Thank you, Mr. Chairman.

[Prepared statement of Mr. Allen appears in appendix.] The CHAIRMAN. Thank you very much, Mr. Chairman. Mr. John.

STATEMENT OF LIONEL JOHN, EXECUTIVE DIRECTOR, UNITED SOUTH AND EASTERN TRIBES, NASHVILLE, TN

Mr. JOHN. Good morning, Mr. Chairman and members of the committee and staff.

I am pleased to be here this morning testifying before you on some recent events that surrounded the Public Law 93-638 amendments, Public Law 100-472.

I must share with you first that I have just had a wonderful experience, having been selected by tribal people to participate and help chair the proceedings of the regulation work groups. I also had the wonderful experience of being a cochairperson of the Indian Health Service steering committee. It has been wonderful to work with these people.

We would hope the spirit of this experience would be something that we could build on and that we could continue to work in this direction, when Indian measures are enacted, that the tribes be given participation.

I don't know of any other legislation where we had specific language that called for participation of Indian people into a regulatory development process. It has worked to a point. However, we feel that there are still some things missing in the process.

One of the things that I would recommend to the committee is to consider either another amendment or to have a technical amendment to refine some of the areas that have surfaced at this stage of the development process that may need clarifying language.

I'm going to touch on some of these items in my discussion this morning and see if we can encourage some further development of clarifying language.

First off, the process which we have spoken about this morning of involving tribes has fallen short in terms of what is desired.

We had this experience where we were able to work with the agencies. Of course, we struggled through the learning process of how to get along with each other, but it did take some steps forward.

Now it seems that at this stage of the process, as Mr. Allen pointed out to you, there are other parts of the process that are looming as impediments to a total combination of effort. It seems that the language has to touch on the refinement of the process in dealing with OMB and with the departments. We work at the lower agency levels quite well at this point, but it seems that we don't have access to encourage any expedience on the part of the Department and OMB.

This was demonstrated in the schedules that we are working under today. We are now looking at some implementation date of late 1990, which is really uncertain because, as we go along month by month, there seems to be new occurrences of issues that surface that slow down the process. As a result, we don't really know when we'll arrive with the regulation. I don't think that was the intent

in the first place, because it was very explicit in the amendment that there were time lines established when things were to occur.

Once we got into the process we recognized that truly those time lines were far too short for the entire process to be consummated, but we think now that the time lines are far too long. And there is nothing to control that. That's the point I'm bringing to you. There needs to be additional language to expedite the process.

This whole business that we are involved in is a process of change, and we have gotten this far with the experience that we have so far, and we need to look beyond that to see what we can add to it to make these things happen much more readily, because the end result of what we are looking at is improved conditions for Indian people and Indian life on the reservations. Any time we have delays in implementation of regulations, or any enactment of a law, it just means that there is that much longer a wait for Indian people to realize benefits from these new laws. We wish that that would be examined.

In the development of the regulations, there are a number of issues that have surfaced which we think need additional attention.

One of these issues, as I recall, in earlier hearings in previous years there was a great deal of concern on tribal recovery of indirect cost. At this time, we have worked with the indirect cost issues, and I don't feel satisfied that we have yet found the solution of what we're trying to achieve.

In the first instance, the tribes were very anxious and hopeful that we would find a mechanism whereby the tribes could, once and for all, recover the full cost that they were experiencing for operating Federal Government programs.

While we have language very explicitly saying in the amendment bill that there will be 100 percent indirect cost recoveries paid to the tribes, we find that at least so far in this year's experience that neither agency has demonstrated any willingness to follow the language of the amendments.

From the Indian Health Service, there are shortfalls recognized. There is provision in the act that each secretary must come back to the appropriation committee by March 15 and ask for supplemental monies. Instead of that, we had a request from Indian Health Service to take what it called third-party recovery-clinical and hospital sites collecting from insurance companies and using that money to supplant the government's responsibility for indirect cost payments.

The tribes-and particularly in the USET area-feel very strongly opposed to that. They feel that those monies that are gained by third party recovery should be used to broaden the delivery of health care and that the money should not be used in substitute of providing the 100 percent recovery to the tribes.

The Bureau of Indian Affairs is the movement on with the indirect cost issue of transferring the negotiation of indirect cost rates, as has been described already. The USET tribes met earlier this week and tribal chairman from Mississippi, Mr. Philip Martin, introduced a resolution which was unanimously adopted by the USET member tribes opposing the transfer of the indirect cost ne

gotiation simply because they feel it is the old adage of "the fox in the hen house" routine.

Most disturbing to the tribal leaders was the language in the justification for the Bureau's budget, which indicated that the Bureau was intending to reduce overall costs of indirect recoveries. The tribes feel that that's just another game to shorten what those tribes are going to recover, and they just don't feel that's appropriate.

We have, on various occasions, offered solutions or ideas to agencies which generally go unheard. We do think that we have some ideas on how this could be worked out, and we think that there needs to be additional emphasis put on this matter because it isn't satisfying, as yet, as it is developing.

Additionally, in relation to funding problems, the Bureau, of course, was instructed in the act to engage in a study of its budget, its funding process, and the IPS-the Indian Priority System.

The Bureau, we feel-at least from the Eastern Tribes-shortchanged the effort by not providing any funds to conduct the work. There was a total restriction on using any Bureau money for any type of study work; thus, it made it very difficult for tribes to deal with the subject.

Furthermore, we discovered in the process that, generally speaking, tribes don't understand the Bureau's budget process, and when we asked the Bureau if they would teach the tribes what their processes were, we didn't get very far with the request.

So there is more work that needs to be done with this, and I really worry that the report that you have received back from the Bureau of Indian Affairs may be lacking in quality because it did not get the full play that at least the Eastern tribes felt that it should have had. I bring that to your attention this morning.

The need for joint regulations and joint process between the two agencies has already been mentioned. That's one of the shortcomings of the amendment bill. While it was addressed in the report language, there was no specific language in the amendment that required the two agencies to come up with common regulations. We think that in order to make this happen, then the language must be inserted; otherwise, it will continue to wander around. We think that we need to see some language to kind of shepherd that along.

So far in the work, as far as the development of working documents, we find that the amendments addressed specific contracts. There had been work that had been going on previously with the agencies about simplified contracts, and this process doesn't really seem to address that in the fullest sense.

Also, in the act, itself, there seems to be an oversight as far as the emphasis placed on grants and cooperative agreements. It has been mentioned briefly, and has been addressed only briefly so far in the development process. So we think that there needs to be more attention paid to that.

The law speaks to the provision of general liability insurance for tribes. I know in the audience today and later to testify before you will be other experts, but I just wish to mention to you that the tribes are very interested in some form of development where they can participate in an economic development manner to form an

Indian insurance company and, in the process, help tribes help themselves.

I will defer on that subject to other witnesses this morning and let them broaden the issue.

We did find that there are some inconsistencies. When I mentioned technical amendments earlier, the inconsistencies that I speak of are key points between the recent passage of the 437 amendments and the 638 amendments. We have some of those delineated in a document which we will present to you.

There was concern from the tribal sector that the work thus far focus a good deal on the necessity for standards. There was some discussion about the possibility of using standards or the requirement of standards as a sort of barrier or obstacle and using it as a form of declination. While the amendments are silent on the issue of declinations, as had been in the previous act, we now have this issue of standards.

The tribal people certainly feel and understand that there is definitely a need for standards. I think the issue is who is going to master the standards and how they are to be utilized. The tribal people subscribe to standards. But the point that I raised that the tribes are objecting to is that these issues be used as obstacles-as declination issues. We don't think that is the intent of this amendment.

We have a concern about some language we didn't deal with thus far to any appreciable degree in the regulation development process about a citation in section 102 of title II which states that the contracting capability will extend for funding to other agencies than the Bureau of Indian Affairs and the Indian Health Service, and that gives us a little bit of difficulty-particularly the word "other." We're not sure if that allows that we can use these Public Law 93-638 mechanisms to contract with the Department of Labor, with Housing and Urban Development, with the Department of Education, and with other governmental agencies.

We think that needs some clarification as to what we really intended to have happen. Certainly, I believe Indian people would be delighted to have a single process to deal with the Government. One of the major complaints before us, as you may well know, is that there has been long records of multitudes and multitudes of reports and contracting requirements put upon the tribes from all of the various governmental agencies. We are just simply looking for an easier way to go, and we think that this might be the vehicle. I'm suggesting that be looked at and broadened.

Additionally, we did have some concerns about a couple of other items. The Indian Health Service came in with a split budget this year distinguishing between the Federal and the tribal funds. The tribes don't clearly understand the intent of that and are suspicious of it, and, at the present time, wish that the subject be deferred until we can understand what is intended and what can be accomplished by going by that process.

We think that those types of adventures ought to be researched and discussed with tribal representatives before we get to actually submitting to such things.

One other issue which is not contained in the amendments but is of grave concern to Indian people is the subject of eligibility for

services under the Indian Health Service. We have provisions that are standing out there today which have postponed the implementation of final regulation on eligibility. We understand that the work is underway by the Indian Health Service to deal with the issue, but that the reports may come in late.

We really think that there has to be some very in-depth work done on that issue and, even beyond that, the tribes feel very strongly, as we have stated to you before, that the issue of eligibility is certainly the domain of the tribal governments. We don't feel that governmental agencies should be dictating to tribes who is going to be serviced or members of their tribes. That has been a long-standing position of Indian tribes.

I have a final item here which I will just mention briefly. There are a number of issues that we have dealt with both in the Bureau of Indian Affairs and the Indian Health Service in this regulatory development process which have fallen victim in reality to a shortage of time.

We had the regulation development workshops going. Indian Health Service primarily sponsored these workshops and then ran against a shortage of funds to continue work. We left the last workshop, which was held in Albuquerque, with a number of issues which I call out to lunch. We did not reach conclusion in all respects of consideration for these issues, and while the agencies are continuing to develop regulations for those subjects, they're going to be coming back out to Indian country without the benefit of full participation. We'll have to address it in that fashion because we simply ran out of time.

The agencies didn't have any more funds to continue this process that we were using, and so subsequently we have had to drop back and resort to other measures to get the work accomplished.

I will conclude my remarks this morning. I certainly appreciate the opportunity to come before you and express the concerns that I have realized exist out in Indian country. I will certainly be happy to continue to work with you.

Thank you, Mr. Chairman.

[Prepared statement of Mr. John appears in appendix.] Senator COCHRAN. Mr. Chairman.

The CHAIRMAN. Yes?

Senator COCHRAN. Mr. Chairman, I wonder if I could ask that a copy of the resolution that Mr. John referred to that had been adopted at the recent meeting that was offered by Philip Martin, Chief of the Mississippi Band of Choctaw Indians be printed in the record as an exhibit to his testimony.

The CHAIRMAN. Is the resolution available?

Mr. JOHN. I would need to get it. It was transported back to my office, and they are putting the appropriate numbering scheme to it. We will submit it to you, sirs, as readily as possible.

Senator INOUYE. Upon submission, that resolution will be made part of the record.

Senator COCHRAN. Thank you, Mr. Chairman. [Resolution appears in appendix.]

The CHAIRMAN. Thank you very much.

Mr. Dean.