We have a number of legislative proposals and positions of individual members of Congress on legislation which are obviously and in many cases admittedly based on the desire to protect local non-Indian business interests from Indian competition. Several years ago the United States Supreme Court held that state taxes imposed and collected on Indian reservations did not infringe on the right of Indians to make their own laws and be ruled by them. This Congress and the American people who elect them have been urging our Indian tribes to become economically selfsufficient and to rid themselves of dependency on the federal government. But when the Supreme Court allowed state taxation on the reservations, where was Congress to correct the mistake? The fact is, the Congress doesn't have an Indian economic development policy other than this misbegotten gambling craze. If a tribe wants to encourage the growth of a healthy mixed economy on the reservation, it must choose between imposing a tax on top of the state taxthereby discouraging private investment on the reservation or declining to tax thereby continuing its dependency on the federal government. The idea that this tax situation does not interfere with tribal self-government is breathtaking. S.2097 Turning to the proposal at hand, I want to recognize the chairman's effort to address a very complex set of problems in a fair and constructive manner. Here are my comments. The bill combines several issues in a way that is not helpful to clarity of thought. I would agree with many other witnesses in pointing out that these Titles deal with disparate issues, and suggest that Titles I and III be separated. First, let me address the insurance provisions of Title II. 1. TITLE II We do not know how many tribes are now insured, how many insurers hide behind tribal sovereign immunity (in which case, what exactly is the tribe paying for?), or how many tribes have trouble finding insurers. It doesn't make sense to legislate first and define the problem second. 2. The bill provides that the federal insurance will be available to all tribes having a TPA allocation. My understanding is that all tribes have a TPA allocation, and that tribes that compact or contract under 638 for all or part of the TPA allocation are covered to that extent by the Federal Tort Claims Act. It is not clear, then, what this legislation is intended to cover in relation to the existing protection of the Tort Claims Act, in relation to causes of action outside the Tort Claims Act, and in relation to tribes having a TPA but neither compacting nor contracting under 638. 3. The bill provides that the federal insurance will be available to tribes not buying their own coverage. Will this be a disincentive to tribes to buy their own coverage if the Secretary will buy it for them? Will tribes who now buy their own insurance cancel in favor of the Secretary's policy? Given the lack of information on the real scope of the problem (and in light of the current public attention to the far more serious problem of the ability of the public to sue their HMO's), it seems that there is insufficient basis for this legislation at this time. TITLE I I have had some experience in state-tribal relations, having been a founder of the Commission on State-Tribal Relations in 1976 a coalition of organizations of tribal governments, state legislators, attorneys general and county governments formed to examine the intergovernmental relationships on Indian reservations and encourage their improvement. I might add that we enjoyed the participation of several state governors in our work, but none of the organizations of state governors saw fit to associate with us formally. Let me state in the clearest terms possible a fundamental problem with the whole area of statetribal relations. In all the work I have done in this area, I am constantly finding that well-meaning people on both sides of the fence think that tribal, state and municipal governments cannot meet and make agreements without federal consent. That is absolutely untrue. I understand that from time to time Congress wishes to encourage states and tribes to settle their differences without recourse to litigation. But for Congress to grant "consent" where none is required does not facilitate tribal-state cooperation, it discourages it. Formal (as opposed to political) barriers to tribal-state (and in that I include tribal-county or tribalmunicipal) agreements can only be found in federal, tribal or state law. Not only is there no general federal principle of law requiring federal consent to tribal-state agreements, the Indian Reorganization Act recognizes in specific terms the power of Indian tribes to negotiate with state and local government. We must assume that the Congress that passed the IRA meant that tribes could not only negotiate but could make agreements - Congress was surely not encouraging pointless intergovernmental negotiations. Rather than assume the need for federal consent to negotiations, one must look at the specific subject matter and determine whether that subject matter is one that falls within federal control, and one must look at the proposed agreement to determine whether its provisions trigger some federal power. Tribes, for example, cannot encumber or alienate trust property without federal approval. An intergovernmental agreement that sought to do this, then, would require the appropriate federal consent. Tribes cannot transfer jurisdiction to state governments without a referendum of the people, a restriction imposed by federal law. Therefore, there are federal limitations on tribal powers to make agreements, but they are not of the sort that would in general require Congressional consent in advance of any negotiations or any agreement that might be made. In summary, the consent of the United States is not needed for tribes and state to make tax agreements unless they infringe on a particular federal restriction. In fact, there are probably hundreds of tax collection agreements throughout the country, some decades old, whose legality is not in question. What is missing in the equation is the political will on the part of states and tribes to make tax collection agreements. In a situation such as this, the party whom the existing law favors finds the law crystal clear; the party feeling disadvantaged by existing law finds it "ambiguous" and seeks to have it "clarified" - that is, changed to be more favorable. Under the existing state of the law, tribes play defense and states play offense. These tax provisions will encourage states to bring additional pressure to extend their taxing powers deeper into reservation life. The greatest encouragement possible for increased tribal-state cooperation in the tax or any other area is for the federal government - all three branches to take seriously the federal trust responsibility to Indian tribes. When that happens, states see an incentive to negotiate. If, on the other hand, the states see - as they often do - a lack of federal enthusiasm for the tribal position, they are not encouraged to negotiate but instead encouraged to take a hard line. That is precisely why the anti-tribal forces control the agenda in the Congress now - because the Congress does not simply reject their position and get on with business. As long as the anti-tribal forces feel they can get some concession, why on earth would they not continue the pressure? As I understand the law, Indian tribes are only obligated to pay taxes to the state on fee land and on certain off-reservation activities (under the Mescalero decision). S. 2097 seems to be aimed at situations in which the Supreme Court has suggested that tribes should collect taxes for the states on transactions where the state taxes the consumer and the tribe is the vendor. Even in these three situations, a very small amount of money is involved, but this bill may open the door to much larger claims by the states because of the ambiguous wording of the bill. I would have thought that the Congress might have learned some lessons about facilitating tribalstate agreements from the fiasco of the gaming compacts. As a general rule, I would urge this committee to make a very careful analysis - as I understand these hearings to be - of the costs and benefits of federal involvement in the tribal-state relationship, particularly where, as here, there is no inherent federal role. Finally, I would like to address Sect. 105, JOINT TRIBAL-FEDERAL-STATE COMMISSION ON INTERGOVERNMENTAL AFFAIRS. As the founder and principal staff support for the Commission on State-Tribal Relations for about ten years (and as a veteran of the American Indian Policy Review Commission), I have some experience in this area. It is true that there is a need for more detailed information concerning the tribal-state relationship. Little of that information is available from federal agencies, however. The tribes, states and municipalities have the information about existing agreements - formal and informal - and would be willing to share that information if it would be of help. Rather than create a commission which would put everything on hold for a few years, this Committee could perform a valuable service by holding hearings in which each federal agency is asked to report on the actions it takes to support tribal taxing and regulatory powers, thereby facilitating tribal-state cooperation. It could also hold hearings on the public services - paid for out of both federal and state tax dollars - which are denied to otherwise eligible Indian people on the ground that they are Indians and - unlike their non-Indian neighbors - are required to exhaust specifically Indian services before being served by state and local government. I am skeptical about whether a federal commission would help at this point. It might delay the slow progress in this area by providing the excuse that "Let's not do anything until the federal commission makes its report". In my view, the track record of such commissions is pretty dismal, being mired in organizational politics and the difficulty of obtaining funding to do the job needed. The greatest disincentive to increased tribal-state cooperation these days is the perception by the states that they have the tribes on the run politically, and the shocking but not surprising overreaching by many states in the gaming compacting process. It is reminiscent of the 19th century treaty negotiations that Indian tribes are forced to engage in "negotiations" with the states with U.S. Attorneys and federal marshals figuratively standing outside the door ready to close them down if they don't agree to state demands. Creating such an inherently unfair and unworkable process is not my idea of the actions of a trustee, or of facilitating true tribal-state cooperation. If Congress would give a clear indication to the states that it is truly committed to tribal selfdetermination and not willing to give in to state pressure, tribes and states can get back to the business of negotiating their way around various obstacles as they have been for the past 30 years, and with very little federal involvement. The best single thing Congress could do would be to reduce the power of states in the gaming negotiations and restrict the power of states to impose taxes on Indian reservations, which would enable tribes to have an economic development policy and begin to solve their economic problems without undue reliance on gaming revenue. Thank you for the opportunity to testify. Testimony of Phyllis C. Borzi, J.D., M.A. Center for Health Policy Research Washington, D.C. on Title II of S. 2097 "The Indian Tribal Conflict Resolution and Tort Claims and Risk Management Act of 1998" Mr. Chairman, Mr. Vice-Chairman and Members of the Committee: Good morning. My name is Phyllis C. Borzi, and I am a senior research staff scientist at the Center for Health Policy Research of the George Washington University Medical Center. I am honored to be invited to testify before you today on Title II of the Indian Tribal Conflict Resolution and Tort Claims and Risk Management Act of 1998. Early this year, the Center completed a study entitled "Accessment of Access to Private Liability Insurance for Tribes and Tribal Organizations with Self-Determination Contracts/Compacts." I was the primary author of that study. Although the study had a somewhat narrower focus than the provisions of Title II of S. 2097, many of the issues that we examined and information that we gathered may be relevant to your consideration of the bill. In the few minutes that I have this morning, I will briefly describe our study, summarize the relevant findings and recommendations, and comment on several issues raised by S. 2097. I have provided the Committee with a copy of the entire study, including the "Handbook for |