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it is not clear at all in the regulations about what is the response of the administration.

Arguably, those tribes retroceding have a right to have services maintained at the prior level by the Bureau. But there are necessarily budget restrictions involved in any question like this. If there is only enough money for services to be administered by the contract and not enough money for services to be administered parallel to the contract to those tribes who wish to retrocede, this places a hard decision on a contracting officer.

We would urge the regulations reflect a concern to continue with these contracts and to advise those tribes that wish to retrocede that there is only so much money available and they will have to contend with a reduced level of service. In effect, we are urging that the emphasis be on continuing with the contract rather than on canceling the contract and then there simply would not be enough funds to maintain services outside the contract.

[The prepared statements of Messrs. Deloria and Parker follow:] STATEMENT OF PHILIP S. DELORIA AND ALAN PARKER OF THE AMERICAN INDIAN LAW CENTER BY REQUEST AND FOR THE NATIONAL CONGRESS OF AMERICAN INDIANS

The Indian Self-Determination and Education Assistance Act has been widely recognized as an outstanding effort on the part of the 93rd Congress and particularly this Subcommittee to strengthen the processes of self-government of Indian Tribes. We feel that the Bureau of Indian Affairs has made a sincere and commendable effort to secure the input of Indian Tribes and organizations in the drafting of regulations to implement this Act. In general, these regulations reflect that input and that effort. Most assuredly there are problems with these regulations and we intend to address some of these problems in testimony this morning. However, we wish to point out that we recognize the amount of time and effort expended by the BIA staff in drafting what is overall in an exceptable set of regulations to implement an excellent piece of legislation.

In our judgment, if the Indian Self-Determination Act is to be successfully implemented through it, the most important issue to be considered is not directly related to the regulations themselves, but is nevertheless of the most crucial importance at this time. We are referring, of course, to the level of funding available to the Federal Agencies to put this legislation into effect. While we acknowledge that this Subcommittee is not charged with an appropration function, nevertheless, we would suggest that it is quite appropriate for the Committee to concern itself with the Administration's budgetary plans for implementing this Committee's legislation.

Specifically, we refer to Section 104 of the Act which provides authority for the BIA to award grants to Indian Tribes and Tribal organizations for the purposes of strengthening their administrative capabilities in order that they may successfully assume contracts to deliver the various Federal services. It is our understanding that the Administration has yet to submit a budget request to implement Section 104 for Senate mark-up for F.Y.-1976 as part of the Administration budget. We further understand that if the request is not submitted soon, or prior to the mark-up session, the Administration will then have to rely on a supplemental request which will necessarily delay funding until well into the next fiscal year.

We take note of the fact that this Subcommittee has been scheduled to receive testimony from Administration witnesses on the 28th of this month, and we would respectfully recommend that OMB as well as Interior Department fiscal plans regarding implementation of P.L. 93-638 be scrutinized.

With respect to Section 104, Grants to Indian Tribal Organizations, we note that Sub-section (C) specifies that "funds made available to tribal organizations under this Section may be used as matching shares for any other Federal grant programs which contribute to the purposes for which grants under this Section are made." This Section is implemented by 402.12, Purposes of Grants, and 402.33, Matching Shares, of the proposed regulations.

The American Indian Law Center of Albuquerque, New Mexico, has been involved in a study entitled "Federal Indian Domestic Assistance Programs"

(FIDAP) for the purpose of establishing the precise legislative barriers which may exist or which have been interpreted to limit Tribal participation in Federal Domestic Assistance Programs. The focus of this study has been on Congressional legislative eligibility requirements. The FIDAP study research findings will be made available to Tribes (1) to increase Tribal participation overall in Federal Domestic Assistance Programs and (2) partcularly as a strategy to open up such programs for Tribal participation. The FIDAP study has established that approximately $48 billion is appropriated annually for Federal Domestic Assistance Programs, and it is clear that the potential for Tribal participation in these previously closed programs, or programs previously closed to Tribes, will be immeasurably increased if Section 104 grant funds are available for matching purposes at a realistic level.

Although it is true that the Administration has successfully requested approximately $11 million as an addition to the BIA budget for the purposes of absorbing projected "contracting" costs, they have yet to initiate a request designed to implement the grant-making authority of this Act. Without belaboring the point, we feel that it is obvious that the overall thrust and purposes of this Act cannot be realistically achieved insofar as the great majority of the Indian Tribes is concerned unless and until a substanial amount of funding is made available to the Indian Tribes for the purpose of improving their present administrative capabilities. This issue was thoroughly considered by the Congress in its deliberations on the bill S. 1017 and the legislative history of that bill amply demonstrates that full funding of Section 104 is essential to the success of this legislation.

Additional budgetary considerations surround the concepts of multitribal contracts resulting in two or more delivery systems and contracted services which now appear as line-items. During the joint NCAI/NTCA review session in August, we received the clear impression from BIA representatives that the Bureau would consider as a cause for declination a multi-tribal request to contract which would not affect all Tribes in the organization or jurisdiction and which would result in a lack of funding for the delivery of services at the existing level to the non-contracting Tribes. While the accommodation of parallel systems of delivery of services is not specifically addressed in the proposed regulations, we feel that this point needs to be clarified by Administration witnesses. The BIA has also indicated that it will contract services which are presently line items and that the available funds for contracting are the current Bureau budget funding levels. It is our understanding that the Bureau plans to make additional funds available where Tribal organization costs exceed Bureau costs for performing on the contract so that the Tribal organization can incur costs which are not reflected in the line-item figure. We would ask for clarification of this important point in the regulations and for assurance from Administration witnesses that they will not restrict contracting on our Tribal organizations to existing line-item levels. At this time we are not prepared to spell out the exact details of a plan to accomplish this goal.

Discussion of the following sections of the proposed regulations constitutes a summary of the highlights of the joint NCAI/NTCA task force commentary which has been submitted to this committee, and includes follow-up considerations on behalf of NCAI.

401.2-Definitions, Sub-paragraph A-1—Trust Responsibility.

401.18-21-Role of the Tribal Council in Reviewing Contracting Applications. 401.74-Reassumption, Subsection A-1-Violation of Rights.

401.54-Contract funds and the Appendix A to 406 of the Regulations; Principles for determining costs applicable to grants. Part 2, Number 16; Legal Expenses.

I. 401.2—Definition of Trust Responsibility

Upon initial analysis of the proposed regulations' definition of "Trust Responsibility", we were quite dismayed by the narrowness and seemingly negative emphasis of the proposed definition. The joint NCAI/NTCA commentary offers an expanded definition of Trust Responsibility which would emphasize the role of the Bureau as being legally charged not only with the advocatory protection of trust resources but also with the strengthening of tribal self-determination. This expanded definition was premised on the assumptions of the task force that: (1) given this call for a Federal definition of Trust Responsibility we should not settle for a negative definition, but should rather require a comprehensive allencompassing statement and; (2) since the whole tone and emphasis of the

legislation is directed at a federal policy of strengthening tribal self-determination, this policy should be reflected in a regulatory definition.

However, upon reconsideration, we have concluded that this interpretation of Trust Responsibility is offered for the limited, technical purposes of P.L. 93-638 regulations only, that is, designating those specific "Trust Responsibility" functions which the Federal government cannot totally contract out to the tribes without abrogation of its core trust role.

From this perspective, it is clear that such a definition does not foreclose a broader interpretation of Trust Responsibility for other purposes which may quite possibly include a legal responsibility to protect and preserve tribal rights of self-government consistent with "the highest degree of fiduciary responsibility" as suggested in the NCAI/NTCA recommendations. However, for the narrower purposes of identifying those "non-contractable" trust functions of the Federal Government, the proposed regulations' definition is technically correct and acceptable.

Indeed, there are advantages to the tribes in construing this definition narrowly in order to allow for the greatest flexibility in contracting such services as natural resource development functions.

II. 401.18-.22-Role of the Tribal Council

The Act does not clearly identify the role of the tribal governing body in relation to the question of contract and re-contract applications by tribal organizations which are in some way separate from the tribal governing body. During NCAI initial analysis of the proposed regulations, it seemed to us that the regulations could be read to allow contracting by tribal organizations without specific affirmative review and approval by the tribal governing body. For reasons which have been elaborated upon in the joint NCAI/NTCA commentary, it was felt that it would be detrimental to the effective functioning of the tribal governing body as well as inconsistent with the policy of this Act, to provide for the possibility for contracting of reservation based services without providing for review and approval by the tribal governing body. Simply put, it is just not good government. Consequently, we would urge the Administration and this Committee to preserve this oversight function in the tribal governing body, rather than to allow for a possibility of contracting by a tribal organization completely outside of the tribal government.

The joint NCAI/NTCA paper called for an affirmative resolution by the tribal council upon each and every recontracting application or application to maintain existing contracts by separately constituted tribal organizations whereas the proposed regulations call for a reasonable time period during which the tribal governing body has an opportunity to exercise a veto power over the contract application.

Upon reconsideration, we feel that if this "veto" authority is retained it would still preserve sufficient protection of the tribal governments oversight role. To require an affirmative resolution in all instances may place an unnecessary burden on the tribal governing body, and, given the often time consuming nature of this process, may result in an unintended lapse of contract by separately constituted tribal organizations, contracts which are not only acceptable but are quite beneficial to the community.

III. 401.74-Reassumption—Violation of Rights

The clause in the regulation calling for reassumption in the contract when the federal agency finds a simple "violation of rights", resulting from a contractor's performance, calls for comment and clarification.

We feel this requirement and authority must be interpreted in light of two principles:

1. The violation must occur in the performance of a contract and not simply in the exercise of Tribal governing powers. This is clear from the text of the Act. Furthermore, the violation surely ought to be of a serious and reoccurring nature to justify action by the contracting officer. Since the regulations also call for the cancelation of the contract for failure to perform under the terms of the contract (401.75), it seems clear that the "reassumption" power in the hands of the BIA contracting officer is reserved for extraordinary circumstances.

2. A "violation of rights" can only mean something in the nature of fundamental civil rights. In view of the long established principle of Federal law that Indian Tribes are not subject to the U.S. Constitution unless expressly provided by the Congress, we can only assume that it was the Subcommittee's intention not to bring in the Federal Bill of Rights as a standard to measure such

violations of rights. Rather, such rights are to be protected by the Indian Civil Rights Act in other relevant law, which is not U.S. Constitutional law. From this perspective, rights of persons must necessarily be defined by and in the context of certain traditional or customary practices of Indian Tribes, which on occasion have been found to be inconsistent with the prevailing AngloAmerican concept of civil rights. In such instances, the Federal Courts, in applying the 1968 Indian Civil Rights Act, have correctly concluded that such rights are to be interpreted in the context of the Tribe's right to follow traditional and customary practices.

IV. 401.54, Contract Funds, and Appendix A to 406, Principles for Determining Costs; Part II (16) Legal Expenses

The proposed regulations presently do not provide for: (1) reimbursement of legal fees incurred during the negotiation process, (2) legal fees for appeals of either declination, reassumption, or cancellation decisions.

A great many Indian Tribes, including those standing to benefit the most from this Act, simply cannot afford to retain a general counsel or special counsel for purposes of advising them in matters such as contract negotiations. While it is not always the case, too often the negotiation process can be characterized as an adversary proceeding. Consequently, a tribe that does not have access to legal counsel or that cannot charge legal fees off as indirect contract costs, is at a very real and serious disadvantage. It would be accurate to say that many such tribes would be virtually at the mercy of the contracting officer. If the entire contracting approach is to be truely successful, the tribes must be able to secure the best possible contracting terms. The alternative is to doom such contracting efforts to failure in many cases. Consequently, we would strongly urge modification of the regulations to allow tribes access to legal counsel at those critical stages of the contracting process.

Ms. HARJO. In regard to the IHS regulations, the NCAI/NTCA joint review project did not go into detail on these regulations as we were never provided with a current set of regulations. I understand that even today these regulations are being written and changed around. There are inconsistencies and conflicts, we feel, between the IHS regulations and the BIA regulations and we would recommend that a study group composed of tribal people, tribal leaders, be appropriated through Congress and be formed to try to line up these two sets of regulations.

We base this on such concepts as the suspension of contracts without protective provisions, as included in recent IHS regulations, and because there is no clear statement of policy regarding retrocession in the IHS regulations, as appears in the BIA regulations.

Victor LaCourse, tribal affairs officer of the Portland area Indian health office, has called IHS regulations an iceberg, and by letter to NCAI documented the 44 documents which are included and referred to in the IHS regulations. His staff could find fewer than 10 at the Portland area IHS office. If those documents are generally unavailable in the Portland area office, we would assume that they are greatly and generally unavailable to Indians.

Senator ABOUREZK. We will ask IHS for them. I think the time for your panel has come to a close.

Ms. HARJO, I would ask that Mr. Roger Jim's statement on behalf of the Yakima Nation be included.

Senator ABOUREZK. That will be accepted.

[The prepared statement of Mr. Jim follows:]

STATEMENT OF ROGER JIM, ON BEHALF OF THE YAKIMA INDIAN NATION

In the main these regulations reflect a considerable and commendable effort on the part of the Bureau of Indian Affairs to maintain the integrity of the Act and incorporate the various suggestions from various areas. We are particularly

impressed with the fact that it is made clear throughout these regulations that this right to contract with the tribes shall not diminish the trust responsibility of the federal government in any way. We would hope that these hearings regarding these regulations would make it clear that it is the intent of Congress in the adoption of Public Law 93-638 and also the intention of the Bureau of Indian Affairs and the Department of the Interior in the promulgation of these regulations that there be no diminishment or lack of maintenance of the trust responsibility. We would also request that these Congressional hearings make it clear that there shall be no state regulation of contractors acting under a Public Law 93-638 contract and that there should be immunity from taxation of said contractors from both state and federal taxation.

Further, it should be made clear that the provisions of the National Environmental Protection Act does not pertain to these contracts so as to require an environmental impact statement before the execution of these contracts. We do have some questions in regards to these regulations which we hope that these hearings will clarify and thereby provide a proper legislative history to assist in the interpretation of the proposed regulations.

The first of these questions regards Section 403.2. The perennial question of who is an Indian is again raised. Proposed regulations require that one must be a member of an Indian tribe. We call to the Congress' attention that there are many persons who may have a large degree of Indian blood but because of such things as residence requirements or the fact that their Indian Blood is from many different tribes, this person would not be eligible for services under this Act. This would be true even though he may possess more Indian blood than a person who is enrolled with one of the federally recognized tribes. It is suggested that this committee should pursue this subject with the Departmental witnesses.

Likewise in Section 405.2, we have a question of what is a previously private school. It would seem that the regulations simply that it is a school, kindergarten through 8th or 9th through 12th. When departmental witnesses are before the committe, could it be clarified whether this can also include pre-school through third grade or seventh through ninth grade for example.

With regard to Section 403.4, it is requested that the legislative record contain a clear description of what maximum Indian participation is to be and how it will be achieved.

With regard to Section 403.12, the legislative record should be supplemented to show whether the eligibility residence requirement is still limited to Indians on or near reservations.

With regard to Section 403.13, we believe that the legislative record should clearly show that the 70% total Indian enrollment refers only to operational contracts and not to supplemental contracts. If this is not the case, it would seriously affect all our local school districts on the Yakima Reservation.

With regard to Section 403.18, part N, the legislative record should be made clear as to whether if a student who is one-fourth or more degree Indian but still not affiliated, recognized or enrolled by a tribe is to be counted in Indians eligible for this education plan.

With regard to Section 403.20 parts e, f and g, the legislative record should clearly show that if operational contracts increase, there will be no decrease in moneys available for supplemental contracts. Johnson-O'Malley monies have been limited to supplemental contracts. We presume that there will be no decrease in the supplemental contracts even if operational contracts are increased. Otherwise, this would be a severe change in policy on the part of the Bureau of Indian Affairs. This should be examined by Congress.

With regard to Section 403, is it necessary that the tribes contract with the BIA for Johnson-O'Malley funds or will they have the option to utilize state Johnson-O'Malley offices if the tribe desires.

With regard to Section 404, we would like to know why funds are limited to previously existing private schools. Why are they not available for developing new school projects. The definition of previously operated private schools appears to us to be so restrictive that it eliminates the possibility of any tribe starting any new school. It would appear to us that the proper approach to this problem would be eligibility based on need rather than first in time. It would appear to us with regard to Section 403.35 that there should be some definition of capital outlay. Is it any equipment or purchase over $100,000? Is capital outlay expenditures limited to operational contracts only or available for supplemental contracts. This matter should be clear in the regulations or at least in the legislative hearings.

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