STATEMENT OF S. BOBO DEAN, ESQ., HOBBS, STRAUSS, DEAN & WILDER, WASHINGTON, DC

Mr. DEAN. Good morning, Mr. Chairman.

My name is Bobo Dean. I am with the law firm of Hobbs, Strauss, Dean & Wilder of Washington, DC, and Portland, OR.

We are presently representing 13 tribes and tribal organizations in connection with tribal participation in the development of the regulations under the 1988 amendments to the Indian Self-Determination Act. I have personally been involved in Federal-Indian law since 1965, and represented the Miccosukee Tribe in 1970 when it negotiated the first contract for tribal operation of an entire BIA agency.

We have provided a written statement to the staff of the committee, and also a memorandum analyzing the April 3 draft regulations which were circulated by the Indian Health Service to tribal representatives across the country. And also, although I believe it is not an official issuance of the BIA, it does note a number of BIA comments and input with respect to the regulation process. So far as we know, that April 3 draft is the last draft of the regulations that is publicly available.

We would ask that the points that we have made in those statements be considered.

In our oral testimony, we would simply like to highlight a few of the points where, to borrow a phrase from Mr. John, we feel that the Federal agencies are perhaps out to lunch in their approach to the particular issues that are before them.

I would also like to ask that we have an opportunity to submit for the record a statement on the construction regulation portion of the regulations. The tribal representatives and the IHS construction work group are still at work developing an approach to the application of the Federal acquisition regulations to 638 construction regulations.

The amendments provide that the exemption from Federal acquisition regulations does not apply to construction, although it does apply to other forms of Public Law 53-638 contracting. The issue there is whether that means that all of the Federal acquisition regulations are applicable or whether the secretaries retain the right, as the statute would seem to provide, to waive those Federal acquisition regulations that are not appropriate in an Indian self-determination contract.

That issue has been discussed but not resolved in that work group, and my understanding is that the Federal representatives indicated a willingness to consider tribal input on that issue. That is still in preparation. I believe we will be able to provide something in a few days to the committee that we ask to be included in the record.

The CHAIRMAN. So ordered.

[Information to be supplied appears in appendix.]

Mr. DEAN. Thank you.

One of the major disputes which has arisen in the history of the Indian Self-Determination Act over the years involves the level of funding to which tribes are entitled under the act. Under the April 3 draft, the appeal of a funding dispute is treated as a declination

under the act. This ensures that funding does not become a threshold issue to be resolved before a proposal can be processed-a position which had been taken by the Indian Health Service in the past and which is criticized in Senate Report 100-274, the legislative history of the 1988 amendments.

We believe that the April 3 draft correctly addresses this issue, but we understand that the Indian Health Service objects to the draft language because it refers to a funding level appeal as a declination appeal. IHS, we understand, is willing to provide the same hearing and appeal rights when a contract is refused on a funding issue as it does in any other dispute, but unwilling to describe such a refusal to contract as a declination.

In our opinion, this is not merely a semantic dispute. The act requires the Indian Health Service or the BIA to do one of two things when it receives a request from a tribe to contract: One, it may approve the proposal; or, two, if its objects are not resolved through discussions and negotiations, it may decline it and provide an appeal and a hearing. That is the statutory mandate. The April 3 draft reflects this mandate.

The IHS approach that a dispute over funding involves a third alternative is unacceptable, even when the same appeal rights are provided by regulation. Under the IHS approach, as we understand it, such rights are provided by the agency as a matter of grace. In fact, the statute gives IHS no third alternative. It must approve or it must decline in accordance with the statutory declination procedure.

We urge, therefore, that the language of the April 3 draft should be retained.

The IHS also seeks to add a sixth method to the five statutory provisions which allow the unilateral reduction in a recurring contract funding level. The IHS would add "changed circumstances and factors" as a ground on which the agency may unilaterally reduce a contract funding level in future years.

We are unaware of the statutory basis for this IHS regulatory proposal which would substantially increase the discretion of the agencies to reduce recurring contract funding levels without tribal consent.

Section 105(c)(2) of the act permits "changed circumstances and factors" to be taken into consideration when contracts are renegotiated, but that does not authorize unilateral reductions by the agency, and we believe that the regulation should track the unilateral reduction provisions which are contained in the 1988 amendments.

We are also concerned with the status of the implementation of calendar year contracting mandated by section 105(d) of the amended act. As we understand this provision, it requires that contracts in fiscal year 1990 commence on January 1, 1990, "unless the Secretary and the Indian tribe or tribal organization agree on a different period." However, the Administration has not requested the quarter-year funding necessary to implement this provision without leaving the final quarter of the contract year contingent on a future appropriation.

The whole reason that I understand that Congress provided for calendar year contracting was to enable the contract to be negotiat

ed and put in place based upon firm appropriation figures; therefore, to implement this provision without having in hand the funds necessary to fund the contract for a full year would defeat the purpose of the amendment.

We urge that your committee work with the Appropriations Committee to assure either that the Bureau of Indian Affairs and Indian Health Service be provided with the dollars necessary to implement this provision in fiscal year 1990, or that the act be amended to prohibit BIA or IHS from insisting upon calendar year contracting over the objection of the tribal contractor.

We also believe that the Indian Health Service has taken an unnecessarily restrictive interpretation of the new statutory language relating to mature contracts. We recognize that the mature contract is a new and, so far as we know, unprecedented concept in government contracting. IHS has concluded that an Indian tribe wishing mature contract status cannot opt for a mature contract for a specific term of years-that the term of the contract, under the 1988 amendments, must be indefinite.

We urge that the committee review this matter with IHS to clarify that a tribal governing body has the discretion to select a contract term which it deems best for the needs of its members and most consistent with the purposes of the contract, and that the 1988 amendments are not meant to require an indefinite term for a contract qualifying as mature when a definite term-for example, 5 years-is more appropriate based on the needs of the tribe or the purposes of the contracted program.

The Bureau of Indian Affairs suggests that the declination criteria of section 102 of the act shall apply to the renewal of an existing contract for the same functions or programs. That is to say, if a tribe has contracted a law enforcement program and the contract comes up for renewal and they are not expanding the functions which they contracted-simply a renewal of a program which has been in place and which has already passed the declination criteria-the Bureau position, as I understand it, is that the contract proposal would have to be again reviewed against the declination criteria in the same manner as it was reviewed initially.

This is contrary to the present BIA and IHS regulations. The existing BIA regulations provide that contracts will be renewed when involving the same functions as already contracted.

We advocate the retention of that language, and adding to it a phrase from existing BIA guidelines, "renewal of such contracts is not at the discretion of the Secretary." We urge that that language should be incorporated into the regulations.

The IHS also seeks to eliminate regulatory presumptions from the draft which make it easier for an Indian tribe or tribal organization to contract under the act. The regulatory presumptions which are continued in the April 3 draft from the existing BIA and IHS regulations clarifies that the burden lies with the Secretary to prove that an Indian tribe cannot satisfactorily operate a Public Law 93-638 contract.

We believe that these provisions, which are essentially a part of the present system and are included in the April 3 draft but questioned by the Indian Health Service, should be retained.

The IHS also wishes to weaken the statutory timeframe in which to award a contract under the act. The IHS would provide in regulations that a contract which was not declined on the 60th day is deemed approved on the 90th day "to the extent the proposal conforms to the law and regulations," and would delete language which would allow the Indian tribe to incur contract costs from the 31st day after approval of the contract.

As we understand the 1988 amendments, it mandates that the agencies act to disapprove and provides that the contract shall be approved on the 90th day if it has not previously been disapproved. The language proposed by the IHS would have the effect that a tribe would essentially proceed at its peril where the agency has not acted, and it could act as though the contract had been approved, but the Agency would still be able to complain later that the proposal was not in conformity with the law or regulations.

We think that if a proposal is going to be declined by the agency, the Agency should gear itself up and act to provide a declination notice within the statutory timeframe.

Another controversial issue in the regulation drafting process has been the question of program quality assurance, program standards, and data recording requirements, which Mr. John has mentioned.

The reason for this controversy is that this section goes to the heart of the contracting debate; namely, how much authority are the Federal agencies willing to relinquish to Indian tribes and tribal organizations which contract under the act. It is a question of who will ultimately exercise control over the lives of Indian people.

The Act, especially as amended by Public Law 100-472, answers this question in favor of the Indian people, themselves.

In the area of program quality, the IHS and tribal representatives have reached a compromise which is reflected in the April 3 draft on the issue of tribally developed standards and data requirements. The IHS still has some reservations, but has recognized the right of Indian tribes to develop their own standards, which must be reviewed and approved by the agency.

The Bureau is still reviewing this position and has yet to comment so far as we are aware. Its representatives have suggested that for some Bureau-funded programs there must be specific mandatory program requirements. This may be so in some instances. For example, regulations perhaps should provide that certain training must be provided to police officers carrying firearms. There may be a series of mandatory requirements, to which I would suspect no tribal organization would object.

But these minimum requirements should be stated in regulations to assure fairness to all tribes and to deter the agencies from imposing detailed requirements as to program content which would inhibit innovation in the tailoring of programs to meet tribal needs.

As I have noted, we have included a number of other issues in our written statement. To conclude my oral testimony, I would only like to mention that I think the regulation process so far has not sufficiently addressed the manner in which other programs in the Department of the Interior and the Department of Health and

Human Services will be brought into the Public law 93-638 process. Both agencies have recognized that the 1988 amendments make other programs carried on by the Secretaries for Indian tribes subject to 638. They have indicated that they are developing, in consultation with those other agencies, some approach to those programs, but we are not aware of where that process has reached.

I would simply then like to thank you, Mr. Chairman, for the opportunity to present these views. And I would urge that the committee continue this oversight process and work closely with both agencies until the regulations are issued.

Thank you, Mr. Chairman.

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

The CHAIRMAN. Thank you very much, Mr. Dean.

Before we proceed, may I assure all the witnesses that your prepared statements and supporting documents will all be made a part of the record in total, together with your oral statement.

The matter before us today and the discussion that evolves around it are very important. In my mind, this may be the most important hearing of this session because we are considering something very fundamental and basic, and that is the nature of Indians, Indian tribes, nations, and rancherias, the nature of the Government of the United States, and the nature of the relationship between Indian organizations and the Government of the United States.

Under international definitions, the United States is considered a sovereign. A sovereign is one who is generally empowered with determining membership or citizenship, has the power to enact ordinances or rules and regulations that will affect the conduct of its members. A sovereign usually has the power to tax.

The United States is a sovereign. Do you consider Indian nations and tribes to be sovereign?

Mr. ALLEN. I might try to respond to that, Mr. Chairman. In my opinion, the answer is yes. We firmly believe that the tribal governments are sovereigns. We believe that we have the right and responsibility to manage the affairs of our tribes and our resources. We are frustrated over some of the losses that we experience— whether it might be through legislation or through the court system-but we are adjusting to it as a reality checked to the conditions that we are experiencing today.

But the tribes do not have any reservation and do not fall back one inch in their efforts to move our governments forward in terms of managing our affairs—to be able to control our governmental affairs to the fullest context.

That is what we feel we are trying to accomplish through the various laws that we urge Congress to pass to allow us to implement that relationship between us and the Federal Government.

We recognize that the cross-jurisdictional issues can be very complex, but we feel that, as we move forward within the competence, expertise, and capabilities of the tribes-all the way from the skills that we have as managers to the legal aspects to the political skills of the tribal leadership—we do act in a manner of the same kind of sovereign context as the U.S. Government.

We recognize that we are a microcosm. We are very small as against the backdrop of the U.S. Government. And we feel that we