tion as an important and positive first step toward getting this problem resolved. NACS and SIGMA's members do not seek to limit tribal self-government, nor do they seek to deter tribes' legitimate economic development. Rather, SIGMA and NACS seek only to provide the States with an effective means to enforcing Native American tribes obligation to collect and remit to the States excise and sales taxes properly imposed by the State on non-tribal members with whom the tribe has business. For at least three reasons, NACS and SIGMA cannot support S. 2097, at least with respect to the resolution of disputes regarding claims for the collection and remittance of State-imposed excise and sales taxes. First, contrary to what I believe, the Chairman's intention was subjecting this type of dispute to the procedure set forth in S. 2097 will not, in our opinion, expedite or reduce the cost of resolving these disputes, but rather it will have exactly the opposite effect. Mr. Chairman, the law in this area is by now well settled. Simply stated, the States may not impose a tax on tribes and their members with respect on Indian land activity, but, likewise, the courts have resolved that the States can impose upon the tribes an obligation to collect and remit taxes lawfully imposed upon non-Native Americans with whom they're doing business. Consequently, the only factual issues available for resolution in these areas, I believe, are whether or not the taxes are impermissibly imposed upon the tribe or its members. That issue is one of simple, straight-forward statutory construction for which the Federal courts are superbly suited. I will tell you that these cases come forward. They normally go off in the context of summary judgment procedures, and in a relatively short period of time. If we were to take one of these cases, for example, to the Federal Courthouse in Alexandria, I can assure you that we would be done and gone from that courthouse within 90 days. In contrast, the procedures that I understand to be set forth by S. 2097 would require could require a minimum of 13 months of negotiation before dispute could be submitted to the panel established under section 103 of the bill. The time then allowed the panel to resolve the issues submitted to it is undetermined. Second, nowhere can I find in S. 2097 a means by which a decision of the section 103 panel can be enforced. I may not understand what's going on here, but I see in section 104 enforcement mechanisms only with respect to agreements or compacts between the tribes and the States. As a consequence, a party may have submitted to the negotiation process, may have grieved and argued its case before the mediation panel, may have obtained a favorable decision with respect to its position and still have its dispute unresolved because it has no effective means of enforcing that decision. Third, I want to tell you that we perceive that the creation of a special panel to resolve this type of dispute is duplicative of the Federal courts and would unnecessary politicize this issue. We put individuals on the Federal bench for a life tenure for a reason—it's to depoliticize. Our perception is that the Federal courts are an im partial and expert panel, which would be a good place to resolve these disputes. In summary, while the procedures which S. 2097 were established could be appropriate for the resolution of some State and tribal governmental disputes, we believe they would be inappropriate for the resolution of the type of tax disputes upon which I have focused today. In contrast, the mechanisms which would result from the enactment of S. 2300, which Senator Gorton introduced recently, would achieve a legitimate objective in providing the States and tribes with an efficient and cost-effective means of resolving tax disputes and remedying any impropriety that result from those disputes. My clients certainly thank you for the opportunity to share their views with you this morning. I will gladly respond to any questions which my testimony may have risen. [Prepared statement of Mr. Columbus appears in appendix.] The CHAIRMAN. Senator, would you like to introduce our last panelist? Senator INOUYE. I would like to have this opportunity to say a few words about Billy Frank. As I am certain Senator Gorton would agree, I know of no other person on Indian country who has spent so much time for so long to bring together diverse interests and parties to bring about amicable solutions. It is through his leadership that agreements among the State of Washington, local governments, private sector companies and individuals and Indian tribes have been forged addressing the management of fisheries, timber and protection of water quality. I am reminded of one of the cases that Senator Gorton and I worked upon, the Puyallup settlement that now brings about the enhancement and expansion of the Port of Tacoma. Throughout that process I had the good fortune of having Billy Frank at my side to advise me on how to work together with Indian country. Billy Frank, Mr. Chairman, has encouraged people not only in his State of Washington, but all over the Nation to look upon litigation as the last resort, and to instead explore ways to resolve disputes in a harmonious manner. So I am extremely pleased to have Billy Frank, Chairman of the Northwest Indian Fisheries Commission in Olympia, with us today. The CHAIRMAN. Thank you. STATEMENT OF BILLY FRANK, CHAIRMAN, NORTHWEST Mr. FRANK. Thank you. Thank you, Mr. Chairman, and thank you, Senator, for those kind words. I hope we all continue to work together to better all of our lives. I am Billy Frank, Chairman of the Northwest Indian Fisheries Commission. I've been elected Chairman over the last 20 years by the tribes, the 20 sovereign tribes in Western Washington. I wish that there was a kind of a conflict resolution in my time. I was arrested when I was 14 years old for fishing in front of my house on the Nasqually River, the lower part of the river, and when I was 14 years old, continued to be arrested up until 1974. In over 6 years, 70 times jailed, contempt of court in the State of Washing ton, ended up to be the United States v. Washington, confirmed by the United States Supreme Court in 1979 that we did indeed have a right to fish where I was fishing. If we had a conflict resolution at that particular time, maybe we would all be better off here in this setting and start working on the real problems of the water sheds. The water sheds are in trouble in our State of Washington and throughout our nation, as everyone knows. In my testimony I talk about living on the water shed. Over 10 years ago the city of Tacoma and the Nasqually Tribe, my tribe and I was the leader of the tribe at that time-was in court for 15 years on the water shed. The city of Tacoma owns two hydroelectric dams on the 40-miles of the Nasqually River. The city of Sencreli owns a diversion dam on the 26 miles of the Nasqually River. For 15 years we fought over that water; in 15 years we never got anything done and the salmon died on that water shed. We got to the Ninth Circuit Court of Appeals and we decided to sit down in this conflict and solve it. We did so we backed out of the Ninth Circuit Court and down to our local district, and came out with an agreement today. We've living with in-stream closed, we've got enhancement programs and the water shed is breathing and living 24-hours a day over that dispute. But there's all kind of disputes in our land, throughout our country, that we've been addressing and getting to an end and working every day for a better day. Timber fish and wildlife is an example of what we accomplished over the last 25 years on dispute resolutions with the timber industry. It's a forum that is not going to settle all the problems on the water shed, but it's a forum that will address problems on the water shed. It's a high level forum of the CEOs of the timber industry, the little forest people, the tribes, the environmentalists, the State of Washington, agencies, environmentalists and so on that sit on this Board. We address all kinds of problems on the water sheds, and we make it better every day in that forum. We work with the State of Washington, The Forest Practice Board and recommend laws that are wrote. Over the years in my lifetime I've seen us come to the table, a place at the table for Indian people and Indian tribes, and it was hard getting to the table at first because a misunderstanding and the misinformation about us people, about the Indian people. The Indian people are like anybody else their needs are the same as anybody else, and to get to the table was one job, but after we got to the table, this Congress has implemented laws to keep us at the table the Magnuson Act and other Acts that we have in the Northwest, the Power Planning Act is another example. But these are laws and very positive steps that's been taken for Indian people to sit at the table and try to work on problems in our own homeland. These are very positive things, and we have to continue to do that. I am happy to be here today, along with this panel, to try to work on this bill to make it better. Our tribal chairmen are here in the room that will address a lot of the tort and different laws that we have to talk about within the boundaries and adjacent to our reservation, working with our States and working with the Federal Government as partners and the local counties and the ports at the mouths of our rivers. Our salmon is gone in the Northwest, as we all know. We have to-we cannot fight anymore. We have to sit and work these problems out for the future of our generation and our next, and next and next generation. So, thank you, Mr. Chairman. [Prepared statement of Mr. Frank appears in appendix.] The CHAIRMAN. I thank this panel. Billy, let's see if I've got this right. Your tribes had an aboriginal right to fish for probably 1,000 years up in that part of the country, is that right? Mr. FRANK. Yes. The CHAIRMAN. And maybe perhaps less than 100 years ago the large fisheries began to develop, develop political clout, legislative clout, superior numbers? Mr. FRANK. Yes. The CHAIRMAN. And we're primarily responsible for the depletion of fish because you sure didn't do it as a tribal group for hundreds of years before that? Mr. FRANK. Yes. The CHAIRMAN. Now, suddenly, you become the perpetrator of a crime when you didn't deplete the fish? Mr. FRANK. Right. The CHAIRMAN. There's sure something wrong with that. Mr. FRANK. Yes. The CHAIRMAN. I understand 18 of the 26 tribes in Washington have cigarette agreements with the State. Does your tribe have an agreement with the State? Mr. FRANK. Yes. The CHAIRMAN. You never had any problem with the taxes you've paid from the State? Mr. FRANK. The Nasqually Tribe, I don't think so. I'm not in government right now. I've moved over to the Chairman of Natural Resources in the Northwest Indian Fisheries Commission. The CHAIRMAN. Okay. Mr. Columbus, I might Mr. FRANK. There is, Mr. Chairman, arrests going on in the State of Washington on cigarettes, interceptions, that are happening, and tribes are being held up on the interstate at gun point, and it seems like we're going backward. It's very sad. The CHAIRMAN. Thank you. I might point out that the intent of this legislation, by the way, is not to make a final judgment. The intent was to try to avoid expensive litigation and time-consuming problems that we have to resolve here, but it was never intended to be the determinant. If they can reach an agreement, the intent was to have them negotiate and reach an agreement, and if they couldn't, the intent was to pass their judgment on or their opinion on to the courts or here, but it was kind of a measure to try to not go forward with more contentious and expensive ways of resolving conflict. Mr. COLUMBUS. If I may, Mr. Chairman, it was not my intention to suggest that that's not a good thing to have happen. I think it's great if the parties can sit down and get these things resolved vol untarily. The question you had is two-fold-one, what is the inducement? I mean, Mr. Frank's story is a great story and I'm glad it worked out. I wish it could work out that well everywhere. What happens when it doesn't work out and what's the inducement for people to come to the table and make it work out? It should never get to the point where the parties have the kind of inducement that Mr. Frank in the State of Washington and the other folks had to work something out. I mean, 15 years is a long time. The CHAIRMAN. You referred in your statement about our March hearing stating "undisputed evidence" of tax evasion was presented. We did a little research on that because at the time I asked some of the people who were bandying about some pretty big numbers about States who were not being paid their fair share of taxes where they got their information, and we were provided a number of letters from different States. And a study of California, Oklahoma, New York, Michigan, Wisconsin, New Mexico and otherslet me just read a couple of things. There were statements made in that March 11th hearing, and one of the statements was: California is losing between $30 million and $50 million a year in cigarette taxes, according to the Deputy Director of the Special Tax Department of the State of California. In a letter dated April 30, 1998, about 1 month before that statement was made, the Director indicated, and I quote, There is currently no significant revenue loss due to sales of fuel or cigarette taxes to non-Indians, as Indian reservations in California are generally not located near major metropolitan areas. Every one of the States that we checked with, including Oklahoma and New York, Michigan, Wisconsin and so on, the statements about how much taxes the States were losing that were made March 11, every single one of them is disputed by the States themselves who say in fact they are not losing very much taxes. How do you respond to that. Mr. COLUMBUS. Mr. Chairman, to the best of my knowledge, the representatives of my clients that day, the National Association of Convenience Stores and the Society of Independent Gasoline Marketers of America, made none of those statements. The CHAIRMAN. No; they were made by independent-well, some of them, in fact, were made by Congressman Istook. Mr. COLUMBUS. And what I can tell you, Mr. Chairman, is, therefore, with respect to the validity of those statements I know that at least one of my clients has been involved in litigation in the State of New York over the collection of excise taxes on tobacco for over a decade, and it is my understanding that the Department of Finance and Revenue in papers filed in Court estimated at one point that the State was losing over $100 million a year on such taxes. But as to the statements made with respect to these other States, I can't support them or deny them, Mr. Chairman. The CHAIRMAN. Well, we don't have all the States, but I mentioned some, and some I think may be misunderstood-maybe it's semantics. New York is an example, and one of the statements was, Currently the State of New York estimates tax losses at $65 million for untaxed cigarettes and $35 million for untaxed motor fuels. |