Counterclaims, Setoff, Or Related Claims Second, Section 103(d) of S. 2097 would require an alternative dispute resolution panel to consider any "counterclaims, setoff, or related claims" raised by a tribe in a dispute with a state over issues of state taxation. This subsection both ignores the Supreme Court's decisions on state/tribal tax disputes and potentially opens up the issues to be considered by the panel to any grievance or argument a tribe chooses to bring before the proposed panels. In the area of tax disputes, the Supreme Court decisions regarding state/tribal tax disputes do not mention the issue of setoff or related claims. Of course, if a tribe is sued by a state for the collection of state excise or sales taxes, the tribe may bring a counterclaim against the state as part of the same lawsuit for legitimate, related claims against the state.. Section 103(c) also gives no guidance to the proposed panel regarding the weight or attention it should give to such tribal counterclaims. Theoretically, under the language of this subsection, the panel would be required to give equal weight to the most absurd or tangential tribal counterclaim. Even more, the failure of a panel to adequately consider every and all tribal counterclaims -- no matter how unrelated to the underlying dispute -- could give rise to a tribal challenge of the panel's processes and decisions. Panels Would Be Mired In Politics Third, Section 103(d) of S. 2097 provides that the proposed panel be comprised of five members, including three executive branch representatives. While this composition may be attractive to tribes under the current Administration, which tends to be sympathetic to many Native American issues, this situation could be reversed in the future under other Administrations of either party. In short, a panel composition that may be sympathetic to Native American claims in 1998 may turn hostile to these claims in 2002, leading to conflicting and/or contradictory panel decisions and inconsistent justice. This potential political whipsaw also would undermine the authority of the proposed panel and weaken the faith of all potential parties to a dispute that they would get a fair hearing and a just decision from the panel. This potential underscores the redundant nature of such a panel. The federal judiciary was established to render impartial and unbiased decisions on matters such as intergovernmental disputes. The drafters of the Constitution established an independent judicial branch to avoid exactly the type of political influence to which these proposed panels will be subject. Panel Decisions Lack Enforcement Authority Fourth, nowhere in S. 2097 is there an indication of how, if at all, the decisions of the proposed panel would be enforced against a party to a dispute. Section 104 of the bill expressly authorizes federal district court jurisdiction for civil actions for parties to a state/tribal agreement or compact. However, it is silent on the issue of the enforcement of a decision of the proposed intergovernmental dispute resolution panel. For example, assume that a state brings a claim against a tribe for failure to collect and remit a lawfully-imposed, non-discriminatory state excise tax on cigarettes. After hearing the dispute, the panel finds that the state's claim is justified and orders the tribe to begin collecting and remitting the appropriate tax to the state. There is no mechanism available to the state under S. 2097 to enforce the panel's decision against the tribe. Instead, the state would be faced with the same judicial remedies that are available to it now. And the tribe would be successful in defeating any lawsuit to enforce the panel's decision by asserting a defense of tribal immunity. Thus, under S. 2097 and the proposed dispute resolution panels, nothing is really resolved. Support For Certain Ideas In S. 2097 NACS and SIGMA do support several of the concepts included in S. 2097. First, the active involvement of the Department of the Interior in convening non-binding mediation between a state and a tribe involved in a tax dispute is an important initiative that should be pursued. However, we are concerned that such mediation take place within the parameters of the Supreme Court's decisions on this subject and that Interior participants be familiar with, and bound by, these decisions. In addition, we are concerned that the timetable for such mediation outlined in Section 102 of S. 2097 may prove too cumbersome both for states and for tribes. If the issues addressed in the mediation are confined to whether the state tax at issue is a lawful, non-discriminatory tax for which the incidence is on a non-Native American and whether the tribe has a duty to act as an agent of the state in collecting and remitting the tax, then the elongated timetable should be unnecessary. Second, NACS and SIGMA are intrigued that Section 104 of the bill would require states and tribes to include a provision in any agreement or compact reached under Section 102 waiving both the state's and the tribe's sovereign immunity in order to enforce the provisions of the compact or agreement in federal district court. To date, Native American tribes have been unwilling under any circumstances to waive any portion of their tribal immunity to permit state enforcement of lawful state taxes. And yet, under Section 104, tribes would be required to waive their tribal immunity to the extent necessary to enforce a compact or agreement as part of any state/tribal agreement. If the tribes are willing to support legislation that would require them to waive a portion of their tribal immunity, then perhaps there are other circumstances in which the Congress could restrict tribal immunity without eviscerating the entire concept of tribal immunity -- a result some tribes have predicted from such a restriction in the past. NACS and SIGMA Support The "State Excise, Sales, and Transaction Tax Enforcement Act of 1998" Senator Slade Gorton recently introduced the "State Excise, Sales, and Transaction Tax Enforcement Act of 1998." NACS and SIGMA strongly support this legislation for many of the reasons that we have criticized S. 2097. First, this legislation closely tracks the relevant Supreme Court opinions by stating affirmatively in federal law that tribes and their members are required to: (1) act as agents of the state when selling tobacco products and motor fuels to non-Native Americans; and, (2) collect and remit to the appropriate state lawfully-imposed state excise, sales, and transaction taxes on such sales to non-Native Americans. Second, in the event there is a dispute as to whether the state tax at issue is lawful, this legislation provides that a state may seek a declaratory judgment on this issue from an impartial federal district court. Third, if the appropriate federal district court decides that the tax is lawful, then the state is authorized under this legislation to bring an action against a tribe in federal district court to enforce the tribes' duty to collect and remit that tax to the state. Fourth, to the extent necessary to enforce this duty, tribal immunity is waived. In addition, Senator Gorton's bill does not disturb any existing state law or state/tribal compacts or agreements that exempts a tribe from collecting and remitting state excise, sales, or transaction taxes. Thus, if a state has an existing compact with a tribe that exempts the tribe from its duty to act as an agent of the state, or if existing state law exempts the tribe from such a duty, then the legislation would not apply. Senator Gorton's bill represents a more comprehensive and logical solution to the issue of state/tribal disputes over tax issues than S. 2097 for several reasons. First, it limits its application to lawful state taxes under which the incidence of the tax is on non-Native Americans only. Second, it respects existing state compacts and law. Third, it places enforcement authority in the hands of the impartial federal judicial system, not in the hands of a potentially politically-influenced panel. Fourth, as with S. 2097, it limits tribal sovereignty only to the extent necessary to enforce lawful, non-discriminatory state excise, sales, and transaction taxes. Conclusion NACS and SIGMA are heartened by the introduction of S. 2097 and by the fact that our requests for congressional assistance in resolving the issue of Native American state excise tax evasion are being actively considered by this Committee and others in Congress. However, NACS and SIGMA will lend their strong support to Senator Gorton's legislation because it promises to provide more effective, comprehensive, and rapid relief to our members. We have attempted to be constructive in our criticism of S. 2097, and hope that our testimony has been taken in that light. Thank you for this opportunity to testify, Mr. Chairman. I would be pleased to answer any questions you or your colleagues may have. Northwest Indian Fisheries Commission 6730 Martin Way E., Olympia, Washington 98516-5540 Phone (360) 438-1180 FAX #753-8659 TESTIMONY TO THE UNITED STATES SENATE THE "INDIAN TRIBAL CONFLICT RESOLUTION AND TORT CLAIMS AND RISK MANAGEMENT ACT OF 1998" By Billy Frank, Jr., Chairman, Northwest Indian Fisheries Commission July 15, 1998 Chairman Campbell and other Honorable Members of the Senate Indian Affairs Committee, I am Billy Frank, Jr., chairman of the Northwest Indian Fisheries Commission. In this capacity, I am the elected natural resources management spokesperson for the treaty Indian tribes of western Washington. The Commission I represent is an outstanding professional organization, based in Olympia, Washington, which supports the natural resource management programs of 20 sovereign Indian nations. As confirmed in the US. v. Washington Federal District Court decision of 1974, and reconfirmed by the United States Supreme Court in 1979, the treaty Indian tribes in our state co-manage the great Pacific Northwest salmon resource with the state. In the capacity of co-managers we have amassed highly significant experiences which we feel can provide important insight and perspective relative to the legislation you are considering today. Before I elaborate on these collective experiences, however, I would like to speak to you briefly about my own experiences as a tribal member from the Nisqually Tribe in the hope that my personal experiences will also provide some helpful insight. I have lived on the Nisqually River all my life, along with many of my closest relatives and fellow tribal members. The Nisqually River is a glacierfed river with its origins at Mt. Rainier. It travels about 90 miles into the southern end of Puget Sound. My father was born in a long house on that river just before Washington became a state. He was only a boy when a treaty was established between the tribe and the state, but he remembered well what life was like before most of the land was taken over by farmers, ranchers, timber barons and the non-tribal government. He remembered when fish and game, giant cedar trees and a great variety of natural vegetables and other plants provided ample sustenance for the entire tribe. He also remembered being taken away from his family and placed in a government boarding school, forbidden to speak his native language or practice his culture. He ran away from that school and made his way back to his family, on the river of his birth. He grew up there, on the Nisqually, where he continued to practice the customs he had been taught. And, he taught me the values of our heritage, even as we witnessed the massive destruction of our ancestral lands, the damming and pollution of our river and the assault on our traditional way of life by big business, entrepreneurs and government agents. Over Testimony on S.2097 Chairman Billy Frank, Jr. July 15, 1998 Page 2 the natural resources and habitat upon which we had depended for our livelihoods and spiritual strength from time immemorial. In the 1960's, the invasion of our treaty-protected rights reached a pinnacle as the state began to arrest us on a frequent basis for exercising those rights. That led to the U.S. v. Washington case, which the tribes won. In fact, we have won virtually every court case since then, and there have been many of them. Yet, the fish that my father and I have loved so much have stopped coming to the Nisqually River and, like many tribes, most of our tribe's fishermen are unemployed. Still, we have hope. We hope that the fish will return to the river and that our way of life can go on. We hope that everyone who now lives in the state, and who chooses to do so, will be able to catch fish in the generations to come. We hope these things for good reasons. It is Nature's way for people to catch fish. They provide good nutrition and they culturally connect us with the planet that sustains us. By caring for the fish, teaching respect for them and building our lives around them, we retain a critical part of our past that can be passed on to the generations to come. That's why we devoted ourselves, on the Nisqually, to building positive relations with the people of various vocations who live up and down the river. Together, as a team, we have cleaned up the river. We have shared our thoughts, desires and dreams together: Farmers, Ranchers, Politicians and Tribal Members. We found commonality in the goal of restoring and protecting the salmon resource, realizing that none of us want the salmon to stay away forever. My father is gone now, but his spirit is strong. The Indians of the Nisqually will not be put in government boarding schools. We will not tolerate assaults on our culture. We will speak our language if that is what we wish to do. And, we will remain devoted to the restoration of the salmon. The salmon has not returned yet, but we hope that it will, and we share that hope with our neighbors. I come before you today specifically to support the conflict resolution portion of S. 2097, and particularly as it pertains to natural resource management. We appreciate the findings and purposes described in this bill, and we agree that alternative dispute resolution can result in more expedited, less costly and less contentious results than litigation. We have alway seen court as a last resort, and have deferred to it only when it was the only path remaining to us. We appreciate the acknowledgment that, in such extreme cases, the United States government must get actively involved in the role of trustee for the Indian tribes. But we also appreciate the proactive involvement of the United States described in this legislation. We further welcome the acknowledgment in this legislation that disputes can rise, not only from the perspectives of non-Indian government toward the tribes, but vice-versa as well. It has, after all, always been our opinion that disputes should be settled between people and governments short of court. The problem has unfortunately been that court has generally been the one and only way we could get their attention. Our efforts to be heard have generally fallen on deaf ears. The natural resources which have always brought us life have fallen victim to everything from canneries to the woodsman's ax through the years, and our objections summarily dismissed. |