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Like the insurance provisions of Title II, Title l’s treatment of retail taxes appears to proceed from insufficient factual foundations. We ask again if the Committee knows the true extent of the perceived problem, or if it is proceeding from anecdotal evidence and exaggerations presented as fact by retail industry lobbyists. In addition to determining the amount of legitimate taxes actually foregone by state and local governments, we would urge the Committee as well to research how much revenues would be lost to tribes if they are required to collect state and local taxes without any offset for tribal taxes levied on the same transactions. And how much this effort is likely to cost—and who is expected to pay for it? The federal government? The state? Certainly not us.
In general, the provisions of Title I give short shrift to the jurisdiction of tribes to levy their own retail taxes, an aspect of tribal sovereignty repeatedly confirmed by the Supreme Court. The payment and collection of tribal retail taxes are clearly left out of the bill's alternative dispute resolution procedures, and might not even be an appropriate part of the tax compacts that Title I contemplates. Section 101(b) gives the consent of the United States to “compacts and agreements relating to the collection and payment of certain retail taxes.” As "certain retail taxes” is nowhere defined, it is not at all clear whether these “compacts and agreements” are supposed to include consideration of tribal taxes, or if they are intended only to cover state and local taxes. In lieu of any statement supporting the enactment of Title II in the bill's Findings, $ 101(b) speaks of consistency with “Supreme Court decisions regarding the collection and payment of certain retail taxes of a State or political subdivision thereof.” Whether tribal taxes are to be included in these compacts is therefore an open question.
Also unclear from the text of $ 101 is what kinds of state and local retail taxes are supposed to be included in these “compacts and agreements.” The Supreme Court clearly distinguished taxes levied on non-Indian patrons of reservation businesses, which state and local governments may charge (Oklahoma Tax Comm'n v. Citizen Band of Potowatomi Indian Tribe of Okla., 498 U.S. 505 (1991)) and taxes on the tribe itself, which they may not, absent Congressional authorization. (Oklahoma Tax Comm'n v. Chickasaw Nation, 515 U.S. 450 (1995).) Only consumer taxes should be included in tax compacts made under $ 101, in keeping with these decisions. We would like the Committee to clarify that it is not, by this proposal, giving its consent for states and local governments to tax tribes directly, and to expressly affirm the rule of Chickasaw Nation that they may not generally do so. Further, tribal retail taxes should be clearly included in those taxes that the bill's compacts are intended to address.
As noted, tribal taxes are clearly not included in the alternative dispute resolution procedures set forth in § 103(c) of the bill. The new Intergovernmental Alternative Dispute Resolution Panel may only hear a “claim involving the legitimacy of a claim for the collection or payment of certain retail taxes owed by an Indian tribe to a State or political subdivision,” (emphasis added). A tribe, on the other hand, may apparently only raise “counterclaims, setoffs, or related claims submitted or
filed by the tribe ... regarding the original claim.” We feel that the Committee ought to correct this one-sidedness and give the Panel the authority to entertain original claims regarding tribal taxes.
Like the legitimacy of state consumer taxes at issue in Citizen Band of Potowatomi, tribes' authority to levy transaction taxes is the law of the land. Cotton Petroleum Corp. v. New Mexico, 460 U.S. 163 (1989); Washington v. Confederated Tribes of the Colville Indian Reservation, 447 U.S. 134 (1980). If S. 2097 is truly to “achieve intergovernmental harmony,” as it stated Purposes proclaim ($ 2(b)), then each government should have equal rights and obligations. Without the inclusion of tribal retail taxes in the bill’s procedures, the double-taxation problems noted by the Supreme Court in Colville and Cotton Petroleum Corp. will continue to plague relations between tribes and states.
The mediation procedures of § 102 not only should be binding, but should set forth firm timetables, in order to keep the parties at the table and to clearly distinguish between mere delay, on one hand, and refusal to participate in the process, on the other. Indian tribes have already seen too much foot-dragging and stonewalling from states in the name of “negotiation” under the Indian Gaming Regulatory Act. Intergovernmental harmony will not be furthered by more of the same.
Federal court jurisdiction, provided by $ 104(a)(1)(A), should be expanded to include all failures to observe the rules established by the bill, not only those arising under already-made compacts. Federal jurisdiction should also be exclusive, to avoid inequitable results that may follow from state court decisions, to which the tribe may not even be a party, that may nevertheless affect or foreclose a tribe's taxing jurisdiction or other rights, whether under a compact or by law. The provisions of 104(a)(2), which require each party's agreement to waive sovereign immunity in tax compacts, should require states specifically to waive any Eleventh Amendment defense as well, to avoid any confusion and prevent frustration of the bill's purposes.'
Finally, we wonder where all of the money for the new procedures, agencies, and programs required by S. 2097 will come from. Appropriations for the Department of the Interior are already shamefully shy of what is needed to discharge its functions, particularly with respect to Indian tribes. Current efforts to deny tribes sorely needed school construction funds and costs for administration of self-determination contracts belie the bill's assurances of funding for these new programs and procedures. This Congress has repeatedly stated its distaste for “throwing money” at problems; throwing money that does not exist (at problems we know too little about) is unlikely to be more effective.
Again, we welcome the Chairman'sefforts to provide a realistic starting point for discussion. We feel strongly that S. 2097 should be treated as only a starting point and that discussion and
'Congress may not, as a rule abrogate a state's Eleventh Amendment immunity. Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996). A voluntarily waiver of a state's Eleventh Amendment immunity may nevertheless provide consideration for a tribe's waiver of its tribal immunity.
further research be pursued. We respectfully request any consideration of particular measures, especially comprehensive legislation like S. 2097, be deferred until after such research and analyses have been conducted. Thank you.
Department of Justice
STATEMENT FOR THE RECORD
THOMAS L. LECLAIRE
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
S. 2097, INDIAN TRIBAL CONFLICT RESOLUTION AND
TORT CLAIMS AND RISK MANAGEMENT ACT OF 1998
DEPARTMENT OF JUSTICE STATEMENT
ON S. 2097
Chairman and Members of the Committee, thank you for inviting the Department of Justice to provide its views on Title II of s. 2097, a Bill to encourage and facilitate the resolution of conflicts involving Indian tribes, and for other purposes.
In our work with Indian tribes, the Department of Justice is guided by fundamental principles that have governed the relations between the United States and Indian tribes for over two hundred years. As President Clinton recently explained:
Since the formation of the Union, the United States has
Executive Order No. 13084 (1998).
Congress has recognized that "the United States has a trust responsibility to (Indian tribes) that includes the protection of the sovereignty of each tribal government." 25 U.S.C. S 3601 (2). Under the Federal trust responsibility to Indian tribes, the United States exercises the highest standard of care in matters of tribal self-government.
8. 2097, Title II --Tort Liability Insurance
By way of background, we note that Congress has extended the provisions of the Federal Tort claims Act ("FTCA") to tribes and their personnel when they are carrying out self-determination contracts. Pub. L. No. 101-512, § 314 (codified as amended at 25 U.S.C. $ 450f note (1994)). Other legislation has similarly expanded FTCA coverage to include certain tribal activities. See 25 U.S.C. SS 2802-2804 (the Secretary of the Interior acting through the Bureau shall be responsible for providing or assisting in the provision of law enforcement services in Indian country); Pub. L. No. 100-446 as amended and codified at 25 U.S.C. $ 450 (g) (Secretary of Health and Human Services is directed upon the request of any tribal organization to implement hospital and health