[DOCID: f:sr460.110]
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Calendar No. 961
110th Congress Report
SENATE
2d Session 110-460
======================================================================
TO PROTECT INDIAN ARTS AND CRAFTS THROUGH THE IMPROVEMENT OF APPLICABLE
CRIMINAL PROCEEDINGS, AND FOR OTHER PURPOSES
_______
September 15, 2008.--Ordered to be printed
_______
Mr. Dorgan, from the Committee on Indian Affairs, submitted the
following
R E P O R T
[To accompany S. 1255]
The Committee on Indian Affairs, to which was referred the
bill (S. 1255), to protect Indian arts and crafts through the
improvement of applicable criminal proceedings, and for other
purposes, having considered the same, reports favorably thereon
with amendments and recommends that the bill, as amended, do
pass.
Purpose
The purpose of S. 1255 is to authorize any federal law
enforcement officer to conduct an investigation of the sale of
any good that is misrepresented as an Indian-produced good or
product that occurs on land under the jurisdiction of the
federal government. The bill also authorizes the Indian Arts
and Crafts Board to refer an alleged offense to any federal law
enforcement officer for appropriate investigation. Further, S.
1255 permits a federal law enforcement officer to investigate
an alleged offense regardless of whether such officer receives
a referral from the Board and revises the requirements for
initiating actions for the misrepresentation of Indian-produced
goods and products and the penalties for such
misrepresentation.
Background and History
The Indian Arts and Crafts Act of 1990 (P.L. 101-644) is a
truth-in-advertising law that prohibits misrepresentation in
marketing of Indian arts and crafts products within the United
States. The law covers all Indian and Indian-style traditional
and contemporary arts and crafts produced after 1935. Under the
law, it is illegal to offer, sell, or display for sale any
Indian art or craft product in a manner that falsely suggests
it is Indian-made or the product of a particular Indian, Indian
Tribe, or Indian arts and crafts organization that resides
within the United States. For a first offense under the Act, an
individual can face civil or criminal penalties of up to a
$250,000 fine or a 5-year prison term, or both. If a business
violates the Act, it can face civil penalties or can be
prosecuted and fined up to $1,000,000.
A major challenge has been establishing a process to
investigate cases brought under the Act as the Indian Arts and
Craft Board must rely exclusively on the willingness of other
law enforcement agencies to proceed with the investigation of
complaints. The law is currently written so that only the
Federal Bureau of Investigation (FBI), acting on behalf of the
Attorney General, has the authority to investigate and make
arrests in cases of suspected Indian art counterfeiters. S.
1255 would amend the law to expand existing federal
investigative authority by authorizing other federal
investigative bodies, such as the Bureau of Indian Affairs
(BIA) Office of Law Enforcement, in addition to the FBI, to
investigate cases of misrepresentation of Indian arts and
crafts.
Tribal and individual Indian income is derived from the
sale of handmade Indian arts and crafts. Yet, millions of
dollars are diverted each year from these original artists and
Indian tribes by those who reproduce and sell counterfeit
Indian goods. Few, if any, criminal prosecutions have been
brought in federal court for such violations. Enforcing the
criminal law under the Indian Arts and Crafts Act is often
delayed due to limited resources in light of other
responsibilities of the FBI, including investigating terrorism
activity and violent crimes in Indian country. Therefore,
expanding the investigative authority to include other federal
agencies is intended to promote the active investigation of
alleged misconduct.
Summary of the Amendment
During an open business meeting on June 19, 2008, the
Committee considered and approved an amendment to S. 1255. The
amendment altered the scope of the conduct of investigations to
alleged violations on all land within the jurisdiction of the
United States. In addition, the amendment altered the
submission of findings of alleged violations to any federal or
State prosecuting authority, rather than just the Attorney
General of the United States.
Section-by-Section Analysis of S. 1255
Sec. 1. Short title
Section 1 states that the bill may be cited as the ``Indian
Arts and Crafts Amendments Act of 2008.''
Sec. 2. Indian Arts and Crafts
Section 2 of the bill expands the powers of the Indian Arts
and Crafts Board to pursue or defend violations of the bill by
amending 25 U.S.C. Sec. 305d and Sec. 305e.
Sec. 305d is amended by striking sections (a) and (b) and
inserting the following provisions. First, the Act defines
federal law enforcement officers and their authority to conduct
alleged violations of the Indian Arts and Crafts Act within the
jurisdiction of the United States. S. 1255 defines the process
for criminal proceedings through a referral by the Board to a
Federal law enforcement officer or by the initiation of an
investigation by a federal law enforcement officer without the
referral of the Board. As part of the criminal proceedings, the
findings of an investigation shall be submitted to a federal
prosecuting authority or the Indian Arts and Craft Board. When
the Board receives the findings of an investigation, the Board
may recommend to the Attorney General that criminal proceedings
be opened and the Board may provide support, should that
investigation be initiated. In lieu of, or in addition to, any
criminal proceedings, the Board may recommend that the Attorney
General pursue a civil action.
Sec. 305e is amended by striking subsection (d),
``Definitions,'' and replacing it as subsection (a). It changes
the definition of ``Indian tribes'' to be consistent with the
Indian Self-Determination and Education Assistance Act (25
U.S.C. 450b) and provides other technical and confirming
amendments to the ``Definitions'' subsection. Subsection (c),
entitled ``Persons that May Initiate Civil Actions,'' in
Sec. 305e is struck and replaced as subsection (d), making
technical and conforming amendments to the subsection. This
subsection clarifies how the Attorney General, the Board, and
any Indian Tribe involved in the civil suit may initiate a
civil action and recover costs related to attorney's fees or
other costs incurred as a direct result of the activities of
the investigation.
In addition, there are a series of other minor technical
and confirming amendments to Sec. 305e.
Sec. 3. Misrepresentation of Indian produced goods and products
Section 3 amends 18 U.S.C. Sec. 1159 and reorganizes the
structure of penalties that are applied to violations of the
law. This section structures the penalties in accordance with
the value of the goods that are offered, sold, or displayed for
sale in violation of the law. If the applicable good is equal
to or greater than $1,000, for a first violation, an individual
will be fined not more than $250,000, imprisoned for not more
than 5 years, or both. A person other than an individual, for
example a business, will be fined not more than $1,000,000 for
a first violation. If the applicable good is less than $1,000
an individual will be fined not more than $25,000, imprisoned
for not more than 1 year, or both. A person other than an
individual, such as a business, will be fined not more than
$100,000 for a first violation.
In the case of subsequent violations that person,
regardless of the amount in which the applicable goods are
offered, sold, or displayed for sale, an individual will be
fined and imprisoned for not more than 15 years and a person
other than an individual, such as a business, will be fined not
more than $5,000,000.
Section 3 also clarifies the definition of the term
``Indian tribe,'' for purposes of this section. There are also
a number of other technical and conforming amendments to
Sec. 1159.
Legislative History
S. 1255 was introduced in the Senate on May 1, 2007, by
Senator John McCain (R-Ariz.). S. 1255 was received in the
Senate and referred to the Committee on Indian Affairs on May
1, 2007. The Committee ordered the bill to be reported
favorably, with an amendment, on June 19, 2008.
Committee Recommendation
On June 19, 2008, the Committee on Indian Affairs convened
a business meeting to consider S. 1255, and other measures.
During the business meeting, the Committee voted, by a voice
vote, to report S. 1255 favorably, with an amendment, to the
full Senate with a recommendation that it do pass.
Cost and Budgetary Considerations
The following cost estimate for S. 1255, as provided by the
Congressional Budget Office, is set forth below:
S. 1255--Indian Arts and Crafts Amendments Act of 2007
S. 1255 would allow any federal law enforcement officer to
investigate the sale of counterfeit Indian art products, rather
than only employees of the Federal Bureau of Investigation as
under current law. Based on information from the Department of
Justice (DOJ), CBO estimates that the cost of implementing S.
1255 would not be significant because it would not appreciably
change the workload of federal law enforcement officers or DOJ
attorneys who would prosecute the cases.
S. 1255 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
S. 1255 also would modify the penalties for persons who
market or sell counterfeit Indian arts and crafts. Under
current law, the maximum penalties are the same for all
offenders, regardless of the value of the goods. The bill would
reduce the maximum penalties for offenders who market or sell
counterfeit items priced at less than $1,000. Criminal fines
are recorded as revenues, deposited into the Crime Victims
Fund, and later spent. CBO estimates that enacting S. 1255
could reduce the amount of revenues deposited into the fund and
direct spending from the fund, but any such effects would be
insignificant.
The CBO staff contacts for this estimate are Leigh Angres
and Jeffrey LaFave. The estimate was approved by Peter H.
Fontaine, Assistant Director for Budget Analysis.
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 S. 1255 will
have a minimal impact on regulatory or paperwork requirements.
Executive Communications
There have been no executive communications received by the
Committee with regards to this legislation.
Changes in Existing Law
In compliance with subsection 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 1255, 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). Enactment of S. 1255, as amended,
would affect no changes in existing law except the following
provisions:
25 U.S.C. Sec. 305d
Sec. 305d. [Referral for criminal and civil violations; complaints;
recommendations] Criminal Proceedings; Civil
Actions
[(a) The Board may receive complaints of violations of
section 1159 of title 18 and refer complaints of such
violations to the Federal Bureau of Investigation for
appropriate investigation. After reviewing the investigation
report, the Board may recommend to the Attorney General of the
United States that criminal proceedings be instituted under
that section.
[(b) The Board may recommend that the Secretary of the
Interior refer the matter to the Attorney General for civil
action under section 305e of this title.]
(a) Definition of Federal Law Enforcement Officer.--In this
section, the term ``Federal law enforcement officer'' includes
a Federal law enforcement officer (as defined in section 115(c)
of title 18, United States Code).
(b) Authority to Conduct Investigations.--Any Federal law
enforcement officer shall have the authority to conduct an
investigation relating to an alleged violation of this Act
occurring within the jurisdiction of the United States.
(c) Criminal Proceedings.--
(1) Investigation.--
(A) In general.--The Board may refer an
alleged violation of section 1159 of title 18,
United States Code, to any Federal law
enforcement officer for appropriate
investigation.
(B) Referral not required.--A Federal law
enforcement officer may investigate an alleged
violation of section 1159 of that title
regardless of whether the Federal law
enforcement officer receives a referral under
subparagraph (A).
(2) Findings.--The findings of an investigation of an
alleged violation of section 1159 of title 18, United
States Code, by any Federal department or agency under
paragraph (1) (A) shall be submitted to--
(A) A Federal or State prosecuting authority;
or
(B) the Board.
(3) Recommendations.--On receiving the findings of an
investigation under paragraph (2), the Board may--
(A) recommend to the Attorney General that
criminal proceedings be initiated under 13
section 1159 of title 18, United States Code;
and
(B) provide such support to the Attorney
General relating to the criminal proceedings as
the Attorney General determines to be
appropriate.
(d) Civil Actions.--In lieu of, or in addition to, any
criminal proceeding under subsection (c), the Board may
recommend that the Attorney General initiate a civil action
under section 6.
25 U.S.C. Sec. 305e
Sec. 305e. Cause of action for misrepresentation of Indian produced
goods
(a) Definitions.--In this section:
(1) Indian project.--The term ``Indian'' means an
individual that--
(A) is a member of an Indian tribe; or
(B) is certified as an Indian artisan by an
Indian tribe.
(2) Indian product.--The term ``Indian product'' has
the meaning given the term in any regulation
promulgated by the Secretary.
(3) Indian Tribe.--
(A) In general.--The term ``Indian tribe''
has the meaning given the term in section 4 of
the Indian Self-Determination and Education
Assistance Act (25 U.S.C. 450b).
(B) Inclusion.--The term ``Indian tribe''
includes, for purposes of this section only, an
Indian group that has been formally recognized
as an Indian tribe by--
(i) a State legislature;
(ii) a State commission; or
(iii) another similar organization
vested with State legislative tribal
recognition authority.
(4) Secretary.--The term ``Secretary'' means the
Secretary of the Interior.
[(a)] (b) Injunctive or equitable relief; damages
A person specified in [subsection (c)] subsection (d) of
this section may, in a civil action in a court of competent
jurisdiction, bring an action against a person who, directly or
indirectly, offers or displays for sale or sells a good, with
or without a Government trademark, in a manner that falsely
suggests it is Indian produced, an Indian product, or the
product of a particular Indian or Indian tribe or Indian arts
and crafts organization, resident within the United States,
to--
(1) obtain injunctive or other equitable relief; and
(2) recover the greater of--
(A) treble damages; or
(B) in the case of each aggrieved individual
Indian, Indian tribe, or Indian arts and crafts
organization, not less than $1,000 for each day
on which the offer or display for sale or sale
continues.
For purposes of paragraph (2)(A), damages shall include any
and all gross profits accrued by the defendant as a result of
the activities found to violate this subsection.
[(b)] (c) Punitive damages; attorney's fee
In addition to the relief specified in [subsection (a)]
subsection (b) of this section, the court may award punitive
damages and the costs of [suit] the civil action and a
reasonable attorney's fee.
[(c) Persons who may initiate civil actions
[(1) A civil action under subsection (a) of this
section may be commenced--
[(A) by the Attorney General of the United
States upon request of the Secretary of the
Interior on behalf of an Indian who is a member
of an Indian tribe or on behalf of an Indian
tribe or Indian arts and crafts organization;
[(B) by an Indian tribe on behalf of itself,
an Indian who is a member of the tribe, or on
behalf of an Indian arts and crafts
organization; or
[(C) by an Indian arts and crafts
organization on behalf of itself, or by an
Indian on behalf of himself or herself.
[(2) Any amount recovered pursuant to this section
shall be paid to the individual Indian, Indian tribe,
or Indian arts and crafts organization, except that--
[(A) in the case of paragraph (1)(A), the
Attorney General may deduct from the amount
recovered--
[(i) the amount for the costs of suit
and reasonable attorney's fees awarded
pursuant to subsection (b) of this
section and deposit the amount of such
costs and fees as a reimbursement
credited to appropriations currently
available to the Attorney General at
the time of receipt of the amount
recovered; and
[(ii) the amount for the costs of
investigation awarded pursuant to
subsection (b) of this section and
reimburse the Board the amount of such
costs incurred as a direct result of
Board activities in the suit; and
[(B) in the case of paragraph (1)(B), the
amount recovered for the costs of suit and
reasonable attorney's fees pursuant to
subsection (b) of this section may be deducted
from the total amount awarded under subsection
(a)(2) of this section.]
(d) Persons That May Initiate Civil Actions.--
(1) In general.--A civil action under subsection (b)
may be initiated by--
(A) the Attorney General, at the request of
the Secretary acting on behalf of--
(i) an Indian tribe;
(ii) an Indian; or
(iii) an Indian arts and crafts
organization;
(B) an Indian tribe, acting on behalf of--
(i) the Indian tribe;
(ii) a member of that Indian tribe;
or
(iii) an Indian arts and crafts
organization;
(C) an Indian; or
(D) an Indian arts and crafts organization.
(2) Disposition of amounts recovered.--
(A) In general.--Except as provided in
subparagraph (B), an amount recovered in a
civil action under this section shall be paid
to the Indian tribe, the Indian, or the Indian
arts and crafts organization on the behalf of
which the civil action was initiated.
(B) Exceptions.--
(i) Attorney general.--In the case of
a civil action initiated under
paragraph (1)(A), the Attorney General
may deduct from the amount--
(I) the amount of the cost of
the civil action and reasonable
attorney's fees awarded under
subsection 2(c), to be
deposited in the Treasury and
credited to appropriations
available to the Attorney
General on the date on which
the amount is recovered; and
(II) the amount of the costs
of investigation awarded under
subsection (c), to reimburse
the Board for the activities of
the Board relating to the civil
action.
(ii) the cost of the civil action;
and
(II) reasonable attorney's
fees.
[(d) Definitions
[As used in this section--
[(1) the term ``Indian'' means any individual who is
a member of an Indian tribe; or for the purposes of
this section is certified as an Indian artisan by an
Indian tribe;
[(2) subject to subsection (f) of this section, the
terms ``Indian product'' and ``product of a particular
Indian tribe or Indian arts and crafts organization''
has the meaning given such term [1] in regulations
which may be promulgated by the Secretary of the
Interior;
[(3) the term ``Indian tribe'' means--
[(A) any Indian tribe, band, nation, Alaska
Native village, or other organized group or
community which is recognized as eligible for
the special programs and services provided by
the United States to Indians because of their
status as Indians; or
[(B) any Indian group that has been formally
recognized as an Indian tribe by a State
legislature or by a State commission or similar
organization legislatively vested with State
tribal recognition authority; and
[(4) the term ``Indian arts and crafts organization''
means any legally established arts and crafts marketing
organization composed of members of Indian tribes.
[(e) Severability
[In the event that] (e) Savings Provision.--If any
provision of this section is held invalid, it is the intent of
Congress that the remaining provisions of this section shall
continue in full force and effect.
(f) Regulations
Not later than 180 days after November 9, 2000, the Board
shall promulgate regulations to include in the definition of
the term ``Indian product'' specific examples of such product
to provide guidance to Indian artisans as well as to purveyors
and consumers of Indian arts and crafts, as defined under this
Act.
18 U.S.C. Sec. 1159
Sec. 1159. Misrepresentation of Indian produced goods and products
(a) It is unlawful to offer or display for sale or sell any
good, with or without a Government trademark, in a manner that
falsely suggests it is Indian produced, an Indian product, or
the product of a particular Indian or Indian tribe or Indian
arts and crafts organization, resident within the United
States.
[(b) Whoever knowingly violates subsection (a) shall--
[(1) in the case of a first violation, if an
individual, be fined not more than $250,000 or
imprisoned not more than five years, or both, and, if a
person other than an individual, be fined not more than
$1,000,000; and
[(2) in the case of subsequent violations, if an
individual, be fined not more than $1,000,000 or
imprisoned not more than fifteen years, or both, and,
if a person other than an individual, be fined not more
than $5,000,000.]
(b) Penalty.--Any person that knowingly violates subsection
(a) shall--
(1) in the case of a first violation by that person--
(A) if the applicable goods are
offered or displayed for sale at a
total price of $1,000 or more, or if
the applicable goods are sold for a
total price of $1,000 or more--
(i) in the case of an individual, be
fined not more than $250,000,
imprisoned for not more than 5 years,
or both; and
(ii) in the case of a person other
than an individual, be fined not more
than $1,000,000; and
(B) if the applicable goods are offered or
displayed for sale at a total price of less
than $1,000, or if the applicable goods are
sold for a total price of less than $1,000--
(i) in the case of an individual, be
fined not more than $25,000, imprisoned
for not more than 1 year, or both; and
(ii) in the case of a person other
than an individual, be fined not more
than $100,000; and
(2) in the case of a subsequent violation by that
person, regardless of the amount for which any good is
offered or displayed for sale or sold--
(A) in the case of an individual, be fined
under this title, imprisoned for not more than
15 years, or both; and
(B) in the case of a person other than an
individual, be fined not more than $5,000,000.
(c) As used in this section--
(1) the term ``Indian'' means any individual who is a
member of an Indian tribe, or for the purposes of this
section is certified as an Indian artisan by an Indian
tribe;
(2) the terms ``Indian product'' and ``product of a
particular Indian tribe or Indian arts and crafts
organization'' has the meaning given such term in
regulations which may be promulgated by the Secretary
of the Interior;
[(3) the term ``Indian tribe'' means--
[(A) any Indian tribe, band, nation, Alaska
Native village, or other organized group or
community which is recognized as eligible for
the special programs and services provided by
the United States to Indians because of their
status as Indians; or
[(B) any Indian group that has been formally
recognized as an Indian tribe by a State
legislature or by a State commission or similar
organization legislatively vested with State
tribal recognition authority; and]
(3) the term ``Indian tribe''--
(A) has the meaning given the term in section
4 of the Indian Self-Determination and
Education Assistance Act (25 U.S.C. 450b); and
(B) includes, for purposes of this section
only, an Indian group that has been formally
recognized as an Indian tribe by--
(i) a State legislature;
(ii) a State commission; or
(iii) another similar organization vested with
State legislative tribal recognition authority;
and''.
(4) the term ``Indian arts and crafts organization''
means any legally established arts and crafts marketing
organization composed of members of Indian tribes.
(d) In the event that any provision of this section is held
invalid, it is the intent of Congress that the remaining
provisions of this section shall continue in full force and
effect.
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