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I think it would be wise, however, for us to understand, again, the degree of the problem almost on a reservation by reservation basis before legislating on the matter, and we would be happy to work with the committee on defining the scope of an analysis to be carried out by ourselves and the Indian Health Service, I might add, to try to define the scope of the problem before we sort of go in with provisions, especially provisions that create some fairly burdensome requirements on the Bureau and on the Department to provide insurance or create some form of insurance coverage for the tribes.
The CHAIRMAN. Ms. Hoffman. STATEMENT OF EILEEN HOFFMAN, FEDERAL MEDIATION AND
CONCILIATION SERVICE, WASHINGTON, DC Ms. HOFFMAN. Good morning, Mr. Chairman, Mr. Vice Chairman, and members of the committee.
My name is Eileen Barkas Hoffman. I'm the Director of Special Projects at the Federal Mediation and Conciliation Service. I'm submitting our testimony, for our Acting Director, Richard Barnes, for the record, and want to spend the next 5 minutes summarizing, and, of course, will answer any questions.
We applaud the committee's efforts, with S. 2097, which in its preamble says, “To encourage and facilitate the resolution of conflicts involving Indian tribes.” Many of you may be familiar with the work of the Federal Mediation and Conciliation Service, but, briefly, we are a Federal agency that was established by Congress in 1947 to mediate labor disputes and provide facilities for arbitration to avoid interruptions in interstate commerce.
Our responsibilities and expertise however, have expanded over the years, as we've been called upon to use the techniques of dispute resolution in other fields—to provide training in conflict resosution to labor management and others, did mediation services abroad and to entertain foreign delegations looking at how Americans resolve conflict.
Today, not only does FMCS offer dispute resolution services to labor and management, our original jurisdiction in the Federal Government, to companies and unions involved with interstate commerce and to States where they don't have a mediation service, but increasingly we are being asked to offer our services in other fields-call it alternative dispute resolution. And this is especially so under the Administrative Dispute Resolution Act of 1996, and its predecessor legislation in 1990.
A brief account of some of our efforts are included in our testimony. We have more than 300 employees situated throughout the United States, five regional offices and 200 staff mediators who are working with the parties to design their own systems, to work on resolving problems and to avoid litigation, if possible, in the courts. We also have a roster of more than 1,500 arbitrators who are private citizens who render awards in contract formation and interpretation disputes.
I don't want to say that we are the only organization. I think we are the largest—and I'm prejudice—the best Federal organization in terms of dispute resolution, but we are looking outward and inIn 1970 we were asked in—and one of our former directors actually mediated a land dispute involving the Navajo and Hopi Indian Tribes. Increasingly, we have been doing some work with Native Americans, and some of our experiences with the Indian tribes are included. We've been doing negotiated rulemaking involving Native American housing to produce by consensus a comprehensive regulation that deals with the implementation of the Native American Housing Assistance and Self-Determination Act of 1996. We've also done work with Indian self-determination regulatory negotiations.
In all of these efforts we tend to use a team of mediators who work throughout the United States and who have built up their expertise and experience looking at such issues as tribal self-determination, self-governance, housing and other issues. And what we've seen is that through negotiations first and then facilitation tribal leaders, concerned parties and those affected by the actions of tribal governments can find common ground and develop innovative solutions, rules and regulations.
Some general comments, though, on the legislation and the reason we're here. First, of course, we salute the use of ADR to resolve these issues, but we have some concerns, and I appreciate when you said it's a work in progress.
About the structures and the procedures in the proposed legislation-specifically, under section 101 of S. 2097 FMCS would provide the mediation and other dispute resolution services to assist the negotiations, and under section 103 would assist the newly formed intergovernmental ADR or alternative dispute resolution panel, and we have a few questions for clarification about this legislation, but, in general, as I mentioned, support its mission.
The nature of the negotiations—are they going to be binding or non-bind? We would hope but it seems a little confusing, but that may be just my reading of the text that in fact if there is no agreement it isn't binding, but, of course, every effort would be to have it binding if the parties agree.
The nature of the mediation-we also wonder if the mediation is going to be mandatory or optional and we would opt that it be optional, if possible. We believe if the tribes and all parties concerned can reach a resolution themselves, that's the most important thing.
On the period of negotiation we would like that clarified.
I see that my time is up—I had a few more moments, but it's up to you.
The CHAIRMAN. We'll get back to you during the questions.
COLORADO DEPARTMENT OF REVENUE, DENVER, CO Mr. FAGAN. Thank you, Mr. Chairman, and members of the committee. My name is Řenny Fagan and I'm the Executive Director of the Colorado Department of Revenue. Thank you for the opportunity to testify on the tax issues related to this bill.
Colorado's experience with the Southern Ute and Ute Mountain Ute Tribes is that negotiated settlements are an effective tool to partnerships, and in that regard we see S. 2097 as an important means to bring parties together and establish a mediated settlement or a negotiated settlement, and, therefore, it can be an effective public policy tools for tribes and States.
It seems to me that there's some need for negotiated settlements that arise from the State of law itself regarding transactions taking place on tribal lands that involve non-Indians. As I understand the saw, the courts really apply a balancing test between the tribal interests and self-government and self-determination versus the States' interest in collecting revenues for services provided to all, and that test is done on an individual fact-by-fact basis. In that kind of situation, obviously, either party has the risk of loss, and, therefore, a negotiated settlement seems like a negotiated settlement seems like a much better way to work things out. Even if the State wins, there are enforcement problems to the States, which have been touched on today.
A second main need is that there's a growing need for mutual economic success together, and that is better formed through negotiation and mediation rather than through conflict. I would like to briefly talk about an example of a tax compact in Colorado involving the Southern Ute Tribe, the county of LaPlata and the State of Colorado that dealt with oil and gas producing lands that were located within the Southern Ute Tribal Reservation, but the specific lands were reacquired by the tribe over time in their original origins in terms of allotment and whether they were alienated and whatnot was really at issue. The county was concerned that the reacquisition of lands by the tribes would lead to a loss of its tax base. The parties fought it out in court with the tribes winning in the Federal District Court and also that being reversed by the Tenth Circuit. So at that point the parties sat down. The Lieutenant Governor of the State came in as a party to negotiate, along with the former Director of Natural Resources for the State that was hired by the county, and the tribes showed great leadership and willingness to resolve the dispute.
The way it ended up was a classic compromise, I think, of the tribe retaining its sovereignty and with an explicit tax compact that says that the State and county may not assess the lands, but in return the tribe took the bold step of agreeing to pay, make voluntary payments, in the amount of the taxes that would be owed.
So it was a good win-win situation for an agreement, and it shows that negotiation can work based upon principled negotiations.
Another example would be in the gaming compacts that the State has with both the Southern Ute and Ute Mountain Ute Tribes that I was involved in that similarly involved successful negotiations based upon those issues of sovereignty and the issues concerning the State, which was to make sure that gaming conformed to what was legal in Colorado and did not exceed that. So our experience is that negotiated settlements can be effective tools and are good ways to form partnerships.
With respect to certain comments on this particular bill, I think the main concern I would see from the State's standpoint is that the language that ties together the claims to be mediated with the claims that go to the panel be narrowed so that it's clear that only those claims that the parties agreed to put in mediation would be those claims that would be considered by the panel, and in my written testimony I've pointed out some suggestions regarding section 102(e)(2) and section 103(c), as they tie together. Obviously, at any given time, a taxing authority can have several different kinds of disputes going with any taxpayer in the area of tribal law. There are recent cases that have involved race tracks, hotel casinos, cigarette tax, the fuel tax, activities occurring on a recreational lake. All those seem similar but they are actually a little bit different in terms of how the State taxes come up. So I think from the State's standpoint they wouldn't want—if you're trying to mediate or negotiate on one of those particular issues, that you're not opening up every State tax issue there is for the panel to come in and resolve, and I think those can be taken care of by narrowing down the language in those two sections.
Another suggestion would be to change the composition of the panel that would resolve the disputes. The way it's structured now there are three Federal members—one State member and one tribal member. I think from the State's standpoint they want to be assured that this process is going to be fair and that the kind of nuances of State tax laws will be fairly considered.
So my recommendation would be to narrow that panel to three members—one Federal, one State and one tribal—or to somehow expand State membership on that.
Another suggestion would be to continue to have mediation services allowed in the bill, but also to allow the parties to select their own mediators. In our case in Colorado having an outside party has been effective to shed new light on particular disputes and resolutions but they haven't been formal mediators. They have been probably people that have been selected by the parties in their own cases, so I think adding an option that parties can select their own mediators.
That will conclude my comments, thank you.
STATEMENT OF R. TIMOTHY COLUMBUS, COUNSEL TO THE
NATIONAL ASSOCIATION OF CONVENIENCE STORES, AND THE SOCIETY OF INDEPENDENT GASOLINE MARKETERS OF AMERICA
Mr. COLUMBUS. Thank you, Mr. Chairman, and Mr. Vice Chairman. My name is Tim Columbus. I am a member in the law firm of Collier, Shannon, Rill and Scott and appear today on behalf of our clients, the National Association of Convenience Stores and the Society of Independent Gasoline Marketers of America. In the interest of time, Mr. Chairman, I'll summarize my statement.
At the outset, Mr. Chairman, both NACS and SIGMA's members want to commend you and the committee for holding this hearing and for your recognition of and efforts to resolve the problems arising from some Native American tribes of State, excise and sales taxes. All for the reasons I'll explain in a moment, NACS and
tion as an important and positive first step toward getting this problem resolved.
NACS and SIGMA's members do not seek to limit tribal self-government, nor do they seek to deter tribes' legitimate economic development. Rather, SIGMA and NACS seek only to provide the States with an effective means to enforcing Native American tribes obligation to collect and remit to the States excise and sales taxes properly imposed by the State on non-tribal members with whom the tribe has business.
For at least three reasons, NACS and SIGMA cannot support S. 2097, at least with respect to the resolution of disputes regarding claims for the collection and remittance of State-imposed excise and sales taxes.
First, contrary to what I believe, the Chairman's intention was subjecting this type of dispute to the procedure set forth in S. 2097 will not, in our opinion, expedite or reduce the cost of resolving these disputes, but rather it will have exactly the opposite effect. Mr. Chairman, the law in this area is by now well settled. Simply stated, the States may not impose a tax on tribes and their members with respect on Indian land activity, but, likewise, the courts have resolved that the States can impose upon the tribes an obligation to collect and remit taxes lawfully imposed upon non-Native Americans with whom they're doing business.
Consequently, the only factual issues available for resolution in these areas, I believe, are whether or not the taxes impermissibly imposed upon the tribe or its members. That issue is one of simple, straight-forward statutory construction for which the Federal courts are superbly suited. I will tell you that these cases come forward. They normally go off in the context of summary judgment procedures, and in a relatively short period of time. If we were to take one of these cases, for example, to the Federal Courthouse in Alexandria, I can assure you that we would be done and gone from that courthouse within 90 days.
In contrast, the procedures that I understand to be set forth by S. 2097 would require—could require a minimum of 13 months of negotiation before dispute could be submitted to the panel established under section 103 of the bill. The time then allowed the panel to resolve the issues submitted to it is undetermined. Second, nowhere can I find in S. 2097 a means by which a decision of the section 103 panel can be enforced. I may not understand what's going on here, but I see in section 104 enforcement mechanisms only with respect to agreements or compacts between the tribes and the States.
As a consequence, a party may have submitted to the negotiation process, may have grieved and argued its case before the mediation panel, may have obtained a favorable decision with respect to its position and still have its dispute unresolved because it has no effective means of enforcing that decision.
Third, I want to tell you that we perceive that the creation of a special panel to resolve this type of dispute is duplicative of the Federal courts and would unnecessary politicize this issue. We put individuals on the Federal bench for a life tenure for a reason-it's to depoliticize. Our perception is that the Federal courts are an im