PS 01425.015 Idaho

A. PS 04-108 Shoshone-Bannock Tribes - Settlement Agreement

DATE: May 30, 2002

1. SYLLABUS

The FMC/Astaris Corporation (FMC) operates an elemental phosphorus plant on the Shoshone-Bannock Tribe reservation. The corporation violated the Resource Conservation and Recovery Act of 1976 (RCRA) regarding the control of hazardous waste. FMC agree to pay the tribe $40 million over a 5 year period. The first payment of $30 million was paid in October 2001 and the remaining payments will be made in equal installments of $2 million over the next 5 years. The monies were dispersed to individual members of the Shoshone-Bannock Tribe on a per capita basis. Effective October 17, l975, gross receipts derived from trust lands and distributed per capita to members of the Shoshone-Bannock Tribe are excluded from income and resources for SSI purposes.

2. OPINION

You asked us whether proceeds from a settlement agreement received by members of the Shoshone-Bannock Tribes would be countable income and resource for purposes of determining eligibility for Supplemental Security Income (SSI) benefits.

FACTUAL BACKGROUND

The Shoshone-Bannock Tribes (hereafter "Tribes") are federally recognized tribes residing on the Fort Hall Indian Reservation (hereafter "Reservation") near Pocatello, Idaho. The Reservation encompasses 870 square miles, of which 96 per cent is tribal land or is held in trust by the United States for the benefit of the Tribes or their members, and 4 per cent is fee land owned by individuals, including non-Indians. The Fort Hall Business Council is the governing body for the Tribes.

The FMC/Astaris Corporation (hereafter "FMC") operates an elemental phosphorus plant on 1046 acres of land owned in fee simple by FMC on the southwest corner of the Reservation. It obtains the phosphate from mining leases, which provide revenue to the Tribes.

The Department of Justice initiated an enforcement action on behalf of the Environmental Protection Agency (EPA) against FMC for violations of the Resource Conservation and Recovery Act of 1976 (RCRA), 42 U.S.C. § 6901, a program for controlling hazardous waste from the time it is generated, through its treatment and storage, until its ultimate disposal. The RCRA violations related to FMC's failure to meet regulatory requirements for management of hazardous wastes.

Pursuant to Executive Order 12778, 56 Fed. Reg. 55,195, the Department of Justice and the EPA invited the Tribes to participate in negotiations with FMC. Representatives from the Federal government met with the Tribes' Land Use Commission, counsel for the Tribes, and various members of the Fort Hall Business Council. The Tribes participated in the negotiations relating to injunctive relief as well as potential Supplemental Environment Projects (SEPs), which are not required by law but can result in mitigation of the penalty. The Tribes were provided all proposals, sampling results, and drafts of a proposed RCRA Consent Decree. In addition, the Tribes attended meetings and discussions with FMC. The only discussions with FMC not open to the Tribes concerned the civil penalty amount to be paid to the United States as a result of the RCRA violations. After 18 months of negotiations, FMC agreed to spend a total of approximately $170 million - including a civil penalty of $11.8 million - to settle the RCRA violations. FMC agreed to close surface ponds, construct a waste treatment plant to render the facility's phosphorus waste non-hazardous, and implement upgrades to its facility to meet RCRA requirements.

In September 1998, the Department of Justice and EPA agreed to delay the filing of the proposed RCRA Consent Decree to explore options for including the Tribes own claims against FMC. The Fort Hall Business Council declined to participate in the RCRA Consent Decree and passed a resolution opposing it.

On October 16, 1998, the Department of Justice and EPA filed a Complaint against FMC in the United States District Court for the District of Idaho. Meanwhile, the public was given thirty-days to comment on the proposed RCRA Consent Decree. During this comment period, EPA conducted two public sessions in Pocatello. The Tribes provided comments and also intervened in the district court action, arguing that the proposed RCRA Consent Decree allowed FMC to come into compliance over a period of several years; that it allowed waste in all but one of the ponds to be capped in place without deactivating and stabilizing the waste; and it did not dictate waste-treatment methods or additional requirements for air-pollution reduction SEPs. The Tribes also asserted that the United States violated its trust duty to the Tribes.

On July 13, 1999, the United States District Court approved the RCRA Consent Decree. In addition to paying the civil penalty to the United States, FMC must begin operating a Land Disposal Restrictions (LDR) Treatment System by May 26, 2002. Up until then, FMC will continue treating, storing, or disposing of five waste streams as currently managed without these wastes being subject to the LDRs. The Tribes issued permits to FMC for the continued operation of certain ponds pending the completion of the waste treatment plant. The SEPs included a health-assessment project for the benefit of the Tribes valued at $1.65 million.

The Tribes appealed the RCRA Consent Decree to the Court of Appeals for the Ninth Circuit.

On July 7, 2000, the Ninth Circuit held:

RCRA is not aimed specifically at protecting Indian tribes (citation omitted), and thus the United States does not have a specific trust duty to enforce RCRA on fee land within the Tribes' reservation. Moreover, the record discloses a diligent assertion of RCRA claims by the government, a fair and extensive consultation with the Tribes, and a reasonable settlement reached at arm's length between the government and FMC. The United States therefore satisfied its general trust duty to the tribes.

United States v. Shoshone-Bannock Tribes v. FMC Corp., 2000 WL 915398, *1 (9th Cir. 2000).

The Tribes filed a petition for a writ of certiorari to the United States Supreme Court. The Solicitor General and the Department of Justice opposed the petition, which was ultimately denied on May 14, 2001. Shoshone-Bannock Tribes v. United States, 532 U.S. 1019 (2001).

Subsequently, FMC notified the EPA and the Fort Hall Business Council that it did not believe that it could dredge and remove hazardous waste from a pond known as Pond 18 in an environmentally friendly manner without risking worker's safety. FMC requested permission to close Pond 18 in place by capping it under the RCRA regulations. Following discussions with FMC, the Fort Hall Business Council, on the Tribes behalf, agreed with FMC's proposal and sent a letter to EPA recommending that Pond 18 be capped. In return for sending the letter and the final approval by EPA, FMC agreed to pay the Tribes $40 million over a five-year period. The first payment of $30 million was paid in October 2001, and the remaining payments will be made in equal installments of $2 million over the next five years.

When the Fort Hall Business Council received the first payment, it convened a meeting to determine the beneficial use of the funds for the Tribes. On October 22, 2001, the Fort Hall Business Council passed a resolution dispersing the money to the individual tribal members on a per capita basis to remedy "the physical, spiritual, and psychological welfare of the Tribal members who have been adversely affected by the years of contamination of the air, water, and land by the FMC facility." Resolution No. FHBC-01-1606. The resolution also noted that:

WHEREAS, traditionally, the Shoshone and Bannock peoples are generous, humble, and sharing people who share their belongings and property among the Tribal community; and

WHEREAS, through Tribal customs of sharing and gift giving there is a blessing for the receiver of property or gift, and in the Shoshone language such giving and blessings are referred to as "sundehai" and in the Bannock language "suuthii"; and

WHEREAS, based on Tribal traditions and customs, the Fort Hall Business Council wishes to share the FMC Pond 18 monies with all the Tribal members to give them good feelings and blessings for all their suffering, misery, and strife that they have felt in the past and present, and to help alleviate the economic loss to the Tribal members; and

WHEREAS, the Fort Hall Business Council hopes that this act of giving ("sundehai and suutihii") will spread a blessing throughout the Tribal community and lessen the adverse physical and emotional harm on the Shoshone and Bannock peoples and begin a healing process for all the people; and . . .

THEREFORE, BE IT RESOLVED BY THE FORT HALL BUSINESS COUNCIL OF THE SHOSHONE-BANNOCK TRIBES, that the $30 million received pursuant to the FMC Pond 18 agreement will be given as a gift to each enrolled member of the Shoshone-Bannock Tribes. (emphasis in original)

Resolution No. FHBC-01-1606. According to Jeannette W~, General Counsel for the Shoshone-Bannock Tribes, individual tribal members received $6,500.00 on November 1, 2001 pursuant to the resolution. You wish to know how these individual payments should be treated for SSI purposes.

DISCUSSION

The SSI program, 42 U.S.C. §§ 1381-1383d (Title XVI of the Social Security Act) was enacted by Congress in 1972 to provide "a subsistence allowance, under federal standards, to the Nation's needy, aged, and disabled." Schweiker v. Wilson, 450 U.S. 221, 223 (1981); see also 20 C.F.R. § 416.110 (stating that the purpose of the program is "to assure a minimum level of income for people who are [aged], blind or disabled and who do not have sufficient income and resources to maintain a standard of living at the established Federal minimum income level"). Under the Act, an aged, blind or disabled individual is eligible for SSI if his income and resources are below a specified amount set forth in the Act and implementing regulations. 42 U.S.C. § 1382.

The land on the Fort Hall Indian Reservation is held in trust for the benefit of the Shoshone-Bannock Tribes. 25 U.S.C. § 459a; POMS SI 00830.830. Effective October 17, 1975, any and all gross receipts "derived from, or which relate to" these trust lands are deposited to the credit of the Tribes and expended by the Tribes for such beneficial programs as the Fort Hall Business Council may determine. 25 U.S.C. § 459d(a). "All gross receipts (including but not limited to bonuses, rents, and royalties" derived by the United States "from any contract, permit or lease . . . or otherwise" must be "administered in accordance with the laws and regulations applicable to receipts from the property held in trust by the United States for Indian tribes." 25 U.S.C. § 459d(b). All "gross receipts" distributed to members of the Tribes are excluded from income and resources for SSI purposes. 25 U.S.C. § 459e; POMS SI 00830.830D.5.

Here, the monetary settlement between FMC and the Tribes relates to lands held in trust, specifically Pond 18 on the Reservation. The first payment under the settlement, $30 million, was deposited to the credit of the Tribes and expended by the Fort Hall Business Council, the governing body for the Tribes, for a beneficial purpose, i.e., to remedy "the physical, spiritual, and psychological welfare of the Tribal members who have been adversely affected by the years of contamination of air, water, and land by the FMC facility." Thus, the $6,500 payment distributed per capita to the tribal members represents "gross receipts" and should be excluded as income and resources for SSI purposes.


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PS 01425.015 - Idaho - 05/26/2004
Batch run: 01/27/2009
Rev:05/26/2004