We think you are looking for very constructive solutions to issues that are being raised by Senator Gorton and others regarding the fairness of the laws and regulations, the fairness of competition within Indian reservations and their economies and their communities. I want to note that it always is as a matter of overall observation quite frustrating for Indian country against the backdrop of a nation that is built to protect the poor and the disadvantaged and the minorities, a country that has fundamental principles designed to elevate the poorest of the poor and to assist them, but yet the issues that we are being raised with today, the issues we are addressing, are issues that are really intended and targeted as suppressing the most disadvantaged communities in America, and the Indian communities clearly as reflective of that. So when we talk about your proposals and the issues that they're intending to address, the issues of fairness really does not apply across the Nation. For example, we would ask Senator Gorton why is he not working with such diligence with regard to the application of liability coverages against the States, the fairness of the State's application, consistent with the tribes? We note the Shakopee paper. When you look at the Shakopee paper presented to you on May 6, it gives you countless examples of States and local governments claiming waivers of immunity from suits by citizens that have been wronged by actions of their citizens and employees. So there's a lot of inconsistencies here in regard to what we're dealing with and we're quite frustrated with that. We would like to make a quick observation that this bill has two key areas that it's trying to address the dispute resolution process, and then secondarily the full liability coverage. One of the suggestions we would throw at you is you may want to separate this bill into two different bills so that it does not become a vehicle for unfriendly amendments because of one section versus another section, so that we may want to methodically chip away at each of these areas and they don't confused among themselves. We are, obviously, very disturbed over the idea and the notion that the tribes are evading taxes and that there's unfair competition out there when you can look around the country and see unfair advantages all the time. Right here in the District of Columbia the taxation for cigarettes is 55 cents a pack. Across the border, just a few miles away, is Virginia, and the taxation is four cents. So are we looking at unfair tax advantages for the companies in Virginia as opposed to the companies in the District of Columbia? The issue for us is when you look at the economies of Indian reservations, we do have to have some price disparities to provide some opportunities for our depressed economies. America provides these price disparities all the time, and they're all the time trying to create new kinds of laws, and tariffs and what have you to create equities, but the fact is we're trying to enhance economies. We're trying to provide an opportunity for tribal governments in order to assure them that they would be able to become truly selfsufficient, which is a goal that this goal set out for us. So we point out one thing that is not recognized by the Congress so far is that the court has provided opportunities such as the side of negotiation with the States. Those remedies are available to them. They can collect those taxes at the wholesalers; they can work out agreements with the States that would work out very effectively. What we want to point out is that we do not want to see a forum that would create a disadvantage to the tribes-that is a major issue to us, and we know that you have heard some suggestions that may bring that into reality. But one of our points is if we bring a resolution board together, if it became a reality, it has to be managed or it has to be administered by people who understand Indian law. They have to understand the history of tribal-State relationships and the ongoing clash over control and jurisdiction. That is critical for anyone to even understand what's going on, and we're very fearful of whether or not it is going to be administered fairly for the tribes or to the disadvantage of the tribes. One last point I would like to make on the torts claims issue. You have a couple of sections in there that we think merits emphasize. One is the analysis of who would pay for this insurance. Both this committee has recognized we do need to study and assess what the situation is out there and how we would pay for it. Would additional burdens be put upon the tribes with an already limited budget that it would also take away from direct services to tribal communities that are already depressed? That is a major issue. So we would encourage you to look at that study in section 202 to find out exactly what the coverage and what the risk is. One last point in conclusion-we are very concerned about any kind of legislation that has a notion that one size fits all. It doesn't work with insurance and there are some solutions, and Assistant Secretary Gover had suggested that the tribes can contribute to what the solution should be. With regard to taxation issues, that have been raised before this committee, in our judgment, it is a local intergovernmental concern between the tribes and States. You need to provide incentives to provide that opportunity. And last but not least, this Congress has a long-standing historical and moral obligation to protect the tribes and their rights because we are at such disadvantages in our political system. Thank you. [Prepared statement of Mr. Allen appears in appendix.] STATEMENT OF PHILIP S. DELORIA, DIRECTOR OF THE Mr. DELORIA. You were right the first time. In fact, that was the first thing I was going to say. I would like to thank you for inviting me to testify and I would like to beg the committee and its staff to stop calling me professor, which seems to be a habit. I am not a professor any place. I have free rent at the University of New Mexico Law School, but I am not part of the law school. I run an Indian-controlled organization that does policy studies. I appreciate the opportunity to testify here today on this important legislation. I think everybody agrees that tribes should and do usually act responsibly in the tort area, and if there is a possibility-and I don't know if there are legal barriers for tribes to get should be pursued. I know that many tribes already have coverage, and I think it's very important to find out if there are any tribes that are actually having trouble getting coverage. I haven't heard of that, and I'd be interested to know the source of that information. I also in trying to check out and prepare testimony I got very different information from tribal people and from attorneys who represent tribes as to what the actual practice is in terms of insurance companies trying to force tribes to claim sovereign immunity when a claim is made. If the insurance company forces a tribe to claim sovereign immunity, I don't know what the tribe is paying the premium for because that means they're walking away. Then it's legal insurance; it's not liability insurance. You're getting a free lawyer to go in there and claim sovereign immunity, and I hope that the premiums are adjusted accordingly. I don't know, and have been unable to find out either from Federal or tribal attorneys, the relationship between the Federal Tort Claims Act and what happens after that when a claim is entered under that. One source told me that the Feds turn around and try to collect from the tribe and its insurance company, and somebody else said no they don't. So I think the factual background is pretty shaky here and we all need to go into that more deeply. I think on a broader level, and I try to concern myself with the broader policy issues, I do think that we all have to get our act together on the Indian side of the table. We can't keep coming in here and telling the Federal Government, "We're taking care of it; it's none of your business," although that's our first impulse. I do think that the marketplace in general is what forces governments to waive their sovereign immunity, and I think that's what is happening with tribes. That does not mean that there won't be a few things to slip through the cracks, and I think we have an obligation, and I hope NCAI will take a stronger position in creating some kind of peer pressure so that any tribes that are really bad actors in this area, that there is some peer pressure because it hurts all the tribes. If I could move to the State-tribal relationship where I do have some experience, Mr. Chairman. My experience since 1976 working with State-tribal relations is that either the State or the tribe, if they feel the Federal Government is going to tip the balance in their favor, they will not negotiation with each other. If they come to Washington looking for a Federal entity to win the battle for them and that Federal entity says, "Go home," or even better yet says, "Go home, we have a trust responsibility and we're going to tend to be on the Indian side," they'll go home and they'll negotiate it. That's why we have several hundred tax collection agreementsbecause they decided to negotiate. The Supreme Court said the tribes should collect the tax for the States. That's not self-executing any more than Wurster v. Georgia was self-executing. You still have to figure out how you're going to do it, and at that point the States needed to sit down with the tribes and negotiate, and that's what needs to be done. But as long as there is a perception that tribes are on the run politically in Washington, the States have no incentive to negotiate because they're going to think they can come to fix every little thing that goes wrong that some non-Indian doesn't like on the reservation. As long as there's that perception, you're not going to get any improvement in State-tribal relations, and all the Federal commissions in the world aren't going to help. My red light is on. [Laughter.] [Prepared statement of Mr. Deloria appears in appendix.] The CHAIRMAN. Yes, it sure is. Ms. Borzi. STATEMENT OF PHYLLIS C. BORZI, CENTER FOR HEALTH POLICY RESEARCH, GEORGE WASHINGTON UNIVERSITY MEDICAL CENTER, WASHINGTON, DC Ms. BORZI. Thank you, Mr. Chairman, Mr. Vice Chairman. My name is Phyllis Borzi, and I am a senior research staff scientist at the Center for Health Policy Research of the Medical Center of George Washington University, and I'm very honored to be asked to testify this morning before you on this bill. Last year our center conducted the study that Secretary Gover referred to, and I was the primary author of the study. The study was on assessment of the access to private liability insurance for tribes and tribal organizations with self- determination contractsalmost as big a mouthful as the name of your bill. I provided the committee with a copy of the entire study. I want to say before I continue my testimony that my remarks today are my own, and, obviously, don't reflect the views of the Federal Government that funded the study or the members of our technical advisory group from the various Federal agencies that assisted us in making sure that the study stayed on track. As you know, the Federal Tort Claims Act coverage is not like real insurance, but it sort of operates for tribes like insurance because what it does is it immunizes tribes and tribal employees who may have committed negligent acts in the course of carrying out their 638 contracts as long as that's what they're doing. The activities, they give rise to the potential tort liability have to part of the activities that they're required to perform under their 638 contract, and the individuals who may have committed these allegedly negligent acts have to be employees of the tribe carrying out the contract or the compact. We were asked by the Department of Human Services in conjunction with the Department of the Interior and the Department of Justice to look at this interaction between the coverage for selfdetermination activities that the tribes have under the Federal Tort Claims Act, and the private liability insurance that many of them have chosen to buy. When we started the study, we had lots of questions, and I've listed them in my testimony. They're the same questions that you have and that your legislation suggests we need the answers to, like how many tribes have private liability insurance? What kind of insurance do they have? Is it comprehensive insurance? Is it gap coverage? Is it designed to be coordinated with the immunity they have under the Federal Torts Claims Act? What do they pay for it? We had lots of questions, and I can tell you that after 16 or 17 months of research, we didn't really have the answers to those questions. So I think it's very important and more work needs to be done in this area. But let me just give you a sense of some of the issues that we think are difficult here. The way the bill is structured really the Secretary of the Interior in order to provide this liability insurance is going to have to make some assessment on a tribe by tribe basis of whether the private insurance that tribes have already is adequate. Well, it seems to me that there are a lot of problems with making that assessment. The first is finding out initially whether the tribes really do have private liability insurance. Ours was a study in which notices were sent to all the recognized tribes and invitations were issued to come and participate in the study. Obviously, that had its limitations. We were only able really to get 22 tribes to participate in our study, and so I would hope that to the extent that there is a much broader study you would have some mechanism for having everybody in. Since my time is quickly running out, let me just go to what I think is a really critical issue, and that's the issue of sovereign immunity. As I've sat here this morning, I've listened to a variety of witnesses and senators talking about this issue. It was our experience in terms of the tribal representatives that we dealt with that in every case their desire to purchase private insurance was because they felt a commitment to people who might be injured as a result of their activities or their employees' activities on tribal lands to make them whole, and the types of insurance policies that they were able to buy in the market place varied considerably in terms of the coverage that they got. One insurance company that insured a fair number of tribes had as part of its policy no description at all of how this sovereign immunity issue was to play out, but what they told us when we met with them in our site visits was that they routinely asserted the tribes' sovereign immunity as a way to defeat every claim legiti mate or not. When we inquired about the pricing of their product, it seemed clear to us that those products that they sold to tribes were priced no differently from the other kinds of insurance that other companies were selling, which made it clear that the insurance company would not assert sovereign immunity as a way of defeating claims, except with the express written consent of the tribe. So the provision in your bill that says that sovereign immunity can't be used by the insurance company to defeat the claims we think is very important. We try to talk-because we guarantee confidentiality to all the participants in the study, we certainly couldn't go back to the tribes that purchase coverage from this one insurance company and specifically tell them about this, but I tried to test whether or not they did not that that's what they were doing. And when I raised the issue with the tribal representative, he said to me, Well, why do we need insurance? If the point of this is to always assert our tribal sovereign immunity, we could do that. We don't need to pay some insurance com |