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how much progress has been made under the Self-Determination policy and how far we have to go to bring conditions in Indian country up to even minimally acceptable levels. Such a report could also provide a powerful tool for analyzing proposed legislative changes in federal Indian policy.

Tort liability insurance

At Standing Rock, a person who is injured by a tort caused by a tribal employee is today covered in one of two ways. First, in those programs which the Tribe operates under a Self-Determination contract, there is Federal Tort Claims Act coverage. Second, the Tribe purchases liability insurance. While these are effective mechanisms for addressing tort claims, we also support the enactment of a provision establishing a federal law framework for tribal tort insurance. In effect, such a provision would reflect the policy of many tribes including Standing Rock, which have long acted on the premise that maintaining tort insurance is in the best interest of the Tribe, and necessary to protect tribal members and non-tribal members alike.

In our view, a federal law provision concerning tort insurance for tribes should include certain elements. First, the scope of coverage should be defined in a manner appropriate to tribal governmental status. For example, other governments have generally defined exceptions to their own tort liability -- such as the discretionary functions doctrine. Tribes should not be required to obtain insurance for activities beyond those typically covered by other governments. Second, punitive damages should be wholly excluded. This would be consistent with the Federal Tort Claims Act and the laws of many states with regard to their tort claims liability. Punitive damages are an invitation to widespread litigation, and, if available, would make insurance for tribes prohibitive from a cost standpoint. And third, the tort claims covered by insurance should be heard, to the maximum extent possible, in tribal court.


We look forward to working with the Committee to refine S. 2097, and to move forward with legislation which addresses tribal-state tax disputes and tort claims in a positive manner, consistent with the sovereignty of the tribes.

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JULY 13, 1998

Mr. Chairman and members of the Committee, thank you for the opportunity to provide my thoughts on S. 2097, “The Indian Tribal Conflict Resolution and Tort Claims and Risk Management Act of 1998." My name is Ramos Romero, and I am Governor of the Pueblo of Tesuque, a federally-recognized tribe in New Mexico.

First, we would like to thank the Chairman for his work in bringing to the Committee a proposal that attempts to balance the interests of Indian tribes with those of the states and private parties in resolving issues, real or perceived, concerning retail transaction taxes and tort claims. The Chairman's bill is a welcome turn in the direction of the Committee's discussions of tribal sovereign immunity. We hope that S. 2097 will provide a starting point from which tribes and their opponents in these debates can find a common ground on which to fashion a lasting resolution of their differences.

While the Chairman's bill provides a much appreciated and useful point of departure, S. 2097 has several serious shortcomings that need to be resolved before such sweeping changes are considered. Because it tries to do too much with too little information, the bill may ultimately create more of the strife and confusion that it is designed to reduce.



In contrast to the House's recent attempt to address a problem without providing a solution (H.R. 3097, repealing the Internal Revenue Code without providing any replacement), S. 2097


proposes to provide solutions for problems whose extent-even whose existence—is largely unknown. Though we hear much of the problems” that S. 2097 claims to resolve, we have seen little more than anecdotal evidence, often in the form of exaggeration from those with economic interests adverse to those of Indian tribes. We ask the Committee to exercise caution before recommending a new, comprehensive law to address problems that have, as yet, not been defined or quantified, particularly when such a law would create new liabilities for a single ethnic group of society.

In several respects, S. 2097 itself implicitly acknowledges that its premises have not been clearly established. Title I deals with tax collection, and Title II deals with torts and insurance. Yet nowhere in the bill's Findings are tax issues even mentioned. A comprehensive scheme of tax compacting and dispute resolution, including two brand-new government bodies, nevertheless follows, out of the blue and without justification or explanation.

Other than the abundance of self-serving “statistics” offered by retail trade association lobbies, we have yet to see any accurate numbers identifying and quantifying the revenues “lost” to state and local governments as a result of tribes' failure to collect states' retail taxes. Nor has anyone shown how much revenue tribes would lose if required to collect state taxes in full, without offset for tribal taxes on the same transactions. Only after the Committee has researched and taken the true measure of these competing concerns should it attempt to craft a solution.

In contrast to the missing foundations for Title I, section 2 of S. 2097 includes several findings in support of Title II, regarding tribes' "need for comprehensive and cost effective insurance." $ 2(a)(13). In particular, $ 2(a)(11) cites barriers faced by tribes in “obtaining liability insurance because of the high cost or unavailability of such coverage in the private market.” Again, however, we believe that this “finding" represents no more than a perception based on incomplete investigation. Our experience in obtaining liability insurance has not supported the premise that it is either unavailable or too expensive. We buy it and have for seven years.

Title II itself acknowledges that it puts the cart before the horse by prescribing treatment for an as-yet incompletely diagnosed illness. The salient operative provision ($ 201(b)(1)) requires the Secretary of Interior to obtain or provide tort liability insurance for each Indian tribe that receives a tribal priority allocation,” but Section 202 provides that “before carrying out the requirements of section 201, the Secretary shall conduct a comprehensive survey of the degree, type and adequacy of liability insurance coverage of Indian tribes.” § 202(a)(1) (emphasis added). We suggest this Committee first determine “the degree, type and adequacy of liability insurance coverage of Indian tribes" before ordaining a flood of changes in the law of tribal liability and administration.


Even after performing the “comprehensive survey” required by $ 202, the Secretary's responsibility is not particularly clear. Section 201(b)(3) relieves the Secretary's insurance obligation with respect to tribes already found to have adequate insurance. Then, § 201(f) requires the Secretary to develop regulations regarding “the amount and nature of claims to be covered” by the (sometimes) required insurance, along with “a schedule of premiums that may be assessed against any Indian tribe” for whom insurance is required. Note too that the Secretary is supposed to conduct the “comprehensive survey” to determine the adequacy of existing coverage before defining in regulations what coverages are adequate, quite a trick even for a federal agency.

This is a lot of work for the Department of the Interior, requiring it practically to duplicate the underwriting and actuarial operations of an insurance company, funding for the costs of which is by no means assured. For all we know, many and perhaps most tribes may already have appropriate insurance and would thereby be excepted from the legislation. We just don't know. We suggest, again, that the Committee research the need for and practicability of such tasks before expanding the responsibilities of the Department of the Interior in this manner.



In addition to stabbing in the dark, S. 2097 is stabbing at both apples and oranges by attempting to address two disparate and unrelated issues. As a result, it addresses neither adequately. Titles I and II, in fact, share nothing other than page numbers, some broad policy statements, and a few definitions. Otherwise, all they have in common are that they both concern Indian tribes, both involve some aspect of tribes’ sovereign immunity, and both were joined in Senator Gorton's earlier proposal, S. 1691. Senator Gorton himself, by withdrawing S. 1691 in favor of five separate measures he expects to introduce, seems to have found that commingling of issues is confusing, burdensome, or perhaps just inappropriate. We suggest that the Committee consider each issue separately, so that each may be dealt with clearly and purposefully.



With regard to tort liabilities and insurance coverage, as we have noted, for example, much more needs to be learned before one can say what is lacking. As mentioned, the Pueblo of Tesuque has not experienced“significant barriers to obtaining liability insurance.” Even though the State of New Mexico requires gaming tribes to carry more insurance than the state itself is required to carry for similar activities, insurance has not been our biggest hurdle by a long shot. It is entirely possible that the noted.“high cost or unavailability of such coverage in the private market” is the product of someone's second-guessing and that such problems as exist are primarily regulation problems if the insurance industry rather than problems with Indian tribes. If so, these issues would be better addressed in insurance regulations.



The dire picture that the retail lobby has tried to paint, of state treasuries going broke at the hands of unscrupulous Indian traders, is unsupported. Its proponents cite revenue statistics that do not distinguish between those consumer taxes that states may legitimately impose (under Oklahoma Tax Comm'n v. Citizen Band of Potowatomi Indian Tribe of Oklahoma, 498 U.S. 505 (1991)) and taxes that states have attempted to levy on tribes themselves (not permitted without Congressional authorization, as clearly stated in Oklahoma Tax Comm'n v. Chickasaw Nation, 515 U.S. 450 (1995)). In keeping with the mandate of § 101(b) that tax compacts be “consistent with Supreme Court decisions regarding the collection and payment of certain retail taxes,” we ask that the Committee clearly state that only consumer taxes are intended to be the subject of compacts covered by this or similar legislation, and that Chickasaw Nation continues to be the law of the land.

In dealing with retail transaction taxes, Title I of S. 2097 still seems to proceed from the assumption that tribes must pay homage to states, without much in the way of reciprocal deference to tribes' sovereign privileges. The plan proposed under S. 2097 is not a two-way street. Rather, it could become an expressway into the shallow pockets of America's Indian tribes.

Indian tribes clearly have authority to levy transaction taxes, as do states according to Cotton Petroleum Corp. v. New Mexico, 460 U.S. 163 (1989), and Washington v. Confederated Tribes of the Colville Indian Reservation, 447 U.S. 134 (1980). But consistency with these Supreme Court decisions does not appear to be among the goals of S. 2097. As a result, it is not clear whether the "compacts and agreements relating to the collection and payment of certain retail taxes” (for which the United States gives its consent under $ 101(b)) are intended to embrace only state and local taxes, or tribal retail taxes as well.

It is clear, on the other hand, that the bill's new Intergovernmental Alternative Dispute Resolution Panel (“Panel”) may hear only claims for the collection or payment of retail taxes “owed by an Indian tribe to a State or political subdivision(§ 103(c)) (emphasis added). A tribe may apparently raise before the Panel only "counterclaims, setoffs, or related claims submitted or filed by the tribe . . . regarding the original claim.” The Panel's lack of authority to entertain tribes' original claims regarding tribal taxes is, we feel a serious omission. Tribal taxes, like state and local taxes, should be equally subject to tax compacting under § 101(b) and the dispute resolution

( procedures of § 103(c), if S. 2097 is truly to achieve intergovernmental harmony and Indian selfdetermination.

The mediation and dispute resolution procedures of g 102 and 103 also lack any set times and deadlines for the procedures prescribed. Despite the reference in § 102(a) to "good faith negotiations.”the mediation procedures provide no prescribed time period by which a party's delay may be deemed a refusal to participate. Given the experience of tribes negotiating gaming compacts, we feel that timetables and sanctions should be clearly set forth in any mediation procedure. As

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