States of America in Congress assembled, That (a) the funds on deposit in the United States Treasury to the credit of the Iowa Tribes of Oklahoma and of Kansas and Nebraska that were appropriated by the Act of December 26, 1969 (83 Stat. 447), to pay a judgment by the Indian Claims Commission in docket numbered 79-A, and the interest thereon, and funds appropriated by the Act of July 6, 1970 (84 Stat. 376), to pay judgments in Indian Claims Commission dockets numbered 153, 158, 209, and 231, and the interest thereon, after payment of attorney fees and other litigation expenses, shall be divided on the basis of one-hundredand-seventy-one two-hundred-and-seventy-ninths (61.29 per centum) to the Iowa Tribe of Kansas and Nebraska and one-hundred-and-eight two-hundred-and-seventy-ninths (38.71 per centum) to the Iowa Tribe of Oklahoma. (b) The funds so divided, including interest accruing thereon, may be advanced, deposited, expended, invested, or reinvested for any purposes that are authorized by the respective tribal governing bodies and approved by the Secretary of the Interior. (c) Any part of such funds that may be distributed per capita under the provisions of this Act shall be payable only to those persons who meet the membership requirements specified in the constitution of the respective tribes. (d) None of the funds distributed per capita under the provisions of this Act shall be subject to Federal or State income taxes. (e) Sums payable under this Act to enrollees or their heirs or legatees who are less than twenty-one years of age or who are under a legal disability shall be paid in accordance with such procedures, including the establishment of trusts, as the Secretary of the Interior determines appropriate to protect the best interests of such persons. (f) The Secretary of the Interior is authorized to prescribe rules and regulations to carry out the provisions of this Act. Approved June 23, 1971. 1 Public Law 92-30 92nd Congress, H.R. 1444 1 June 23, 1971 An act to provide for the disposition of funds appropriated to pay judg ments in favor of the Snohomish Tribe in Indian Claims Commission docket numbered 125, the Upper Skagit Tribe in Indian Claims Commission docket numbered 92, and the Snoqualmie and Skykomish Tribes in Indian Claims Commission docket numbered 93, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the funds appropriated by the Act of May 29, 1967 (81 Stat. 30, 42), to pay a judgment to the Snohomish Tribe in Indian Claims Commission docket numbered 125, and the Act of October 21, 1968 (82 Stat. 1190, 1198), to pay judgments to the Upper Skagit Tribe in Indian Claims Commission docket numbered 92 and the Snoqualmie and Skykomish Tribes in Indian Claims Commission docket numbered 93, together with the interests thereon, after payment of attorney fees and litigation expenses, and such expenses as may be necessary in effecting the provisions of this Act, shall be distributed as provided herein. SEC. 2. The Secretary of the Interior shall prepare separate rolls of all persons born on or prior to and living on the date of this Act who are lineal descendants of members of the Snohomish Tribe, of the Upper Skagit Tribe, including the allied Suiattle-Sauk Band, and the Snoqualmie and Skykomish Tribes, as they were constituted in 1855: Provided, That no person shall be enrolled as a descendant of the Snohomish Tribe if he has shared or is eligible to share in a per capita distribution of a judgment against the United States recovered by any other tribe. SEC. 3. Applications for enrollment must be filed with the Superintendent, Western Washington Agency, Bureau of Indian Affairs, at Everett, Washington, in the manner and within the time 1 House Report No. 92-148 and Senate Report No. 92-140 are not published herein. linits prescribed for that purpose. The determination of the Secretary of the Interior regarding the utilization of available records and rolls, and the eligibility for enrollment of an applicant, shall be final. SEC. 4. The judgment funds of the respective tribes shall be distributed per capita to the persons whose names appear on the roll of the respective tribe prepared in accordance with section 2 of this Act. SEC. 5. Sums payable to adult living enrollees or to adult heirs or legatees of deceased enrollees shall be paid directly to such persons. Sums payable to enrollees or their heirs or legatees who are less than twenty-one years of age or who are under legal disability shall be paid in accordance with such procedures, including the establishment of trusts, as the Secretary of the Interior determines appropriate to protect the best interests of such persons. SEC. 6. The funds that are distributed per capita under the provisions of this Act shall not be subject to Federal or State income tax. SEC. 7. The Secretary of the Interior is authorized to prescribe rules and regulations to carry out the provisions of this Act, including the establishment of deadlines. Approved June 23, 1971. Public Law 92-41 92nd Congress, H.R. 8311 1 July 1, 1971 An act to amend the Renegotiation Act of 1951 to extend the Act for two years, to modify the interest rate on excessive profits and on refunds, to provide that the Court of Claims shall have jurisdiction of renegotiation cases, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, SECTION 1. Two-YEAR EXTENSION. Section 102(c) (1) of the Renegotiation Act of 1951 (50 U.S.C. App., 1 Senate Report No. 92-245, page 495, this Bulletin; House Report No. 92-235 is not published herein. sec. 1212(c) (1)) [P.L. 90–634, C.B. 1968-2, 775] is amended by striking out "June 30, 1971" and inserting in lieu thereof "June 30, 1973". SEC. 2. MODIFICATION OF INTEREST RATE ON EXCESSIVE PROFITS AND ON REFUNDS. (a) Section 105(b) (2) of the Renegotiation Act of 1951, as amended (50 U.S.C. App., sec. 1215(b) (2)), is amended (1) by striking out the phrase "rate of 4 per centum per annum" each place it appears and inserting in lieu. thereof "rate per annum determined pursuant to the next to the last sentence of this paragraph for the period which includes the date on which interest begins to run"; (2) by striking out the phrase "interest shall accrue and be paid" the second place it appears in subparagraph (A) and inserting in lieu thereof "interest at the same rate shall accrue and be paid"; and (3) by adding at the end thereof the following new sentences: "Interest shall accrue and be paid at a rate which the Secretary of the Treasury shall specify as applicable to the period beginning on July 1, 1971, and ending on December 31, 1971, and to each six-month period thereafter. Such rate shall be determined by the Secretary of the Treasury, taking into consideration current private commercial rates of interest for new loans maturing in approximately five years.”. (b) Section 108 of the Renegotiation Act of 1951, as amended (50 U.S.C. App., sec. 1218), is amended by striking out "at the rate of 4 per centum per annum" in the last sentence and by inserting before the period at the end of such sentence "at the rate per annum determined pursuant to the next to the last sentence of section 105(b) (2) for the period which includes the date on which interest begins to run". (c) (1) The amendments made by subsection (a) shall apply only with respect to amounts of excessive profits determined by the Renegotiation Board and with respect to the amounts of additional excessive profits deter mined by the Tax Court or the Court of Claims after June 30, 1971. (2) The amendments made by subsection (b) shall apply only with respect to amounts finally adjudged or determined to have been erroneously collected after June 30, 1971, by the United States pursuant to a determination of excessive profits. SEC. 3. JURISDICTION OF RENEGOTIATION CASES. (a) Section 108 of the Renegotiation Act of 1951, as amended (50 U.S.C. App., sec. 1218), is amended (1) by striking out in the first sentence thereof "The Tax Court of the United States" and inserting in lieu thereof "the Court of Claims"; (2) by striking out the following sentence: "For the purposes of this section the court shall have the same powers and duties, insofar as applicable in respect of the contractor, the subcontractor, the Board and the Secretary, and in respect of the attendance of witnesses and the production of papers, notice of hearings, hearings before divisions, review by the Tax Court of decisions of divisions, stenographic reporting, and reports of proceedings, as such court has under sections 1110, 1111, 1113, 1114, 1115(a), 1116, 1117 (a), 1118, 1120, and 1121 of the Internal Revenue Code in the case of a proceeding to redetermine a deficiency."; and (3) by striking out each place it appears therein "Tax Court" and inserting in lieu thereof "Court of Claims”. (b) Section 108A of such Act is amended to read as follows: "SEC. 108A. REVIEW OF COURT OF CLAIMS DECISIONS. "The decisions of the Court of Claims under section 108 shall be subject to review by the Supreme Court upon certiorari in the manner provided in section 1255 of title 28 of the United States Code for the review of other cases in the Court of Claims." (c) Section 114(5) of such Act is amended by striking out "Tax Court," and inserting in lieu thereof "Court of Claims, the United States Tax Court,". (d) Sections 103(f), 103(i), 105 (a), 105(b), and 106(a) (b) of such Act are amended by striking out "The Tax Court of the United States" or "the Tax Court" each place it appears therein and inserting in lieu thereof "the Court of Claims". (e) The amendments made by this section shall apply with respect to any case in which the time for filing a petition under section 108 of the Renegotiation Act of 1951 for a redetermination of an order of the Renegotiation Board determining an amount of excessive profits expires on or after the date of enactment of this Act. Any petition for a redetermination of an order of the Renegotiation Board which is filed with the United States Tax Court on or after the date of enactment of this Act and before the ninetieth day after such date of enactment shall be deemed to be filed with the Court of Claims and shall be transferred from the United States Tax Court to the Court of Claims within thirty days after the day it is so filed. Except as determined by the Chief Judge of the United States Tax Court as described hereinbelow, all cases arising under the Renegotiation Act of 1951 which are pending in the United States Tax Court on the date of enactment of this Act shall be transferred within thirty days after such date from the United States Tax Court to the Court of Claims. In any such case in which the Chief Judge of the United States Tax Court finds and determines that proceedings have progressed to the point that the case can be more expeditiously decided by the United States Tax Court than the Court of Claims, the Chief Judge by order entered within. thirty days after the date of enactment of this Act shall direct that such case be retained by the United States Tax Court. The applicable provisions of the Renegotiation Act of 1951 as in effect prior to the amendments made by this section shall be applied with respect to any case under the Renegotiation Act of 1951 which at any time was pending in the United States Tax Court and which is not transferred to the Court of SEC. 4. THE UNITED STATES TAX (a) The first sentence of section 7447 (c) of the Internal Revenue Code of 1954 (relating to recalling of retired judges of the United States Tax Court) is amended by striking out "Any individual who is receiving" and inserting in lieu thereof "At or after his retirement, any individual who has elected to receive". (b) Section 7448 (m) of such Code (relating to computation of annuities of widows of Tax Court judges) is amended by striking out "14 percent of the average annual salary received by such judge for judicial service and any other prior allowable service during the last 5 years of such service prior to his death, or prior to his receiving retired pay under section 7447 (d), whichever first occurs, multiplied by the sum of his years of judicial service," and inserting in lieu thereof "14 percent of the average annual salary (whether judge's salary or compensation for other allowable service) received by such judge for judicial service (including periods in which he received retired pay under section 7447 (d)) or for any other prior allowable service during the period of 5 consecutive years in which he received the largest such average annual salary, multiplied by the sum of his years of such judicial service,". (c) (1) The amendment made by subsection (a) shall be effective as if included in the Internal Revenue Code of 1954 on the date of its enactment. Provisions having the same effect as such amendment shall be treated as having been included in the Internal Revenue Code of 1939 effective on and after August 7, 1953. (2) The amendment made by subsection (b) shall apply only with respect to judges of the United States Tax Court dying on or after the date of the enactment of this Act. Approved July 1, 1971. Public Law 92-59 An Act to provide for the disposition of funds appropriated to pay a judgment in favor of the Pembina Band of Chippewa Indians in Indian Claims Commission dockets numbered 18-A, 113, and 191, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the funds appropriated by the Act of June 9, 1964 (78 Stat. 204, 213), to pay a judgment to the Pembina Band of Chippewa Indians in Indian Claims Commission dockets numbered 18-A, 113, and 191, together with the interest thereon, after payment of attorney fees and litigation expenses, and such expenses as may be necessary in carrying out the provisions of this Act, shall be distributed as pro vided herein. SEC. 2. The Secretary of the Interior shall prepare a roll of all persons born on or prior to and living on the date of this Act who are lineal descendants of members of the Pembina Band as it was constituted in 1863, except that persons in the following categories shall not be so enrolled: a. those who are not citizens of the United States; b. those who are members of the Red Lake Band of Chippewa Indians; and c. those who participated in the Mississippi, Pillager, and Lake Winnibigoshish Chippewa Band awards under the provisions of the Act of September 27, 1967 (81 Stat. 230). SEC. 3. Applications for enrollment shall be filed with the Area Director, Bureau of Indian Affairs, Aberdeen, South Dakota, in the manner and within the time limits prescribed for that purpose. The determination of the Secretary of the Interior regarding the utilization of available rolls and records and the eligibility for enrollment of an applicant shall be final. SEC. 4. In developing the roll of Pembina descendants, the Secretary of 1 1 House Report No. 92-150 and Senate Report No. 92-142 are not published herein. the Interior shall determine which enrollees are members of the Minnesota Chippewa Tribe, the Turtle Mountain Band of Chippewas of North Dakota, or the Chippewa-Cree Tribe of Montana, and subsequent to the establishment of the descendancy roll shall apportion funds to the three cited tribes on the basis of the numbers of descendants having membership with these tribes. Funds not apportioned in this manner shall be distributed in equal shares to those enrolled descendants who are not members of the three cited tribes. SEC. 5. The funds apportioned to the Minnesota Chippewa Tribe, the Turtle Mountain Band, and the ChippewaCree Tribe may be advanced, expended, invested, or reinvested for any purpose authorized by the respective tribal governing bodies and approved by the Secretary of the Interior: Provided, That the governing body of the Minnesota Chippewa Tribe shall act in concert with the General Council of the Pembina Band of Chippewa Indians of the White Earth Reservation for the purpose of making recommendations to the Secretary; And provided further, That the Pembina descendants within the Turtle Mountain Band shall be authorized to establish pursuant to regulations set by the Secretary the Pembina Descendants Committee and that the tribal governing body shall be required to work in concert with such committee for the purpose of making recommendations to the Secretary and only those members of the three cited tribes who are enrolled as Pembina descendants under the provisions of this Act shall be permitted to share in any per capita distribution of the funds accruing to the tribes. SEC. 6. None of the funds distributed per capita under the provisions of this Act shall be subject to Federal or State income taxes. SEC. 7. Sums payable to adult living enrollees or to adult heirs or legatees of deceased enrollees shall be paid directly to such persons. Sums payable to enrollees or their heirs or legatees who are less than twenty-one years of age or who are under legal disability shall be paid in accordance with such procedures, including the establishment of trusts, as the Secretary of the Interior determines appropriate to protect the best interests of such persons. SEC. 8. The Secretary of the Interior is authorized to prescribe rules and regulations to effect the provisions of this Act, including the establishment of deadlines. Approved July 29, 1971. Public Law 92-138 92nd Congress, H.R. 88661 October 14, 1971 An Act to amend and extend the provisions of the Sugar. Act of 1948, as amended, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Sugar Act Amendments of 1971". * SEC. 18. (a) *** (b) Section 4501 (b) of the Internal Revenue Code of 1954 (relating to termination of tax on manufactured sugar) is amended by striking out "June 30, 1972" each place it appears therein and inserting in lieu thereof "June 30, 1975, or June 30 of the first year commencing after the effective date of any law limiting payments under title III of the Sugar Act of 1948, as amended, whichever is the earlier date". SEC. 19. The provisions of this Act shall become effective on January 1, 1972, except that the amendments made by sections 3, 4, 5, and 7(2) of this Act shall become effective on the date of enactment of this Act for purposes of actions relating to 1972 and subsequent years. Approved October 14, 1971. 1 This publication of the law is restricted to excerpts involving internal revenue matters; House Report No. 92-245, Senate Report No. 92-302, and Conference Reports Nos. 92-527 and 92-381 are not published herein. Subpart C.-Committee Reports [Bracketed numerals indicate official report page numbers.] Senate Report No. 92-245 RENEGOTIATION AMENDMENTS OF 1971 June 29, 1971 Mr. LONG, from the Committee on Finance, submitted the following report to accompany H.R. 8311.1 The Committee on Finance, to which was referred the bill (H.R. 8311) to amend the Renegotiation Act of 1951 to extend the Act for two years, to modify the interest rate on excessive profits and on refunds, to provide that the Court of Claims shall have jurisdiction of renegotiation cases, and for other purposes, having considered the same, reports favorably thereon without amendment and recommends that the bill do pass. I. SUMMARY The Renegotiation Act of 1951, as amended, authorizes the Government to recapture excessive profits on certain Government contracts and subcontracts. In the absence of legislation, this act will expire as of June 30, 1971. H.R. 8311 extends the act for 2 years, or until June 30, 1973. The bill also amends the Renegotiation Act in two other respects. The first amendment deals with interest rates on excessive profits determinations and on refunds where excessive profits determinations are found to be erroneous. In these cases the bill provides for flexible interest rates to be determined by the Secretary of the Treasury (at 6-month intervals) on the basis of current commercial rates at the time of the excessive profits determinations. The second amendment provides the U.S. Court of Claims with exclusive jurisdiction over redeterminations of excessive profits determined by the Renegotiation Board. The U.S. Tax Court up to this time has had jurisdiction of these cases. 1 Public Law 92-41, page 492, this Bulletin. The bill also makes two minor changes in the present law provisions relating to the U.S. Tax Court. Present law is modified to make it clear that judges who have retired from active duty can be immediately recalled for judicial duty. The bill also provides that their salary base period, for purposes of computing survivors' annuities, is to be the period of 5 consecutive years in which the judges receive the largest amount of compensation for their services. II. GENERAL STATEMENT 1. THE RENEGOTIATION PROCESS The Renegotiation Act of 1951, in general, provides that the Renegotiation Board is to review the total profit derived by a contractor during a year from all of his renegotiable contracts and subcontracts in order to determine whether or not this profit is excessive.1 The Board is empowered to eliminate those profits found to be excessive in accordance with certain statutory factors. Thus, renegotiation is determined not with respect to individual contracts but with respect to all receipts or accruals from renegotiable contracts and subcontracts of a contractor during a year. These contracts vary in form from cost-plus-fixed-fee to firm fixedprice contracts. Some may be prime contracts, while others are subcontracts, and they may be concerned with many different services and products. With respect to any given year they may also reflect only partial payments made on the contracts. For purposes of renegotiation, profits generally are defined and determined in much the same way as for tax purposes. This similarity is also reflected in that provision is made in renegotia 1 Contractors with renegotiable sales exceeding the $1,000,000 statutory "floor" for a fiscal year must file a report with the Renegotiation Board. "Renegotiable" contracts and subcontracts are those with the following agencies: the Departments of Defense, the Army, the Navy, and the Air Force, the Maritime Administration, the General Services Administration, the National Aeronautics and Space Administration, the Federal Aviation Administration, and the Atomic Energy Commission. tion for a 5-year loss carryforward, as well as the offsetting of losses and profits on different contracts within the year. The Act provides, in general terms, that the Renegotiation Board in determining whether profits are excessive is to give favorable recognition to the efficiency of the contractor with particular regard to attainment of quantity and quality production, reduction of costs, and economy. The Board must also consider the reasonableness of costs and profits, the net worth (with particular regard to the amount and source of public and private capital employed), the extent of the risk assumed, the nature and extent of the contribution to the defense effort, and the character of the business. Thus, in effect, the Board in its judgment must consider all of these factors, and the producer, where these factors are present to the greatest extent (e.g., is most efficient or makes the greatest contribution to the defense effort), is permitted to retain more profit than the producer who satisfies these factors to a lesser extent. Various types of contracts are excluded from the Act; some on a mandatory and others on a permissive basis. The mandatory exemptions include contracts with a State, local, or foreign government, those dealing with certain agricultural commodities, those dealing with minerals and related products, those with certain regulated common carriers or public utilities and those for standard commercial articles or services. 2. TWO-YEAR EXTENSION OF THE ACT [3] In the absence of legislation, the Renegotiation Act will expire as of June 30, 1971. The committee agrees with the House that in view of existing international conditions, the continuation of the Renegotiation Act is in the national interest. The renegotiation process allows an after-the-fact review of the profits on renegotiable contracts and subcontracts relating to the national defense and space efforts. This is a renegotiation of a contractor's fiscal year aggregate profits on these contracts; thus, it is completely different from price adjustments or redeterminations with respect to individual contracts. The renegotiation process therefore provides a further check on the reasonableness of the prices (and the related overall profits of the contractor) that the Government has to pay in order to maintain its defense commitments. Modern military and space procurement is characterized by changing technical requirements and increasing complexity. The nature of the procurement often means that there is a lack of established market costs or prices to guide procurement officers. Accordingly, negotiated contracts are used for the bulk of the dollar amount of these procurements. This includes contracts negotiated with sole-source suppliers as well as contracts negotiated with some degree of market price competition. Negotiated Department of Defense military contracts accounted for 89 percent of the value of the Defense Department's military procurement in fiscal 1970, which was a continuation of the increase in percentage from 82 percent in fiscal 1965 to 87 percent in fiscal 1967. In addition, negotiated NASA contracts represented 99 percent of the value of NASA's procurement in fiscal 1970 as compared to 91 percent in fiscal 1961. A second factor which indicates the need to extend the Renegotiation Act is the continued high level of defenserelated procurement during 1968-70. Total military procurement rose from $28 billion in fiscal 1965 to a peak of $44.6 billion in fiscal 1967; military procurement then declined slightly to $43.8 billion in fiscal 1968, to $42 billion in fiscal 1969 and to $36 billion in fiscal 1970. Although the military procurement level has declined somewhat during 1968-70, the level of overall defense-related procurement is expected to remain relatively high. Moreover, in view of the normal timelag between the time a contract is awarded and the time renegotiation filings are made with respect to the contract or subcontract, the amounts from military procurement awards made during the peak of the Southeast Asia conflict will continue to be reported in Renegotiation Board filings during the next 2 years. For example, although total military and space procurement has declined since fiscal 1967, the level of renegotiable sales filed with the Board increased substantially from $33.1 billion in fiscal 1967 to $48.5 billion in fiscal 1969 and $48 billion in fiscal 1970. The timelag also is reflected by the increase in the number of above the $1,000,000 floor filings received by the Board-from 3,737 in fiscal 1967 to 5,030 in fiscal 1969 and 5,085 in fiscal 1970. Furthermore, the level of excessive profit determinations made by the Board have risen during this period-from $16 million in fiscal 1967 to $21.4 million in fiscal 1969 and $33.5 million in fiscal 1970. The committee agrees with the House that in view of the extent of our defense effort and the nature of much of defense and space-related [4] procurement, the Renegotiation Act should be extended for a 2-year period, from June 30, 1971, to June 30, 1973. The 2-year extension is in place of the permanent extension recommended by the administration. The nature of the renegotiation process and its inherent reliance on human judgment are factors that lead the committee to consider it desirable to have periodic congressional review of the renegotiation process. The 2-year extension of the Act will give Congress another opportunity to review the renegotiation process and the impact of the military procurement buildup in recent years on defense and space-related profits. In connection with this extension of the Act, the committee has considered the matter of fiscal year renegotiation. Although renegotiation is conducted on a fiscal year basis, in some cases events occurring in other years are taken into account to improve equity. For example, a contractor may incur high startup costs under a long-term contract and as a result realize deficient profits on his aggregate renegotiable business in the early years of the contract. His profits under the contract, |