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(e) PREFERENCE.—In obtaining or providing tort li

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2 ability insurance coverage for Indian tribes under this sec

3 tion, the Secretary shall, to the greatest extent practicable,

4 give preference to coverage underwritten by Indian-owned

5 economic enterprises, as defined in section 3 of the Indian 6 Financing Act of 1974 (25 U.S.C. 1452), except that for 7 the purposes of this subsection, those enterprises may in

8 clude non-profit corporations.

9 (f) REGULATIONS.—To carry out this title, the Sec10 retary shall promulgate regulations that,


(1) provide for the amount and nature of claims


to be covered by an insurance policy or equivalent


coverage provided to an Indian tribe under this title;

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(2) establish a schedule of premiums that may

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(1) STUDY.-In order to minimize and, if pos

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of section 201, the Secretary shall conduct a com



prehensive survey of the degree, type, and adequacy of liability insurance coverage of Indian tribes at the



time of the study.


(2) CONTENTS OF STUDY.—The study con

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OF RISK.—For each Indian tribe described in section

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201(a)(1), for each category of risk identified under



paragraph (2), the Secretary, in conducting the study, shall determine whether insurance coverage other than coverage to be provided under this title




or coverage under chapter 171 of title 28, United


States Code, applies to that Indian tribe for that ac

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(b) REPORT.—Not later than 3 years after the date

5 of enactment of this Act, and annually thereafter, the Sec6 retary shall submit a report to Congress concerning the 7 implementation of this title, that contains any legislative

8 recommendations that the Secretary determines to be ap

9 propriate to improve the provision of insurance of equiva

10 lent coverage to Indian tribes under this title, or otherwise

11 achieves the goals and objectives of this title.

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The CHAIRMAN. We'll start with our first panel. That will be Kevin Gover Assistant Secretary for Indian Affairs; Eileen Hoffman, the Federal Mediation and Conciliation Service; Renny Fagan, the Colorado Department of Revenue; Timothy Columbus, the National Association of Convenience Stores, and Billy Frank, the Chairman of Northwest Indian Fisheries Commission.

I will tell the panel, as we do with all of our panels, that all of their complete written testimony will be included in the record, and we operate this committee with a little light system, which you can see ahead of you. When that little red light goes on, that means it's time to wrap up your verbal presentation and turn it over to the next person.

We'll start with Kevin Gover first.

Mr. GOVER. Good morning, Mr. Chairman.

We're wading into some broad and often murky waters here, and I think there are a few points that we would like to make. First, certainly, a process or a tribal State or tribal local agreement is always the best way to proceed in any sort of jurisdictional contest. What we have found, and certainly my experience as a private attorney over the years, was that these problems can be resolved at the local level and that in point of fact only very rarely is any Federal approval of that sort of thing required. So there is some question about the need for specific authorization to complete these sorts of agreements.

A second thing I'd like to point out is that we do encourage negotiated or even mediated resolution of these issues, and quite often they’re less contentious than they at first seem. It's when we sort of find ourselves caught in the place of arguing positions and principles rather than practical outcomes that we find it difficult to agree.

The third thing I would like to point out is it seems to me we don't yet know the scope of the problems that we're trying to address. I testified at a hearing in the other body a couple of weeks ago on the issue of the collection of retail taxes on Indian lands, and there are many more subtleties and complexities to the issue than meet the eye. So, for example, the States do, in my judgment, have an effective remedy for tribes that fail to pay fuel taxes, and many States have adopted laws that collect the taxes prior to the fuels' entry into the reservation. If a State chooses to do so, so be it—that is a tax the Supreme Court has said can be collected.

Other States, however, have chosen not to do that, and I don't think we should assume that is not a deliberate choice. In the State of New Mexico, for example, there have been proposals for the last several years to amend the State laws so that those taxes can be collected on wholesale purchases by tribes on the reservations. The State could do that but it has chosen not to, and it has chosen not to, in my opinion, because the legislature has made the political judgment that they wish for the tribes to have that advantage, and we should be careful about assuming, again, that is not a deliberate choice or one that the State is unwilling to live with.

That brings us to the issue of cigarette taxation, and that's a difficult one because the States often do not have an effective remedy that is attractive—I mean, they do have the option of seizing shipments and that sort of thing, but I don't think the tribes or the States are particularly interested in that method of tax collection. To that I would say that it seems to me that we are occasionally asking the wrong question. It is true, as Senator Gorton points out, that the Supreme Court has said that tax can be collected, and, in fact, that the tribes can be required to collect it on sales to nonIndians. The question is whether we should require that.

One of the questions that remain unanswered in the debates that are taking place on the Hill is this—States have been authorized by the Supreme Court to tax on the reservations, but are they providing services to which reservation residents, Indian or non-Indian, are entitled? I believe that the balance of payment, if you will, in terms of State tax collection on the reservation and services provided by the States to the reservation is probably badly out of balance, and so some of the oddities that we see, like tribal smoke shops, are minimal compared to the impact of State taxation on the reservations. Because the States can tax and regulate on the reservations in at least some circumstances, the tribes are deprived of the ability every other government has to establish economic policy through taxation and regulation, and that is the great barrier to economic development on Indian lands.

Mr. Chairman, my time is up. Thank you very much for this opportunity.

[Prepared statement of Mr. Gover appears in appendix.]
The CHAIRMAN. Thank you.
We'll go on to Ms. Hoffman.

Senator GORTON. Excuse, Mr. Chairman. I certainly would like to hear Mr. Gover's opinion on the tort part, even if it requires him to have a little bit of extra time.

The CHAIRMAN. Do you have some comments dealing with torts? Senator GORTON. It does certainly impacts BIA-do a lot of work

Mr. GOVER. We have some thoughts on that matter, Mr. Chairman.

We do think that insurance is a likely vehicle for the resolution of many of these problems. We think, obviously, that persons injured by the tortious conduct of a tribal government need to be compensated. We think insurance is the better way to approach that, rather than waivers of sovereign immunity. We are not anxious, frankly, to become the insurer of tribal government activity or the insurance agent of the tribal governments. We think that the key provision in this bill is the requirement that we go out and look at the issue and try to understand with more specificity the degree of the problem.

There have been two excellent studies conducted under contracts awarded by the Department of Health and Human Services that I want to bring to the committee's attention where they look at the issue of access to private liability insurance for the tribes, and there are some very important observations and recommendations made in those studies, and I recommend them to the committee.

on it.

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