Thank you for your invitation to present testimony regarding Title I of S. 2097-Indian Tribal Conflict Resolution, Tort Claims, and Risk Management Act of 1998. Since I will be out of town all next week, I have asked Eileen Barkas Hoffman, FMCS Director of Special Projects to deliver this testimony and answer any questions you and your committee may have. As the agency's former General Counsel and a mediator, she is very knowledgeable about this area and has directed a number of FMCS ADR projects. I had a very helpful visit with your Chief Counsel, Paul Moorehead yesterday. He was able to answer some questions about the legislation and testimony for me and my staff. Again, I wish to thank you for including FMCS as the provider of mediation services in this important legislation. We look forward to working with you and your staff to assist in any dispute resolution systems design. Sincerely yours, C. Put Ba C. Richard Barnes Enclosure Charles Richard Barnes Acting Director Federal Mediation and Conciliation Service Richard Barnes was appointed Acting Director of the Federal Mediation and Conciliation Service in April 1998. He oversees the work of 200 federal mediators in fifty states, the Panama Canal, Puerto Rico, the U.S. Virgin Islands and Guam. As Acting Director, he is responsible for the delivery of mediation and arbitration services to the United States labor-management community; alternative dispute resolution services to federal, state and local governments; and an international program which provides training and technical assistance in labor-management and conflict resolution systems to other nations. Barnes had been Deputy Director for Field Operations since 1996. He played a key role in the Strategic Redirection of FMCS, a four-year reinvention process aimed at realigning the agency, its services and personnel with the changing needs of the collective bargaining and conflict resolution communities. As Deputy Director, he also led mediation teams in helping resolve some of the most significant labor-management disputes in recent years, including the 1997 strike by 185,000 Teamsters against United Parcel Service, and 1998 negotiations between Kaiser Foundation Hospitals and the striking California Nurses Association, affecting 30 hospitals in Northern California. A native of Chattanooga, Tennessee, Barnes joined FMCS in August 1987. After serving as Coordinator for Alternative Dispute Resolution and for Preventive Mediation in his district, he was appointed District Director in 1994, and was selected Southern Regional Director in 1995. Prior to joining FMCS, Barnes was an International Representative and District Council Business Manager for the Laborers' International Union of North America, assigned to the Atlanta, Georgia Regional Office. He is a Vietnam-era veteran of the U.S. Army, and served at the Medical Field Service School at Brooke Army Medical Center, Fort Sam Houston, Texas. He is an 1985 graduate of Antioch University, earning a Bachelor of Arts degree in Labor Studies. Since October 1, 1997, Eileen B. Hoffman has served as the Agency's Director of Special Projects, responsible for facilitation, mediation and training in a variety of sectors including the federal sector where she represents FMCS on the National Partnership Council's Planning Committee and works with the U.S. Postal Service and its unions for their National Labor Relations Summit. She also provides outreach for the Agency's arbitration services and serves as chairman of the FMCS Arbitrator Review Board. Before assuming this position, she served as the Agency's General Counsel and Director of Legislative Affairs from October 1991 until September 1997. Her career with FMCS began in 1975 when she joined the New York field office as a mediator; in 1978 she went to London for a special exchange with the British Advisory, Conciliation and Arbitration Service; in 1979 she was assigned to work in the Washington, D.C. field office and in 1985 was promoted to become a District Director for a 10-state area with a staff of 17 mediators; She was also in charge of coordinating the Agency's Federal Sector Program. Prior to joining FMCS she served as Research Director of the Massachusetts Labor Relations Commission in Boston, MA, and as a Labor Relations Research Specialist for the Conference Board, Inc. in New York City. She has designed ADR programs and facilitated negotiated rule-making proceedings for a number of federal agencies, represented FMCS at the Independent Mediation Service of South Africa (IMSSA), participated in a special US Department of Labor-FMCS Task Force on Polish labor law in Warsaw, and serves as liaison for FMCS to such labor and dispute resolution organizations as the Association of Labor Relations Agencies (ALRA), the Industrial Relations Research Association (IRRA), the American Bar Association's Labor Law Section, and the Society of Professionals in Dispute Resolution. A graduate of the New York State School of Industrial and Labor Relations at Cornell University, she received her M.A. in Political Science from Columbia University, and her J.D. from Georgetown University Law Center, where she was awarded the John F. Kennedy Labor Law Prize. She has served as a past president of SPIDR, and on the Executive Boards of IRRA, ALRA, SFLRP, as a public member of the Federal Labor Law Committee of the ABA's Labor Law Section, and on the Advisory Boards of the Cornell ILR School and Rutgers University School of Management and Labor Relations. She has written in the fields of collective bargaining, dispute resolution and comparative labor relations, and developed training programs for EEO, labor, management, and government officials. She also teaches negotiations and ADR at the law school and business school levels. A member of the D.C. and Pennsylvania bars, she serves as a mediator for the Court of Appeals for the District of Columbia Circuit. Testimony of Renny Fagan, Executive Director of Colorado Department of Revenue S.2097 The Indian Tribal Conflict Resolution and Tort Claims and Risk Management July 15, 1998 I am Renny Fagan, the Executive Director of the Colorado Department of Revenue. I appreciate the opportunity to present comments on Title I of S. 2097, concerning mediation of retail tax issues. Colorado's experience with the Southern Ute and Ute Mountain Ute tribes is that negotiated compacts can successfully resolve disputes. Therefore, the kind of mediation embodied in S. 2097 can be helpful to states and tribes. After giving some background about Colorado, I will comment on specific provisions of the bill and offer suggestions to improve the workability of the concept from the state standpoint. Colorado's Tax Structure and Tax Issues Involving Tribes The Department of Revenue collects over $5 billion in income, sales, severance, estate, excise, fuel and motor vehicle taxes for the state of Colorado. We also collect about $550 million of sales and use taxes for counties and certain cities. In addition to many other functions, the Department regulates limited stakes gaming, which Colorado voters authorized in 1991. Colorado has a decentralized local government tax system. While the state constitution and statutes set forth property classification and assessment rules, local governments establish mill levies (except school districts) and local county assessors largely administer the property tax. In addition, Colorado has a somewhat unique constitutional provision establishing home rule cities which have sales tax authority independent from the state. Home rule cities may define their tax base, establish their tax rate, and collect and enforce their tax without state involvement. These features make Colorado's tax policy complex. The Southern Ute and Ute Mountain Ute tribal lands are located in southwest Colorado. Over the years, the state, local governments and the tribes have dealt with tax issues. Under principles of tribal sovereignty, the state recognizes that transactions occurring on tribal land between tribal members are immune from state tax. However, we have debated whether the state and local governments can impose tax on transactions taking place on the reservation involving non tribal members or the operation of a business owned by a non-tribal entity. In seeking to impose tax, the state's interest is to protect the local and state tax base from erosion and to establish fairness by ensuring that like transactions are taxed in like manner. The state wishes to avoid the existence of tax havens where a differential tax rate would significantly affect purchasing decisions. Both state and local governments seek revenue to fund services widely shared by all, such as education, transportation, and law enforcement. In claiming immunity from tax, the tribes foremost interest is to exercise and obtain recognition of their sovereign authority. They also assert that state taxation can interfere with the federal policy of promoting tribal economic development and self-determination. The convergence of issues such as sovereignty, competition for economic development, state constitutional restrictions on state and local tax policy and federal law make this area of tax policy complex, and one where the need to form partnerships is more important than ever. S. 2097 Provides a Useful Method of Resolving Tax Disputes By establishing a formal means to negotiate and mediate tax disputes, S.2097 provides a useful public policy tool. When the state and the tribes cannot informally agree on whether certain transactions are taxable, the parties often resort to litigation. As a part of the court process, we often end up negotiating a solution, but only after expending time, money, and sometimes, good will. Therefore, we see this bill as a means to formalize dispute resolution, while avoiding protracted legal conflict. Colorado's Recent Experience With Tribal Negotiations In recent years, the state and the Southern Ute and Ute Mountain Ute Tribes have used negotiated compacts to establish working partnerships which recognize the important interests of all parties. A. The Southern Ute Taxation Compact In 1996, the Southern Ute Tribe, the State and La Plata County successfully negotiated a taxation compact involving real and personal property and other taxes pertaining to oil and gas production. The dispute involved land owned or acquired in fee simple by the Tribe, and to a lesser extent, the taxation of non-Indian owned joint interests in the production wells. The State and County claimed that land previously subject to tax should continue to be taxable. The Tribe argued that the lands located within the reservation were tax exempt. The parties litigated in the federal district court for the District of Colorado. After a lengthy, complex analysis of federal allotment law and other federal statutes, the court found in favor of the Tribe. The Tenth Circuit Court of Appeals reversed, finding that since the previous non-Indian owner had paid the taxes due and since no assessment was pending against the Tribe, the case was not ripe for determination. In essence, after two years of litigation, the parties were back to the beginning. |