<DOC>
[110 Senate Hearings]
[From the U.S. Government Printing Office via GPO Access]
[DOCID: f:42575.wais]
S. Hrg. 110-450
THE SUCCESS AND SHORTFALL OF SELF-
GOVERNANCE UNDER THE INDIAN SELF-
DETERMINATION AND EDUCATION ASSISTANCE ACT AFTER TWENTY YEARS
=======================================================================
HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
__________
MAY 13, 2008
__________
Printed for the use of the Committee on Indian Affairs
----------
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COMMITTEE ON INDIAN AFFAIRS
BYRON L. DORGAN, North Dakota, Chairman
LISA MURKOWSKI, Alaska, Vice Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona
KENT CONRAD, North Dakota TOM COBURN, M.D., Oklahoma
DANIEL K. AKAKA, Hawaii JOHN BARRASSO, Wyoming
TIM JOHNSON, South Dakota PETE V. DOMENICI, New Mexico
MARIA CANTWELL, Washington GORDON H. SMITH, Oregon
CLAIRE McCASKILL, Missouri RICHARD BURR, North Carolina
JON TESTER, Montana
Allison C. Binney, Majority Staff Director and Chief Counsel
David A. Mullon Jr., Minority Staff Director and Chief Counsel
C O N T E N T S
----------
Page
Hearing held on May 13, 2008..................................... 1
Statement of Senator Barrasso.................................... 3
Statement of Senator Cantwell.................................... 65
Statement of Senator Dorgan...................................... 42
Prepared statement........................................... 42
Statement of Senator Murkowski................................... 1
Statement of Senator Tester...................................... 3
Witnesses
Allen, Hon. W. Ron, Chairman/CEO, Jamestown S'Klallam Tribe...... 8
Prepared statement with attachment........................... 10
Cason, James, Associate Deputy Secretary, U.S. Department of the
Interior....................................................... 4
Prepared statement........................................... 5
Marshall, Hon. Clifford Lyle, Chairman, Hoopa Valley Tribe....... 43
Prepared statement........................................... 45
Peltola, Gene, President/CEO, The Yukon-Kuskokwim Health
Corporation, accompanied by: Lloyd B. Miller, Esq., Partner,
Sonosky, Chambers, Sachse, Endreson and Perry, LLP; Dan
Winkelman, Esq., General Counsel, Yukon-Kuskokwim Health
Corporation.................................................... 55
Prepared statement........................................... 57
Steele, Jr., Hon. James, Tribal Council Chairman, Confederated
Salish and Kootenai Tribes..................................... 50
Prepared statement........................................... 51
Appendix
Benjamin, Melanie, Chief Executive, Mille Lacs Band of Ojibwe,
prepared statement............................................. 85
Carroll, Marie, President, Arctic Slope Native Association; John
``Chance'' Houle, Chairman, Chippewa Cree Tribe of the Rocky
Boy's Reservation; Gregory Pyle, Chief, Choctaw Nation of
Oklahoma; Harold Frank, Chairman, Forest County Potawatomi
Community; Andy Tueber, President, Kodiak Area Native
Association; Alonzo Coby, Chairman, Shoshone-Bannock Tribes of
the Fort Hall Reservation; Nancy Egan, Chairwoman, Shoshone-
Paiute Tribes of the Duck Valley Reservation; and Linwood
Killam, CEO, Riverside-San Bernardino County Indian Health,
Inc., joint prepared statement................................. 83
His Horse Is Thunder, Ron, Chairman, Standing Rock Sioux Tribe;
A.T. Stafne, Chairman, Assiniboine and Sioux Tribes of the Fort
Peck Reservation; Marcus Wells, Jr., Chairman, Three Affiliated
Tribes of the Fort Berthold Reservation, joint prepared
statement with attachment...................................... 75
Smith, Chad, Principal Chief, Cherokee Nation, prepared statement 79
THE SUCCESS AND SHORTFALL OF SELF-
GOVERNANCE UNDER THE INDIAN
SELF-DETERMINATION AND EDUCATION
ASSISTANCE ACT AFTER TWENTY YEARS
----------
Tuesday, May 13, 2008
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m. in room
562, Dirksen Senate Office Building, Hon. Lisa Murkowski, Vice
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
Senator Murkowski. We are calling to order the Committee on
Indian Affairs. We have an oversight hearing on the Success and
Shortfalls of Title IV of the Indian Self-Determination and
Education Assistance Act.
Chairman Dorgan is planning on joining us here this
afternoon. He is not able to be here for probably the first 45
minutes or so. But he has indicated that he is looking forward
to the opportunity to hear from all of you and an opportunity
to ask questions. So we will await his arrival, but until then,
I will begin with the proceedings.
I want to acknowledge Chairman Dorgan for bringing this
hearing on tribal self-governance. I think it is fair to say
that the self-governance program has literally reshaped the way
in which health care services are delivered to Native people in
Alaska. So any hearing on this particular subject is always of
great interest to me and so many within the State.
I want to welcome Gene Peltola, the President and CEO of
Yukon Kuskokwim Health Corporation. I know you took a long
flight from Bethel and experienced a little mechanical
difficulty to get here, so we appreciate your long journey and
your willingness to be part of the group this afternoon.
It has been nearly 40 years since President Nixon issued
his famous special message to Congress on Indian affairs, which
outlined his new and more enlightened Federal Indian policy of
tribal self-determination. By enacting the Indian Self-
Determination Education and Education Assistance Act, Congress
set in motion the transition from Federal domination of Indian
programs to meaningful tribal control of these programs to make
them more responsive for their Native communities.
In 1988, Congress expanded upon that approach by enacting a
tribal self-governance demonstration project and then several
years later, made self-governance a permanent program within
the BIA and the IHS. After 20 years, the humble beginning of
self-governance as an experimental demonstration project, with
only 7 tribes compacting $27 million in BIA programs, has
expanded to over 230 tribes compacting an estimated $350
million for the BIA and over 380 tribes and tribal
organizations compacting over $1.2 billion within the IHS.
The self-governance program has enabled Indian tribal
governments to make significant improvements in the delivery
and quality of health care, resource management and road
systems. I have noted in previous Committee hearings that self-
governance has been particularly successful in our Alaska
Native communities.
By all accounts, it would appear that self-governance is a
tribal success story, but there remain so many outstanding
issues that need further examination. This Committee held an
oversight hearing in the 109th Congress on self-governance
which suggested that there may be compelling reasons to reform
the BIA's self-governance if it is going to continue to
flourish. I want to welcome back Mr. Ron Allen, Chairman Allen,
who testified during the 109th, and I am interested in hearing
whether any progress has been made or not since the time of
that hearing and any other recommendations they may have for
improvement.
A significant problem in impacting the success of self-
governance is the shortfalls in the Government's payments of
contract support costs for the BIA and the IHS programs.
Contract support costs are essential to the tribal
administration of these programs. Other departments of the
Government pay their contractors general and administrative
costs that they incur, and I believe that the Departments of
Interior and Health and Human Services should and must do the
same.
Contract support costs shortfalls force compacting tribes
to reach into funds intended for the tribes' offices intended
to fund the administration of their programs, which in turn
then necessarily forces a reduction in services. This is not
what self-governance is all about.
A tribe's decision in the first instance to join the self-
governance program, to take on basically the responsibility of
the Federal Government's job of delivering services to Native
people turns in large measure on the Government's agreement to
pay these costs. Yet I understand that the BIA has an estimated
$25 million current contract support cost shortfall, and that
IHS programs are currently facing a $110 million shortfall. I
do hope to hear from the Interior Department on how its
contract support cost policy has affected the shortfall and how
it has impacted this self-governance program.
I do thank the witnesses for their participation and look
forward to your testimony. With that, Senator Tester, I will
turn to you for any comments you would choose to make.
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. Thank you, Vice Chair Murkowski. I also
want to thank the Chairman, but I want to thank you, because I
know that you have played a big role in getting this hearing
up. I think it is a very important hearing to have.
I also want to welcome the panel. Thank you all for being
here. A special welcome to Chairman Steele from the Salish
Kootenai. I have had the opportunity to work with Chairman
Steele at the State level and it is good to work with you at
this level, too.
One of the things that I think we all hope and we all try
to achieve is self-sufficiency in Indian Country. I think self-
government is a big first step in that. We need to hear from
you folks as to what we can do to help improve the system. I
know it is not perfect, but ways that we can change or adapt or
new ideas, whatever it may be, workable solutions, let's just
put it that way, that Congress can enact to really empower even
more than what has been empowered in the past.
As I said, I think this is an important hearing. I think it
is a right first step to have. I know it hasn't been exactly a
success story in all cases. In some cases it has worked better
than others. That tells me that we may have to do some tweaking
here and there. Those tweaks, from my perspective, need to come
from you.
So I appreciate your being here. I look forward to hearing
from Mr. Cason, too, as this panel rolls forward, and once
again, thank you. Thank you, Senator Murkowski, for your
efforts.
Senator Murkowski. Thank you, Senator Tester. With that, we
will begin, and we will start with you, Mr. Cason. Mr. James
Cason is the Associate Deputy Secretary of the Department of
the Interior here in Washington. I will just introduce
everybody and then ask you to begin, Mr. Cason.
He will be followed by the Honorable Ron Allen, who is the
Chairman and Executive Director of the Jamestown S'Klallam
Tribe in Sequim, Washington; the Honorable Clifford Lyle
Marshall, Hoopa Valley Indian Tribe in Hoopa, California. We
also have the Honorable James Steele, Jr., Chairman of the
Confederated Salish and Kootenai Tribes in Pablo, Montana; and
Mr. Gene Peltola, who is the President and CEO of the Yukon-
Kuskokwim Health Corporation in Bethel, Alaska.
Senator Barrasso, we are just about ready to go to the
panel, but if you would care to make any opening comments, we
would be happy to hear from you.
STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Thank you very much, Senator Murkowski. I
appreciate the opportunity. I want to thank you for holding
this hearing.
When I visit with leaders on the Wind River Reservation in
Wyoming, I find that both of our tribes there, the Northern
Arapaho and the Eastern Shoshone, are working to build autonomy
within their own people, as Senator Tester and you both have
commented on. Our concerns are that the agency charged with
administering the contracts to allow self-governance, the BIA,
is often weighed down by Government bureaucracy. That is what I
heard two months ago in one of our now several different visits
to the reservation in Wyoming. There are procedural
requirements that slow the process of delivering needed
services, and I think it is time to seriously take a look at
the bureaucratic red tape that we expect the States and tribes
and private individuals to face whenever cooperating with the
Government. I think they are specific and significant in terms
of working with our own tribes.
The BIA should put tribes in a position to succeed, to
provide a platform for the Indian people to prosper and then
the Government really ought to just get out of the way.
So I am looking forward to the hearings, and finding the
best ways to help our tribes succeed. Thank you, Madam
Chairman.
Senator Murkowski. Thank you, Senator Barrasso.
With that, Mr. Cason, we will proceed to you, please.
STATEMENT OF JAMES CASON, ASSOCIATE DEPUTY SECRETARY, U.S.
DEPARTMENT OF THE INTERIOR
Mr. Cason. Thank you so much. Good afternoon, Vice Chairman
Murkowski and members of the Committee. I am pleased to be here
today to discuss the Department of Interior's tribal self-
governance program.
In 1988, Congress amended the Indian Self-Determination and
Education Assistance Act by adding Title III, which authorized
self-governance demonstration projects. In 1994, Congress again
amended the Act by adding Title IV, establishing a program
within the Department of Interior to be known as tribal self-
governance. The addition of Title IV made self-governance a
permanent option for tribes.
These amendments authorize federally-recognized tribes to
negotiate funding agreements with the Department of Interior
for programs, services, functions or activities administered by
the Bureau of Indian Affairs and within certain parameters,
authorizes such funding agreements for other bureaus of the
Department.
The law allows federally-recognized tribes to assume
programs administered by the Department's bureaus and offices
other than BIA, subject to negotiations, and as long as the
programs are available to Indian tribes or Indians. The law
also authorizes the Secretary to include other programs
administered by the Secretary which are of special geographic,
historical or cultural significance to the participating tribe
requesting the compact.
In 1990, the first seven funding agreements with the
Department were negotiated for about $27 million in total
funding. For fiscal year 2007, there are 94 agreements that
include 234 federally-recognized tribes and approximately $380
million in total funding. Some of these agreements are with
tribal consortia, which account for the difference in the
number of tribes exceeding the number of agreements.
The Department funding agreements allow federally-
recognized tribes to provide a wide range of programs and
services to their members such as law enforcement, education
and welfare assistance. Many of the funding agreements include
trust-related programs, such as real estate services,
appraisals, probates, natural resource programs, such as
forestry, fisheries and agriculture. What makes these funding
agreements unique is that Title IV allows tribal governments to
redesign programs for their members, set their own priorities
consistent with Federal laws and regulations, and respond to
the unique needs of tribal members without seeking approval
from departmental officials.
Many tribes have been successful in implementing self-
governance programs and annual funding agreements to meet their
tribal needs. Detailed examples are included in my written
testimony.
While the hearing today is an oversight hearing on tribal
self-governance, the Department of Interior is aware that the
House of Representatives' legislation would extend provisions
of Title V of the Indian Self-Determination and Education
Assistance Act to programs within the Department of Interior.
Within the Department, except for the Bureau of Indian Affairs
and specific instances with other bureaus, there are functions
and responsibilities that do not lend themselves to compacting
or funding agreements under the provisions like those in Title
V of the Indian Self-Determination and Education Assistance
Act.
In addition, if Title V were extended to the entire
Department, non-BIA bureau programs that have both Indian and
non-Indian stakeholders would be subject to funding agreements
at the tribes' discretion. And if extended, the non-BIA bureaus
of Interior would have no negotiating rights with regard to
what would be authorized under those agreements. Therefore,
consistent with the Department's statement to the House Natural
Resources Committee where the Department expressed opposition
to H.R. 3994, the Department again before this Committee
expresses its opposition to any extension of provisions of
Title V to non-BIA bureaus of the Department.
It is my understanding, however, that the self-governance
group may be on the cusp of a different sort of proposal and we
would be very encouraged to take a look at that. As I
understand it, that alternative proposal would strike the other
non-BIA bureaus in its approach to extend Title V.
As the Department moves forward with the current Title IV
provisions, we have gained valuable insight into working in
partnership with non-BIA bureaus and tribes. We look forward to
continuing to work with tribes on ways to expand compacting
opportunities and improve our program.
Madam Chairman, that concludes my statement and I will be
happy to answer questions.
[The prepared statement of Mr. Cason follows:]
Prepared Statement of James Cason, Associate Deputy Secretary, U.S.
Department of the Interior
Good afternoon, Chairman Dorgan, Vice Chairman Murkowski, and
Members of the Committee. I am pleased to be here today to discuss the
Department of the Interior's Tribal Self Governance program.
Self-governance Tribes have been good managers of the programs they
have undertaken. Some Tribes add their own resources to the programs
and are able to fashion programs to meet the particular needs of their
beneficiaries. They are also well suited to address changing needs.
Tribes have said that our current compacts with them reflect a true
government-to-government relationship that indicates they are not
viewed by the Federal government as just another federal contractor.
While the hearing today is an oversight hearing on Tribal Self
Government, the Department of the Interior is aware of the House of
Representatives' legislation that would extend the provisions of Title
V of the Indian Self-Determination and Education Assistance Act, which
governs the programs of the Indian Health Service, to the programs of
the Department of the Interior. Within the Department, except the
Bureau of Indian Affairs and specific instances with other bureaus,
there are functions and responsibilities that do not lend themselves to
compacting or funding agreements under provisions like those in Title V
of the Indian Self-Determination and Education Assistance Act.
Therefore, consistent with the Department's statement to the House
Natural Resources Committee, where the Department expressed its
opposition to H.R. 3994, the Department again, before this Committee,
expresses its opposition to any extension of the provisions of Title V
of the Indian Self-Determination and Education Assistance Act to the
non-BIA bureaus of the Department of the Interior.
The policy of Indian self-determination is one that has endured for
almost forty years. In a message to Congress on March 6, 1968,
President Lyndon Johnson said:
I propose a new goal for our Indian programs: A goal that ends
the old debate about ``termination'' of Indian programs and
stresses self-determination . . . The greatest hope for Indian
progress lies in the emergence of Indian leadership and
initiative in solving Indian problems. Indians must have a
voice in making the plans and decisions in programs which are
important to their daily life . . .
In July 1970, President Nixon gave his famous Special message to
Congress which stated:
It is long past time that the Indian policies of the Federal
government began to recognize and build upon the capacities and
insights of the Indian people. . . . The time has come to break
decisively with the past and to create the conditions for a new
era in which the Indian future is determined by Indian acts and
Indian decisions. . .. Federal termination errs in one
direction, Federal paternalism errs in the other. Only by
clearly rejecting both of these extremes can we achieve a
policy which truly serves the best interests of the Indian
people. Self-determination among the Indian people can and must
be encouraged without the threat of eventual termination. In my
view, in fact, that is the only way that self-determination can
effectively be fostered. . .
And more recently, on October 30, 2006, President Bush declared:
My Administration will continue to work on a government-to-
government basis with tribal governments, honor the principles
of tribal sovereignty and the right to self-determination, and
help ensure America remains a land of promise for American
Indians, Alaska Natives, and all our citizens.
Background
In 1988, Congress amended the Indian Self-Determination and
Education Assistance Act (the Act) by adding Title III, which
authorized the Self-Governance demonstration project. In 1994, Congress
again amended the Act by adding Title IV, establishing a program within
the Department of the Interior to be known as Tribal Self-Governance.
The addition of Title IV made Self-Governance a permanent option for
tribes. These amendments, in section 403(b), authorize federally
recognized tribes to negotiate funding agreements with the Department
of the Interior (Department) for programs, services, functions or
activities administered by the Bureau of Indian Affairs (BIA) and,
within certain parameters, authorized such funding agreements with
other bureaus of the Department. In the year 2000, the Act was amended
again to include Titles V and VI, making Self-Governance a permanent
option for tribes to negotiate compacts with the Indian Health Service
(IHS) within the Department of Health and Human Services and providing
for a now-completed study to determine the feasibility of conducting a
Self-Governance Demonstration Project in other programs of that
Department.
The law allows federally recognized Tribes to assume programs
administered by the Department's bureaus and offices other than the BIA
subject to negotiations and as long as the programs are available to
Indian Tribes or Indians. The law also authorizes the Secretary to
include other programs administered by the Secretary which are of
special geographic, historical, or cultural significance to the
participating Tribe requesting a compact.
In 1990, the first seven funding agreements with the Department
were negotiated for about $27 million in total funding. For FY 2007,
there are 94 agreements that include 234 federally recognized tribes
and approximately $380 million in total funding. Some of these
agreements are with tribal consortia, which account for the number of
such tribes exceeding the number of agreements. These Department
funding agreements allow federally recognized tribes to provide a wide
range of programs and services to their members such as law
enforcement, education, and welfare assistance. Many of the funding
agreements include trust related programs such as real estate services,
appraisals, probates and natural resource programs such as forestry,
fisheries, and agriculture. What makes these funding agreements unique
is that Title IV allows tribal governments to re-design programs for
their members and set their own priorities consistent with Federal laws
and regulations. This authority allows tribal leaders the ability to
respond to the unique needs of their tribal members without seeking
approval by Departmental officials.
Successes
Many Tribes have been successful implementing Self-Governance
programs to meet their tribal needs. For example, the Chickasaw Nation
accomplishments in 2006 included providing education services to 7,209
students. 945 students participated in remedial education and tutoring
and 82 percent of the students receiving tutoring gained one grade
level or more. Scholarships were provided to 181 undergraduate students
and 43 graduate students. The Tribe's tribal district court heard 1,118
cases. It collected almost $50,000 in court fees and over $32,000 for
restitution and child support. In January 2006, the Tribe's Supreme
Court and district court were audited by a team from the BIA central
office and received excellent ratings. The Tribe also provided career
counseling, skills assessment, aptitude testing, and other employment
readying services to 1,320 clients. The Tribe coordinated a job fair
that attracted 53 vendors and over 500 job seekers. The Tribe's police
department implemented a new computer system which has aided in
multiple dispatching methods and improved data collection,
investigation, and crime analysis and reporting. This example is just
one of many where Tribes have been successful in directly administering
federal programs.
Section 403(b)(2) of Title IV authorizes other bureaus within the
Department of the Interior to enter into funding agreements with Tribes
subject to such terms as may be negotiated between the parties. The
Council of Athabascan Tribal Governments (CATG) has successfully
implemented Annual Funding Agreements (AFAs) since 2004 to perform
activities in the Yukon Flats National Wildlife Refuge in Interior
Alaska. The CATG represents the Tribal governments of Arctic Village,
Beaver, Birch Creek, Canyon Village, Chalkyitsik, Circle, Gwichyaa Zhee
Gwich'in Tribal Government of Fort Yukon, Rampart, Stevens Village, and
Venetie. Members of these Tribes live near or within the Yukon Flats
National Wildlife Refuge, the third largest of the more than 540
conservation units in the National Wildlife Refuge System. The Refuge
was established in 1980, and includes more than 8.5 million acres of
wetland and boreal forest habitat along 300 miles of the Yukon River,
north of Fairbanks, Alaska. It is internationally noted for its
abundance of migratory birds.
Activities subject to the AFAs include: (1) locating and marking
public easements across private lands within the Refuge boundary; (2)
assisting with environmental education and outreach in local villages;
(3) monitoring wildlife harvest; (4) surveying moose populations (in
cooperation with the Alaska Department of Fish and Game); and (5)
maintaining Federal property in and around Fort Yukon. Public use
(including sport and subsistence hunting, fishing, and trapping) is not
affected by these agreements. Management authority remains with the
Fish and Wildlife Service as required by the National Wildlife Refuge
System Administration Act.
The Bureau of Land Management also has an annual funding agreement
with the CATG. Under the agreement, CATG performs preseason refresher
training and testing services for Emergency Firefighters within
Alaska's Upper Yukon Zone.
In FY 2007, Redwood National and State Parks had three agreements
under the Indian Self-Governance Act with the Yurok Tribe for watershed
restoration in the South Fork Basin of Lost Man Creek (a boundary area
between the Park and the Yurok reservation); the conduct of
archeological site condition assessments; and natural resource
maintenance. Since 2002, the Lower Elwha Klallam Tribe has been
assisting the National Park Service as a Self- Governance tribe in the
planning, design, and implementation of mitigation measures for the
Elwha River Restoration Project. At Grand Portage National Monument,
there have been AFAs for the past nine years. The agreement between the
National Park Service and the Grand Portage Band of Minnesota Chippewa
touches most park operations. The Band and the Park dedicated a new
Grand Portage Heritage Center in August 2007. Over nine years, $3.3
million has been transferred to the Band and 34 special projects have
been completed in addition to routine maintenance.
The Bureau of Reclamation has also been successful under the
current law. In FY 2007, Reclamation had seven annual agreements with
six Tribes, totaling more than $18.6 million.
Extension of Title V
Non-BIA bureau programs, that have both Indian and non-Indian
stakeholders, would be the subject of funding agreements at the Tribe's
discretion if Title V were extended to the Department. If extended, the
non-BIA bureaus of Interior would have no negotiating rights with
regard to what would be authorized under those agreements.
We understand some of the impetus for extending Title V to the
Department at this time stems from the agreement between the U.S. Fish
and Wildlife Service and the Confederated Salish and Kootenai Tribes
(CSKT) of the Flathead Nation regarding the National Bison Range
Complex in Montana. While there has been considerable controversy over
the 2006 AFA between the Service and the CSKT, through this process the
Department is gaining a better understanding of what each party needs
to make a successful agreement with a non-BIA bureau work well. We
believe that ultimately the process will grow stronger as a result of
our efforts.
We are opposed to simply providing the receiving party unilateral
power to determine the terms and length of the agreement as well as the
disposition of the funds, which would occur if Title V were
unilaterally extended to non-BIA bureaus within the Department. This is
particularly true where non-BIA bureaus have other statutory mandates
with which they must comply. We believe the authority provided to the
Secretary for the Self-Governance program is sufficient to protect the
interests of Indian Tribes in non-BIA programs.
Conclusion
As the Department moves forward with the current Title IV, we have
gained valuable insight into working in partnership with non-BIA
bureaus and Tribes. We look forward to continuing to work with the
tribes on ways to expand compacting opportunities and improve our
program.
Mr. Chairman, this concludes my statement and I will be happy to
answer any questions you may have.
Senator Murkowski. Thank you. We appreciate that.
And we will go to Chairman Allen, please.
STATEMENT OF HON. W. RON ALLEN, CHAIRMAN/CEO, JAMESTOWN
S'KLALLAM TRIBE
Mr. Allen. Thank you, Madam Chair and Senators. I
appreciate the opportunity to testify.
As you have identified, I am the Chair of the Jamestown
S'Klallam Tribe, located in Northwestern Washington State. Our
Tribe has been among the original seven tribes that advanced to
self-governance back in 1991. We were also one of the first ten
in the demonstration project in 1988.
So I come to the Committee with a great deal of experience
and exposure to self-governance and the success of self-
governance as we moved forward over this last 20 years. Just a
few weeks ago, we celebrated our 20th anniversary of the self-
governance movement and reflected on the successes of the self-
governance movement. What self-governance is, in a nutshell, it
is empowering the tribe. It is recognizing our sovereignty as a
government and recognizing our rightful place as a government
within the family of the American political system.
So what it is doing is picking up from the Nixon era,
moving us forward and recognizing that as a government, we need
to be empowered to take control over our own affairs and manage
our own affairs and not to be second guessed by a Federal
bureaucratic system.
Conceptually, back in 1975, the Indian Self-Determination
Act was intended to empower the tribes, and it was also
intended to reduce the Federal bureaucracy and put the controls
in the tribes' authority, so that tribal governments could
manage our own affairs. We were contractors back in the 1970s
and 1980s and into the 1990s. In the 1990s, when self-
governance emerged, now we asked the Federal Government start
recognizing the tribes as governments, let us make our own
decisions as governments, with regard to the limited resources
that the Federal Government provides to our people for programs
A through Z. It has had a remarkable success. When you think
about where we started with the pilot project in 1988, with ten
tribes and the seven tribes that started in 1991, with the
Lummi Nation and the Salish and Kootenai Tribes and five others
of us that moved forward, we now have identified well over 300
tribes that are moving forward with respect to both DOI, BIA
and the IHS. We have had remarkable success. And we have
written books now and put out material that show that success.
So we are here before this Committee, we want to continue
to advance the authority of the tribes. As always, when
Congress passes legislation and recognizes authorities and
provides instruction to the Executive Branch, you always have
the interpretation of what the Congress meant. And sometimes
the report language isn't enough, or the language in the bill
isn't enough. So we have found ourselves exposed to obstacles
and impediments, bureaucratic impediments, we always refer to
them, that impede our ability to move our agenda forward.
Our agenda, Jim had mentioned that we are suggesting that
at this juncture, we would delete the non-BIA agencies. We are
not intending to delete them. What we are suggesting is to put
them in abeyance for the moment, because of where we are
politically in this Congressional session. If the Congress has
the power and ability and will to be able to move it forward
with regard to at least the BIA component of the legislation
that we are advancing, and that we would come back in the next
session and advance what we believe to be self-governance with
respect to the rest of the BIA programs.
It really is just a political reality factor that we are
weaving into it. We have been negotiating these amendments now
for six years. And for the last five years with the Department
of Interior. In the last year and a half, we have had
significant success with Jim Cason and his colleagues over at
Interior and have had remarkable movement. Now we have bridged
gaps, we have bridged gaps with 95, 97 percent of the issues.
That required a compromise on both sides, both the Department
of Interior and the BIA have both imposed compromises in order
to propose to you the legislation that we are submitting and we
have been discussing. We understand that the House is going to
introduce a piece of legislation that is very similar, if not
almost exact, to what we are suggesting for you to consider and
that would help us move this agenda forward.
Now, I would say that thinking of all the past hearings
that we have had, historically, that are about empowering
tribes, we have had generations, generations of Self-Governance
before the Self-Determination Act. The Self-Determination Act
advanced many more generations of leaders. I can think of
Wendell Chino down in Mescelaro Apache, Roger Jourdain of Red
Lake, Joe de la Cruz at Quinault Nation and others, who have
moved this agenda forward with the support of Congress. Now we
are at a juncture where we need to move forward again to fully
empower us.
The Title V amendments, you already approved and recognize
our authority. We know that the DOI and BIA should be
consistent. So our proposal here is focusing on what authority
we have right now at the BIA and those programs in Interior
that do have, that clearly are tribally-authorized in order to
control.
I will conclude there, Madam Chair and be open to
questions. We really hope that you can help us move this
forward so we can make some significant progress for this
session.
[The prepared statement of Mr. Allen follows:]
Prepared Statement of Hon. W. Ron Allen, Chairman/CEO, Jamestown
S'Klallam Tribe
Good afternoon. Thank you for the opportunity to be here today. My
name is W. Ron Allen and I am the Chairman and Chief Executive Officer
of the Jamestown S'Klallam Tribe, located in Washington State. I am
also the Chairman of the Department of the Interior (DOI) Self-
Governance Advisory Committee (SGAC), and I offer my testimony today in
both capacities. My Tribe was one of the first 7 Tribes to negotiate a
Self-Governance Compact and Funding Agreement in 1990. I am pleased to
be able to testify on what Congress needs to do on Tribal Self-
Governance.
I am here to urge you to introduce and promptly enact legislation
to enhance Indian Tribes' opportunities under Self-Governance by
amending Title IV of the Indian Self-Determination and Education
Assistance Act (ISDEAA) (P.L. 93-638 as amended). A House version of
this legislation, H.R. 3994, is currently under review by the House
Natural Resources Committee. We have been told the House Committee
expects to report its bill before the end of this month. We hope that
members of this Committee will introduce a companion bill in the Senate
and move this Committee and the Senate to approve this critical
legislation this year. I attach to this testimony draft legislation
substantively similar to H.R. 3994 which Tribes hope the Senate will
adopt.
These Tribally proposed Title IV amendments advance several
important purposes. Most fundamentally, they create consistency between
the Title IV Self-Governance initiative in the DOI and the Title V
Self-Governance initiative in the Department of Health and Human
Services (DHHS). Since its enactment in 2000, Title V of P.L. 93-638
has proven to be a sound framework for carrying out government-to-
government agreements in the health care arena. The Title IV amendments
would essentially mirror Title V, enhancing consistency, clarity, and
workability in the relationship between the federal and Tribal
governments.
The Title IV amendments have long been a top legislative priority
of Self-Governance Tribal leaders. Four years ago, Tribal leaders
testified before this Committee in support of a predecessor bill, S.
1715, the Department of the Interior Tribal Self-Governance Act of
2003. That bill was favorably reported and recommended for passage by
this Committee in Senate Report No. 108-413 (Nov. 16, 2004), but
unfortunately died in that Congress. Two years later, I testified at
this Committee's oversight hearing on Self-Governance in Indian
Country, along with other Tribal leaders, in favor of comprehensive
Self-Governance legislation. This Committee has thus heard about the
need for this legislation on a number of occasions over the past 5
years and Self-Governance Tribes urge the Committee and the full Senate
to act on this legislation this session.
Passage of the Title IV amendments would represent a major
milestone on the path toward Tribal Self-Governance and self-reliance.
The true import of these proposed amendments, however, cannot be
understood without an appreciation of the unprecedented positive impact
Self-Governance has had on Indian Tribes over the past 20 years.
Background of Title IV
Although it is hard to imagine today, prior to 1975, the federal
government administered almost all programs serving American Indian and
Alaska Native Tribes. In 1975, the ISDEAA was enacted with three
primary goals: (1) to place the federal government's Indian programs
firmly in the hands of the local Indian people being served; (2) to
enhance and empower local Tribal governments and their governmental
institutions; and (3) to correspondingly reduce the federal
bureaucracy.
The original Title I of the ISDEAA, still in operation today,
allows Tribes to enter into contracts with the DHHS and the DOI to
assume the management of programs serving Indian Tribes within these
two agencies. Frustrated by the stifling bureaucratic oversight imposed
by BIA and the Indian Health Service (IHS), and the lack of flexibility
and cost-effectiveness inherent in Title I contracting, a small group
of Tribal leaders helped win passage of the Tribal Self-Governance
Demonstration Project in 1988. That Project authorized the Jamestown
S'Klallam and nine other Tribes to enter into compacts with DOI.
Unlike Title I contracts--which subjected Tribes to federal
micromanagement of assumed programs and forced Tribes to expend funds
as prioritized by BIA and IHS officials--Self-Governance agreements
allowed Tribes to set their own priorities and determine how program
funds should be allocated. The Demonstration Project proved to be a
tremendous success, and in 1994, Congress enacted Title IV of the
ISDEAA, thereby implementing permanent Tribal Self-Governance within
DOI.
The Success of Self-Governance
The success of Self-Governance can be seen in the increasing number
of Tribes that choose to participate. In Fiscal Year 1991, the first
year Self-Governance agreements were negotiated between the BIA with
Tribes, only seven Tribes entered into agreements. At that time, the
total dollar amount compacted by Indian Tribes was slightly over $27
million. By Fiscal Year 2006, 231 Tribes and Tribal consortia entered
into 91 annual funding agreements, operating over $300 million in
programs, services, functions and activities.
The growth in Tribal participation in Self-Governance revealed by
these numbers is remarkable. The number of Tribes and Tribal consortia
participating in Self-Governance today is 33 times greater than in
1991. While only a tiny fraction of Tribes participated in Self-
Governance the first year in 1991, today approximately 40 percent of
all federally recognized Tribes are Self-Governance Tribes and the
interest by other Tribes is continuing to grow.
Under Self-Governance, Tribes have assumed the management of a
large number of DOI programs, including roads, housing, education, law
enforcement, court systems, and natural resources management. Why is
this initiative such a huge success? Simply put, Self-Governance works
because it:
<bullet> Promotes Efficiency. Devolving federal administration from
Washington, D.C. to Indian Tribes across the United States has
strengthened the efficient management and delivery of federal
programs impacting Indian Tribes. As this Committee well knows,
prior to Self-Governance, up to 90 percent of federal funds
earmarked for Indian Tribes were used by federal agencies for
administrative purposes. Under Self-Governance, program
responsibility and accountability has shifted from distant
federal personnel to Tribal leaders elected by those to be
served. Efficiencies have increased as politically accountable
Tribal leaders leverage their knowledge of actual needs, local
resources, conditions and trends to make cost-saving management
decisions. \1\
---------------------------------------------------------------------------
\1\ As an aside, this policy of transferring management from
federal to Tribal governmental control is currently being undermined by
the National Business Center (NBC), the Interior agency charged with
negotiating indirect cost agreements with Tribes and Tribal
organizations. NBC has recently threatened to abandon its longstanding
policy of allowing, without documentation, 50 percent of Tribal council
expenses in Tribal indirect cost pools. Under the new policy, no such
expenses would be allowable as indirect costs unless a Tribe could
document, through detailed personnel activity reports, the time and
expense council members and staff devote to running federal programs.
Many, if not most, Tribes vest managerial responsibility for carrying
out ISDEAA agreements in their Tribal councils, and such Tribes count
on indirect cost reimbursements to defray the cost of these Tribal
governmental functions. The NBC's unilateral revocation of the ``50
percent rule'' would force Tribes to spend great amounts of time to
produce--and the DOI to review--documentation parsing Tribal council
minutes and activity reports to determine the precise amount of council
members' time and expense devoted to federal programs. We ask this
Committee to urge the Secretary to avoid this wasteful exercise by
directing the NBC to abandon its plan to revoke the 50 percent rule.
<bullet> Strengthens Tribal Planning and Management Capacities. By
placing Tribes in decision-making positions, Self-Governance
vests Tribes with ownership of the critical ingredient
necessary to plan our own futures: information. At the same
time, Self-Governance has provided a generation of Tribal
members with management experience beneficial for the continued
---------------------------------------------------------------------------
effective stewardship of our resources.
<bullet> Allows for Flexibility. Self-Governance allows Tribes great
flexibility when making decisions concerning allocation of
funds. Whether managing programs in a manner consistent with
traditional values or allocating funds to meet changing
priorities, Self-Governance Tribes are developing in ways
consistent with their own needs and priorities, not those of a
monolithic federal bureaucracy.
<bullet> Affirms Sovereignty. By utilizing signed compacts, Self-
Governance affirms the fundamental government-to-government
relationship between Indian Tribes and the U.S. Government. It
also advances a political agenda of both the Congress and the
Administration: namely, shifting federal functions to local
governmental control.
In short, Self-Governance works, because it places management
responsibility in the hands of those who care most about seeing Indian
programs succeed: Indian Tribes and their members.
Need for Title IV Amendments
While the overarching policy of Self-Governance has been a great
success for my Tribe and so many others, the legal framework to carry
out that policy within the DOI could be vastly improved. Shortly after
Title IV was enacted, the DOI began a rulemaking process to develop and
promulgate regulations. The process was a failure in many ways.
Ultimately, five years after the rulemaking process began, DOI
published regulations that, from the Tribal perspective, failed to
fully implement Congress's intent when Title IV was enacted. The
regulations moved Self-Governance backward, not forward.
In 2000, after the enactment of Title V of the ISDEAA--permanent
Self-Governance within DHHS--Tribal leaders began discussions about how
the Title IV statute could be amended to get the initiative back on
track. The development of Title V benefitted from the lessons learned
as Title IV was implemented; Title V directly addressed many of the
problem issues that emerged during the Title IV rulemaking process.
Congress in Title V filled many of the gaps and corrected many of the
problems in Title IV. But the improvements and greater Tribal authority
embodied in Title V remain absent from Title IV. Consequently, many
Self-Governance Tribes today are forced to operate under two different
sets of administrative requirements, one for IHS and one for BIA.
Tribal leaders have decided that Title IV needed to be amended to
incorporate many of Title V's provisions, and that has been a top
legislative priority for over six years. Four years ago, I testified
before this Committee in support of S. 1715, a bill that would have
amended Title IV in many of the same ways as H.R. 3994. Numerous
meetings and extensive correspondence sought to narrow the differences
between Tribal and DOI representatives. On September 20, 2006, several
Tribal leaders presented testimony to this Committee regarding problems
implementing Self-Governance in DOI under Title IV and made the case
for legislative relief. These problems, ranging from inadequate funding
levels to bureaucratic recalcitrance, have caused participation in
Tribal Self-Governance to level off and even recede. That is
unfortunate because Self-Governance has a proven track record of
enhancing the ability of Tribes to improve the efficiency,
accountability and effectiveness of programs and services.
Over the past year, discussions between the Tribal Title IV Task
Force and DOI representatives intensified and yielded a number of
compromise agreements reflected in the attached draft Tribally proposed
bill. This bill incorporates all of the agreements reached between
Tribal and DOI representatives. While some areas of disagreements
remain, agreement has been reached on over 97 percent of the bill's
contents. The vast majority of the proposed amendments are not new or
radical ideas--most have been adapted directly from Title V.
Thus the Tribal draft reflects nearly six years of discussions,
drafting, negotiations, and redrafting--and, as discussed below,
significant Tribal concessions. The time has come to pass this
legislation, which would significantly advance Congress's policy of
promoting Tribal Self-Governance.
Overview of the Proposed Amendments
The proposed bill would bring Title IV into line with Title V,
creating administrative efficiencies for Tribes while also importing
the beneficial provisions of Title V currently missing in the earlier
Self-Governance statute. Let me quickly summarize a few of the key
provisions in the amendments, as embodied in the Tribal draft. To
address problems in the DOI's implementation of the Tribal Self-
Governance program, and to expand Tribes' options for pursuing their
right to Self-Governance, the draft bill would, among other things:
<bullet> clarify and limit the reasons for which the agency may
decline to enter a proposed agreement, and the time frame for
making the decision;
<bullet> require that funds be transferred promptly after they have
been apportioned to the Department;
<bullet> clarify how the construction provisions would apply;
<bullet> protect Tribes from DOI attempts to impose unilaterally
terms in compacts or funding agreements; and,
<bullet> provide a clear avenue of appeal and burden of proof for
Tribes to challenge adverse agency decisions.
Over the past four months we have had intense discussions with DOI
representatives about various provisions in H.R. 3994 and the Tribal
draft bill. They have made it clear that they have problems with some
of the bill's provisions, and you may hear testimony from Department
representatives opposing one or another provision of the bill. In
weighing such testimony, I ask that you keep the following major facts
in mind:
First, the Tribally proposed draft bill that is attached to my
testimony is different from H.R. 3994 in a number of important
respects. While it contains the consensus language that Tribal and
department representatives reached on close to 95 percent of the
provisions prior to the introduction of H.R. 3994, it also contains
Self-Governance Tribes most recent efforts to bridge the gaps on the
remaining areas of disagreement.
In fact, the Tribally proposed draft bill reflects significant
compromises on the part of Tribes. For example, a major priority of
Self-Governance Tribes for years has been to expand Self-Governance by
making certain non-BIA programs within the DOI compactable as a matter
of right. The DOI has repeatedly made clear that the administration
would fight the enactment of these amendments if they contain these
mandatory non-BIA provisions. To enhance the chances that this
important legislation will pass during this Congress, Self-Governance
Tribes reluctantly decided to strike the mandatory non-BIA provisions
from the bill. We continue to think that these mandatory provisions
make good policy sense and will pursue their enactment in the future.
But for now, in order to get the remaining amendments passed this year,
we are deferring our request as to non-BIA provisions.
Second, there is ample precedent for the few provisions in the bill
with which DOI may continue to have problems. Title V, which has worked
very well in the context of health care services, served as the model
for H.R. 3994 and contains most of the contested provisions, none of
which has caused the IHS any difficulty in its implementation of
similar provisions over the past seven years.
Finally, to some extent Self-Governance presents an inherent, and
perhaps intractable, tension between Tribes and the Department. A
bureaucracy such as the DOI will inevitably resist yielding its
authority--and its funding--to other entities, such as Tribes. For this
reason, complete agreement between Tribal and federal viewpoints is
likely impossible, and Congress should not wait for such agreement
before acting. We believe that the Title IV amendments, especially
after the most recent Tribal concessions discussed above, protect the
interests of the federal government while advancing those of Tribal
governments. We hope that this Committee will agree and finally take
action to enact them.
Need to Clarify the Applicability of Title IV to the Department of
Transportation
Almost none of the provisions presently included in H.R. 3994 are
new--Self-Governance Tribal leaders have been advocating them for over
six years and many of them come directly from Title V. I would like to
take a moment to discuss a provision that would be new, however: the
proposed Section 419 that would clarify that Title IV applies to
agreements entered into by Tribes and the Department of Transportation
(DOT) to carry out transportation programs such as the Indian
Reservation Roads Program.
This new provision is important and necessary. The 2005 highway
bill, SAFETEA-LU, authorized Tribal governments to receive funding from
and to participate in a number of Department of Transportation (DOT)
programs as direct beneficiaries without having the BIA or state
governments acting as intermediaries. The statute specifically says
that DOT and Tribes can enter into agreements for these programs ``in
accordance with the [ISDEAA].'' \2\ Some DOT officials have interpreted
this language to mean the agreements must be consistent with the ISDEAA
but are not really ISDEAA agreements. This erroneous interpretation has
caused a great deal of confusion and disagreement over whether, and to
what extent, Title IV applies to DOT. The new section 419 will make
clear that the negotiation and implementation of Tribal funding
agreements with DOT will be governed by Title IV.
---------------------------------------------------------------------------
\2\ 23 U.S.C. Sec. 202(d)(5).
---------------------------------------------------------------------------
Tribal Self-Determination in Natural Resource Management
Finally, a few words about another idea for advancing Tribal Self-
Determination and Self-Governance that has been before this Committee
in the past. The DOI Self-Governance Advisory Committee has supported
legislation increasing Tribal Self-Determination in natural resource
management; Title III of S. 1439 in the 109th Congress. Under that
bill, Tribes would have been authorized to develop an Indian Trust
Asset Management Plan that, once approved by the Secretary of Interior,
could be implemented by the Tribe without the need for Secretarial
approval of every individual transaction or decision. A similar concept
has been incorporated into the Tribal Energy Resource Agreement
provisions of the Energy Policy Act of 2005. \3\ We suggest that the
Committee revisit the idea of expanding Tribal self-determination in
natural resource management, and we are prepared to present concrete
legislative proposals to that end.
---------------------------------------------------------------------------
\3\ Pub. L. No. 109-58 (Aug. 8, 2005).
---------------------------------------------------------------------------
Conclusion
In conclusion, I would like to step back for a moment and reinforce
a broader point. As a long-term Self-Governance Tribal leader and in my
role as Chairman of the DOI Self-Governance Advisory Committee, I have
had the opportunity to talk regularly with many other Tribal leaders
regarding Self-Governance. Although they recognize the implementation
problems cited above, and the need for the Title IV amendments
described earlier, every single Tribal leader made a point of praising
the overwhelming success of Self-Governance. That has also been our
experience at Jamestown. Self-Governance allows us to prioritize our
needs and plan our future in a way consistent with the Tribe's distinct
culture, traditions, and institutions.
My deepest hope is that this Congress will enact the Title IV
amendments proposed by the Tribes (see attached draft bill) so that we
can build on the successes of the past 20 years and further Tribal
Self-Governance in partnership with the United States, to achieve our
mission and our goals.
Thank you.
Attachment: Tribally Proposed Draft Bill
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Murkowski. Thank you, Mr. Allen. I would like to
recognize the Chairman, and also Senator Cantwell has joined
the Committee.
STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
The Chairman. Senator Murkowski, thank you very much. I
regret I was delayed, but Senator Murkowski and Senator Tester
indicated they would be here.
Let me thank all the witnesses. I will just put my opening
statement in the record and we will proceed with the witnesses.
[The prepared statement of Senator Dorgan follows:]
Prepared Statement of Hon. Byron L. Dorgan, U.S. Senator from North
Dakota
Today the Committee will examine the Tribal Self-Governance Program
as the program reaches its twentieth year in existence.
As we'll hear today, the program is seen by many as an overall
success. The basic idea of vesting tribal governments' with greater
authority to manage and control programs administered by the United
States to benefit their communities is the cornerstone of the Indian
Self-Determination policy.
The Self-Governance Program took Self-Determination one step
further. The program offers a Tribe the flexibility to pick and choose
programs and prioritize funding amounts that fit their individual
community's needs.
Dissatisfied with the services provided by the federal government,
many Tribes today administer their own education, health care, and law
enforcement services. In addition, Tribes are managing programs for job
training, dam safety, forestry, utility services, and even land title
record keeping. These Tribes have generally taken greater control of
their destiny.
The goals of the Self-Governance Program are to reduce the federal
bureaucracy, improve the delivery of services to tribal residents, and
strengthen the governing bodies of Indian Tribes.
As we'll hear today; however, we are falling short of that goal.
One indicator for me is the fact that no Tribe in North Dakota
participates in the Self-Governance Program. I believe their reluctance
lies in part on the barriers that will be discussed today.
The Self-Governance program began as a demonstration project for 10
Tribes in 1988. The number of participating Tribes quickly increased
when the program was made permanent. However, that has leveled off over
the past decade.
Many Tribes point to the bureaucratic obstacles that exist at the
federal level. The most prominent barriers to participation are delays
in distributing funds to Tribes, and the inadequate provision of
contract support costs.
Congress, the agencies, and the Tribes must all cooperate and
coordinate to make the Program a success. However, I believe much of
the failure lies in a lack of planning. While it does not have an easy
job, the Bureau of Indian Affairs has simply not planned for growth in
the Program.
For decades, the Bureau of Indian Affairs has been forced to wear
several hats. It provides direct services to some Tribes, and enters
into Self-Determination contracts and Self-Governance compacts with
others. As a result, the agency has to employ direct service providers,
contract and compact negotiators, and others to service the contracts
and compacts. This is no easy task.
For the first time in decades, the BIA sought to address these
difficulties.
Assistant Secretary Artman began his dialogue with Tribes on the
modernization of the Bureau of Indian Affairs. While the term
modernization may cause some unease, I believe that he started a
necessary dialogue that would force the Bureau to plan for the future.
Of course, Mr. Artman's work has been cut short. Last week, I
expressed my disappointment regarding his departure. But the Bureau
must move forward. It is my hope that those who remain at the Bureau
will listen to today's discussion, and begin to plan for not only the
future of the Bureau, but also the future of Indian country.
Senator Murkowski. Thank you.
Mr. Marshall.
STATEMENT OF HON. CLIFFORD LYLE MARSHALL, CHAIRMAN, HOOPA
VALLEY TRIBE
Mr. Marshall. Good afternoon. My name is Clifford Lyle
Marshall, Chairman of the Hoopa Valley Tribe. I first ask that
my written testimony be entered into the record.
Senator Murkowski. Without objection, so ordered. It will
be entered, as will all the testimony from all the
participants.
Mr. Marshall. Thank you for this opportunity to present my
views regarding the self-governance program. Please allow me to
trump Chairman Allen by saying that the Hoopa Tribe was the
tribe in the Nation to enter into a self-governance compact
with the United States in 1990.
I thank this Committee for its continuing bipartisan
support of the tribal self-governance program. Through self-
governance, Indian Country has experienced many dynamic and
pioneering changes in the last 20 years. Through self-
governance tribes have been able to strengthen tribal
government, stabilize funding bases, improve and expand
services and increase staffing and technical capabilities.
Self-governance tribes have also become effective partners with
the United States, working together to address and resolve
decades of backlogged trust management issues.
The self-governance program spurred an important transition
from bureaucratic, one size fits all programs to flexible,
tribally-designed and administered programs. For this reason,
they work. This is not to say that self-governance is easy.
Self-governance is government and performing the functions of
government is hard work. During the first eight years of self-
governance, the Hoopa Tribe adopted over 40 ordinances,
including a legislative procedures act and a budget ordinance
to make our government more efficient and accountable. Today,
tribal ordinances total over 70. We added to and improved our
governmental capabilities. Today the Hoopa Tribe has assumed
management authority over all Federal programs on our
reservation.
Currently, the Tribe manages 54 programs, including 10
enterprises created in the last 20 years. The Tribe manages all
lands and resources on the reservation. These programs include
a range of services to our people, have spurred economic
development on our reservation and ensure quality management of
our trust resources. Our programs are audited annually and
evaluated annually by the BIA regional office.
Self-governance is an authorizing law, not an
appropriations law. Yet it has given the Hoopa Tribe the
ability to generate significant additional dollars to help
offset the costs of carrying out trust activities. At Hoopa, we
can show that the Tribe matches $3 from other sources for each
$1 compacted from the BIA that is used for trust management
programs.
In 1997, Hoopa and six other California tribes established
the California Trust Reform Consortium to work with the BIA
Pacific Regional Office to address trust resource management
issues. In 1998, the Consortium and Regional Office entered
into an agreement that defines the management roles and
responsibility of the regional office and the tribes in this
regard. This working relationship has worked well for the last
10 years.
The specific problem to the future of self-governance is,
frankly, the Office of Special Trustee and the Department of
Interior's redesign of the trust relationship. The self-
governance program was designed to create flexibility. Trust
reform reorganization is inflexible. The Hoopa Tribe's
successes all occurred before the effort of trust reform
reorganization, and we are now in conflict with it because they
do not mirror the universal program as designed by the OST.
Tribal self-governance programs do not fit into the
inflexible trust reform boxes the Department of Interior has
now created. We can only expect to see regression of all the
progress made if dominating Federal control re-emerges. Please
sunset OST this session or limit its purpose or protect the
agreements entered into with the self-governance tribes.
In particular, Congress needs to continue to protect the
successful trust management programs developed by the Section
139 tribes to ensure the advances we have made to date.
We are deeply disappointed that the Title IV amendment
proposals do not include the mandatory non-BIA programs. Trust
responsibility is the obligation of the United States, not the
BIA. All Federal agencies that perform operations that impact
trust resources or rights of a tribe have a trust obligation to
protect those resources and rights. We strongly feel that
compacting should be extended to other Federal agencies and we
ask that current Section 403(b)(2) should remain in Title IV.
Congress passed various Federal laws that mandate
restoration of the Trinity River, which goes through my
reservation, to protect the Hoopa Tribe's federally-protected
fishing rights. The Bureau of Reclamation, however, has
determined that the restoration programs are not Indian
programs under the Self-Governance Act, and trust
responsibility affords them no priority in setting budgets.
Trinity River habitat restoration, however, is so under-
funded that it threatens our federally-reserved fishing rights.
Specific language in H.R. 3994, which would enable tribes to
contract to perform programs that restore, maintain and
preserve a resource in which an Indian tribe has a federally-
reserved right, would resolve problems in executing contracts
that we currently face wit the Bureau of Reclamation over
management of Trinity River programs.
The Hoopa Tribe requests that the Senate Committee
introduce Title III of Senate Bill 1439, the Indian Trust
Reform Act of 2005, as a standalone bill. Title III would
create the Indian Trust Asset Management Demonstration Project
which would allow tribes to design and manage the resources as
long as the tribes meet the requirements of Federal law. The
Hoopa Valley Tribe already does this.
We ask Congress, in conclusion, to continue to support
self-governance and protect the progress self-governance tribes
have made from the potential negative effects of the
Department's trust reform reorganization. We ask that you
sunset OST. We also ask Congress to address mandatory non-BIA
compacting and finally, we ask that you introduce Title III of
Senate Bill 1439 as a standalone bill.
This concludes my remarks and I would be happy to address
any questions you may have.
[The prepared statement of Mr. Marshall follows:]
Prepared Statement of Hon. Clifford Lyle Marshall, Chairman, Hoopa
Valley Tribe
Good Afternoon. I am Clifford Marshall, Chairman of the Hoopa
Valley Tribe of Northern California. Thank you for this opportunity to
present my views regarding the Self-Governance Program and, more
importantly, the future of Self Governance. The Hoopa Tribe was one of
the first tier of tribes under the Self-Governance Project in 1988 and
was the first tribe in the Nation to enter a Self-Governance compact
with the United States in 1990.
First, and foremost, I thank this Committee for its continuing
bipartisan support for the Tribal Self-Governance Program. The Self-
Governance provisions in the Indian Self-Determination and Education
Assistance Act stand as one of the most progressive pieces of Indian
legislation enacted by Congress. In 1988, Congress listened to many
tribes who were saying loudly that they were extremely unhappy with BIA
programs and funding. Congress answered with the Self Governance
Project that provided tribes with funding, flexibility in designing
their own programs, and the authority to set their own budget
priorities.
Through Self Governance, Indian Country has experienced many
dynamic and pioneering changes in the last twenty years. Self-
Governance tribes have progressively moved to stabilize funding bases,
improve and expand services at the reservation level, and increase
staffing and technical capabilities. Tribes have been able to
strengthen tribal government, and establish administrative capability.
Through Self-Governance, tribes have become effective partners with the
United States, working together to positively address and resolve
decades of backlogged trust management issues.
The Self-Governance Program spurred an important transition from
bureaucratic one-size-fits-all, federally-dominated programs to
flexible tribally-designed and administered programs. Tribes are in the
best position to determine what is needed by, and how to provide for,
their governments and members. Prior to Self-Governance, there had been
a lack of tribal participation in designing programs and setting
agendas; instead, there was a reliance on federal-project planning.
These federally-developed programs were not only chronically under-
funded, they were not meeting the on-the-ground needs of Indian people.
Self-Governance afforded tribes the opportunity to take over the
planning and development of these programs. At that point they became
based on the priorities and needs of Indian communities as determined
by the tribes, and for this reason, they work.
This doesn't mean to say that Self-Governance is easy. Self-
Governance is government, and performing the functions of government is
hard work. Before Self-Governance the Tribe contracted most BIA
programs under the Indian Self-Determination Act, Public Law 93-638.
Frustrated with the short-comings of 93-638 contracting, the
inflexibility of the BIA-designed programs, the draconian oversight of
the BIA and contract compliance obligations, and the stark reality that
needs on the ground were not being met, the Tribe embarked on Self-
Governance and has not looked back.
For the first eight years of the program, we worked simply to
regain control of reservation affairs and develop our governmental and
administrative structure. The Tribal Council adopted over forty (40)
ordinances, including the Tribe's own legislative procedures ordinance
and a Tribal Budget Ordinance, to make our government more efficient
and accountable. Today tribal ordinances total seventy (70). Again,
creating a structure of government wasn't easy. During this beginning
period, we were also able to stabilize our tribal government funding
base, which required a lot of hard work and negotiation. We added to
and improved our governmental capabilities, and set a course to begin
planning for our future. Today, the Hoopa Tribe has assumed management
authority over all Federal programs on its reservation.
Specific Hoopa Self-Governance Programs
Self-Governance has allowed us the flexibility to design our own
programs. Currently, the Tribe manages 54 programs, created in the last
twenty years. These programs provide a range of services to our people,
have spurred economic development on our reservation, and ensure
quality management of our trust resources. We are proud of the fact
that Hoopa was the first to compact health care with the Indian Health
Service (IHS) in California, and now has a hospital, a dental clinic,
and the only ambulance service and emergency room within 70 miles of
the reservation and the next nearest hospital. Much of the other
programs we manage would be Bureau of Indian Affairs (BIA) trust
resources and services related programs.
The Tribe established the first tribal court in California in 1983,
adding a branch of government that the BIA had overlooked when it
drafted the first tribal constitutions in the 1930's. The Tribe then
established its own law enforcement department for resource protection
and to enforce fish regulations. The Tribe then entered into a cross-
deputization agreement with Humboldt County, giving tribal police the
authority to enforce state criminal laws. This relationship was the
first in California and has been in existence for approximately 13
years. The Tribe also enforces its own civil traffic code.
The Tribe originally contracted forestry management from the BIA as
part of a settlement agreement for mismanagement of tribal timber lands
in 1983. Since 1988, we have compacted and independently managed our
forest lands under a 10-year forest management plan that exceeds
environmental standards required by Federal law. This plan has allowed
our timber to be ``Smart Wood'' certified, a certification that allows
lumber products produced from our timber to be exportable to Europe,
which has created increased value and revenue from our annual timber
sales. Our Forestry Department has received exemplary trust evaluations
from then BIA's Pacific Regional Office (PRO).
The Tribe also owns and operates its own logging company, creating
seasonal employment and additional revenue from annual timber harvests.
We also have our own nursery to grow trees for replanting. Forestry
management includes forestry protection, and the Hoopa Tribe has
created its own wildland fire protection program. All tribal
firefighters meet the same qualification requirements of the United
States Forest Service.
When Hoopa assumed forestry management, we also took over the BIA
roads department. Though the reservation contains over 100 miles of
roads, the only Tribe receives $113,000 a year for roads maintenance
from the BIA, not enough to maintain one mile of road. To maintain and
upgrade our forest roads neglected for decades by the BIA, a percentage
of our annual timber sales go toward road maintenance. Almost seven
years ago, the Tribe invested in an aggregate plant that now helps
subsidize the roads program by paying the salaries of roads department
employees with revenues generated from state and federal contracts and
from the sale of sand, gravel, road base and cement.
The Tribe has also compacted realty from the BIA regional office.
Through tribal ordinances, the Tribe assigns land to tribal members for
housing, agriculture, and grazing. The Tribe created a public utilities
district that has spent the past 15 years laying a reservation-wide
water system. We are now in the process of developing a reservation-
wide irrigation system, using river water as the source, and are in the
beginning stages of designing a reservation-wide sewer system that is
projected to be needed to serve our community.
Hoopa has its own Tribal Environmental Protection Agency, TEPA,
which ensures that our resource management programs perform in
compliance with Federal EPA regulations. TEPA monitors and enforces
both air and water quality standards set by the Tribal Council. TEPA is
also responsible for enforcement of the Tribe's solid waste ordinance.
This past year the Tribe established the Office of Emergency Services
to prepare and coordinate our departments and make the Tribe eligible
for FEMA funding in the event of a disaster. The Tribe has its own
fisheries department that monitors in-stream habitat and salmon
populations in the Trinity River basin. This is a well-respected
program that also contracts with the Bureau of Reclamation and the
United States Fish and Wildlife Service for collection of fisheries
enhancement data.
We also have a housing authority, a human services department that
provides alcohol and drug abuse counseling, as well as family crisis
counseling, and an education department that encompasses preschool to a
junior college branch campus.
In regard to addressing poverty through economic development, we
still have a long way to go. We have created programs addressing the
obstacles to employment such as lack of education, training, and drug
and alcohol abuse. With the collapse of the timber industry in our
region in the 1970's we have been searching for a new industry that
would establish an economic base from which we could build a local
economy around. In 2003, the Tribe invested in, financed, and built the
largest and most state-of-the-art modular housing plant on the West
Coast, to provide an affordable product for Northern California
residents. This plant produces homes using the same materials as on-
site construction for less than half the cost. Our hopes were that this
would create the opportunity for tribal members to invest in businesses
that provide services and/or materials to the plant. Because of the
collapse of the housing industry, along with the housing mortgage
industry, sales for our corporation, ``Xontah Builders'' has dropped
significantly and employment in our plant has been reduced by 50
percent. We are still in operation, operating with a skeleton crew of
thirty-five (35) and anticipate increased sales once the housing market
rebounds.
Funding Benefits and Government-to-Government Relationships
A benefit of major importance in Self-Governance that gets little
attention is how it has helped to generate additional funding for
carrying out underfunded federal programs. Evidence of chronically
underfunded Indian programs, sometimes as much as 75 percent within the
BIA and IHS budgets, has been well-documented over the past several
decades. Many tribes hesitate to assume federal programs under Self-
Governance because they understand there is not adequate money to
support the tribe in carrying out the functions of the programs that
the tribes want to administer. However, while Self-Governance is an
authorizing law-not an appropriations law-it gives tribes the ability
to generate significant additional dollars to help offset the cost of
carrying out trust activities. At Hoopa, we can show that the Tribe
matches $3.00 from other sources for each $1.00 compacted from the BIA
that is used for trust management programs.
Another benefit is the ability to redefine the working
relationships between tribes and the BIA. For Self-Governance to work,
tribes must develop and define a strong positive working relationship
with their BIA counterpart. The Hoopa Tribe has enjoyed a solid working
relationship with the BIA Pacific Regional Office (PRO) for more than a
decade. In 1997, Hoopa and six other California tribes established the
California Trust Reform Consortium. It was created to work with the PRO
to address the trust resource management issues upon which many of the
claims made in the Cobell litigation are based.
In 1998, the Consortium and the PRO entered into an agreement that
established the terms, conditions and operating procedures for the
Consortium. The ability to develop a new working relationship with the
Regional Office was made possible by the flexibility created by Self-
Governance. The agreement defines the management roles and
responsibilities of the PRO and the tribes and includes provisions for
a funding process through the PRO, a joint oversight advisory council,
a process for developing ``measurable and quantifiable trust management
standards,'' methods for resolving disagreements and disputes, and
finally, a participatory process for annual trust evaluations. This
working relationship that is unique to California has worked well for
the last ten years.
Specific Problems that Impede the Development of Tribal Self-
Governance: Trust Reform
To be blunt, the specific problem to the development of Self-
Governance is the Office of Special Trustee (OST) and the Department of
the Interior's (DOI's) redesign of the trust relationship. OST is an
obstacle to tribal governmental, social, and economic development. The
Self-Governance Program is designed to create flexibility. Trust Reform
Reorganization is inflexible. I have presented to you the successes of
my Tribe in developing government, social programs, and resource
management programs, and in developing a unique working relationship
with the BIA PRO. Please note that all of these occurred before the
effort of Trust Reform Reorganization, and are now in direct conflict
with it because they do not mirror the universal program as designed by
the OST. Please sunset OST this session, or limit its purpose to the
management of IIM accounts, or adopt language that will protect the
agreements entered into with the Self-Governance Tribes.
An example of this is the Office of Self Governance's decision not
to honor an agreement entered into between the Hoopa Tribe and the
tribes of the California Trust Reform Consortium and the PRO. This
agreement was entered into in 1995 and approved by the Washington
office by Special Authorization. This agreement allowed the Regional
Office to distribute BIA funds for forestry and roads programs directly
to the Tribes. This resolved a bureaucratic problem of having the PRO
send the funds back to Washington and then resent from Washington to
the tribes; a process which would delay receipt of the funds by several
months. In 2008, however, the OSG reinterpreted the Self-Governance Act
as prohibiting anyone, other than the OSG, from distributing funds to
the Tribe. Because the language previously approved in 1995 was
included every year in the Tribes' annual funding agreement, the Office
of Self Governance (OSG) held up approval of the agreement for four
months. The problem that was resolved through negotiation under Self
Governance over thirteen years ago has now been reinstated because it
does not comport with the DOI's model for trust reorganization.
The OSG needs to understand that the Self-Governance Act was not
designed to promote or protect bureaucratic activities; instead it
exists to engage the direct participation of tribes to improve the
provision of services to Indian people and the working relationships
between the United States and tribes. We can only expect to see
regression of all the progress made if dominating federal control re-
emerges, something that the Self-Governance Program sought to keep at
bay.
We view the reorganization plans of the DOI, starting with BITAM,
as an attack on Self-Governance principles. There is an inherent
conflict. Self Governance was designed to give tribes the flexibility
to design their own programs and set their own internal funding
priorities. Tribal Self-Governance programs, created before Trust
reform, do not fit into the inflexible trust reform boxes DOI has now
created. In the end, the DOI/OST trust plans will fail because tribal
governments' local priorities and needs are not addressed in the
reorganization plan. This is a plan for bookkeepers, not tribal
governments.
Congress needs to continue to protect the programs developed by the
Section 139 tribes. These programs were designed before the DOI's Trust
Reform Reorganization and have been described as being light-years
ahead of other tribally-developed self-governance programs and DOI's
trust reform programs. We need the continued protection of Congress to
ensure the advances we have made to date are not undermined by DOI's
Trust Reform Reorganization.
Non-BIA Mandatory Programs
Another area of major concern for the Hoopa Tribe is compacting
non-BIA programs. We are deeply disappointed that the Title IV
amendment proposals no longer include the mandatory non-BIA programs.
We understand that the Title IV Task Force agreed to remove this
section, which was originally drafted by the Hoopa Valley Tribe,
because of the strong opposition from Interior. It is short-sighted to
leave out of Self-Governance those non-BIA programs that have statutory
trust obligations to tribes and Indian people. The issue is this: Trust
Responsibility is an obligation of the United States not the BIA. All
federal agencies that perform operations that impact trust resources or
rights of a tribe have a trust obligation to protect those resources
and rights. Self-Governance affords tribes with the ability to ensure
these resources are protected through compacting. We strongly feel that
this ability should be extended to other federal agencies.
On the Trinity River, which flows through the Hoopa Reservation and
which the Tribe has federally protected fishing rights, the Bureau of
Reclamation operates the Trinity River Division of the Central Valley
Project. The Trinity Dam, completed in 1964, was the primary reason for
80 percent declines in the Trinity River fishery resources, and has
been the subject of numerous congressional and court actions associated
with violations of the United States' trust obligations to the Tribe.
To correct the declines in fishery resources, Congress passed various
federal laws that mandated restoration of the Trinity River fishery
resources as part of the Federal trust obligations to the Tribe.
Ironically, the Bureau of Reclamation (BOR) has determined that the
programs that are mandated by Congress to fulfill the trust obligations
of the United States to our Tribe are not ``Indian Programs'' under the
Self-Governance Act.
The problem here is that funding for Trinity River habitat
restoration is so underfunded that it jeopardizes a trust resource and
threatens our federally-reserved fishing rights. The Hoopa Tribe is
also recognized by law as a co-manager of the Trinity River Fishery.
The Hoopa Valley Tribe has worked tirelessly for years to get
Congressional action to address this inadequate funding level for the
Trinity River Restoration Program. But what we are seeing instead is
the movement of legislation to fund other river restoration efforts,
without identifying additional funds, furthering the burden on the
limited funds that the Trinity River Restoration Program currently
relies upon. Trust Responsibility is not perceived by BOR as an
obligation that gives tribal water and fishing rights any priority.
Absent an acknowledgement that a trust duty is owed, protection of the
Tribe's rights takes a back seat to other projects, even newly proposed
projects.
The House bill, H.R. 3994, included specific language in Section
405(b)(2)(B) which would enable tribes to contract to perform programs,
or portions thereof, that ``restore, maintain or preserve a resource
(for example, fisheries, wildlife, water or minerals) in which an
Indian tribe has a federally reserved right, as quantified by a Federal
court.'' We refer you to our November 8, 2007, testimony before the
House Committee on Natural Resources for details on the importance of
this provision to the Hoopa Tribe, and how it would resolve problems we
currently face with the BOR over the management of Trinity River
programs. These problems include delays in executing contracts which
result in a significant financial burden for the Tribe and
administrative, programmatic and staffing nightmares for our programs.
What needs to be understood, which does not seem to be by other federal
agencies, is that the trust responsibility to tribes is the trust
responsibility of the United States and it is owed to tribes by all
federal agencies.
Having said this, we ask that Congress include the federally-
reserved rights language in Title IV amendments. If this is not
possible at this time, we ask that it be clear that current section
403(b)(2) remains in the law. We would like to move forward with
legislation that allows tribes to exercise their self-governance in
other areas and in a more expansive way. With this, we ask you to take
up and address the federally-reserved right issue with respect to non-
BIA agencies as soon as possible.
TITLE III of S. 1439, the Indian Trust Asset Management Demonstration
Act
The Hoopa Tribe requests that the Senate Committee introduce Title
III of the S. 1439, the Indian Trust Reform Act of 2005 as a stand-
alone bill. Hoopa worked with several tribes in the Northwest and the
Committee staff on the development of this proposal. Title III of S.
1439 would create the Indian Trust Asset Management Demonstration
Project, which would allow tribes to continue their own tribally-
developed trust resource management programs. Title III authorizes
tribes to design and manage their resources in a manner different than
the Secretary as long as the tribes meet the requirements of tribal and
federal law. Again, I point out that the Hoopa Tribe is already doing
this with our forestry program, which is acknowledged nationally as a
model program. Title III also would grandfather in Section 139 (131)
tribes that currently manage their own trust resources into the
Project. Active participation by tribal governments in the management
of trust assets not only creates positive results, but reduces the
chance of conflicts or breach of trust claims. We are committed to
working with the Committee toward the enactment of Title III.
Conclusion
We ask Congress to continue to support Self-Governance and protect
the progress Self-Governance tribes have made from the potential
negative effects of DOI's Trust Reform Reorganization. We ask that you
sunset OST. We ask that Congress enact mandatory non-BIA provisions as
soon as possible. If this is not possible at this time, we ask that
section 403(b)(2) remain in Title IV and that Congress begin working on
the future of Self-Governance with the participation of the tribes.
Finally, we ask that you introduce Title III of S. 1439 as a stand-
alone bill. This concludes my remarks and I would be happy to address
any questions you may have.
Senator Murkowski. Thank you, Mr. Marshall. We appreciate
your specific suggestions.
With that, we will move to Chairman Steele.
STATEMENT OF HON. JAMES STEELE, JR., TRIBAL COUNCIL CHAIRMAN,
CONFEDERATED SALISH AND KOOTENAI TRIBES
Mr. Steele. Chairman Dorgan, Vice Chairwoman Murkowski,
Committee members and particularly Senator Tester from Montana,
my name is James Steele, Jr., and I serve as the Chairman of
the Tribal Council of the Confederated Salish and Kootenai
Tribes. On behalf of my tribes, I thank you for the opportunity
to provide our views to your Committee.
I have submitted a more detailed statement for the record
that I will now summarize.
The Indian Self-Determination Act of 1975 and the Tribal
Self-Governance Act of 1994 have been two of the most
successful and important pieces of Federal Indian legislation
in the history of this Country. The last 20 or 30 years have
seen great changes in Indian Country. Progress has been made,
and it is no coincidence that this progress has been realized
at the same time as the Indian Self-Determination Act has been
implemented and improved by the passage of the Self-Governance
Act.
We were one of the first to enter into a contract with the
BIA to operate and manage BIA programs in the 1970s. We were
also one of the original 10 tribes to implement the Self-
Governance Act when it was just a demonstration project. Today,
I believe we operate more Federal programs than any tribe in
the Country. We have done so with excellent evaluations and
clean audits. A recent report funded by the State of Montana
showed that the Confederated Salish and Kootenai Tribes
contributed $317 million a year to the Montana economy.
My submitted statement discusses our success in operating
our large electrical utility, known as Mission Valley Power,
for the past 20 years that serves tribal and non-tribal members
on the reservation; the Bureau of Indian Affairs' land title
recording office for the Flathead Reservation since 1996; the
BIA Safety of Dams program; the BIA's forestry program, fire
programs, including one with the U.S. Fish and Wildlife Service
for protection of the National Bison Range; the Individual
Indian Monies Program and Title Plant functions for the
Flathead Reservation.
In addition to the programs I have just discussed, we
compact for all other available BIA programs, including law
enforcement, tribal courts, education, et cetera. There are
areas where improvements are needed, and for these reasons, the
enactment of the pending legislation is important.
Work still needs to be done to ensure that the Federal
Government will fully fund its obligation of paying full
contract support costs, so that it can meet this legal
requirement to contracting tribes. The Indian Self-
Determination and Education Assistance Act was not intended to
be a money-losing proposition for the tribes. Nor was it
intended as a mechanism for tribal governments to subsidize
Federal programs and Federal statutory obligations.
Just as tribally-contracted programs should be funded at
the same level as federally-administered programs, so should
they have equal liability coverage under the Federal Tort
Claims Act. Unfortunately, the Interior Department has not
established a successful overall record with respect to self-
governance contracting of non-BIA programs. We have been at the
forefront in the effort to contract non-BIA programs primarily
through our 14-year effort to contract activities at the
National Bison Range.
The Bison Range consists of three national wildlife
refuges, located in the middle of the Flathead Indian
Reservation, two of which are owned by the tribes. We are
currently in the final stages of negotiations with the United
States Fish and Wildlife Service for another annual funding
agreement to contract activities and positions at the National
Bison Range complex. We are hopeful that we can reach agreement
on a new AFA that would return CSKT to the bison range and
establish a productive tribal-Federal partnership.
To fully realize Congressional objectives behind the Tribal
Self-Governance Act, there needs to be an accompanying
Congressional commitment to fully fund the Federal programs
being contracted by the tribes. Shrinking or stagnant Federal
funding requirements requiring supplementation of tribal
dollars is a real problem for many tribes and a huge
disincentive.
We are supportive of the proposed legislation and in
particular, agree with the definition for the term ``inherent
Federal function.'' The proposed definition would provide
consistency with Title V of the Act, thus promoting a more
cohesive Federal self-governing policy overall.
We support the inclusion of activities in the Office of
Special Trustee as mandatory for inclusion in an AFA at a
tribe's option. We support language which retains the existing
authority for tribal self-governance, contracting of non-BIA
programs which are of special geographical, historical or
cultural significance to an Indian tribe. We support the
language that we retain the existing statutory language
mandating funding to tribes for contract support costs and the
language regarding Federal Tort Claims Act coverage.
I encourage this Committee to continue working with the
tribes to improve the Tribal Self-Governance act and ensure
that it fulfills tribal and Congressional objectives. We need
to eliminate disincentives and remove barriers to self-
governance participation. The proposed legislation is a good
start toward accomplishing those ends.
On behalf of the Confederated Salish Kootenai Tribes, thank
you for the opportunity to provide testimony and also thank you
for the opportunity to submit more lengthy written testimony.
Thank you.
[The prepared statement of Mr. Steele follows:]
Prepared Statement of Hon. James Steele, Jr., Tribal Council Chairman,
Confederated Salish and Kootenai Tribes
Greetings Chairman Dorgan, Vice-Chairwoman Murkowski and Committee
members. My name is James Steele, Jr. and I serve as the Chairman of
the Tribal Council of the Confederated Salish and Kootenai Tribes
(``CSKT'' or ``Tribes''). On behalf of the Confederated Salish and
Kootenai Tribes, I thank you for the opportunity to provide our views
to your Committee.
I am pleased to testify before this Committee on the draft
legislation which would amend the Tribal Self-Governance Act's Interior
Department provisions found in Title IV of the Indian Self-
Determination and Education Assistance Act. I note that, almost four
years ago today, my predecessor, Tribal Chairman Fred Matt, provided
testimony to your Committee on similar Self-Governance amendments.
The Indian Self-Determination and Education Assistance Act (ISDEAA)
of 1975 and the 1994 amendments to that act, known as the Tribal Self-
Governance Act (Title IV of ISDEAA) have been two of the most
successful and important pieces of federal Indian legislation in the
history of this country. They rank with the Indian Reorganization Act
of 1934 as setting the stage for Tribal governments to determine our
own affairs, protect our own communities, and provide for our own
people in concert with our respective cultures and traditions. It has
been a crucial step in realizing the federal policy of Indian Self-
Determination which was ushered in over thirty years ago. I say
``step'' because I believe the federal government is still in the
process of realizing that goal.
The last twenty or thirty years have seen great changes in Indian
country. Many Tribes have developed vibrant economies, established
stronger governments, rebuilt communities, and achieved other hallmarks
of progress and success. It is no coincidence that this progress has
been realized at the same time as the Indian Self-Determination and
Education Assistance Act has been implemented and improved, including
by passage of the Tribal Self-Governance Act. The record shows that
empowering Tribal governments and communities clearly results in
benefits not only for Tribal members, but for surrounding communities
and the larger public as well. After President Nixon signed the Indian
Self-Determination Act into law the Salish and Kootenai Tribes we were
one of the first to enter into a contract with the Bureau of Indian to
operate and manage BIA programs. We were also one of the original 10
tribes to implement the Self-Governance Act when it was just a
demonstration project initiated by the late Congressman Sid Yates
during his tenure as Chairman of the House Appropriations Subcommittee
on the Interior. We have expanded the number of programs we operate
ever since and today I believe we operate more federal programs than
any Tribe in the country and we have done so with excellent evaluations
and clean audits.
At present, the CSKT Tribal government administers $25 million in
self-governance funds, $150 million in contracts and grants, and $44
million in Tribal revenue. Our government alone has 1,000 full-time
employees. We are the largest employer on the Flathead Reservation, one
of the largest employers in western Montana and we contribute over $30
million in payroll and over $50 million in purchasing in the local
economy. A recent report funded by the State of Montana showed that the
Confederated Salish and Kootenai Tribes contribute $317 million to the
Montana economy annually.
Tribal Self-Governance Act Successes
Congress should be pleased to see that there is no shortage of
success stories from Indian Tribes participating in the Interior
Department's Tribal Self-Governance program. I am proud to testify that
the Confederated Salish and Kootenai Tribes have many of our own.
Following are just a few of these success stories:
<bullet> In the mid-1980s we took over total control and management
of the electrical utility on our reservation, known as the
Electrical Division of the Flathead Indian Irrigation Project
and then renamed as Mission Valley Power (MVP). This utility
serves every home and business on the reservation, to Indians
and non-Indians. It is considered one of the best run utilities
in the state of Montana. Since the Tribes took over, MVP has
replaced and updated much of the utility's infrastructure yet
managed to retain some of the lowest rates in the region. We
have even been approached by off-reservation residents asking
if the utility could be extended to serve them.
<bullet> CSKT has contracted the operation of the Bureau of Indian
Affairs' (BIA) Land Title Recording Office for the Flathead
Reservation since 1996. We are one of only Tribes I know of who
contract this program. Control of this program's activities
helped create the Tribal government capacity and infrastructure
that allowed us to partner with the BIA to address the problem
of land fractionation on the Flathead Indian Reservation
through a program for Tribal acquisition of fractionated
interests.
<bullet> In 1989, CSKT contracted the BIA's Safety of Dams (SOD)
program. One of the main objectives of this program is to
eliminate or ameliorate structural and/or safety concerns at 17
locations on the Flathead Reservation as identified by the
Department of Interior National Dams--Technical Priority Rating
listing. CSKT's SOD Program provides investigations, designs
and SOD modifications to resolve the concerns of the dams on
the list.
The Tribes' SOD Program has been extremely successful and,
under our administration, Reservation dams have been modified
at a cost significantly lower than originally estimated by the
Bureau of Reclamation. For example, the Black Lake Dam was
completed in November 1992 at a savings of approximately $1.3
million below BOR estimates. The Pablo Dam Modification Project
was completed in February 1994 at a savings of nearly $140,000.
The first phase of the McDonald Dam SOD program has been a
``model'' program which has been used by other tribes.
<bullet> Our Forestry Program is another example of a success made
possible by the Tribal Self-Governance contracting framework.
In Fiscal Year 1996, following a year-long Tribal study of the
assumption of BIA's Forestry programs, CSKT compacted all of
those Forestry activities. We also administer fire pre-
suppression and suppression activities through other
agreements, including one with the U.S. Fish and Wildlife
Service for fire protection at the National Bison Range, which
is located on our Reservation.
<bullet> In Fiscal Years 1997 and 1998 respectively, CSKT began
compacting for administration of both the Individual Indian
Monies (IIM) program and the Northwest Regional Office title
plant functions for the Flathead Reservation. Few tribes
operate these programs. The fact that CSKT does so is a
testament to our strong commitment to exercise our full
authority under the Tribal Self-Governance Act.
In addition to the above-listed areas, CSKT compacts for all other
available BIA programs, including: law enforcement; Tribal courts;
education programs, etc. Our Tribal government infrastructure and staff
is well-equipped to administer these programs and we are very
experienced in federal contracting requirements. Our Natural Resources
Department alone has well over 100 employees, including biologists,
botanists, hydrologists, wildlife technicians, etc.
While it is outside the scope of the Indian Self Determination Act
or the Tribal Self Governance Act it may also be noteworthy that we
have signed an innovative agreement with the State of Montana governing
hunting and fishing on all lands on the reservations that applies to be
both tribal members and non-Indians. I point this out because that
agreement is an important exercise in tribal governmental authority,
which is one of the underpinnings of tribal Self Determination and Self
Governance.
One of the great benefits of the Tribal Self-Governance contracting
scheme is that it results in capacity building at the Tribal level (as
illustrated by our above-referenced Land Title Records Office example).
This capacity building results in benefits for Tribal governments,
Tribal enterprises, and communities as a whole--both Indian and non-
Indian. It helps provide quality jobs for Tribal members who want to
remain in the Tribal community. It also helps to provide a stronger
civic structure that supports greater economic development,
environmental protection, safety, and other public benefits.
Areas Where Improvements Are Needed
Contract Support Costs. Work still needs to be done to ensure that
the federal government will fully fund its obligation of paying full
contract support costs so that it can meet this requirement to
contracting Tribes. As we have stated to this Committee before, the
Indian Self-Determination and Education Assistance Act was not intended
to be a money-losing proposition for tribes, nor was it intended as a
mechanism for Tribal governments to subsidize federal programs and
federal statutory obligations. Unfortunately, the reality of Tribes
having to absorb indirect costs associated with contracting federal
programs currently serves as a real disincentive for Tribes to contract
such programs as intended by Congress. We assume that all other federal
contractors fully recover their indirect costs when doing business with
the federal government and have never understood why tribes get
disparate and negative treatment in this regard, especially since our
indirect cost rates are negotiated pursuant to the same OMB criteria as
are used by other contractors.
Federal Tort Claims Act (FTCA) coverage. Just as Tribally-
contracted programs should be funded at the same level as federally-
administered programs, so should they have equal liability coverage.
CSKT is concerned about the apparent trend within the U.S. Department
of Justice to opine that FTCA coverage does not extend to contracting
Tribes, their employees or volunteers under various circumstances.
This, like insufficient contract support cost funding, creates a
fundamental, and powerful, disincentive for Tribal contracting and
thereby undermines the Congressional objectives behind the Act.
Contracting of Non-BIA Programs. Unfortunately, the Interior
Department has not established a successful overall record with respect
to Self-Governance contracting of non-BIA programs. The Confederated
Salish and Kootenai Tribes have been at the front of the effort to
contract non-BIA programs, primarily through our nearly 14-year effort
to contract activities at the National Bison Range Complex (NBRC). The
NBRC consists of three National Wildlife Refuges located in the middle
of the Flathead Indian Reservation. It is also noteworthy that the
bison at the NBRC descend from a herd once owned by tribal members. All
three refuges are administered by the U.S. Fish and Wildlife Service
(FWS) as part of the National Wildlife Refuge System. Two of the NBRC
refuges, the Ninepipe and Pablo Refuges, are actually located on
Tribally-owned land; FWS operates them as refuges through easements
granted by CSKT.
In 14 years, the FWS has entered into only one other AFA and that
is in Alaska for some work to be done at Yukon Flats with the Council
of Athabascan Tribal Governments. That AFA does not contain any
personnel transfers.
CSKT is hopeful that the Department's record in this area will
change. Certainly there have been supporters at the policy making level
of the Interior Department (such as Secretary Kempthorne, Deputy
Secretary Scarlett, Associate Deputy Secretary Cason and Assistant
Secretary Laverty) and there have been some excellent people for us to
work with in the field (such as Dean Rundle from the Denver office and
others) but there have also been a number of opponents, primarily
entrenched federal employees or retirees who do like to see things
change. Were it not for our perseverance and the support from
headquarters, we would likely still be mired down. We are currently in
the final stages of negotiations with the U.S. Fish and Wildlife
Service for another Annual Funding Agreement to contract activities and
position at the NBRC. We are hopeful that we can reach agreement on a
new AFA that would return CSKT to the National Bison Range and
establish a productive Federal-Tribal partnership.
Tribal Subsidizing of Federal Programs. To fully realize
congressional objectives behind the Tribal Self-Governance Act, there
needs to be an accompanying congressional commitment to fully funding
the federal programs being contracted by Self-Governance Tribes.
Shrinking or stagnant federal funding necessitating supplementation of
Tribal dollars is a real problem for many Tribes. I realize that, as an
appropriations matter, this is somewhat of a separate issue from the
Self-Governance legislation itself. It is, however, integrally related
to achieving the goals of the Act and merits attention.
Draft Title IV Amendments Legislation
As has been our position before this Committee with past proposals
for Self-Governance amendments, CSKT is generally supportive of the
proposed legislation.
With respect to Sec. 401(8) of the proposed legislation, CSKT
believes that inclusion of a definition for the term ``inherent federal
function'' is very important, and we are glad to see it addressed in
the current legislation before the House and the draft legislation
presented to this Committee. During some of our past negotiations, the
discussion of what constitutes an ``inherent federal function'' within
the meaning of the Tribal Self-Governance Act has at times been
frustrating. Providing, for the first time, a definition for the term
in Title IV is a good start for addressing this issue. The proposed
definition would provide consistency with Title V of the Act, thus
promoting a more cohesive federal Self-Governance policy overall.
We support the explicit identification, in Sec. 405(b)(1)(A), of
Office of Special Trustee (OST) activities as mandatory for inclusion
in an AFA (at a Tribe's option). This reflects organizational changes
within the Interior Department since the Act was originally passed, and
makes clear that the programs are still available for Tribal compacting
despite any reorganization. CSKT has been entering into AFA's with the
OST for performing appraisal activities.
CSKT also supports Sec. 405(b)(2) of the proposed legislation,
which retains the existing authority for Tribal Self-Governance
contracting of non-BIA programs which are of special geographical,
historical or cultural significance to an Indian Tribe. As indicated
above, CSKT has utilized this authority to enter into a past AFA with
the U.S. Fish and Wildlife Service covering activities at the National
Bison Range Complex and we are currently in negotiations with the
Service for a new AFA there.
CSKT is pleased to see that the current Title IV amendments
legislation on the House side (H.R. 3994), as well as the proposed
Senate legislation, no longer contain the prohibition of ``compacting''
the Flathead Agency Power Division or Flathead Agency Irrigation
Division which is currently found in 25 U.S.C. Sec. 458cc(b)(4)(C).
CSKT has contracted the Power Division under a P.L. 638 contract since
1987 and, as indicated above, has built a solid record of success in
administration of the utility, now known as Mission Valley Power.
It is important that Sec. 409(c) of the proposed legislation would
retain the existing statutory language mandating funding to tribes for
contract support costs. As noted above, this is a fundamental issue for
realizing the full potential of the Tribal Self-Governance objectives.
Stronger efforts to secure adequate appropriations for this area are
badly needed.
The provision in Sec. 412(a) of the proposed legislation which
further clarifies application of the Federal Tort Claims Act (FTCA)
will hopefully assist in clarifying the federal responsibilities for
liability coverage when Tribes contract for administration of federal
programs and activities. We continue to support the optional
incorporation of Title I provisions into an AFA, as stated in
Sec. 412(b) of the proposed legislation. Such incorporation can help
strengthen an AFA and supply additional tools for contracting Tribes.
It also promotes consistency between ISDEAA's Titles.
Closing Comments
I believe the Confederated Salish and Kootenai Tribes are a good
example of how Tribes can thrive under the Tribal Self-Governance
framework. As illustrated by this testimony, surrounding communities--
both Indian and non-Indian--also benefit from this type of Tribal
success. I encourage this Committee to continue working with Tribes to
improve the Tribal Self-Governance Act and ensure that it fulfills
Tribal and Congressional objectives. Together, we need to make sure
that there are incentives to participate in the Tribal Self-Governance
framework. Similarly, we need to eliminate disincentives and remove
barriers to Self-Governance participation. The proposed legislation is
a good start towards accomplishing those ends.
On behalf of the Confederated Salish and Kootenai Tribes, thank you
for the opportunity to provide testimony. I would be happy to answer
any questions.
Senator Murkowski. Thank you, Chairman Steele.
Finally, we will go to Mr. Peltola.
STATEMENT OF GENE PELTOLA, PRESIDENT/CEO, THE YUKON-KUSKOKWIM
HEALTH CORPORATION, ACCOMPANIED BY: LLOYD B. MILLER, ESQ.,
PARTNER, SONOSKY, CHAMBERS, SACHSE, ENDRESON AND PERRY, LLP;
DAN WINKELMAN, ESQ., GENERAL COUNSEL, YUKON-KUSKOKWIM HEALTH
CORPORATION
Mr. Peltola. Good afternoon, Chairman Dorgan, Vice Chair
Murkowski, Members of the Senate Committee on Indian Affairs. I
am Gene Peltola, President and CEO of the Yukon-Kuskokwim
Health Corporation.
YKHC provides health care to the federally-recognized
tribes in Alaska. My testimony today simply focuses on the
disparities within Title IV. The Yukon-Kuskokwim Health
Corporation has been contracting with the Indian Health Service
since before the enactment of the Indian Self-Determination
Act. Today we provide comprehensive health care to 28,000
largely Yupik Eskimo people across a roadless area the size of
Oregon, where the average per capita income is $15,000. Gas in
our main hub city of Bethel is almost $5 per gallon, and in our
villages it is approaching $7 per gallon, the same price we pay
for milk.
When considering the high energy, food and personnel costs
against an IHS appropriation that does not allow for mandatory
inflation costs, providing health care in our region is a daily
and extraordinary challenge.
This is especially true when considering the enormous
health disparities our region faces. For example, Alaska
Natives' leading cause of death is cancer. The Alaska Native
cancer mortality rate is 26 percent higher than the U.S.
Caucasian rates. While cancer mortality for the rest of
Americans is decreasing, it is increasing for us.
Also terribly disturbing are our region's high suicide
rates. Our age-adjusted suicide rate for 15 to 19 year olds is
17 times the national average, something that is entirely
preventable.
Over 20 years ago, former Committee Chairman Inouye wrote
that the single greatest impediment to the success of tribal
self-determination was the failure of the IHS and BIA to pay
contract support costs. I can testify that what Chairman Inouye
said in 1987 is just as true today.
In Fiscal Year 2007, YKHC's annual true shortfall exceeded
$10 million for the very first time. It has gone up
approximately $1 million each year as we seek to take on the
ever-growing IHS programs in a climate of ever-rising costs.
This is truly a crisis.
In 1992 and 1993, when we began operating the local IHS
hospital, we suffered a shortfall of over $2.2 million in
contract support costs. The impact to YKHC was immediate. Over
40 positions were laid off within months. Subsequent rounds of
reductions in force and layoffs occurred in 1997, 2006 and
2007. These events have had a very severe impact on the quality
of care that YKHC can provide our people.
However, the impact is not just measured by $10 million in
shortfall. As a result of that underpayment, YKHC cannot employ
as many primary care providers and we therefore lose an
additional $6 million in revenue from third parties like
Medicaid.
Across Indian Country, we call this the compacting penalty.
Any tribe taking on a Federal trust program has to be ready
either to subsidize the trust responsibly, which we cannot do,
or else essentially relieve the Government of part of that
trust responsibility by cutting the trust programs. Whether
that means cutting a police officer or a realty specialist for
a tribe compacting with the BIA, or cutting a doctor or nurse
for a tribal organization like ours, compacting with the Indian
Health Service, the cut is the same. Nowhere else does the
Government deal with its contractors in this way, whether it is
a Halliburton or Acme, Congress always makes appropriations
necessary to meet the Government's obligation.
But even after the Supreme Court announced in the Cherokee
case that our contracts are as good as gold, we continue to
suffer enormous underpayments. This has to change.
I have six recommendations today. First, the Committee
should consider directing the GAO to study the actual impact of
these continuing severe shortfalls. Second, the Committee needs
to look closely at what is going on with the BIA in this area.
Tribes are experiencing a near 100 percent shortfall in the
payment of their personal costs associated with carrying out
BIA contracts.
Third, the Committee needs to put a halt to the National
Business Center's unilateral change in its indirect cost
practices. The Committee should impose a moratorium on all
changes until there has been thorough tribal consultation.
Fourth, the Committee should pressure the BIA to develop
expertise in the details of contract support cost
administration. If the BIA's data is not reliable, it
jeopardizes all tribal self-determination.
Fifth, I would ask the Committee to look into the status of
the pending contract support litigation. Litigation is grinding
on in various courts and boards, and one judge has recently
ruled that tribes have stood by and waited to file their claims
while a class action was pending, actually have lost all their
rights to pursue those claims. This was a shock, considering
that in parallel litigation against the BIA, the very same
tribe did rely on a class action to protect their rights, and
in fact, they recovered their share of over $100 million in
damages awarded against the BIA.
The fairest approach would be for Congress to extend the
statute of limitations for all tribal contractors to pursue
their claims over historic IHS underpayments from prior years.
A more comprehensive approach would be a legislative change to
create a new claim payment mechanism that would permit all
tribes to receive appropriate compensation through the judgment
fund without draining litigation that takes years to resolve.
Finally, the current contract support shortfall of over
$100 million from the Indian Health Service, which has received
absolutely no increase in six years, and the $40 million
shortfall from the BIA, must finally be eliminated. This can be
done through a combination of appropriation increases by
removing the current caps and by tapping into agency
collections and unobligated balances from prior years. Surely,
using leftover agency balances to meet the Government's legal
obligations to Indian tribes is a higher priority than to
supplement internal agency operations, as currently occurs.
Ultimately, receiving full contract support costs is not
just about money. For tribal organizations like YKHC, it means
being able to systematically address cancer, suicide and other
health disparities.
I thank you for the opportunity and honor to address you
and your Committee today. I believe that full contract support
appropriations is one small step, but it would be a giant leap
in addressing the health disparities of Native Americans
nationwide. Thank you.
[The prepared statement of Mr. Peltola follows:]
Prepared Statement of Gene Peltola, President/CEO, The Yukon-Kuskokwim
Health Corporation
Good afternoon. Mr. Chairman and members of the Committee:
The Yukon-Kuskokwim Health Corporation has been contracting with
the Indian Health Service since before the enactment of the Indian
Self-Determination Act. Today we provide comprehensive healthcare to
28,000 largely Yupik Eskimo people across a roadless area the size of
Oregon, where the average per capita income is $15,000. Gas in our main
hub city of Bethel is almost $5 per gallon, and in our villages it is
approaching $7 per gallon, the same price we pay for milk. When
considering the high energy, food and personnel costs against an Indian
Health Service appropriation that does not allow for mandatory medical
inflation costs, providing healthcare for our 58 tribes is a daily and
extraordinary challenge.
This is especially true when considering the enormous health
disparities our region faces. For example, Alaska Natives' leading
cause of death is cancer. The Alaska Native cancer mortality rate is
approximately 26 percent higher than for U.S. Caucasians. While cancer
mortality for the rest of Americans is decreasing, it is increasing
dramatically for Alaska Natives. Particularly disturbing are our
region's high suicide rates. Our age-adjusted suicide rate for 15-19
year olds is 17 times the national average.
Over 20 years ago, former Chairman Inouye of this Committee wrote
that the single greatest impediment to the success of tribal self-
determination was the failure of the Indian Health Service to pay
contract support costs. I can testify that what Chairman Inouye said in
1987 is just as true today.
In the just concluded Fiscal Year 2007, YKHC's annual true
shortfall exceeded $10 million for the very first time, and it has gone
up approximately $1 million each year as we seek to take on ever
growing IHS programs in a climate of ever rising costs. This is truly a
crisis.
Most people hear about ``contract support costs'' and their eyes
glaze over. But these are very real costs, either the fixed costs of
our overhead that are set by the government, based upon independent
annual audits, or else the cost of providing workers compensation
insurance, and health and retirement benefits to our staff. That's what
contract support costs are. They are fixed and they are real.
In 1992 and 1993, when we began operating the local IHS hospital,
we suffered a shortfall of over $2.2 million in contract support costs.
The impact to YKHC was immediate: over 40 positions were laid off
within months after hospital operations began. Subsequent rounds of
reductions in force and layoffs occurred in 1997, 2006 and 2007.
These events have had a very severe impact on the quality of care
that YKHC can provide. However, the impact is not just measured by the
$10 million shortfall. As a result of that underpayment, YKHC cannot
employ as many primary care provider teams. The care that those teams
provide to our patients is typically billed to Medicare, Medicaid, or
private insurance when available. The result is that $10 million in
reduced direct care services translates into an additional $6 million
in lost revenues from these sources. So, the real loss is at least $16
million to our programs, and even more when you consider that we direct
those lost third-party revenues back into staffing additional teams
throughout our villages.
Across Indian Country, we call this the compacting penalty,
although it is equally applicable to self-determination contracting
tribes. Any tribe taking on the administration of a federal trust
program--whether from IHS or the BIA--has to be ready either to
subsidize the trust responsibility (which we cannot do) or else
essentially relieve the government of part of that trust responsibility
by cutting the trust programs. Whether that means a police officer or a
realty specialist for a tribe compacting with the BIA, or a doctor or a
nurse for a tribal organization like ours compacting with the IHS, the
cut is the same.
Nowhere else does the government deal with its contractors in this
way. Whether it is Haliburton or Acme, Congress always makes the
appropriations necessary to meet the government's contract obligations.
But even after the Supreme Court announced in the Cherokee case that
our contracts are as good as gold, we continue to suffer enormous
underpayments. This has got to change.
I have six recommendations.
First, the Committee should consider directing the General
Accountability Office to study the actual impact of the continuing
shortfalls tribes are suffering in their contract payments. I am sure
YKHC's experience is not unique, and hopefully a GAO report will help
energize Congress to do its part in remedying the situation. As part of
the GAO study, some examination should be made into IHS's new policy,
announced two years ago, not to provide any contract support costs
whatsoever for any new contract or compact operation, regardless of
circumstance, and notwithstanding Congress making available up to $5
million for this purpose every year. The current situation is bringing
to a stop all forward progress on tribal self-determination and self-
governance.
I also recommend that the Committee request that IHS provide its
own comprehensive report on its contract support cost shortfalls. IHS
provided such a report to Congress in 1997 and a new report is long
overdue. IHS should be instructed to work in close consultation with
self-governance Tribes in the development of its report.
Second, the Committee needs to look closely at what is going on
with the BIA in this area. I know from our sister organization in
Southwest Alaska, the Association of Village Council Presidents, that
Tribes are experiencing a near 100 percent shortfall in the payment of
their personnel costs associated with carrying out BIA contracts.
Again, this means Tribes are either subsidizing or, in Alaska cutting,
these vital trust services.
Third, the Committee needs to put a halt to the National Business
Center's unilateral change in its indirect cost practices. As a non-
profit 100 percent of our Board costs are covered in our indirect cost
pool. But the same is not true of tribal governments, and historically
NBC has only permitted 50 percent of Tribal Council costs to be treated
this way. But very recently, NBC eliminated even the 50 percent rule,
now demanding timekeeping records from all Tribal Council members. The
Committee should impose a moratorium on this change until there has
been thorough Tribal consultation.
Fourth, the Committee should pressure the BIA to develop expertise
in the details of contract support cost administration, now that the
BIA has begun implementing its first-ever contract support cost policy
in over 30 years. Congress depends heavily on the integrity of the data
both agencies provide. If BIA's data is not reliable, it jeopardizes
all tribal self-determination.
Fifth, I would ask the Committee to look into the status of the
pending contract support litigation. After 12 years of litigation, YKHC
recently settled its old claims for approximately $42 million. But this
was the exception. For other Tribes, litigation is grinding on in
various courts and Boards. One judge just ruled that tribes who stood
by and waited to file their claims while the Zuni class action
litigation was pending actually lost all their rights to pursue those
claims. This was a shock, considering that in parallel litigation
against the BIA, the very same tribes were years ago told that they
could rely on a class action to protect their rights, and in fact they
recovered their share of over $100 million in damages awarded against
the BIA.
The fairest approach would be for Congress to extend the statute of
limitations for all tribal contractors to pursue their claims over
historic IHS underpayments from prior years.
A more comprehensive approach would be a legislative change to
create a new claim payment mechanism that would permit all tribes to
receive appropriate compensation through the Judgment Fund, without
draining litigation that takes years to resolve.
In the absence of reform in this area along these or some other
lines, I am deeply concerned that YKHC's experience will prove to be
the exception, and that even the 15 percent of tribal contractors that
have dared to litigate will never see their rights vindicated.
Finally, the current contract support shortfall of over $100
million from IHS--which has received absolutely no increase in 6
years--and the $40 million shortfall from the BIA, must finally be
eliminated. In addition to the reforms proposed years ago in S. 2172
and H.R. 4148, this can be done through a combination of appropriation
increases and by using agency collections and unobligated balances from
prior years. In this respect, surely using leftover agency balances to
meet the government's legal obligations to Indian tribes is a higher
priority than to supplement internal agency operation as currently
occurs.
Ultimately, receiving full contract support costs is not just about
money. For tribal organizations like YKHC it means being able to
systematically address cancer, suicide and other health disparities.
Full contract support costs represent the ability to hire a
provider to perform portable mammograms in our villages to detect
breast cancers early in stage 1 when the 5 year survival rate is over
90 percent versus a later stage; it represents the ability to hire a
counselor to deploy a community-wide behavioral health initiative in
order to save a teenager from taking his own life.
The funding of full contract support costs and--more importantly--
its relationship to directly improving American Indians' and Alaska
Natives' health status, is a matter entirely within Congress's power to
address!
Thank you for the opportunity and honor to address your Committee
today.
Senator Murkowski. Thank you, Mr. Peltola.
Chairman Dorgan.
The Chairman. Mr. Cason, I have read your testimony. Let me
ask a question about something Mr. Peltola just referred to,
and that is the ten-day turnaround time with respect to
reimbursements. The Indian Health Service has, it seems to me,
done better in that regard than the Bureau of Indian Affairs.
Can you tell me what is happening at the BIA?
Mr. Cason. It is my understanding, Mr. Chairman, that it
ends up being a combination of a lack of formulaic approach for
distributing money, a staffing issue within our Office of Self-
Governance and mechanisms for getting money out to tribes. So
it is not just one root cause why it takes BIA longer than IHS
to distribute money to the tribes.
It is an issue that is on the plate of the Office of Self-
Governance, to try to improve the timeliness of making
payments. That is a thing that we would like to try to
accomplish, but there are some impediments.
The Chairman. Well, can they make those improvements? Will
they make those improvements? Will they commit to the tribes
they will make those improvements?
Mr. Cason. At this point, Mr. Chairman, I am not sure that
the Office of Self-Governance has the answer on how to fix it
to get to a point where they can make 10-day payments. But
their objective is to speed the process as much as they can.
The Chairman. Well, but it seems to me that there has to be
some accountability. I understand the concern of the tribes, if
they don't have the funding in hand, and they have incurred the
cost, how do they deal with that? So we are wanting to be
encouraging to the tribes with respect to self-governance and
self-determination. And then what we hear is what we so often
hear, I don't like to be overly critical of the BIA, but I am
obviously upset at the moment that we don't have an Assistant
Secretary as the head of the BIA. That was vacant for two
years, filled for one year and now vacant again. There is
something dreadfully wrong with this picture.
And then we have hearings, not just on this issue, but we
have hearings on virtually every issue and try to find out why
is this not moving forward, why is this happening, why is there
the backlog, why is there not approval? I was in a State a
while back and saw a building that had sat, brand-new,
beautiful building, sat empty for a year while they were
waiting for somebody in the BIA to sign some papers. Nobody
would sign the papers.
So when I hear Mr. Peltola and others talk about
reimbursements, I notice that the Indian Health Service has
made whatever adjustments that it is necessary for them to make
in order for them to have a much better record than the BIA at
this point. I guess my question is, will you make a commitment
to improving things there and if so, when?
Mr. Cason. As I said, Mr. Chairman, it is an initiative on
the part of the Office of Self-Governance to do a better job.
They do have some limitations in their processes and their
staffing too.
The Chairman. What does that mean? I don't understand what
that means. I don't understand what formulaic means. Your
answer is not something I understand. What does formulaic mean?
Mr. Cason. Okay. Well, as I understand the distribution of
the IHS funding, it is basically a funding paradigm that, I
have a set number of dollars that I am distributing in a year.
When I get to the next year, I am able to distribute those
number of dollars right up front as soon as I get an
appropriation.
Then if there are any additional dollars to be distributed
as a result of an appropriation, then separate actions are
taken on the incremental dollars. We don't have the same
approach within Indian Affairs, that we end up negotiating on a
year-by-year basis the contracted amounts that we would give
based upon the appropriation we have. So we have more of a
process to get to a distributed amount than the IHS approach.
That is compounded by the fact that the Office of Self-
Governance operates with a staffing difficulty or shortfall, so
the amount of work that they have to do with the staffing that
they have leaves them in a position that they are not as timely
as they need to be.
The Chairman. Well, the staffing shortfall, have you
requested funding to meet that in order to respond to it?
Mr. Cason. Mr. Chairman, I am not sure about what Assistant
Secretary Artman has done in terms of requesting funding for
that particular problem.
The Chairman. Well, who would be sure?
Mr. Cason. I think that would be the Office of Self-
Governance and their budget shop that would be able to tell you
that.
The Chairman. But you come to a hearing and say we don't
have the staffing, do you think that your agency requested the
staffing?
Mr. Cason. As I said, Mr. Chairman, I am not specifically
sure about whether they requested additional staffing for that
specific office.
The Chairman. I don't understand that answer at all.
Somebody--well, you have come, I don't mean to badger you, but
look, you have come to testify on this subject, you have told
us the funds aren't getting out on time because of staffing
issues, among other issues. And I ask you, well, did you
request adequate staffing and you say, I don't know.
Mr. Cason. I would be happy to answer the question for the
record, go back and research it and find out exactly what the
answer is and provide that to the Committee.
The Chairman. All right. I would appreciate it if you would
do that.
[The information referred to follows:]
The Fiscal Year 2009 President's Budget does not request increased
funding or FTEs for the Self-Governance program in Indian Affairs.
However, Indian Affairs plans to add two additional staff to the
program in 2008 through the use of existing resources within the Indian
Affairs budget.
The Chairman. I am going to submit some additional
questions particularly dealing with contract health. I
appreciate all the witnesses being here today.
Senator Murkowski. Thank you, Mr. Chairman.
We know that it is not always exclusively about the money.
But when it comes to the contract support costs, and Mr.
Peltola, I think you said this, you have taken on the
obligation to provide for, at least out in YKHC, a level of
health care and those obligations. You have undertaken, you
have incurred the costs and yet, you are not reimbursed the
actual costs out there, you are not reimbursed even close
sometimes to what those costs are.
And nowhere else, nowhere else can you think of a situation
where the agreement is, well, you take on this obligation and
assume the cost, and we will see how much we actually end up
reimbursing you, and then you throw in issues of timeliness,
the level of frustration is understandably high. Certainly we
hear this time and time again in the State of Alaska. In my
opening comments, I said, there are real good things we can say
about self-governance. But I think we also need to appreciate
that we do need to keep the commitment that we have made there.
You mentioned, Mr. Peltola, the initial number of layoffs
that you were forced to move forward with this $2.2 million
shortfall that you saw, I think it was in 1990. Do you have any
idea, over the course of the years, then, how many folks you
have actually had to lay off? Do you keep data in terms of the
lost jobs, the lost revenues, the other impacts that you have
to YKHC as a result of contract support cost shortfalls?
Mr. Peltola. In 1990, 1997, 2006, 2007, we had to lay off
approximately 150 people.
Senator Murkowski. A hundred and fifty throughout that? And
then as you have indicated, when you have to make those
staffing decisions, what happens is a level of service is also
cut off to the Natives in the region. So that is 150 direct
jobs, but you also have a ripple effect within the community, I
would imagine.
Mr. Peltola. Yes, there is, Senator Murkowski. On top of
that, as you are well aware, in 1980, Congress appropriated a
staffing package for a new hospital in Bethel, funding 56 new
positions. That money never did reach the Bethel Hospital, none
of it.
Senator Murkowski. For any of those positions?
Mr. Peltola. Fifty-six positions were funded by Congress
and none of that money reached Bethel Regional Hospital.
Senator Murkowski. You were successful in filing suit
against the Government for contract support costs. It is my
understanding that the vast majority of self-governance tribes
is about 85 percent of them who have claims do not actually
file their contract support cost claims. Why is that? Why do
you figure that is?
Mr. Peltola. I really don't have an accurate answer on
that. I think a lot of them are waiting to see what is
happening. YKHC was fortunate enough on the 23rd of May of 1996
to file a claim for a contract support shortfall. We have
updated that every year. Just recently, the first week of
December, well, last fall, after 11 years, our claim finally
got to the U.S. Contract Court of Appeals.
Senator Murkowski. Eleven years to get there?
Mr. Peltola. It took 11 years to get there, and we were
ordered into mediation. After five and a half days of
mediation, we settled the claim with a $25 million settlement
on the claim with interest back to May 23rd, 1996. It totaled
almost $43 million. That money came from the U.S. Treasury in
mid-February.
Senator Murkowski. I might suggest that one of the reasons
why you don't have more filing the claims is just the length of
time that you were waiting and fighting, the legal costs that
you incur, and you are trying to provide health care out in an
area that desperately needs it. Your first job is not to fight
the Federal Government for the promises they have made to you.
So we appreciate what you do out there.
We don't have a clock here running, but I think my five
minutes are up. I will turn to Senator Tester, and we will have
an opportunity for second rounds.
Senator Tester. Thank you, Madam Vice Chair.
Just real quickly, Chairman Steele, would you agree in your
situation that the IHS reimbursement works better than the BIA
reimbursement?
Mr. Steele. I don't know if I would go that far. I would
just say, in kind of indirectly answering, we had contracted
the contract health services from the Indian Health Service.
Because the contract support costs weren't adequate and we were
seeing that we were having to potentially subsidize with tribal
dollars those costs, we retroceded that back to the Indian
Health Service. Because it was weighing heavy on our tribal
side of the budget, our tribal dollars. And we weren't getting
the adequate funding for the contract support costs. So we
retroceded back.
So I am not really in a position to answer adequately your
question, Senator. But I don't know that I would go that far.
Senator Tester. Sitting in this position for the last 16,
17 months, we have had a lot of folks come in, we have had a
lot of hearings. Last week, for example, it was inadequate
funding on oil well leases, particularly in North Dakota, on
that reservation. This week it happens to be inadequate
staffing for this law enforcement, health care.
And if you have been here in the Committee meetings, I know
a lot of the people that are watching have, the Chairman has
asked the same questions almost every hearing: do you have
adequate money, do you have adequate staff, did you request it
in your budget. And I can't recall if he ever got an answer on
any of those questions, not once.
I think it is important to know if there is inadequacy in
getting the dollars out, we have to recognize either that you
made the request and somebody turned it down above you, or it
is not a priority. And that is really the way the two fall
down. My goal here, my goal as a policy-maker at the Federal
level, is to give tribes the tools so they can be self-
sufficient, so they can say, we don't need you any more. They
can do it on their own. That is my goal.
But the fact is, if we are putting up roadblocks, whether
it is procedural or through regulations or through different
administrative requirements, that doesn't work very well. So
that was more of a lecture than a question, thank you guys for
being here. I appreciate it. We have some work to do.
Senator Murkowski. Senator Barrasso.
Senator Barrasso. Thank you very much. I want to follow up
on what all of you have said, I am running into the same
experiences. And there is a situation in Wyoming that is
ongoing.
Mr. Cason, if I could ask you, when projects are new,
people don't have experience, and there have been difficulties,
are there things that your agency does to facilitate the
tribes' taking on new contracts, helping them better figure out
what they need to do to get the funding, to fill out the forms
and to receive the funding? It just seems that until they
really get geared up to learn how to do that, the delays seem
to be extraordinary.
Mr. Cason. Senator, I believe there is. As Senator Tester
mentioned, our basic view of the self-governance is similar to
what he said. The successful outcome of a self-governance
program in the end is every tribe runs its own affairs. What we
try to do is facilitate that. Is it perfect? No. But we do have
a fund where we help new tribes who want to take on self-
governance and actually prepare for it. Then once they have
gone through that preparation period, then the funding
allocated, the programs they take over become available to
them. They get the same number of dollars to run a program that
basically we do, along with contract support costs.
There has been a fair mention about contract support costs,
adequacy or inadequacy. That is an issue. In my relationship
with the tribes, we basically worked on that issue to include
both indirect and direct support costs as part of the budget
process. We did move to get more money into that program over
time. It is still not all the way there to full funding.
But it is an important component of running these programs.
We have been supportive of trying to improve on that area of
the budget.
Senator Barrasso. We are certainly looking for ways to
help, through advice, through flexibility. I know when Senator
Thomas was here, he was able to secure an appropriation for the
Wind River Reservation to upgrade its irrigation system. The
BIA still holds $7 million for the project, yet only about
$200,000 has been spent in the past two years, due to red tape
and the tribe's contract difficulties. I don't know if you know
the specifics of that case.
Does that sound unusual to you or something that you would
find disturbing?
Mr. Cason. The experience I have had with our Indian
Affairs programs is, I would say across the board, that in some
cases we have project funding that does take a while to
utilize, because we run into some impediment of one sort or
another. And all the way to the other end of the spectrum,
where the process runs very smoothly and very expeditiously and
we can get projects started and done in a timely way.
So unusual that we would have an issue? No. I have seen a
number of those things. I don't know the specifics about the
Wind River situation, but I would be happy to look into it if
you would like.
Senator Barrasso. I would very much appreciate it if you
would.
[The information referred to follows:]
While you didn't mention a specific fiscal year, upon our research,
we identified a $7.5 million appropriation in the FY 2006 Conference
Report for Irrigation Projects in the Department of the Interior
spending bill. In the FY 2006 Conference Report, the language states .
. .
``The addition of $7,500,000 in non-reimbursable construction
funds for Indian irrigation rehabilitation is separate from the
Navajo Indian Irrigation Project, which retains its own
construction budget of $12,773,000. Within the funds provided
for Indian irrigation rehabilitation, a number of Bureau and
tribal projects are in desperate need of immediate attention to
continue delivering water to users. The Bureau is expected to
consult with the House and Senate Committees on Appropriations,
in the form of a detailed proposal, prior to obligating funds.
The Bureau is expected to administer these funds from the
central office program level to address projects with the
greatest need of rehabilitation. Construction of new projects
or expansion of existing projects is secondary to the
rehabilitation, reconstruction, and necessary upgrade of
current irrigation projects and systems. Specific projects to
be addressed under these guidelines and to be addressed in the
Bureau's proposal for the obligation of these funds are: the
Fort Yates Unit of the Standing Rock Sioux Project, the
Blackfeet Irrigation Project, the Crow Irrigation Project, the
Fort Belknap Irrigation Project, the Fort Peck Irrigation
Project, and the Wind River Irrigation Project.''
Senator Barrasso. Chairman Steele, I don't know if you
heard the question, but just looking at the situation at Wind
River Indian Reservation, where we had $7 million for a project
for an upgrade to the irrigation system, it has been two years
and only $200,000 has gotten there, due to red tape, tribe's
contract difficulties. Does that seem unusual to you in your
experience or disturbing to you?
Mr. Steele. You are speaking in general, across the board?
Senator Barrasso. Yes.
Mr. Steele. I would say in general, it is an accurate
statement.
Senator Barrasso. It is accurate, that kind of time delay
due to red tape and difficulties dealing with the systems?
Mr. Steele. Yes, I would say in general it is an accurate
statement.
Senator Barrasso. Then I would find that disturbing and I
imagine other members of the Committee would.
No further questions, Madam Chairman, thank you.
Senator Murkowski. Thank you, Senator Barrasso. Senator
Cantwell.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Madam Chair. I thank the
witnesses for being here today, particularly Chairman Allen.
Thank you for being here from the Northwest, and thank you for
your leadership in the proposal you are putting forth today to
outline how self-governance can happen in a more efficient way.
I know there have been 15 different Washington tribes that have
used various elements of this. From time to time, we do hear
concerns about flexibility, so I am sure you are trying to
address that.
What are the specific parts of Title V that you think we
really need to incorporate into these amendments? I understand
your concern in the fact that when the rulemaking came out on
the Title IV amendments that the process kind of got bogged
down and that Title V really is a more reflective end result
that we want to look for. So what specifically works about that
that we should adopt?
Mr. Allen. Thank you, Senator. I guess I would point, there
are a number of them in there, probably some of the more
important ones to move self-governance forward within the
Department of Interior and BIA is, the language that would
clarify the reasons why the agency may decline a tribe's
proposal to enter into a compact, what they can do is drag it
on into time immemorial and the tribe just basically loses
interest.
So this amendment provides time-specific process where they
have to respond to a final proposal by the tribe and then they
have to give the reasons.
Senator Cantwell. And that works that way in Title V?
Mr. Allen. Yes, it does. It has very specific time frames
in which they have to respond to you, here is our request, you
need to give us in writing what your argument is. That also
rolls over into a clear avenue where we can appeal.
Right now, we don't have that process. We can't even get to
that juncture in the negotiation. So many tribes are impeded
from entering into negotiations for that very reason. They
won't provide the information that we need in order to
negotiate. So there is that issue.
Title V, as you had discussed, requires the Department to
transfer the funds promptly. That is an issue of staffing.
Senators are correct, that is a problem. On the DOI side, they
have authorized I think like eight FTEs. To put it in
perspective, eight FTEs over $300 million, relative to the
11,000 FTEs that are in the BIA, you would think there could be
some adjustment in FTEs in order to accommodate that kind of
process to get those monies out to the tribes.
But the language in this amendment would provide promptly,
you have an obligation to do it, so you are going to figure out
a way to do it. Construction provisions, clarify that we will
have clear and consistent authority to move forward with our
construction projects. And it would prevent the BIA from
imposing unilateral adjustments. Many times what they will do,
we will negotiate from program A through Z, then they will
unilaterally reduce the funding numbers because they have
changed their allocation.
Mr. Cason referenced some of the problems at BIA. They have
a moving target in many of their programs, general assistance
programs. It is like they throw them back into a pot and
readjust the allocation. So the tribes never know from year to
year what your allocation is. On the IHS side, you always know
from year to year, subject to any adjustment that the Congress
makes.
So those are some of the primary objectives. There are a
couple of others that are important. But what it does is
provide more certainty and requires the BIA to move the
proposals forward, if you are taking on more programs or if a
new tribe is coming in and wanting to negotiate their initial
compact and funding agreement.
Senator Cantwell. Is health care just naturally easier than
some of these other areas?
Mr. Allen. BIA tried to say it is naturally easy for IHS,
because they just deal with health care, or the BIA deals with
social programs, natural resource programs, governmental
programs, enforcement, et cetera. So there is a different level
of different kinds of activities that they administer as
opposed to IHS. IHS has a lot of very sophisticated programs,
from their clinical programs to hospitals.
Senator Cantwell. I was going to say, look at what we have
to deal with here, it is a very complex set of challenges. I
would think some other things would be a lot more
straightforward, particularly the construction, juxtaposed to
say----
Mr. Allen. We feel that construction is consistent with the
other programs and should be treated consistently. So there is
a difference, there is no question about it. But there is no
reason why there can't be consistency as the Federal
Government, whether it is the BIA, Department of Interior or
IHS, when they are dealing with tribal governments.
Senator Cantwell. So why do you think this got bogged down?
Mr. Allen. In my opinion, the success of self-governance
has moved forward effectively. I just think that the system is
continuing to dig back in. The notion that it doesn't want to
let go, that we really don't know what we are doing in general,
broad terms, and there needs to be better oversight or more
oversight over our affairs. That is recalcitrance, it wouldn't
matter whether it was basic programs or trust programs like the
Hoopa Nation has raised or other programs, like Salish and
Kootenai with DOI Fish and Wildlife Service and so forth.
The notion that they don't trust the Indians, and I am
saying this very bluntly, is out there still. We are still
fighting that image, that notion. Even though we have 20 plus
years of success of effectively and responsibly administering
Federal monies that you procure for the benefit of Indian
people.
Senator Cantwell. Thank you, Madam Chair.
Senator Murkowski. Thank you, Senator.
Mr. Cason, I want to ask a question, this goes to the
liability issue. I understand that there still is a difference
between the tribes and the Department of the Interior regarding
the Secretary's liability for tribal operations of programs
that can't be reassumed by the Secretary. Would the Secretary
avoid liability or be able to avoid liability by simply
refusing to reassume the programs?
Mr. Cason. I don't believe so, Madam Chairman. The concern
that we have had over time, the issue of Title V applied to
Title IV has been an issue regarding liability. Our lawyers
have advised us that tribes taking over programs does not
relieve the Secretary of the liability associated with the
performance of the program. Being currently engaged, at least
within the confines of this Administration, with extensive
litigation about what the Federal Government's liability is for
performance of our program over time has been of concern.
We have spent a considerable amount of time dealing with
our liability. There are at least claims of our liability in
the hundreds of millions to billions of dollars that we have
been trying to work out during the course of this
Administration. Understandably, the Administration is very
concerned about our outlying liability exposure.
On this particular issue, there have been concerns about
the standards at which we have to perform and the intersection
of those standards. What I mean by that, Madam Chairman, is
that in some of the past proposed ways of approaching this
problem, and I haven't seen the new proposal from the self-
governance group yet, but in past iterations that we have
talked about, it basically calls for a standard of essentially
irreparable harm before the Secretary could intrude into a
program that has been compacted.
But at the same time, the Federal Government, Department of
Interior, BIA, is being held to exacting high fiduciary
standards of managing its trust responsibilities. So there is a
big gap between those two. And our ability to reassume programs
to ensure that we can meet our fiduciary duties is not the same
as the standard in which the Secretary could exercise a
reassumption of a program.
So we think that there is some potential legal liability
for the Department there. One of the things we would seek to do
in any change to the law is try to marry up authority to run a
program with the responsibility for it.
Senator Murkowski. Let me ask you this, then, Mr. Allen,
from your perspective, how big of a risk are we talking about
in terms of liability for the Government? Can you think of any
situation or any instance where a self-governance tribe has
sued the U.S. Government for failure to protect the tribe from
its own self-governance decision? Mr. Cason has indicated that
from the Government's perspective, they feel there is lots of
money on the line here in terms of liability. What has your
experience been?
Mr. Allen. This is an interesting question. When we raise
the question of the liability with regard to trust resources
versus the other trust, the other trust activities that we
engage in, I don't know of any suit of tribe with the Federal
Government with respect to the programs that we are
administering and administering to the benefit of our people
that we took over from the BIA.
Senator Murkowski. It seems that he would be suggesting
that your own management was inappropriate. I am trying to
reconcile the two.
Mr. Allen. I can assure you that the BIA could never take
over any of our programs and do the same job that we are doing.
They just can't do the same level of quality of service,
categorically, whether you are dealing with trust activities or
any other programs that we administer. I will footnote that the
tribes do, as mentioned by my colleagues here, contribute a
great deal of our money, our own money, to make the services
better. But the quality of the service that we are able to
provide to our people is unquestionably better. If they were to
try to reassume those programs, there would be a major
degradation of the services to our people with respect to every
program that we have taken over.
I know that there are liabilities that the Department is
concerned about. But I don't agree that that notion, and that
maybe it is coming out of the Cobell case, is a reason to
undermine the tribes' ability to take over these programs. In
the past, there have been notions that in taking over these
programs that we want the government to relinquish all Federal
obligation. It is much more surgical than that. Tribes are much
more intelligent and knowledgeable about what legal obligations
you still retain versus what obligations we take over and will
absorb and take full responsibility for it.
Senator Murkowski. Mr. Marshall, you look like you are just
itching to jump in there.
Mr. Marshall. I think you hit the nail on the head, and I
have said this before, the issue of liability, I know of no
self-governance tribe that sued the United States for its own
mismanagement in the last 20 years of self-governance. It
hasn't happened. Tribes who have assumed the responsibility of
managing their own resources do it for a reason, because it is
probably because it has been mismanaged in the past and they
want to do a better job.
My tribe has taken over forestry management, fisheries
management. The tribes that step up and do those things do that
with a commitment. It always comes back to the liability issue
that we can't let you do that because you might sue us for what
you do. It hasn't happened and I don't think it ever will.
So there is a process, if the Bureau determines that a
program is being mismanaged by a tribe, it declares the program
to be in imminent jeopardy. Then the Bureau would reassume
management of the program.
But the tribes that I am familiar with, especially the
tribes to my left and right who have been in the trenches with
us since the beginning, we have taken on the responsibility and
we have found other money. It is not tribal funds, it is not
always tribal funds. We match programs with them, I could show
you my budget, I have a column for tribal money, a column for
indirect cost money, a column for compact money, a column for
grants tribes still contract, a column for enterprise funds. So
you are dealing with five, six columns of funding sources, and
you work out a budget so that you cover the cost of all of your
programs and you set your own priorities.
In terms of resource management, when tribe assume
management of trust resources, it also generates revenue. From
that revenue generation you also set priorities and you cover
costs. We learn as we go. So 20 years of developing a
government which is the foundation of our nation, then figuring
out ways to afford it are positive. But this idea that, well,
now I am glad we were here in the beginning before, like I
said, trust reform reorganization comes in and says, wait a
minute, we have to make sure we are covered.
A question that was asked by the Senator, can you help
tribes get started, well, we have been at it for 20 years. If
you truly want tribes to move toward self-governance, they are
going to take baby steps. That is what I testified to, about
establishing government and administrative capability, you
can't, in the first instance say, well, if you are a baby and
you fall down, we are not liable if you bump your head. You
have to give the tribes the ability to learn how to do this.
And when they get there, they are going to do a great job. We
are an example of that, and I give you my guarantee. If people
need to know how to do it, ask us, because we are doing it.
Thank you for the question.
Senator Murkowski. I appreciate your comments there. Just
one last question for those of you that represent tribes. This
is as it relates to this 50 percent rule that the National
business Center has changed, allowing 50 percent of the tribal
council costs to be counted as indirect contract support costs
without documentation, thus requiring tribal councils to
document all of their costs under this new rule.
We are all about accountability here in the Government and
making sure that the monies that are provided are spent wisely.
Do you believe that under this new rule it provides more
assurances that the Federal Government, I guess the Federal
monies, rather, are being spent in appropriate manners as it
relates to the indirect costs? Does this help you at all in
your opinion? If not, I am assuming not, tell me exactly why.
Mr. Allen?
Mr. Allen. Where to begin this conversation? We fought this
little battle with the Inspector General 15, 20 years ago,
somewhere in that nature. When the Federal Government deals
with the tribal governments, they are dealing on a government
to government basis. We are contracting, we are taking over the
Federal contracts and all the activities that the Federal
Government incurs, all the costs. We have been identifying them
as indirect costs, then we identified direct, indirect costs or
direct contract costs that are associated with those kinds of
costs.
Those are the costs that provide the oversight of these
Federal programs and activities. It is a different animal now
as we move forward. Back then, the way the A-87 rule reads is
that council costs are not allowed except, and then except
means when you can show that the council costs are providing
the oversight of these programs.
All of us do that. I am not even going to say some of us or
most of us. All of us do that. All of our councils, no matter
what the size and how the configuration is, we all provide
oversight over every one of our programs. It varies, just like
you as the Congress provide a variance of oversight over all
the programs of the Federal Government.
So back then, they wanted us to identify by time sheet or
by stipend variation of when they actually provide oversight
over BIA or IHS or HUD or DOL programs, et cetera, and we said,
you are crazy to do this. Because what we will do is we will
incorporate into our indirect costs additional staff to track
down every one of our council members and do that, because that
is not their job. You don't do it as a Senator or Congress
people don't do that. Nobody does that.
So we said, look, keep it simple here. They do provide
oversight and yes, they do provide oversight over other tribal
functions. We would argue those tribal functions are Federal
functions, we are actually carrying out what the Federal
Government should be doing for us. But we decided not to argue
that case, just leave it at 50 percent, and no matter how the
tribe does it, if they have salaries or if they have stipends,
it doesn't make any difference. Just cut it down the middle,
say it is 50 percent, and if we win some, we lose some, it is
okay, we will live with that.
Now they want to revisit it and say, it is illegal. Now the
DNC and the legal counsel from the Department of Interior are
saying that is against the law, that for the last 25 years,
you, the Federal Government have been violating the law. We are
going with this new policy, where did that come from?
So now they are revisiting this thing. Our argument is that
we probably need some sort of very clear remedy that that is a
part of the Federal oversight by the tribal government for
these Federal activities and really don't get into the nitty-
gritty of breaking it down, category by category, program by
program. It just doesn't make sense.
Senator Murkowski. What about any of the rest of you? Mr.
Steele?
Mr. Steele. Madam Chair, if I can philosophically talk for
a second, I think my opinion, since 1491 and prior, we were
self-governing. We were sovereign nations and we believe we are
sovereign nations now. It is ironic to me that we have to go
through, we signed the Treaty of Hellgate in 1855 with the
United States Government, not with the State of Montana.
To be very frank, it always bothers me to have to come to
D.C. and work out exactly what my colleague, Chairman Allen, is
talking about. It is frustrating, because my ancestors
negotiated a treaty that reserved a reservation for our people,
gave up a big chunk of Washington territory which is now
Montana. And we have to go through all of these little hoops
that we are talking about. I appreciate your question, I know I
am not answering it.
But it gets frustrating to me. I think the essence of self-
governance is for us that are at this table and other tribes to
not have to come to D.C. and to ask for this or ask for that.
Keep the Federal responsibility, it needs to be maintained,
that is a treaty right, it is a treaty responsibility. But give
us the tools to be self-governing. Give us the tools to do what
we need to do as a government.
Our constitution of our tribe prohibits our council from
levying taxes. What a novel idea. So we have to get creative.
We have to be business-like, business-minded. We have to raise
funds without dealing with taxes. We can't raise taxes on our
own members without their express consent.
I guess in answering your question, Madam Chair, we just
need the tools and the ability to continue our self-governance
that we have practiced for hundreds of years, not just in the
last 20. And I appreciate the last 20, but for hundreds and
thousands of years we have been self-governing. So I know I
didn't answer directly.
Mr. Marshall. You did, and it was in the same vein as
Senator Barrasso suggested, that the Federal Government gives
you the tools and then we get out of the way and let you do the
work.
Mr. Marshall?
Mr. Marshall. Indirect cost is something that we have
negotiated every year. It is an annual tooth-pulling procedure.
We could settle on an indirect cost rate, not have to go
through that process, understand what the rules are that would
give us stability in budgeting for administration and fiscal
management. So ours has fluctuated, and we did go through a
process that Chairman Allen was saying, is government direct or
indirect. So you couldn't use indirect cost monies to pay for
the executive secretary, because that was government. But I
could pay for the salary of my administrative assistant,
because that was administration.
So we have these terms, when their offices are about 50
feet apart and they work together doing practically the same
thing. That makes for instability. What governments really need
to do is stabilize their governmental capability, define it,
and if they know that they are going to get adequate funding on
an annual basis from the programs that they compact or
contract. And of course, we talked about trust reform
reorganization. We are held to very high standards now for
fiscal accountability, fiscal management. We have to comply
with the Single Audit Act, and we pay a great deal of money to
have professionals come in, because we are managing, as Mr.
Steele said, he is managing a program that contributes $300
million to his State. My annual budget is over $70 million,
gross.
So I have to have a strong fiscal department. We also have
records management obligations that require that we house,
maintain records on site. We do ours electronically because
that is an obligation that has now come through trust reform
reorganization. Those are added costs and expectations from us.
I remember one of the self-governance tribes was hammered
severely because it didn't have fireproof filing cabinets to
protect their records. Well, who comes up with the money for
that, to comply? It wasn't about records management, it was how
to protect them. Those are additional costs that the tribes
assume.
So if we can have stability in funding, specifically
whether you call it contract support or indirect cost, then it
makes it easier for us to establish the capability that the
Department is expecting from us.
Senator Murkowski. Mr. Peltola, since you have traveled
farthest, I will give you the last word.
Mr. Peltola. Madam Chair, I would just like to make one
final parting comment. That is, I want to reiterate what Ron
Allen had to say. At least in health care, in my region, the
membership of my 58 tribes, it would be a total disservice to
those tribal members for the Government to provide health care
service. They could not even come close to providing the
spectrum of services that we provide today and the level of
health care that we provide to our people. I don't know what I
would do, I would stick my head in the sand, I guess, if that
ever happened, because it would be impossible for them to do
it.
I would like to close by saying, I believe it was 1992 when
the Senate Select Committee held hearings in Alaska. The only
Senators there were Senator Stevens from Alaska and Senator
McCain from Arizona. But I testified before the Select
Committee, and I closed out stating that, Senators, if our area
office of the Indian Health Service were to close, become
extinct tonight at 5 o'clock, and if the headquarters in
Rockville, Maryland became extinct at 5 o'clock and we still
had the ability to receive the funds, it would be a step
forward for health care for Native Americans residing in
Alaska.
Thank you.
Senator Murkowski. Thank you, gentlemen.
Mr. Cason, I will circle back to you and give you an
opportunity to respond.
Mr. Cason. I am sorry, Madam Chairman, I wasn't really
after the last word, but I did want to make a comment. There is
a lot of frustration on the part of Indian Country overall
about dealing with the process of funding from BIA,
particularly on the indirect and direct contract support costs.
But I would like to have everybody know, it is frustrating
on the part of the BIA employee, too, to have to do it. We end
up in a situation where we have scarce dollars that we are
trying to allocate in a broad spectrum of ways across Indian
Country. There is desire to have more dollars, so that puts
pressure on the institution to make sure where we are
allocating dollars is a fair distribution.
Then when we take a look at things like indirect support
costs that may range from 30 percent to 130 percent of contract
costs, we feel like we are in a position where we have to be
mindful of what kind of costs we are paying. Because every
dollar I give to one tribe is a dollar I cannot give to another
tribe.
So we look at the costs that we are putting out there,
because we are in a situation right now of pro-rating the
dollars that we have available. Because there are scarce
dollars, we want to make sure everybody gets the fairest mix
that we can. It is a frustrating situation on both sides of the
fence. We are happy to work with Indian Country to find better
ways of skinning this cat. We end up in a situation that maybe
in the end, some sort of a grant process may be a better way to
do things than we do them. But we haven't gotten there yet.
We would like to simplify the process as well. But we are
tasked to provide accountability for where did every dollar go,
how did it get spent, how is it justified. That adds to the
frustration that everybody has in the process. Thank you.
Senator Murkowski. I appreciate your comments there. I do
recognize, though, again, that we are asking through this
contract support cost and the whole operation here, we are
asking for the tribes to administer a job that we here in the
Federal Government would have otherwise been doing. So it
really does come down, I said earlier in this hearing that it
really isn't always about cost, or excuse me, the dollars that
are available.
But when we do have to ration, divide things on a pro-rata
basis and yet the efforts are still underway to provide for
that level of service, we have to figure out clearer equity
here. To have tribes kind of take the Federal Government on,
using precious resources in that way or just fighting for what
it is that they believe they had fairly contracted for, we do
need to find a better path forward. I appreciate your efforts
and your willingness on behalf of the Administration to work to
find that better path forward.
I appreciate the efforts of all of you in this area,
Chairman Allen, your leadership clearly, and those of you from
around the Country, as we try to resolve some of these very
difficult issues that face us in Indian Country and how we make
it happen better here in Washington, D.C.
With that, we will stand adjourned.
[Whereupon, at 4:02 p.m., the Committee was adjourned.]
A P P E N D I X
Joint Prepared Statement of Hon. Ron His-Horse-Is-Thunder, Chairman,
Standing Rock Sioux Tribe; Hon. A.T. Stafne, Chairman, Assiniboine and
Sioux Tribes of the Fort Peck Reservation; Hon. Marcus Wells, Jr.,
Chairman, Three Affiliated Tribes of the Fort Berthold Reservation
We write jointly to highlight a shortfall which significantly
affects Indian tribes and tribal organizations carrying out
construction projects under either Title I or Title IV of the Indian
Self-Determination and Education Assistance Act (ISDA), 25 U.S.C.
Sec. Sec. 450-450n, as well as to urge the Committee to pass a proposed
``technical'' amendment to the ISDA which would resolve the issue.
Major construction cost increases over the last several years,
combined with statutory cost-indexing and the inability to prepare
cost-effective bid packages due to low appropriations levels, are
unnecessarily increasing overall project costs to the taxpayer for
tribal construction projects and pushing the date of completion of
these projects further and further into the future. The current
circumstances are as follows:
<bullet> According to various federal and industry indices,
construction costs are increasing by at least 10 percent or
more per year;
<bullet> Congress and the Department of Interior generally provide
small amounts of construction funding each year to any single
construction project, which often does not even keep up with
statutorily mandated cost indexing, let alone regional and
nation-wide inflation;
<bullet> Total project costs increase if bid packages are smaller,
and decrease with larger bid packages;
<bullet> Current interest rates for borrowing money remain
historically low.
Under these circumstances, financing construction projects makes
good economic sense and is sound public policy. Tribes can build their
respective projects using cost-effective bid packages, and in current
dollars, before construction costs increase even further. Because of
the statutory cost indexing for many authorized projects, tax-exempt
bond financing (or other modes of financing) would save the federal
government and the U.S. taxpayer substantial costs over the life of the
project. It would also allow tribes to build their projects faster,
thus bringing the benefit of these projects to tribal and rural
communities much sooner than if traditional ``pay-as-you-go'' financing
is used. Moreover, because interest rates for borrowing money remain
historically low for all types of financing, contracting and compacting
tribes should be able to obtain financing at favorable rate of
interests.
Therefore, we have proposed the attached ``technical'' amendment to
the ISDA at 25 U.S.C. 450j-1(k). That subsection of the ISDA provides a
non-exhaustive list of costs that are allowable without approval of the
Secretary of the Interior. Our proposed amendment would add the
following provision to the list:
(11) Interest payments, retirement of principal, costs of
issuance, and costs of insurance or similar credit support for
a debt financing instrument, the proceeds of which are used to
support a contracted construction project.
This provision would benefit tribes contracting for specific
construction projects under Title I of the ISDA, as well as tribes
carrying out construction projects under Title IV Self-Governance
agreements, because they could opt to include this Title I provision in
their compacts.
This so-called ``flexible financing'' model has already proven
effective in the Indian Reservation Roads (IRR) construction arena. The
provisions of the SAFETEA-LU legislation and its regulations
specifically authorize States and tribes to use bonds or other debt
financing instruments to pay for project construction costs, and then
use federal appropriations to pay back the financing costs over time.
The Standing Rock Sioux Tribe was at the forefront of flexible
financing in the road construction arena. The Tribe was able to
successfully complete a $26.5 million roads project in three years,
utilizing annual IRR Program funding to partially pay for a private
bank loan. The Tribe's experience serves as a model for demonstrating
that flexible financing can be a win-win situation for both tribes and
the Federal government. Assuming a conservative 5 percent construction
cost inflation over time, the Tribe has calculated that, by utilizing
flexible financing, the Tribe saved $27 million in overall project
costs. In recent years, construction cost inflation has been more in
the range of 8 percent to 15 percent, depending on the type of
materials and certain geographical considerations, so the actual
savings were probably substantially greater. It is also important to
note that this savings calculation does not take into account the
additional transaction costs and bid-price increases necessitated by
pay-as-you-go financing, which forces a tribe to bid out smaller
components of the project each year, rather than achieving economies of
scale with large bid packages. Standing Rock Sioux Tribal officials
estimate that each additional bid package incurs between $100,000 and
$125,000 in additional transaction costs for the project. Eliminating
these unnecessary costs results in still more total project savings
over time. Furthermore, in the Standing Rock Sioux Tribe roads
scenario, the Tribe took out loans in the amount of 6.125 percent
interest. For water project construction, discussed further below,
tribes have taken out U.S. Department of Agriculture (USDA) loans
(often attached to USDA grants) at rates between 4.0 percent and 4.5
percent. With a lower interest rate, one would expect the total project
savings to be even greater over time with flexible financing.
We are particularly interested in flexible financing as it relates
to our municipal, rural, and industrial water projects--and our Tribes
have been battling with the Department of Interior to recognize that
financing costs are allowable costs for these vital water projects.
Each of our respective Tribes has contracted with the Department of
Interior under the ISDA to construct the important drinking water
systems that will provide safe, clean drinking water to our residents
and communities. The construction of drinking water systems is
essential to revitalize economic growth on our respective Reservations,
and the United States government has made repeated promises to our
Tribes to provide a safe and plentiful domestic water supply. However,
our drinking water systems are far from complete, and federal funding
has historically been inadequate to keep up with inflation and cost-
indexing. Many families on our Reservations must still clean dishes and
bathe themselves and their small children in brown well water that
reeks of heavy minerals such as manganese, coal, iron and lime. These
unhealthy minerals also exacerbate the dangerously high level of
diabetes in our communities. As a result, many families in our rural
communities still haul in or truck in potable water to their homes,
making life on the Reservation expensive and inconvenient. To speed
these important drinking water projects along, we have taken it upon
ourselves to find alternative sources of supplemental funding, such as
grants and loans from the USDA.
A Department of Interior administrative ruling has already held
that debt financing is an allowable use of federal funds under a
tribe's Indian self-determination agreement when the debt instrument is
used to pay for valid water construction costs. The Three Affiliated
Tribes of the Fort Berthold Reservation had to bring a lawsuit against
the Bureau of Reclamation in 2005 to gain recognition that the Tribe's
successful financing of a small portion of the water system
construction project through low-interest USDA loans could be repaid
with ISDA contract funds. Ultimately, the Administrative Law Judge
ruled for the Three Affiliated Tribes, holding that these were
allowable costs under current law. See Three Affiliated Tribes of the
Fort Berthold Reservation v. Great Plains Regional Dir., Bureau of
Reclamation, IBIA 05-7-A, at 25-31 (Dec. 22, 2005). However, the
Department of Interior has refused to recognize this principle for
other tribes or other types of financing instruments. For example, the
Assiniboine and Sioux Tribes of the Fort Peck Reservation have so far
been unable to negotiate language into their Fiscal Year 2008 Annual
Funding Agreement (AFA) with the Bureau of Reclamation which would
allow for reimbursement of financing costs. The Assiniboine and Sioux
Tribes may be forced to bring yet another lawsuit against the Bureau to
gain federal recognition of a legal right that should now be well-
recognized. Our respective Tribes' discussions with the Interior
Solicitor's office on this issue have also been unfruitful.
This impasse between our Tribes and the Department of Interior
prompted Senator Conrad, joined by co-sponsors Senator Johnson and
Senator Tester, to introduce S. 2200--the Tribal Water Resources
Innovative Financing Act--in October last year. That bill would affirm
the ability of Indian tribes to use flexible financing techniques to
advance the construction of critical water projects. We respectfully
request that you join Senator Conrad in sponsoring and supporting this
important legislation, so that tribes can finance drinking water
construction projects in today's dollars, bringing these important
projects to completion much sooner and more cost effectively than could
occur with traditional pay-as-you-go funding methods.
However, this issue is not limited to roads projects or drinking
water projects. The reasons why the financing of these projects makes
sense apply with equal force to any construction projects under the
ISDA--including schools, health care facilities, waste and wastewater
treatment facilities, government offices, and any other vital
infrastructure.
We believe that the ISDA already provides that financing costs are
allowable costs for construction projects, in accordance with the
ruling of the Administrative Law Judge in the Three Affiliated Tribes
case. However, due to the reticence of the Department of Interior, we
respectfully urge you to pass the attached legislation to affirm this
principle for all contracting tribes-including tribes carrying out
construction projects under both Title I Self-Determination contracts
and Title IV Self-Governance arrangements.
We thank the Committee for providing oversight on these important
issues and for the opportunity to present this testimony.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
______
Prepared Statement of Chad Smith, Principal Chief, Cherokee Nation
On behalf of the Cherokee Nation, please accept the following
remarks regarding the successes and shortfalls under the Indian Self-
Determination and Education Assistance Act (ISDEA) after twenty years
of existence. I want to thank you for convening this hearing to discuss
important issues affecting Indian Country specifically contract support
costs and Title IV Amendments.
Introduction
The Cherokee Nation (Nation) is a government, cultural entity,
social service agency, and regional development organization deeply
committed to advancing the health and social well-being of its citizens
through the improvement of its communities, creation of a strong
economy, and preservation of the Cherokee language. The Nation was one
of the first tribes in the United States to execute a self-
determination contract under the original ISDEA and in 1990 executed a
self-governance agreement under ISDEA, Title III. Since 1994, all of
the Nation's self-determination programs have been administered under
Self-Governance compacts with the Department of the Interior and the
Department of Health and Human Services.
Title IV Amendments
The United States Constitution recognizes Indian nations as
governments. Hundreds of treaties, federal laws and court cases have
reaffirmed that Indian nations retain the inherent powers to govern
themselves. Since the passage of the Indian Self-Determination and
Education Assistance Act in 1975, tribes have been enabled to
administer programs and services formerly administered by the Bureau of
Indian Affairs and the Indian Health Service on behalf of their people.
The law was amended in 1988 and in 1994 to broaden the scope of Self-
Governance and tribes began to negotiate Self-Governance agreements
with the Federal Government. In 2000, Congress enacted further
amendments authorizing Self-Governance as a permanent option for Indian
Health Service.
The Cherokee Nation was among the first ten Self-Governance tribes
and has experienced great success designing and delivering services
based upon the needs and priorities of our citizens rather than based
upon federal priorities. The successes of Self-Governance tribes are
due in part to local control of service delivery, flexibility of
resources, partnership development and collaboration with other local
governments and an overall ability of a people to govern themselves and
thereby control their destiny.
However, there still remain obstacles to overcome in order for
Self-Governance to reach full potential. The proposed tribal amendments
to Title IV of the Indian Self-Determination and Education Assistance
Act have been drafted to fulfill important purposes such as to ensure
consistency between Title IV and Title V (the permanent Self-Governance
authority within the Department of Health and Human Services enacted in
2000) and to clarify statutory requirements governing construction-
related matters.
The Cherokee Nation has been actively involved in the Title IV
Amendments Workgroup and proposed language to address tribal concerns
regarding section 405(e) existing and subsequent funding agreements. It
has been the experience of Cherokee Nation that an inequity in
negotiation power has existed between the parties, due in large part,
to the Department of Interior's ability to withhold payment if the
tribe does not agree to the terms of the Department. In recent years,
the reality of negotiations has been ``agree to the terms, or don't get
paid.'' Conversely, under negotiations with the Indian Health Service,
funds due to the tribe continue to be paid under Title V Section 505
(e) Subsequent Funding Agreements. This allows for the parties to
concentrate on reaching compromise on the issues and for true
negotiations to occur.
Recommendation: It is imperative to the furtherance of Self-
Governance that the same provisions and interpretations afforded under
Title V with Indian Health Service be extended to the Bureau of Indian
Affairs under the Title IV Amendments.
Contract Support Costs
While enactment of the ISDEA has provided a solid foundation for
the Cherokee Nation and other Tribes throughout the United States to
chart a course for self-determination, it is greatly hampered by the
lack of the Federal Government's commitment to providing funding for
contract support costs that has made it difficult, if not impossible,
for Tribes to enter and maintain ISDEA compacts and contracts.
Pursuant to the Nation's compact with the Department of the
Interior, the Nation administers a wide array of Federal Government
programs serving Indian people, including credit and finance programs;
agricultural, forestry and real estate services; tribal courts; social
services, Indian child welfare and housing improvement programs; a
general assistance program; Johnson O'Malley education programs; law
enforcement services; the Indian Reservation Roads construction,
planning and maintenance programs; Individual Indian Money services;
higher education and adult education services; and child abuse and
early childhood wellness programs.
Under the Nation's Self-Governance compact with the Department of
Health and Human Services, the Nation operates six rural outpatient
clinics providing Indians with primary medical care, dental services,
optometry, radiology, mammography, behavioral health services, medical
laboratory services, pharmacy services, community nutrition programs,
and a public health nursing program. The Nation also operates inpatient
and outpatient contract health services programs for management of
specialty care.
The Cherokee Nation has been able to make tremendous improvements
to these formerly Federal programs and services. The ISDEA has enabled
the Nation to resume responsibility for its own affairs and carry out
these programs and services in a more responsive and accountable manner
for the benefit of Indian people. Unfortunately, the Nation's progress
has been severely impeded by the Federal Government's failure to fund
required contract support costs as mandated by ISDEA, despite the
efforts of Congress to prevent such systematic underfunding of contract
support costs by making several strengthening amendments to the act in
1988 and 1994.
Since the time of the Nation's first Self-Governance compact with
the Department of the Interior in 1990, the Nation has never been fully
funded with contract support costs as mandated by ISDEA. The Bureau of
Indian Affairs (BIA) neglects to provide to the Nation in excess of a
$900,000 in contract support costs annually.
On May 8, 2006 the BIA signed a Contract Support Cost Policy that
became effective in Fiscal Year 2007. This policy now allows the
payment of Direct Contract Support Costs (DCSC) in addition to the
payment of Indirect Contract Support Costs (IDC). A workgroup comprised
of federal and tribal representatives has been organized to assist in
the implementation of this policy including the development of the
annual BIA CSC Shortfall Report to Congress. Historically since 1998,
the Department of Interior has not filed these reports consistent with
Section 106(c) of the ISDEA.
The Indian Self-Determination Fund (ISDF), also known as Contract
Support Costs (CSC) Pool 1, is no-year (available until spent)
appropriations. At this time, the only funds available to pay start-up
and CSC for new contracts are funds from prior year's appropriations.
No recurring appropriations have been made to the ISDF, therefore once
the prior appropriations are gone there are no CSC funds available for
new assumptions. Currently, a tribe may utilize the ISD Fund to assume
BIA programs for the first year but will have to incur the full CSC for
that new program from direct program dollars thereafter.
Recommendation: In addition to fully funding Contract Support
Costs, the Nation requests recurring appropriations be made to the BIA
Indian Self-Determination Fund (ISDF), also known as CSC Pool 1.
As for the Indian Health Service (IHS), in 1992 and 1994,
respectively, the Nation assumed operation of the Redbird Smith Health
Center in Sallisaw, Oklahoma, and the Wilma P. Mankiller Health Center
in Stilwell, Oklahoma. In 1995, the Nation began administering the W.W.
Hastings Indian Hospital contract health program outpatient program,
and in Fiscal Year 1997, the Nation assumed control of the facility's
contract health program inpatient program. Until September 1999, the
Nation did not receive ANY contract support funding for the operation
of these four multi-million dollar programs. In FY 2007, the Nation was
funded at only 63 percent of its requirement for contract support for
IHS programs, a shortage of $3.9 million per year. Despite the lack of
adequate contract support funds, the Nation realizes the benefits and
opportunities of exercising self-determination through ISDEA and
remains committed to undertaking additional programs and services
previously administered by the Federal Government. However, the lack of
contract support funds have served as a disincentive for tribes to
further compact and contract with the Federal Government under ISDEA.
The Nation recently opened a 105,000 square-foot clinic in
Muskogee, Oklahoma through the IHS Joint Venture program. The Nation is
extremely supportive of the Joint Venture Program as it demonstrates
the shared commitment of the Nation and the Federal Government in
providing additional health facilities for the Indian population. The
Muskogee Clinic will have an operating budget of approximately $24
million annually to serve an estimated 7,576 users in its first year of
operation (10,396 projected in FY 2015). The new services will include
primary care, maternal and child care, dental care, eye care,
audiology, pharmacy, physical therapy, and many other vital services.
The Nation provided nearly $23 million of Tribal funds to bring a much
needed facility to serve the Indian population in the Muskogee area.
When a Joint Venture is entered into between a tribe and the IHS,
the IHS agrees to fund the operational and equipment costs for the
facility, and the tribe agrees to fund the design and construction
costs. Although it is mandatory that Contract Support Costs (CSC) are
added to direct operational costs, it is neither included as part of
the Joint Venture Agreement nor submitted by the IHS and therefore, not
appropriated by Congress as part of the cost of Joint Venture project.
CSC is a legitimate component of costs to operate a new facility;
however, it is not planned for in the operational start-up costs in
either the Facilities Appropriation or the Joint Venture account. This
presents a critical policy issue, where the IHS has committed by way of
a Joint Venture agreement to fund the operational costs for the
facility, but has not acquired sufficient appropriations to fulfill its
end of the bargain when a Tribe chooses to operate the facility.
Estimates indicate the Nation's current rate for indirect costs
(which comprise the majority of contract support costs) would require
an additional $6.7 million annually for the Muskogee Clinic. In order
for the continued success of the Joint Venture program, the Nation
strongly believes that contract support funds are included as a
component of the program. Without such funding, resources must be
diverted from patient care to necessary administrative services
resulting in diminished health care services.
Recommendation: When IHS has contracted to fund the operational and
equipment costs for a facility, the IHS should submit to Congress the
total cost of that commitment. The Contract Support Costs should be
included as part of the total project cost within the Joint Venture
Agreement.
In January 2008, the Cherokee Nation initiated the process to
undertake operations of all applicable programs, services, functions
and activities (PSFAs) at the W.W. Hastings Indian Hospital in
Tahlequah, Oklahoma. The decision is based on years of careful
consideration and will enable the Nation to provide a comprehensive
health care system for the use and benefit of all eligible
beneficiaries consisting of a hospital, clinics, and various programs
within the area for the use and benefit of all eligible beneficiaries.
Negotiations are currently underway and the Nation intends to
assume operations of the facility on October 1, 2008. Preliminary
estimates indicate that the Nation's current rate for indirect costs
(which comprise the majority of contract support costs) would require
an additional $4 million annually for the W.W. Hastings Hospital. The
contract support needs due to the additional programs and services
assumed at the Muskogee clinic, as well as the impending programs and
services at W.W. Hastings Hospital, indicate additional financial
burden for the Nation, as well as the entire Indian health system,
absent congressional intervention.
The contract support cost problem has caused severe financial
strains on the Nation's programs and facilities, as it has for many
other tribes in the country. Since contract support costs are fixed
costs that a contractor must incur, Tribes typically either (1) reduce
funds budgeted for critical healthcare, education and other services
under the contract in order to cover the shortfall; (2) they divert
Tribal funds to subsidize the federal contract (when such Tribal funds
are available); or (3) they use a combination of these two approaches.
The Nation remains committed to the furtherance of a comprehensive
health care system because the imperative of self-governance is that
important. Despite the lack of adequate funds to carry out services and
activities through ISDEA compacts, including program funding cuts and
underfunded contract support, the Nation can provide more efficient,
and cost effective services as well as provide continuity of services
to our citizens.
Given the conduct of the agencies and recent court decisions, it is
clear that reforms are needed. Congress intended that tribes would be
fully paid contract support costs if they agree to take over the
administration of these Federal programs. But that is not what has
happened, and the courts have been slow to respond, if at all.
Recommendations: Some of the reforms to the contract support costs
system should include:
Specifically mandate that Indian Health Service utilize any
unobligated balances from prior appropriations Acts to make payments to
tribes or tribal organizations for contract support costs. The IHS
already has this authority but has made a policy decision to not make
these funds available to meet the contract support cost obligations
associated with contracts, self-governance compacts, or annual funding
agreements. This resolution would have no impact to the total
appropriations to Indian Health Service.
Resolving the accounting quagmire created when the government-wide
indirect cost rate is not followed by all government agencies. This
accounting mess has led not only to an under-calculation in indirect
cost rates, but it has also severely strained the ability of tribes to
operate all their Federal programs across all agencies within OMB's
guidelines. For nearly 20 years tribes have called for reform in this
area. It is also critical that Congress uphold existing statutory
flexibility in the expenditure of self-governance funds, to best meet
special or unique local needs, when self-determination funds are pooled
with other funds in each tribe's ``indirect cost pool.''
Strengthening the mandate to fully fund contract support costs by
removing ``availability'' clauses. Courts have at times interpreted the
``availability'' clauses to negate the mandate to fund contract support
costs, an interpretation that effectively downgrades the Nation's
government contracts, negotiated in good faith, to something more akin
to a discretionary grant.
When discussing contract support costs, Tribes often state that the
greatest threat to the success of ISDEA is the failure to fully fund
contract support costs. The Nation fully agrees with that statement as
it has indeed been one of the greatest problems impeding the Nation's
progress. The Nation believes that there is so much more that can be
done, and so much more that must be done, to meet the critical health,
education, economic and social needs of Cherokee citizens and all other
Indians eligible for our services. The Nation is confident in its
abilities to carryout the Federal Government's trust programs, however,
the Nation's ability to administer these programs successfully and to
maximize delivery of high quality services to Indian people, depends on
having adequate contract support cost funding.
The United States Supreme Court recognizes that contract support
costs are a contract obligation that must be paid and the current
system simply should not go on any longer. Neither the BIA nor IHS pays
full contract support costs even though all other Government
contractors receive their full administrative overhead when they deal
with the Federal Government. Although Tribes enter into these
agreements and take over significant responsibilities from the Federal
Government, the Nation is consistently treated as a second-class
contractor, which is unacceptable. Neither agency even requests full
contract support funding from Congress, at times because they haven't
the will, and at other times because the Department or the Office of
Management and Budget stands in the way. And, of course, there are
other, competing demands on the appropriations committees.
Recommendation: After pursuing legal remedy which lasted ten long
years, the United States Supreme Court, by unanimous decision, applied
traditional government contract law to conclude that the government is
liable whenever it fails to pay fully on a contract and where
appropriations are legally available to pay the contract. The Nation
strongly urges Congress to fully fund Contract Support Costs.
Closing
In closing, the Cherokee Nation commends the Senate Committee on
Indian Affairs for its continued efforts to address the insufficiencies
regarding contract support costs and the Nation looks forward to
working with Congress to address this long standing issue that greatly
impedes the ability of Tribes to function as thriving, responsible
governments.
Thank you for holding this oversight hearing on ``The Success and
Shortfall of Self Governance under the Indian Self-Determination and
Education Assistance Act after Twenty Years'' and for your work on
behalf of the Cherokee people and your continued support in Indian
Country. Should you require additional information, I encourage you to
contact Cherokee Nation's Senior Legislative Officer, Paula Ragsdale.
______
Joint Prepared Statement of Marie Carroll, President, Arctic Slope
Native Association; John ``Chance'' Houle, Chairman, Chippewa Cree
Tribe of the Rocky Boy's Reservation; Gregory Pyle, Chief, Choctaw
Nation of Oklahoma; Harold Frank, Chairman, Forest County Potawatomi
Community; Andy Tueber, President, Kodiak Area Native Association;
Alonzo Coby, Chairman, Shoshone-Bannock Tribes of the Fort Hall
Reservation; Nancy Egan, Chairwoman, Shoshone-Paiute Tribes of the Duck
Valley Reservation; and Linwood Killam, CEO, Riverside-San Bernardino
County Indian Health, Inc.
We write as leaders of several Tribes and Tribal Organizations to
convey our very strong support for reform in the Nation's treatment of
Tribes administering essential Indian Health Service and Bureau of
Indian Affairs governmental programs under Title I, Title IV and Title
V of the Indian Self-Determination Act of 1975. It is absolutely
critical that Congress at long last see to it that our self-
determination contracts and compacts are fully paid, including our full
contract support cost requirements due under those contracts and
compacts.
The Indian Self-Determination Act has long been a beacon of hope as
our Tribal communities recover from decades of abuse and neglect. By
contracting and compacting for the management of IHS and BIA programs
benefitting our communities, we have traveled far down the road of
reestablishing and strengthening Tribal Self-Determination, precisely
as Congress envisioned in 1975. We have also provided an invaluable
service to the United States, by simultaneously helping reduce the size
of the Federal bureaucracy and increasing and enhancing the quality of
Federal programs serving Native American people.
But the Federal Government has not always honored its commitment
under these agreements, and historically we have suffered increasingly
large shortfalls in the Government's payment of our contract support
cost requirements.
In its 1988 reforms to the Indian Self-Determination Act, Congress
recognized that the payment of contract support costs, much like
general and administrative costs incurred by any government contractor,
was critical to the success of Tribal Self-Determination. These
contract support costs represent our fixed costs of carrying out our
agreements with the Federal Government. Contract support costs are the
costs of our Federally mandated audits. They are the costs of our
worker's compensation insurance for our police officers, our doctors
and our nurses. They are the costs of our accounting systems. They are
fixed costs that must be incurred year in and year out, and these costs
are annually audited by independent certified public accountants, all
as required by Federal law.
Most of our Tribes and Tribal organizations lack any collateral
source of funds to cover these fixed costs. As a consequence, when the
Indian Health Service or the Bureau of Indian Affairs fails to pay
these costs, the only option we have is to cut services. Ultimately,
then, our very own Indian people are penalized by the Federal
Government's failure to honor the self-determination agreements that
Congress in 1975 urged our Tribes to take on.
The growing crisis caused by continuing shortfalls in contract
payments owed to Tribes and Tribal organizations is reflected in
substantially reduced contracting and compacting initiatives, layoffs,
and reductions in force among program personnel administering these
agreements, as well as in the increasing possibility of wholesale
retrocessions of contracted programs back to the Federal Government. We
respectfully call upon Congress to focus its attention immediately on
this crisis, before it is too late.
We respectfully urge Congress to consider the following multi-
faceted approaches to addressing the current crisis.
First, if members of Congress have any lingering doubt as to the
critical nature of contract support cost payments, and the terrible
impact continuing shortfalls in those payments have on Tribes and
Tribal organizations, then Congress should direct the General
Accountability Office, IHS, and BIA to report to Congress in detail.
The GAO and the National Congress of American Indians each provided
reports to Congress in 1999, providing a strong record for renewed
action today. But if further investigation is necessary, then GAO
should be tasked with primary responsibility for swiftly updating its
1999 report.
Second, the Bureau of Indian Affairs--which only adopted a
comprehensive policy on contract support costs in 2006, 31 years after
Congress passed the Indian Self-Determination Act--must be directed to
commit substantial resources and personnel to strengthening its ability
to accurately administer the BIA's responsibilities under the law.
Recent experience shows that the BIA is still ill-equipped to properly
carry out its responsibilities for accurately determining contract
support cost requirements, and accurately allocating its appropriation
to pay those requirements.
Third, the National Business Center should be prohibited from
unilaterally altering its methodology for determining Tribal indirect
cost rates. NBC sets the rates for most Tribes and Tribal organizations
that contract or compact with the BIA, and for 80 percent of the Tribes
and Tribal organizations that contract with IHS. As such, it is
imperative that NBC's methodologies not be changed without extensive
advance Tribal consultation, followed by formal notice and comment.
Fourth, Congress should consider legislation to facilitate the
resolution of historic breach of contract claims against the Indian
Health Service. In recent years the courts have permitted class actions
to address the Governments's liability for underpaying contract support
costs due under the BIA's contracts and compacts. However, and quite
inconsistently, the courts have not permitted liabilities over IHS's
failure to pay full contract support cost requirements to be resolved
in an identical manner. As a result, although the Supreme Court in the
Cherokee Nation case found IHS's conduct in the period 1994-1997 to be
unlawful, only 6 out of over 330 Tribes have ever been able to recover
compensation.
In the short term, we urge Congress to clarify Tribal rights in
this area by extending the statute of limitations for pursuing claims
to at least December 31, 2010. In the long term, we urge Congress to
consider establishing an alternate mechanism--one that would not
require litigation--for arriving at fair compensation for the contract
underpayments that occurred during the Cherokee period.
Any reform legislation in this area must recognize that the
Government continues to face litigation over its contract support cost
payments in more recent years, including claims filed by most of our
Tribes and Tribal organizations. The Government's liability for IHS and
BIA underpayments in more recent years is presently being litigated.
Since the courts have not finally spoken to the Government's liability
in these more recent years, it is sensible for Congress to limit reform
legislation in this area to the resolution of claims arising during the
Cherokee years only.
Fifth, we respectfully urge Congress to draw upon two sources to
finally close the gap in future contract support cost payments. First,
new appropriations are vitally needed in sums that will substantially
reduce the gaps in contract obligations--which currently hover near $50
million for the BIA and well over $100 million for IHS. In addition,
Congress should commit a fixed amount of each agency's prior year
unobligated balances toward this effort. Tapping into each agency's
prior year unobligated balances to cover current contract support
shortfalls is certainly a higher priority than tapping into those funds
to support internal agency administration (as currently occurs with the
BIA in the area of trust reform).
Finally, Congress should give active consideration once again to
the proposals (as contained in years past in S. 2127 and H.R. 4148), to
create an automatic payment mechanism that would operate independently
of the ordinary appropriations cycle, for contracts that have been
lawfully awarded under the Indian Self-Determination Act.
Alternatively, we recommend that Congress eliminate the current
earmarking ``not to exceed'' caps that inhibit the agencies' ability to
pay full contract support costs. Under these earmarks, the agencies
insist they have no options when they underpay our contracts. While we
do not agree with the agencies on this point, it is clear that, so long
as these earmarks are in place, the agencies cannot exercise any
discretion to reach into the remainder of their appropriations. Prior
to 1998 (for the Indian Health Service) and 1994 (for the Bureau of
Indian Affairs) no earmarks limited the agencies' discretion in this
respect. If Congress would eliminate these earmarks, the agencies would
once again have the authority to reach into other portions of the
agencies' appropriations to pay these contracts. It is apparent from
the Cherokee litigation that the agencies at the time did not
understand they had such authority. With new guidance from the Supreme
Court on this issue, removing the caps would permit contracting Tribes
and the agencies to work together to manage Congress's overall
appropriations consistent with the Government's contractual
obligations.
Before closing, we also respectfully urge Congress to making a
number of improvements to the Indian Self Determination Act. Among
these:
<bullet> Congress should prohibit IHS or the BIA from declining to
award a contract, whether in its entirety or in part, due to an
agency concern that appropriations may not be available to
fully pay the contract. Whether appropriations will be
available to fully pay a contract is a matter exclusively
within the province of Congress to decide, not the agencies.
<bullet> Similarly, Congress should prohibit IHS and the BIA from
refusing to award and fund a subsequent funding agreement,
either based upon agency concerns over available appropriations
or (as has frequently happened in recent years) over an
agency's unilateral imposition of new contract language on a
Tribe. Although such language is included in proposed
amendments to rewrite Title IV of the Indian Self-Determination
Act, we make special note of the critical and immediate
importance of this particular reform.
<bullet> Congress should direct the BIA to develop a comprehensive
tribal shares identification and distribution process, much as
the Indian Health Service did in the mid 1990s. Such a process
will permit Tribes to bring resources currently retained in the
BIA regional offices down to the agency and reservation levels.
For similar reasons, Congress should eliminate the current
appropriations rider which protects the BIA central office from
the tribal shares process--again, a process which IHS
Headquarters has carried out since the mid-1990s.
<bullet> Congress should develop amendments to the Indian Self-
Determination Act that would make Tribal employees carrying out
self-determination programs eligible for participation in the
Federal retirement and health insurance systems. Such a
provision would substantially reduce the need for ``direct''
contract support costs currently furnished to pay such
benefits, while helping maintain parity between direct service
programs and contracted and compacted programs.
<bullet> Congress should clarify that Congress's approval of program
expenditures set forth in section 106(k) of the Act includes
expenditures made from Tribal indirect cost pools.
<bullet> Congress should accelerate to February 1 the deadline for
IHS and BIA to furnish their section 106(c) annual shortfall
reports to Congress, so that Congress can consider such reports
when entertaining supplemental appropriations bills.
Thank you for the opportunity to offer testimony in connection with
the Committee's May 13 hearing, and for holding the record open to
receive these remarks.
______
Prepared Statement of Melanie Benjamin, Chief Executive, Mille Lacs
Band of Ojibwe
Good afternoon, Chairman Dorgan, Vice Chair Murkowski, and members
of the Committee. My name is Melanie Benjamin. I am the elected Chief
Executive of the Mille Lacs Band of Ojibwe.
The key message in my testimony is this--I urge you to introduce
and work to secure Senate and House passage this year of the compromise
tribal legislative provisions to reform Title IV, the self-governance
portion of Public Law 93-638 that governs relations between the
Interior Department and tribes like the Mille Lacs Band. Enactment of
these provisions will remove many obstacles to greater tribal self-
governance.
I have a second message which is in response to a critical on-going
issue on our Reservation. In 2007, University of Minnesota Law
Professor Kevin Washburn testified before your committee about law
enforcement matters and detailed a law enforcement crisis our Band is
facing due to a hostile relationship with Mille Lacs County, which
asserts that our Reservation no longer exists. In response to critical
public safety issues on our Reservation, Professor Washburn asked the
Committee to consider legislation that would create an escape valve
from Public Law 83-280 when state retrocession of criminal jurisdiction
to the Federal Government is not an option. We believe that Self-
Governance would be an appropriate vehicle for developing such
authority under which the Secretary and Tribe could enter into a direct
agreement under Title IV when the state is being non-responsive to
public safety concerns.
I made the same request of Chairman Rahall when I testified before
the House Natural Resources Committee on Self-Governance matters. We
would like to work with the Committee to develop such authority and
make it part of Title IV.
Background
The Mille Lacs Band has long been a leader among other Tribes in
seeking greater tribal self-governance authority and in putting it into
practice. The Band was among the first ten Indian Tribes to participate
in self-governance with the Bureau of Indian Affairs (BIA) in the late
1980s and the first Tribe to negotiate an agreement with the Indian
Health Service (IHS) in the early 1990s.
It has been 20 years since the beginning of tribal self-governance.
Two tribal leaders--Wendell Chino and Roger Jourdain--brought this
concept to the forefront in 1987 as the country was planning the
bicentennial celebration of the United States Constitution. Chino and
Jourdain called for a meeting of tribal leaders in Kansas City to
discuss the 200th anniversary and the need for changes in federal
Indian policy.
Tribes' participation in the bicentennial of the Constitution's
signing was significant. They provided research on what the
Constitution's framers envisioned as the basis of governance and
presented information on the Constitution at the Philadelphia
symposium. They also raised awareness about the U.S. Constitution being
modeled on the Iroquois Confederacy and the Constitution's outlining of
the special relationship between tribes and the Federal Government.
In addition, ten tribes met with Congress to discuss problems in
Indian Country; three main problems were identified: the plenary power
of Congress; the relationship between Indian tribes and the United
States; and the working relationship with the Bureau of Indian Affairs
(BIA). Congress addressed one of these issues by giving each tribe
$100,000 to find a better way to work with the BIA under the Self-
Governance Demonstration Project which became Title III of P.L. 93-638.
The tribes agreed to this action, and each tribe drafted its proposal.
The tribes also agreed that they needed to be treated as governments
like they were during the treaty-making era, when tribes met with the
President on a government-to-government basis. The transition from the
former federal Indian policy of Self-Determination to Self-Governance
was a logical step.
On the 20th anniversary of Self-Governance policy, the question is:
Has Self-Governance resulted in improvements in Indian Country? For the
Mille Lacs Band of Ojibwe, self-governance has led to a number of
successes: First, all six other Chippewa Bands in Minnesota have
negotiated and signed Self-Governance compacts with the Federal
Government, which has increased cooperation among member bands with the
Mille Lacs Band of Ojibwe. Second, the Mille Lacs Band has improved its
government by developing laws and a separation-of-powers system of
government. Third, the Band's main source of financial success has been
its two casinos, which are operated by a separate corporate system.
Without Self-Governance, the Band could not have developed these
businesses to the level they are today. The Band's departments were
allowed to work directly with federal agencies to ensure compliance
with federal requirements, which saved time in developing these
businesses.
Other opportunities that would not have been made available under
past policies include: resolving issues with state government, setting
up partnerships with businesses, improving government structure,
working with other tribal governments, and better financial management.
Finally, the Band's tribal government is better able to establish
government-to-government relationships with the Federal, state, county
and municipal governments.
In the years since Self-Governance was first established as federal
law, we have worked closely with this Committee and other Tribes to
reform the law so as to permit greater tribal self-governance authority
that curbs the federal bureaucracy's insatiable appetite to dominate
tribal operations. Unless the Bureau of Indian Affairs and the Office
of Special Trustee are controlled by the law, they tend to restrict
tribal authority, priorities, administration, and programs.
We are, today, at a point where we must ask the Congress to step in
once again and change the law to remove more obstacles to tribal self-
governance.
As you know, four years ago, this Committee favorably reported out
a predecessor bill, S. 1715, the Department of the Interior Tribal
Self-Governance Act of 2003 (Senate Report No. 108-413, Nov. 16, 2004),
but the full Senate never voted on it.
Enact the Draft Tribal Bill
The efforts of the past seven years to reach agreement with
Interior on specific changes to the Title IV statute have borne great
fruit. The Tribal and Interior representatives have listened to each
other and found ways to accommodate the other's concerns.
The attached tribal draft bill reflects these compromises. But more
importantly, it represents a huge concession on the part of the
Tribes--it completely drops all provisions which would have made
mandatorily applied self-governance to non-BIA and non-OST offices of
the Department like the National Park Service and Fish and Wildlife
agencies.
While the Mille Lacs Band very much regrets having to make this
compromise, we agree with our fellow Tribes that it must be made in
order to clear the way for enactment this year of much-needed self-
governance reforms that focus on BIA and OST and with which the
Department has shown substantial agreement.
Like other Self-Governance Tribes, we reluctantly give up,
temporarily, our request for the application of tribal self-governance
authority to every corner of the Department of the Interior. We do so
only in order to remove the remaining Departmental objections to
enactment of the rest of the tribal draft bill in 2008.
A House version of this legislation, H.R. 3994, is currently under
review by the House Natural Resources Committee. The House Committee
has told us it expects to mark up the bill in the next month. We hope
that you will introduce a companion bill in the Senate and that this
critical legislation can be enacted during this session of Congress.
The draft legislation I have attached to my testimony is substantively
identical to H.R. 3994.
Why the Tribal Reform Bill is Needed
A. The Bill Will Remove Dual and Overlapping Requirements
Mille Lacs and many other Tribes have self-governance agreements
with both IHS and BIA. But because Congress enacted Title IV governing
BIA in 1994 and Title V governing IHS in 2000, Title IV and Title V now
contain provisions that differ from each other and thus require self-
governance tribes to operate separate administrative structures and
systems for programs funded by BIA and IHS.
Congress expanded tribal authority and flexibility when it enacted
Title V governing IHS-funded programs. But the same Tribes still labor
under the more restrictive authority of Title IV governing BIA-funded
programs. These dual requirements are an administrative and cost burden
to Tribes like Mille Lacs Band. And they deter Tribes from assuming
more federal program administration under self-governance authority.
B. The Bill Will Expedite Negotiations and Reduce Conflict
The bill would make significant improvements to the negotiation and
implementation of self-governance agreements. Negotiation disputes
would be resolved quickly with uniform standards. It would clarify and
limit how the BIA may decline to enter into a proposed agreement, and
the time frame for making its decision. It would require that funds be
transferred promptly after they have been apportioned to the
Department. It would streamline how construction provisions would be
implemented. And it would protect tribes from BIA attempts to impose
unilaterally terms in compacts or funding agreements. Finally, it would
provide a clear avenue of appeal and burden of proof for Tribes to
challenge adverse agency decisions.
C. The Bill is Modeled After the 8-Year-Old IHS Law
As you know, Congress in 2000 enacted Title V to govern tribal-
self-governance agreements with the IHS. Title V, which has worked very
well in the context of health care services, served as the model for
the tribal draft bill on Title IV. None of the several provisions of
the draft tribal Title IV bill that BIA refuses to support has caused
the IHS any heartburn over the past eight years. Self-Governance, by
definition, will always reflect an inherent tension between Tribes and
the BIA. Any federal bureaucracy will try to avoid yielding its
authority--and its funding--to tribes. This Committee, and the Senate
and Congress, should keep this in mind when weighing the persuasiveness
of any continuing objections raised by BIA.
We believe that the Title IV amendments, especially after the most
recent tribal concessions discussed above, protect the interests of the
Federal Government while advancing those of tribal governments. We hope
that this Committee will agree.
Conclusion
For eight years we have tried to negotiate with Interior to gain
its agreement to add to Title IV the reforms made by Congress to Title
V (IHS). The broader Title V self-governance authority has worked well
at IHS where there is widespread participation by tribes in self-
governance. We believe tribal participation would expand if Title IV
were amended to look more like Title V (as reflected in the attached
tribal draft bill).
Given the Department's objections to extending self-governance
authority to the non-BIA, non-OST agencies within the Department, the
Tribes have reluctantly agreed to sever those sections and request this
year only amendments dealing with BIA and OST. We have done this only
to facilitate passage this year. We ask that you honor this significant
tribal concession with prompt enactment of these remaining provisions
which are largely without controversy.
The compromise tribal amendments will provide for more efficient
and responsive tribal program administration. Broad-based and sustained
economic development and growth will surely follow an expansion of
tribal self-governance authority. And so we ask the Committee to
marshal its energies and persuade the Senate and the House to enact
these tribal amendments in the closing days of this Congress.
Thank you for this opportunity to express the views of the Mille
Lacs Band of Ojibwe, and for your work, Mr. Chairman, and the work of
this Committee over the years in supporting tribal self-governance at
the request of tribal governments and in the face of resistance from
the federal agencies.
Miigwetch.
Attachment: Tribal BIA/OST Amendments to Title IV *
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* The information referred to is printed on pages 15-42 of this
hearing.
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