actions as a result of the 1978 Supreme Court decision
in Santa Clara Pueblo v. Martinez.
6.
General non-applicability of Federal laws affording special status
to Indians--Sec. 6 (g)
This provision requires that Federal la\vs providing benefits,
programs, or services to Maine Indians or tribes because of their
status as~Indians not apply in Maine, except to the extent Federal
funds were provided the tribes. The provision
~-is
unique, because in no other instance does the Federal Government
. provide funding to tribes without statutory guidance as to the nature
of the trust responsibility,
--is unclear as to tribal and
St~te
intent,
--would cause major uncertainty over which laws in Title 2S of the
U.S. Code apply to M
aine, and
--raises questions whether individual tribal members could receive
Federal scholarship, employment, \</elfare, or heal th care assistance
directl y from the United States because only the tribes ar~ eligible
for such fundin g . HO\,'ever, th e tribes mi ght be prohibi ted from
administeri ng cer t ai n Fed er a l .pr ograms due · to the non-applicability of the
Indian Se lf-Determination Act which authori zes tribes to run the~e
pro gr ams th emselves .
• r
�I.
Lnif lU
j-\11Cn(1Tl0 n--~ e c.
~
le)
The .settlement provision involving trus t l and s tatus authori z.es
substantial changes from existing Federal law:
- -The general restriction on non-alienation of tribal land except
pursuant to Federal law is removed.
--Land owned by the Houlton Band, whether in trust or not, is not
subject to any restrictions on alienation.
--Land in Indian Territory held in trust for the Passamaquoddy or
Penobscot tribes retains restrictions on alienation, and, pursuant
to the settlement, the Secretary of the Int~rior's authority to
approve conveyances is some\vhat more limi ted than for other tribes.
--Passamaquoddy or Penobscot land outside Indian Territory and in
"organized and incorporated" areas of the State would be subj ect
to no alienation restrictions--whether or not the land is held in
trust. (Apparently, a substantial portion of the land to be
purchased for the tribes will be outside of Indian Territory.)
--The removal of the traditional non-alienation provisions for trust
land affects the U.S. ability to protect its title to the land,
is a major change from Federal policy protecting tribal trust lands
from alienation, and renders the U. S. trust responsibi Ii ty ambiguous
at best.
--Tribal land would be subject to State eminent domain proceedings.
8.
Tax~.t io~ ~";Sec.
6208 of the State act
The State act provides for State tax exemption for the settlement
trust fund and income derived therefrom--this is similar to the
State action taken in the Rhode Island Indian claims settlement.
However, other tax provisions in the State act differ substantially
from Federal la\\1:
--The Passamaquoddy and Penobscot tribes agree to make payments . in
lieu of State real estate and personal property taxes on land in
Indian Territory--currently, all trust property is exempt from such
taxation, and tribes do not make alternative payments.
trust property (i.e., all land held for the Houlton Band
and all land held for the other two tribes outside of Indian Territory)
is subject to levy and collection of taxes by all State taxing
authorities--this, apparently ,."ould mean tax payment by the United
States as trustee, or by the beneficiary tribes, and could allow
trust property to be sold for non-payment of taxes. The Federal
Government could be placed in the position of investing millions
of its dollars in a legislative scheme for tribal deve~opment, only
to see the resources dissipated in a short period of time.
-~Other
--Taxation of trust ,land has two importarif _implications: (1) it is
contrary to current Federal law and policy whereby Indian lands
are held by the U.S. in trust in order to prevent their loss from
Indian ownership; and (2) it would, in an unprecedented manner,
allow the State to tax interests of the Federal Government contrary
to basic constitutional law .
.,
�6.
- - Under exi s t i ng Federal c ase l aw, Sta t es cannot t~x Indi an in com
e
earned on re s ervat i ons or income dir ectly derive d from t n lst
property. Similarly, income f r om tribal activiti es is not tax ed
by the State, unless the tribal business is incorp orat ed pursuant
to State law. The State act eliminates these tax exemptions for
the tribes and individual Indians.
9.
~1un i cipality
Status of the Tribes--Sec. 6206 of the State act
The State act would provide the Passamaquoddy and Penobscot tribes
\vi th the powers and ·liabili ties of a municipality under Maine law.
However, other sections of the State act would largely repeal current
State law provisions on tribal organization. The ~-faine tribes have
no constitution, charter, or organic act defining their structure and
powers (as have many tribes nationwide and all other Maine municipalities).
--By granting the t\vO tribes municipality status, :the State act
would seem to limit tribal authority and subject it to State control
(a unique situation for the U.S.). What authority will be delegated
is not specified.
--Can the tribes exercise municipality powers without a charter? Hmv
will the future stability of tribal government be assured without
some type of organic act for each tribe? Should the Federal legislation provide for such a constitution, charter, or organic
document? Any entity, whether private or public, would seem to
need such a charter to conduct business and manage valuable resources
in an efficient manner.
10.
Extinguishment of cl· ims under State la\v--Secs. 4 (a) Cii ) and 11
a
These provisions would extinguish Indian claims existing under State,
not Federal, law.
--Is this appropriate in Federal legislation?
State matter?
Is it. not purely a
--Is the Federal Government being unnecessarily exposed to potential,
unnecessary liability?
�
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George J. Mitchell Papers
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Documents from the George J. Mitchell Papers have been provided by the George J. Mitchell Dept. of Special Collections & Archives, Bowdoin College Library, Brunswick, ME. Additional information about the collection can be accessed on their <a href="https://library.bowdoin.edu/arch/" target="_blank">web page.</a>
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Memo from James Case (staffer to Senator Muskie, and then to Senator Mitchell). This memo is probably addressed to Senator George J. Mitchell, and has a White House analysis of Bill S. 2829 attached. (06/13/1980)
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George J. Mitchell Papers
George J. Mitchell Papers,Box M202.6.2.2.2, George J. Mitchell Dept. of Special Collections & Archives, Bowdoin College Library, Brunswick, ME
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Indians of North America--Maine--Land tenure
Indians of North America--Maine--Claims
Indians of North America--Legal Status, Laws, etc.
Indians of North America--Government Relations
Indians of North America--Politics and Government
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Copyright is retained by the creators of items in this collection, or their descendants, as stipulated by United States copyright law. This item is made available for research and educational purposes by the George J. Mitchell Dept. of Special Collections & Archives, Bowdoin College Library. Prior permission is required for any commercial use.
1723
1725(h)
Application of State Law
Extinguishment of Claims
Jurisdiction
Maliseet
Municipality