Mr. Fagan, does Colorado impose both a general retail sales tax and a State income tax?

Mr. FAGAN. Yes; we do, sir.

Senator GORTON. If an ordinary citizen of Colorado feels that they don't get enough in the way of services from Colorado for the taxes they pay, do you negotiate with them to lower their taxes on an individual basis?

Mr. FAGAN. No; but I'm not sure that that's a parallel situation. Senator GORTON. Well, it seems rather parallel to me.

Mr. Gover, you made so much of what you said I agree with it. You're very straight-forward with this, but one part of your opening statement seemed to me to be curious.

What services provided by States as a general matter through their taxpayers are unavailable to Indian citizens of those States? Don't the vast majority of Indian kids go to State schools?

Mr. GOVER. Yes; they do.

Senator GORTON. Aren't Indians entitled to whatever Welfare payments or public assistance payments that the State has for all other citizens?

Mr. GOVER. I believe that they are, but quite often they are not able to get them because the States take the attitude that you're on an Indian reservation; there's a BIA program for that, and they make it very difficult for an individual applicant, and I think that's one of the issues we have to look at.

Senator GORTON. I think it is too because I think that's clearly unconstitutional.

Mr. GOVER. Let me clarify my point, though. My statement actually assumed that the States do provide all of those services and was not an accusation that they do not. What I was saying is that I believe that on balance when you look at the amount of taxes that are drawn by the State out of the reservations, and compared to the amount of State services provided to the reservation, that the balance of that exchange strongly favors the States, and that I think that is a reason for-that's a subject that ought to be inquired because it helps to account for the depressed conditions of reservation economies. But I was not actually suggesting that the States do not provide services.

Senator GORTON. And I'm speaking about individuals. An individual citizen of the State is entitled to equality and treatment without regard to whether that individual is Indian or non-Indian. Is that not the case? This is just a general proposition.

Mr. GOVER. Yes.

Senator GORTON. Let me ask you I find some force behind your statement that certainly those tribes that have looked into insurance and have obtained insurance know more about it than the Bureau of Indian Affairs does.

What kind of role is applicable there? If we were do determine that we wanted to make certain that every tribe had tort claim insurance for the normal run of torts-automobile accidents and the like, the kind of liability policies that most of us have as individuals and that most business undertake-in your view would the best way to do that be that each individual tribe should look for, whether required not, its own insurance? I'm certain you don't want the insurance-but do you suppose the Bureau might have

the ability to create, say, groups, particularly of the smaller tribes together, under one blanket policy?

It's one thing for a large tribe that's sophisticated in its business acumen to go out and get a good deal on an insurance policy. We all know with our automobile insurance there's a wide variety of premiums for pretty much the same coverage, but in the case of small and unsophisticated drivers, would they not be better off with some way to do that collectively, rather than some kind of requirement that each of them have it and use their TPA's to buy it?

Mr. GOVER. That's a good point and one that I had not considered. That actually holds a lot of promise to create these to create groups instead of having, especially the small tribes, go out and try individually to get decent policies.

My experience, again, in representing tribes in the private sector was that, as you point out, there's a wide disparity in these policies, and quite often I thought that tribes were being taken advantage of by insurers because it's not that easy to understand a liability policy.

I keep coming back to this HHS study because I think they make a number of good points. One role that clearly the Federal Government can play through the BIA and the IHS is to do a couple of things-one, show the tribes where the gaps in their coverage are. The Tort Claims Act does cover a considerable amount of tribal activities. What many tribes may not know is that it does not cover everything, and we ought to, and should, be helping them to identify the gaps in any coverage so that when they go to an insurer, they can say, "We don't need a comprehensive policy; we need this policy," and that's a role that I think is appropriate for us to play. And, certainly, with the committee's endorsement we would do so, but that's the kind of analysis that needs to be done, and if we can help put together groups to reduce the costs of these policies, then I suppose we're willing to do that.

Senator GORTON. And what distinctions are there as a matter of fact between a proposal that simply requires a tribe to have an insurance policy and have the insurer as the defendant against one that allowed a suit to be brought against the tribe but with a limitation of liability co-extensive with such insurances they had? Mr. GOVER. What's the difference between them?

Senator GORTON. Yes; isn't that a distinction without a difference?

Mr. GOVER. I suppose the difference would be in-it's not a distinction without a difference because it does matter who the party defendant is and what this Congress chooses to do with the doctrine of sovereign immunity. Sovereign immunity, obviously, is meaningful to the tribes. It is not meaningful to insurance companies, and I think that it is-it creates no difference in the outcome, which ideally is that the victim of tortious conduct is compensated, but it does make a great deal of difference, I think, certainly, as a matter of principle and precedentially speaking, that the tribe not be subjected to those suits.

Senator GORTON. One other question on this subject that we haven't covered here what justification is there for exempting

tribes from suites under Federal environmental laws that give an individual cause of action against State or local governments?

Mr. GOVER. That create an individual right

Senator GORTON. A number of our Federal environmental laws, of course, allow units of government to be sued for violations of Federal environmental laws. Why should Indian tribes be exempt from such lawsuits?

Mr. GOVER. I apologize, I'm having some trouble with the question.

First of all, my understanding is that Federal environmental laws, the substantive requirements of the Federal environmental laws, do apply to tribes

Senator GORTON. Yes; that is correct.

Mr. GOVER. That they are enforceable by the United States, at least, against the tribes.

Senator GORTON. But many environmental laws-many environmental organizations don't think the United States does a very good job in bringing those lawsuits, and they are permitted to sue States and local governments under the statute, but a State-an individual who can sue a State or local government will be prevented from suing an Indian tribe on the same environmental cause of action.

Is there a justification for that?

Mr. GOVER. I think there absolutely is, and it is that these individuals, these environmental groups and the plaintiffs that they find to bring these actions have no trust responsibility to these tribes, and it is much better that a Federal agency that is charged with, No. 1, a government to government relationship; and, No. 2, a fiduciary responsibility regarding tribal trust assets to be the one that makes the determination whether an enforcement action is the appropriate method, and that is the difference. I mean, there's a vast difference between the EPA having acknowledged its trust responsibility to the tribe bringing an action against it, and an individual who believes he or she has been wronged in some way through some alleged violation of the environmental laws.

The difference between the United States and an individual is vast, in my view, and I don't mean to be trite, but there are many millions of individuals, each of whom would have a right of action, presumably under some circumstances.

The CHAIRMAN. Senator Gorton, we're going to have to move on. Senator GORTON. I've just got one question for Mr. Columbus, if you don't mind?

The CHAIRMAN. Go ahead.

Senator GORTON. Mr. Columbus, one thing-you're here advocating the quality of taxation against businesses run by Indian tribes and the members of the organizations that you represent. A large portion, however, of your justification or your rationale for this I take it is simply a fairness and equality of competition.

Is not the basic reason that you're here that many of your members just simply can't compete against people who aren't subject to rather substantial taxation right next to a member of one of your organizations who must pay those taxes?

Mr. COLUMBUS. Oh, no, Senator, that's absolutely true. The reality is, and most of you are familiar with State motor fuels excise

taxes, for example, or cigarette excise taxes. For example, the State of New York's State excise tax on tobacco, I believe is 54 cents a pack. It is impossible in a commercial sense to compete with someone who does not carry that same cost burden. I mean, that's an out-of-pocket per private retailer.

I should emphasize, Senator, that people who don't want to pay taxes includes my clients too. They don't want to. They didn't have to they wouldn't either. The problem is that there is a terrific commercial fall-out. It does cost my clients a lot of business and jobs, and it also costs the State a lot of money, at least.

Mr. Chairman, when the State of New York went to the U.S. Supreme Court and asked the Supreme Court to approve its taxation scheme for tobacco, the State was pretty insistent that it was costing the State of New York a lot of money, and that they needed that money to support the infrastructure of the State of New York. Money is a zero-sum system. If we don't get it from one place, we're going to get it from another, and what you see is a death spiral for the commercial enterprises who are competing with people who don't carry the same tax burden because while the State has an increasing demand for money, the tax base is shrinking because it's carrying an ever greater share of the State's needs because the folks who are competing with us don't carry any. That doesn't make them bad people; that makes them business people

The CHAIRMAN. We're going to have to move on or we're going to run out of time. Mr. Columbus, thank you for your testimony and thanks to this committee.

Senator Burns, do you have

Senator BURNS. I have no questions.

The CHAIRMAN. Okay, and because of the time constraints, we're going to limit the panel to 5 minutes and the questions of the Senators too from now forward.

If you have any further comments or recommendations for this bill, we would certainly appreciate your turning those in.

Thank you so much.

Mr. COLUMBUS. Mr. Chairman, thank you very much.
Ms. HOFFMAN. Thank you.

Mr. FRANK. Thank you.
Mr. FAGAN. Thank you.

Mr. GOVER. Thank you.

The CHAIRMAN. We're going to combine panels 2 and 3. That will be William Canby, Jr., U.S. Circuit Judge from Phoenix; Apesanahkwat, Chairman of the Menominee Tribe; Ron Allen, President of the National Congress of American Indians; Sam Deloria of the American Indian Law Center; and Phyllis Borzi from the Center of Health Policy Research.

We will start in that order with Judge Canby first with the same time constraints that I mentioned, but all of your testimony will be included in the record.

Judge Canby, if you'd start please.

STATEMENT OF WILLIAM C. CANBY, JR., U.S. CIRCUIT JUDGE, U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT, PHOENIX, AZ

Judge CANBY. Thank you, Mr. Chairman.

I appreciate the opportunity to speak with you today. I used to teach Indian law, and for the last 18 years I've been on the Ninth Circuit Court of Appeals in the West and I am Chairperson of that Court's task force on tribal courts, which was organized 6 years ago to open lines of communication between the Federal and the tribal courts.

I speak, however, as an individual. I can't speak for my court or for the judiciary as a whole.

I've been asked to comment on section 105 of S. 2097, which would establish a joint tribal-Federal-State commission on intergovernmental affairs, and I'll confine my remarks to that section. The commission is to be established by the Secretary and would have representatives of all three governments and would deal with matters of law enforcement, civil and criminal jurisdiction, taxation, transportation, economy development and other matters. It would be advisory; it would be established by the Secretary of the Interior and would advise the Secretary and would report to this committee, to the other body and to the President.

The experience of a task force in the Ninth Circuit, which encompasses the nine western most States, is that tripartite negotiation and agreement could work very well. We stimulated the establishment of groups within the States in the Ninth Circuit. We found in some States that State-tribal organization forums had already been set up, and we prevailed upon them to add Federal representation, and that happened in Arizona, my home state.

An example of a couple of things that happened informally at the local level. As Senator Gorton said, the States-the Indians are entitled to State services and they were entitled to the State mental hospital, but the State mental hospital would not honor civil commitments when they were issued by a tribal court. The tribal judges raised this in the State- Federal-tribal forum. As a temporary matter, some of the State judges in there agreed to honor State commitments and issued-to honor tribal commitments and issued State commitments on the basis of them, but for a long-term solution legislation was purposed to the State and with the cooperation of all three groups it passed easily, and now the State, as a matter of State law, regularly honors tribal court civil commitments to the State mental hospital.

Another example occurred with misdemeanor enforcement on the reservation. As I think this committee knows very well, criminal jurisdiction is highly fractionated on the reservation; civil jurisdiction is too. This creates great enforcement problems.

What was discovered was that non-Indians would come on to the reservation and would commit misdemeanors against Indians or against Indian property, and the only authority on the scene were the tribal police and the tribal courts, but they do not have jurisdiction over non-Indian committing crimes.

The Federal Government has jurisdiction, exclusive jurisdiction when there's an Indian victim, but the FBI and the United States Attorneys are usually after bigger crimes and can't handle misdemeanors. The solution that was worked out by agreement with the help of Attorney General Reno was that the United States Attorney in Arizona would authorize as a special assistant United States attorneys tribal prosecutors who could then bring offenders