[Prepared statement of Mr. Thomas appears in appendix.]

Senator MURKOWSKI. One of the questions I brought up earlier— do you have any explanation as to why the BIA's office in Alaska is growing as dramatically as you have indicated when many of the programs and services have been transferred to the Central Council?

Mr. THOMAS. One of the efforts that BIA Area Director. Nile Cesar has been putting forward is the issue of inequitable funding across the country. As you know, the cost of delivering service is quite high in Alaska. He has put forth a proposal to the Central Office to bring some of those programs up to par or in parity with other regions.

As it turns out, we are 11th on the list of per capita expenditure in BIA programs, yet we are number one in the cost of delivering services. There are 12 BIA areas across this country and we are next to the bottom in BIA per capita expenditure.

Senator MURKOWSKI. Thank you very much, Ed.

We are going to move now to Harold DeMoss, tribal council member, Cherokee Nation.

Please proceed.

STATEMENT OF HAROLD DEMOSS, TRIBAL COUNCIL MEMBER, CHEROKEE NATION OF OKLAHOMA, TAHLEQUAH, OK

Mr. DEMOSS. Thank you, Mr. Chairman.

My name is Harold DeMoss and I am a member of the Tribal Council of the Cherokee Nation, the second largest Indian tribe in the United States. I have been requested by principal chief, Wilma P. Mankiller, to speak on behalf of the Cherokee people, our tribal council, and on behalf of the principal chief herself.

The Cherokee Nation has long maintained a government-to-government relationship with the United States and was one of the first tribes to enter into self-governance. The Cherokee Nation feels that self-governance is not a cure-all to make all things right in Indian country. Rather, self-governance is about streamlining bureaucratic processes that have therefore soaked up a large percentage of the appropriation dollars before reaching the Indian people where they were intended to reach.

Before comment on S. 550, I would like to make three comments about the self-governance program.

First, the Cherokee Nation feels that the self-governance project should be made permanent. We feel that any permanent legislation should be simple and it shouldn't try to accomplish too much at one time.

Second, the Cherokee Nation feels that the effectiveness of the self-governance project depends upon adequate staffing and funding to the Washington, DC Office of Self-Governance. Each of these elements are critical to the future success of the self-governance program.

Third, we feel that before any tribe is admitted to participate in the self-governance program, it must be prepared to demonstrate its financial and administrative ability to manage and operate programs in a responsible fashion.

At this point, I would like to make my specific comments to S. 550. We have presented the committee with a written testimony. Senator MURKOWSKI. Without objection, your prepared statement will appear in the record.

Mr. DEMOSS. The Cherokee Nation supports the provisions in 311 replacing the authority to negotiate on behalf of the departments in the director of the Office of Self-Governance. The nation feels that this would simplify the negotiations process and clarify the authority of the person negotiating with the tribe.

The Cherokee Nation supports the provisions in section 311(d) providing an expedited appeal process for the decision on residuals and tribal shares. However, the Cherokee Nation feels that the timeframes set forth in this section may be unrealistic.

Under section 311(d) the appeals must be filed within 10 days and decided thereafter in 15 days. The Cherokee Nation feels that the determination of residuals and tribal shares involve exceedingly complex issues and may not be susceptible to a fair resolution if the appeals are decided within 15 days.

The Cherokee Nation agrees with the objectives of section 311(e) which clarify the method of determining tribal shares and residual amounts. The Cherokee Nation has not only experienced difficulty in the negotiation of tribal shares and residuals, but also with the agency's methodology for determining tribal shares, residual amounts, or moneys to be reserved for inherently Federal functions. This section will go a long way toward preventing these problems in future negotiations.

Section 312(a)-in the past, the IHS and the BIA have not fully funded 638 contracts for contract support and have not fully funded self-governance compacts for contract support. The Cherokee Nation agrees that the affected secretary should ensure that the contract support costs associated with the tribe's performance and under its annual funding agreement with the United States should be fully funded for the contract support cost.

Section 314(a)—the Cherokee Nation supports this section declaring the non-applicability of FARS and similar rules and regulations to actively undertake pursuant to self-governance compacts. We feel that clarification and expansion of current laws in this section are necessary for self-governance tribes to effectively perform under tribal compacts.

Section 315(a) an Office of Self-Governance has been established in the Department of the Interior and resides in the Office of the Secretary. That is separate and apart from the BIA. IHS has established an Office of Self-Governance within IHS. During our IHS self-governance negotiations this year, we do not feel an independent presence of self-governance. In the Department of the Interior, the Office of Self-Governance actively supports self-governance concepts and acts as an advocate for the tribe's self-governance rights. We are uncertain that the Office of Self-Governance established within IHS can ever act in a similar manner and would recommend that an office be lodged outside the Service, as BIA.

Section 317(a) the Cherokee Nation strongly agrees and requests that a clear definition of shortfall and its use be developed. Because of the limited availability of shortfall moneys, the nation

is concerned that improper use of shortfalls that lead to uncertainty in its funding levels and frustrates planning compacts.

Section 317(b)—we feel that this section, relating to the restructuring and downsizing of the Federal agencies, is critically important. If the tribes are to assume the roles and responsibilities formerly held by the BIA and IHS through self-governance, it is important that the respective agencies, within a reasonable amount of time, must reorganize and downsize accordingly. This can only be accomplished with a carefully crafted, written downsizing plan prepared by the agency.

S. 550 is an important amendment to the act and will greatly facilitate the implementation of the project. But with emphasis here once again, because we feel that self-governance is the future of the Federal Indian policy, it must be made permanent.

I would like to thank the committee for the opportunity to comment on these subjects.

[Prepared statement of Mr. DeMoss appears in appendix.]

Senator MCCAin [resuming CHAIR]. Thank you very much, Councilman DeMoss.

Last, but certainly not least, we will hear from Faith Roessel, director of the Navajo Nation Washington Office in Washington, DC. Welcome back, Ms. Roessel.

STATEMENT OF FAITH ROESSEL, DIRECTOR, NAVAJO NATION WASHINGTON OFFICE, WASHINGTON, DC

Ms. ROESSEL. Thank you, Mr. Chairman. President Zah sends his regrets to not being here and asked me to give these remarks to you personally.

First, before I begin, I would like to acknowledge that we do have other representatives from the Navajo Nation government here with us. There are Ramah Chapter officials that are here. As you know, chapters are our local form of government and are included in our planning grant process right now.

Senator MCCAIN. Welcome. If you would like to stand to be recognized, we would appreciate the opportunity of recognizing you. Thank you. Thank you for coming to Washington, DC to visit your money. Thank you very much.

Ms. ROESSEL. Just recently, the Navajo Nation received a letter of commitment from the Bureau of Indian Affairs to begin the planning process for studying the possibility of going the route of self-governance through the demonstration program. We received a $250,000 grant, although we requested $1.5 million. We are very concerned about the seriously deficient amount because it will inhibit our ability to adequately plan. Overall, this is of concern because if there are certain time lines that have to be met and so forth, it appears that there needs to be some consideration given for large tribes like the Navajo Nation.

We have established within our government a planning office for self-governance within President Zah's executive office. I would like to say that at the outset, we do support the objectives of selfgovernance. But at this point, we would have to reserve judgment on the exact text and form of permanent legislation, which as I un

derstand has been the recommendations made by prior panels and witnesses.

As far as issues unique to Navajo, I think the most important is the fact that we are a large tribe. And because of that, one major question that we are now confronted with is, How do we achieve self-governance? Because we are a government where we have 10 separate divisions which are like Federal agencies, State agencies they have their own regulatory authority-we need to be looking at whether we need to go this route in increments so that we go division-by-division rather than one entire governmental package moving forward. So this is an issue right now because we have 6,100 tribal employees within the various divisions.

A second issue for us is sufficient funding. We believe that we are not going to be able to finish our planning process within 1 year, or even 2 years, and that it may take a longer amount of time for us. So again, resources to finish that process are of importance to us.

A third issue is just the sufficient funding for entering into the compact with the Federal Government. Our current tribal budget, including Federal and non-Federal sources, is around $275 million for this fiscal year 1994. We have in place right now 16 BIA 638 contracts as well as 2 IHS 638 contracts. So again, this is something where we would have to look very carefully at the transition, if we did choose to go the route of self-governance.

In sum, I think that the Nation has been very heartened and helped by the work of Mr. Lavell and his office. He has been very receptive to our concerns and just last week was out there trying to start briefing our tribal officials about exactly what this means, answering questions, and trying to help us begin this process. That is the sum of my comments, Mr. Chairman.

[Prepared statement of Ms. Roessel appears in appendix.]

Senator MCCAIN. Thank you very much, Ms. Roessel. It is always a pleasure to have you with us again.

I would like to recognize with pleasure the presence of my friend and a great friend of Native Americans, Senator Wellstone, for any remarks or questions he may have.

STATEMENT OF HON. PAUL WELLSTONE, U.S. SENATOR FROM MINNESOTA

Senator WELLSTONE. Thank you, Mr. Chairman.

I don't have any formal remarks. I would, however, like to welcome Marge Anderson, chief executive of the Mille Lacs Band of Ojibwe. And I would like to mention to you, Mr. Chairman, that this is a band that is very well known for its progressive programs. It is wonderful the way in which they have taken economic development moneys and put it into two new schools. Marge Anderson and the Mille Lacs Band have really been at the forefront of what gives Minnesota its reputation for being such a progressive State. I have some questions, but first I would like to apologize to the panelists for being late. As is so often the case, as the Chairman knows, there was an important hearing in another committee on health care that I had to attend. That issue is a real concern to me and the reason I had to be here late. So, I apologize for that.

Thank you, Mr. Chairman.

Senator MCCAIN. Would you like to go ahead with your questions?

Senator WELLSTONE. That would be fine.

I assume that the framework of this self-governance program is providing you the kind of flexibility you are looking for in serving the needs of your tribes.

I would like to ask each of the panelists-starting with Marge Anderson-whether the increased freedom and flexibility in funding programs have enabled you to meet the needs of your people better than the BIA-administered programs.

I take it that this is the kind of flexibility you are looking for and more in the kind of framework of self-governance. I would just like to put that question to you, first of all.

MS. ANDERSON. Thank you for your comments, Senator. I appre

ciate that.

Yes; going from 11 cents on a dollar to our 4th year of compacting we are now getting 50 cents on a dollar. So we are able to provide those services to our people a lot better than the BIA has in the past.

Senator MCCAIN. Could you explain that again? What has gone from 11 cents on a dollar to 50 cents on the dollar?

MS. ANDERSON. The appropriations from Congress-by the time it got in our area to the Mille Lacs Reservation we were getting 11 cents on a dollar prior to compacting.

Senator WELLSTONE. And now you estimate 50 cents?

MS. ANDERSON. Yes; this year it is 50 cents.

Senator WELLSTONE. Mr. Chairman, this sounds like a good reinventing government program. [Laughter.]

I would like to ask some of the rest of you to draw on your experiences, please.

Mr. KADAKE. It has made a big impact on our community to be able to create different programs. It has done a lot for us in our

area.

Senator WELLSTONE. Could you give me some specific examples of how dollars have been put to more efficient use or what you have been able to do with that additional capital?

Mr. KADAKE. Well, I have my administrator here. He knows a lot more than I do. As I said earlier, this is just my first year. Could I have him answer the question?

Senator WELLSTONE. Sure, or other panelists. It is meant to be a general question.

Mr. THOMAS. While he is coming up, I will go over my laundry list.

At Tlingit and Haida, we were able to add money to our college student assistance program. Before the program began, we were giving out $1,700 per student and now we give out $2,300. Although it doesn't sound like a big jump, it does make a difference. We went from having only 13 college students on the honor rolls and now we have over 80 of our student on the honor roll. We have transferred funds out of the general welfare assistance program into tribal work experience programs, which gave incentives to people who were willing to work so that they would get the experience as well as make some more money.