[Senate Report 107-324]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 741
107th Congress                                                   Report
                                 SENATE
 2d Session                                                     107-324

======================================================================



 
 TO ESTABLISH A DEMONSTRATION PROJECT TO AUTHORIZE THE INTEGRATION AND 
 COORDINATION OF FEDERAL FUNDING DEDICATED TO THE COMMUNITY, BUSINESS, 
        AND ECONOMIC DEVELOPMENT OF NATIVE AMERICAN COMMUNITIES

                                _______
                                

                November 4, 2002.--Ordered to be printed

 Filed, under authority of the order of the Senate of October 17, 2002

                                _______
                                

    Mr. Inouye, from the Committee on Indian Affairs, submitted the 
                               following

                              R E P O R T

                         [To accompany S. 343]

    The Committee on Indian Affairs, to which was referred the 
bill (S. 343), to establish a demonstration project to 
authorize the integration and coordination of Federal funding 
dedicated to the community, business, and economic development 
of Native American communities, having considered the same, 
reports favorably thereon without amendment and recommends that 
the bill do pass.

                                PURPOSE

    The purpose of S. 343 is to authorize the Secretary of the 
Interior (Secretary) to establish a demonstration project to 
include annual participation of up to 24 Indian tribes, tribal 
organizations, or tribal consortia, to undertake Federally-
funded projects to foster community, economic, and business 
development in Native American communities.

                               BACKGROUND

    In 1970 President Nixon issued his now-famous Special 
Message to Congress on Indian Affairs that called for 
significant changes in Federal Indian policy. Citing the failed 
policies of assimilation and termination of the 1950s, and 
cautioning against an excessive dependence on the Federal 
government, the Message laid the foundation for a more 
enlightened policy that relied on two core principles: economic 
self-sufficiency and political self-determination.
    President Nixon's Message lead to several key legislative 
enactments including the Native American Programs Act (42 
U.S.C. 2992d et seq.) and the Indian Financing Act in 1974 (25 
U.S.C. 1451 et seq.), and the Indian Education Assistance Act 
(25 U.S.C. 455 et seq.), and the Indian Self Determination & 
Education Assistance Act in 1975 (Self Determination Act, 25 
U.S.C. 450 et seq.).
    Prior to 1975, American Indian and Alaska Native 
communities depended in large part on the Federal government to 
provide basic governmental services and programs to their 
members. These services and programs included fire protection 
and law enforcement, social services, natural resources 
management, health and hospital care, and other core 
governmental services.
    The Self Determination Act authorizes Indian tribes and 
tribal consortia to ``step into the shoes'' of the United 
States and assume responsibility and managerial control of 
services and programs previously administered by the Federal 
government.\1\
---------------------------------------------------------------------------
    \1\ The President's Management Agenda likewise proposes that a 
significant percentage of Federally-undertaken activities be 
``outsourced'' to the commercial marketplace. ``Historically, the 
government has realized cost savings in a range of 20 to 50 percent 
when federal and private sector service providers compete to perform 
these functions.'' The President's Management Agenda, Fiscal Year 2002, 
page 17.
---------------------------------------------------------------------------
    Under the provisions of the Self Determination Act, 
participating tribes and tribal consortia receive funding for 
the services and programs they have contracted to manage. In 
addition to program funding, participants are eligible to 
receive contract support costs--funding to cover the costs of 
contract management and administration.
    The President's Management Agenda reflects the policies and 
rationale of the Self Determination Act by proposing that 
nearly half of all tasks currently performed by Federal 
employees be undertaken by the private sector. These tasks 
include data collection, administrative support, payroll 
services and other programs.\2\
---------------------------------------------------------------------------
    \2\ Id.
---------------------------------------------------------------------------
    Under current law, tribes and tribal consortia are 
authorized to negotiate with cognizant Federal agencies to 
enter into contracts and compacts for the administration of 
services and programs, and could accordingly serve to fulfill 
the goals of the Management Agenda.
    These agencies are: (1) the Bureau of Indian Affairs (BIA), 
the principal agency responsible for administering Indian 
policy and discharging the Federal government's trust 
responsibility to American Indians and Alaska Natives; and (2) 
the Indian Health Service (IHS), the principal agency 
responsible for carrying out the Federal obligation for the 
provision of health care services to Native people.
    Participation in the Self Determination Act is entirely 
voluntary and should a tribe or tribal consortium choose not to 
enter into contract or compact for the management of BIA or IHS 
services and programs, the agency in question continues to 
provide services and programs to that tribe or consortium.
    In Fiscal Year 2002, Indian tribes and tribal consortia 
contracted and compacted for nearly $752 million in BIA 
programs and services, out of a total BIA budget of $2.2 
billion.
    Similarly, in that same year, Indian tribes and tribal 
consortia contracted and compacted for over $1.5 billion in 
Indian Health Service programs and services, out of a total IHS 
budget of nearly $2.8 billion. Once having contracted a 
program, the tribe or consortium assumes responsibility for all 
aspects of its management, including program personnel, program 
activities, delivering program services, and establishing and 
maintaining administrative and accounting systems.
    The results of tribal participation in the Self 
Determination Act are overwhelmingly positive. A comprehensive 
study on the impact of tribal compacting for health-related 
programs and services conducted in 1998 indicated that 93% of 
tribal members surveyed indicated that the quality of tribally-
delivered health services had improved after the tribe in 
question had undertaken to provide programs and services under 
the Self Determination Act.\3\
---------------------------------------------------------------------------
    \3\ Tribal Perspectives on Indian Self-Determination and Self-
Governance in Health Care Management. Vol. 2 Narrative Report, National 
Indian Health Board, 1998, p. 111.
---------------------------------------------------------------------------
    In addition to improving the quality of services delivered, 
Self Determination Act contracting and compacting has enhanced 
the administrative and managerial acumen of participating 
tribal governments. In turn, the skills developed in managing 
contracts and compacts can be translated into other areas such 
as Native entrepreneurship, attracting and maintaining outside 
investment, and business and community development.

 ANALYSIS OF THE INDIAN TRIBAL DEVELOPMENT CONSOLIDATED FUNDING ACT OF 
                                  2002

    Services and programs aimed at business and community 
development in Native communities are housed in various Federal 
departments and agencies including the departments of Commerce, 
Interior, Health and Human Services, Labor, Treasury, the Small 
Business Administration and others. Because these services and 
programs are often uncoordinated and provided in an untimely 
manner, their effectiveness in stimulating Native economies and 
increasing employment is not maximized.
    In December, 2001, the General Accounting Office (GAO) 
published its report entitled Economic Development: Federal 
Assistance Programs for American Indians and Alaska Natives \4\ 
in which it cited the lack of coordination of existing Federal 
development programs and services as a prime cause of their 
ineffectiveness. The GAO observed that,
---------------------------------------------------------------------------
    \4\ GAO-02-193, December, 2001.

        [t]he federal government has made a number of efforts 
        to encourage agencies to coordinate their efforts to 
        provide economic development assistance to Indians. For 
        example, the Native American Business Development, 
        Trade Promotion and Tourism Act of 2000 requires [the 
        Department of Commerce] to establish an Office of 
        Native American Business Development.\5\
---------------------------------------------------------------------------
    \5\ GAO-02-193, at 14, citing the Native American Business 
Development, Trade Promotion and Tourism Act of 2000, Pub.L. 106-464 
(2000).

    The Indian Tribal Development Consolidated Funding Act of 
2002 would improve the effectiveness of existing Federal 
development programs and services by replicating the success of 
the Self Determination Act in the realm of Federal business and 
community development programs and in the process accelerate 
development and job creation in Native communities.

                      SECTION-BY-SECTION ANALYSIS

    The Indian Tribal Development Consolidated Funding Act of 
2002 authorizes the Secretary of the Interior to establish a 
demonstration project in which up to 24 Indian tribes, tribal 
organizations, or tribal consortia may participate each fiscal 
year in Federally-funded projects to foster community, 
economic, and business development in Native communities. 
Project participants would be eligible to receive loans, 
grants, financial and other assistance provided through 
existing services and programs.
    Section 1. Short Title. The Act may be cited as the Indian 
Tribal Development Consolidated Funding Act of 2002.
    Section 2. Findings, Purposes. In section 2 Congress finds 
that there exists a unique legal and political relationship 
between the United States and Indian tribes; finds that a 
majority of Native Americans continue to live in poverty; and 
finds that Federal services and programs designed to encourage 
economic development and job creation in Native communities can 
be made more effective if those services and programs are 
better coordinated. The purposes of the bill are to empower 
Indian tribes and consortia to make better use of Federal 
funding; and to coordinate multi-agency Federal assistance to 
target the specific needs of Native communities.
    Section 3. Definitions. Section 3 provides the definition 
for terms used in this Act including ``Applicant''; 
``Assistance''; ``Indian tribe''; ``Project''; and others.
    Section 4. Lead Agency. Section 4 provides that, for 
purposes of this Act, the lead agency is the Department of the 
Interior.
    Section 5. Selection of Participating Tribes. Section 5 
details the manner in which tribal applicants are selected for 
participation in the Demonstration Project.
    Section 6. Application Requirements, Review and Approval. 
Section 6 details the application process to participate in the 
Demonstration Project; identifies the Federal services and 
programs to be integrated; requires project participants to 
identify those agencies that are to be involved in the project; 
and provides for application review and approval procedures by 
the Secretary.
    Section 7. Authority of Heads of Federal Executive 
Agencies. Section 7 describes the scope of the Demonstration 
Project and the participation of Federal agencies.
    Section 8. Procedures for Processing Requests for Joint 
Financing. Section 8 describes the procedures to be used when a 
project is funded by more than one Federal agency.
    Section 9. Uniform Administrative Procedures. Section 9 
details the procedures to be used when conflicting or 
inconsistent Federal regulations are confronted.
    Section 10. Delegation of Supervision of Assistance. 
Section 10 authorizes the head of a Federal agency to delegate 
to another Federal agency the ability to carry out a 
Demonstration Project provided that delegation is consistent 
with Federal law.
    Section 11. Joint Assistance Funds and Project 
Facilitation. Section 11 authorizes the creation of a ``Joint 
Assistance Fund'' for instances of multi-agency project 
funding.
    Section 12. Financial Management, Accountability and 
Audits. Section 12 describes the financial accountability and 
audit requirements, including required filings pursuant to the 
Single Audit Act (31 U.S.C. 7501 et seq.) for each project 
funded under the Act.
    Section 13. Technical Assistance and Personnel Training. 
Section 13 provides information regarding technical assistance 
and training of personnel for projects funded under the Act.
    Section 14. Joint State Financing for Federal-Tribal 
Assisted Projects. Section 14 authorizes the heads of Federal 
agencies to issue regulations governing agreements with States 
to extend the benefits of this Act.
    Section 15. Report to Congress. Section 15 requires that 
one year after the date of enactment, the President shall 
submit a report to Congress detailing the effectiveness of this 
Act together with any recommendations to improve the Act and 
Federal services and programs for Native development.

                          LEGISLATIVE HISTORY

    The Indian Tribal Development Consolidated Funding Act of 
2002 (S. 343) was introduced on February 15, 2001, by Senator 
Campbell, for himself, and for Senator Inouye. On February 26, 
2002, Senator Johnson was added as a co-sponsor. S. 343 was 
referred to the Committee on Indian Affairs and a hearing was 
held on the bill on May 24, 2002. On October 8, 2002, the 
Committee on Indian Affairs, by virtue of a polling instrument, 
considered S. 343 and other measures that had been referred to 
it, and on that date, favorably reported S. 343.

            COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

    On October 8, 2002, the Committee on Indian Affairs, 
committee members considered S. 343 and favorably reported the 
bill to the full Senate.

                    COST AND BUDGETARY CONSIDERATION

    The cost estimate for S. 343 as calculated by the 
Congressional Budget Office, is set forth below:

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, DC, October 18, 2002.
Hon. Daniel K. Inouye,
Chairman, Committee on Indian Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 343, the Indian 
Tribal Development Consolidated Funding Act of 2001.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Lanette J. 
Walker.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

S. 343--Indian Tribal Development Consolidated Funding Act of 2001

    S. 343 would authorize the Secretary of the Interior to 
develop a demonstration project to consolidate Native American 
grant funding with other federal financial assistance for 
economic development. Under the bill, executive agencies would 
be directed to cooperate to jointly finance Native American 
economic development projects. Based on information from the 
Bureau of Indian Affairs (BIA), CBO estimates that any 
additional administrative cost to implement the program would 
not be significant. Such costs would be subject to the 
availability of appropriated funds.
    S. 343 also would authorize the Secretary of the Interior 
to provide planning grants to the 24 tribes or consortium of 
tribes that would participate in the demonstration project. 
Based on information from BIA, CBO expects that each grant 
would range between $40,000 to $50,000 and we estimate that 
providing such grants would cost about $1 million each year 
over the 2003-2007 period, assuming the appropriation of the 
necessary amounts. Enacting S. 343 would not affect direct 
spending or revenues.
    S. 343 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments.
    The CBO staff contact for this estimate is Lanette J. 
Walker. This estimate was approved by Peter H. Fontaine, Deputy 
Assistant Director for Budget Analysis.

                      REGULATORY IMPACT STATEMENT

    Paragraph 11(b) of rule XXVI of the Standing Rules of the 
Senate requires that each report accompanying a bill to 
evaluate the regulatory paperwork impact that would be incurred 
in implementing the legislation. The Committee has concluded 
that an enactment of S. 343 will create only a de minimis 
regulatory or paperwork burdens.

                        EXECUTIVE COMMUNICATIONS

    The Committee has received no official communication from 
the Administration on the provisions of S. 343.

                        CHANGES IN EXISTING LAW

    In compliance with subsection 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
the bill are required to be set in the accompanying Committee 
report. The Committee states that enactment of S. 343 will not 
result in any changes in existing law.


                            A P P E N D I X

                              ----------                              


    [From the Public Papers of the Presidents of the United States 
    Containing the Public Messages, Speeches, and Statements of the 
                               President

  Special Message to the Congress on Indian Affairs, July 8, 1970, by 
                        President Richard Nixon

To the Congress of the United States:
    The first Americans--the Indians--are the most deprived and 
most isolated minority group in our nation. On virtually every 
scale of measurement--employment, income, education, health--
the condition of the Indian people ranks at the bottom.
    This condition is the heritage of centuries of injustice. 
From the time of their first contact with European settlers, 
the American Indians have been oppressed and brutalized, 
deprived of their ancestral lands and denied the opportunity to 
control their own destiny. Even the Federal programs which are 
intended to meettheir needs have frequently proven to be 
ineffective and demeaning.
    But the story of the Indian in America is something more 
than the record of the white man's frequent aggression, broken 
agreements, intermittent remorse and prolonged failure. It is a 
record also of endurance, of survival, of adaptation and 
creativity in the face of overwhelming obstacles. It is a 
record of enormous contributions to this country--to its art 
and culture, to its strength and spirit, to its sense of 
history and its sense of purpose.
    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. Both as a matter 
of justice and as a matter of enlightened social policy, we 
must begin to act on the basis of what the Indians themselves 
have long been telling us. 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.

                 SELF-DETERMINATION WITHOUT TERMINATION

    The first and most basic question that must be answered 
with respect to Indian policy concerns the historic and legal 
relationship between the Federal government and Indian 
communities. In the past, this relationship has oscillated 
between two equally harsh and unacceptable extremes.
    On the one hand, it has--at various times during previous 
Administrations--been the stated policy objective of both the 
Executive and Legislative branches of the Federal government 
eventually to terminate the trusteeship relationship between 
the Federal government and the Indian people. As recently as 
August of 1953, in House Concurrent Resolution 108, the 
Congress declared that termination was the long-range goal of 
its Indian polices. This would mean that Indian tribes would 
eventually lose any special standing they had under Federal 
law: the tax exempt status of their lands would be 
discontinued; Federal responsibility for their economic and 
social well-being would be repudiated; and the tribes 
themselves would be effectively dismantled. Tribal property 
would be divided, among individual members who would then be 
assimilated into the society at large.
    This policy of forced termination is wrong, in my judgment, 
for a number of reasons. First, the premises on which it rests 
are wrong. Termination implies that the Federal government has 
taken on a trusteeship responsibility for Indian communities as 
an act of generosity toward a disadvantaged people and that it 
can therefore discontinue this responsibility on a unilateral 
basis whenever it sees fit. But the unique status of Indian 
tribes does not rest on any premise such as this. The special 
relationship between Indians and the Federal government is the 
result instead of solemn obligations which have been entered 
into by the United States Government. Down through the years, 
through written treaties and through formal and informal 
agreements, our government has made specific commitments to the 
Indian people. For their part, the Indians have often 
surrendered claims to vast tracts of land and have accepted 
life on government reservations. In exchange, the government 
has agreed to providecommunity services such as health, 
education and public safety, services which would presumably allow 
Indian communities to enjoy a standard of living comparable to that of 
other Americans.
    This goal, of course, has never been achieved. But the 
special relationship between the Indian tribes and the Federal 
government which arises from these agreements continues to 
carry immense moral and legal force. To terminate this 
relationship would be no more appropriate than to terminate the 
citizenship rights of any other American.
    The second reason for rejecting forced termination is that 
the practical results have been clearly harmful in the few 
instances in which termination actually has been tried. The 
removal of Federal trusteeship responsibility has produced 
considerable disorientation among the affected Indians and has 
left them unable to relate to a myriad of Federal, State and 
local assistance efforts. Their economic and social condition 
has often been worse after termination than it was before.
    The third argument I would make against forced termination 
concerns the effect it has had upon the overwhelming majority 
of tribes which still enjoy a special relationship with the 
Federal government. The very threat that this relationship may 
someday be ended has created a great deal of apprehension among 
Indian groups and this apprehension, in turn, has had a 
blighting effect on tribal progress. Any step that might result 
in greater social, economic or political autonomy is regarded 
with suspicion by many Indians who fear that it will only bring 
them closer to the day when the Federal government will disavow 
its responsibility and cut them adrift.
    In short, the fear of one extreme policy, forced 
termination, has often worked to produce the opposite extreme: 
excessive dependence of the Federal government. In many cases 
this dependence is so great that the Indian community is almost 
entirely run by outsiders who are responsible and responsive to 
Federal officials in Washington, D.C., rather than to the 
communities they are supposed to be serving. This is the second 
of the two harsh approaches which have long plagued our Indian 
policies. Of the Department of the Interior's programs directly 
serving Indians, for example, only 1.5 percent are presently 
under Indian control. Only 2.4 percent of HEW's Indian health 
programs are run by Indians. The result is a burgeoning Federal 
bureaucracy, programs which are far less effective than they 
ought to be, and an erosion of Indian initiative and morale.
    I believe that both of these policy extremes are wrong. 
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.
    This, then, must be the goal of any new national policy 
toward the Indian people: to strengthen the Indian's sense of 
autonomy without threatening his sense of community. We must 
assure the Indian that he can assume control of his own life 
without being separated involuntarily from the tribal group. 
And we must make it clear that Indians can become independent 
of Federal control without being cut off from Federal concern 
andFederal support. My specific recommendations to the Congress 
are designed to carry out this policy.

1. Rejecting Termination

    Because termination is morally and legally unacceptable, 
because it produces bad practical results, and because the mere 
threat of termination tends to discourage greater self-
sufficiency among Indian groups, I am asking the Congress to 
pass a new Concurrent Resolution which would expressly 
renounce, repudiate and repeal the termination policy as 
expressed in House Concurrent Resolution 108 of the 83rd 
Congress. This resolution would explicitly affirm the integrity 
and right to continued existence of all Indian tribes and 
Alaska native governments, recognizing that cultural pluralism 
is a source of national strength. It would assure these groups 
that the United States Government would continue to carry out 
its treaty and trusteeship obligations to them as long as the 
groups themselves believed that such a policy was necessary or 
desirable. It would guarantee that whenever Indian groups 
decided to assume control or responsibility for government 
service programs, they could do so and still receive adequate 
Federal financial support. In short, such a resolution would 
reaffirm for the Legislative branch--as I hereby affirm for the 
Executive branch--that the historic relationship between the 
Federal government and the Indian communities cannot be 
abridged without the consent of the Indians.

2. The Right to Control and Operate Federal Programs

    Even as we reject the goal of forced termination, so must 
we reject the suffocating pattern of paternalism. But how can 
we best do this? In the past, we have often assumed that 
because the government is obliged to provide certain services 
for Indians, it therefore must administer those same services. 
And to get rid of Federal administration, by the same token, 
often meant getting rid of the whole Federal program. But there 
is no necessary reason for this assumption. Federal support 
programs for non-Indian communities--hospitals and schools are 
two ready examples--are ordinarily administered by local 
authorities. There is no reason why Indian communities should 
be deprived of the privilege of self-determination merely 
because they receive monetary support from the Federal 
government. Nor should they lose Federal money because they 
reject Federal control.
    For years we have talked about encouraging Indians to 
exercise greater self-determination, but our progress has never 
been commensurate with our promises. Part of the reason for 
this situation has been the threat of termination. But another 
reason is the fact that when a decision is made as to whether a 
Federal program will be turned over to Indian administration, 
it is the Federal authorities and not the Indian people who 
finally make that decision.
    This situation should be reversed. In my judgment, it 
should be up to the Indian tribe to determine whether it is 
willing and able to assume administrative responsibility for a 
service program which is presently administered by a Federal 
agency. To this end, I am proposing legislation which would 
empower a tribe or a group of tribes or any other Indian 
community to take over the control or operation of Federally-
funded and administered programs in the Department of the 
Interior and the Department of Health, Educationand Welfare 
whenever the tribal council or comparable community governing group 
voted to do so.
    Under this legislation, it would not be necessary for the 
Federal agency administering the program to approve the 
transfer of responsibility. It is my hope and expectation that 
most such transfers of power would still take place 
consensually as a result of negotiations between the local 
community and the Federal government. But in those cases in 
which an impasse arises between the two parties, the final 
determination should rest with the Indian community.
    Under the proposed legislation, Indian control of Indian 
programs would always be a wholly voluntary matter. It would be 
possible for an Indian group to select that program or that 
specified portion of a program that it wants to run without 
assuming responsibility for other components. The ``right of 
retrocession'' would also be guaranteed; this means that if the 
local community elected to administer a program and then later 
decided to give it back to the Federal government, it would 
always be able to do so.
    Appropriate technical assistance to help local 
organizations successfully operate these programs would be 
provided by the Federal government. No tribe would risk 
economic disadvantage from managing its own programs; under the 
proposed legislation, locally-administered programs would be 
funded on equal terms with similar services still administered 
by Federal authorities. The legislation I propose would include 
appropriate protections against any action which endangered the 
rights, the health, the safety or the welfare of individuals. 
It would also contain accountability procedures to guard 
against gross negligence or mismanagement of Federal funds.
    This legislation would apply only to services which go 
directly from the Federal government to the Indian community; 
those services which are channeled through State or local 
governments could still be turned over to Indian control by 
mutual consent. To run the activities for which they have 
assumed control, the Indian groups could employ local people or 
outside experts. If they chose to hire Federal employees who 
had formerly administered these projects, those employees would 
still enjoy the privileges of Federal employee benefit 
programs--under special legislation which will also be 
submitted to the Congress.
    Legislation which guarantees the right of Indians to 
contract for the control or operation of Federal programs would 
directly channel more money into Indian communities, since 
Indians themselves would be administering programs and drawing 
salaries which now often go to non-Indian administrators. The 
potential for Indian control is significant, for we are talking 
about programs which annually spend over $400 million in 
Federal funds. A policy which encourages Indian administration 
of these programs will help build greater pride and 
resourcefulness within the Indian community. At the same time, 
programs which are managed and operated by Indians are likely 
to be more effective in meeting Indian needs.
    I speak with added confidence about these anticipated 
results because of the favorable experience of programs which 
have already been turned over to Indian control. Under the 
auspices of the Office of Economic Opportunity, Indian 
communities now run more than 60community action agencies which 
are located on Federal reservations. OEO is planning to spend some $57 
million in Fiscal Year 1971 through Indian-controlled grantees. For 
over four years, many OEO-funded programs have operated under the 
control of local Indian organizations and the results have been most 
heartening.
    Two Indian tribes--the Salt River Tribe and the Zuni 
Tribe--have recently extended this principle of local control 
to virtually all of the programs which the Bureau of Indian 
Affairs has traditionally administered for them. Many Federal 
officials, including the Agency Superintendent, have been 
replaced by elected tribal officers or tribal employees. The 
time has now come to build on these experiences and to extend 
local Indian control--at a rate and to the degree that the 
Indians themselves establish.

3. Restoring the Sacred Lands Near Blue Lake

    No government policy toward Indians can be fully effective 
unless there is a relationship of trust and confidence between 
the Federal government and the Indian people. Such a 
relationship cannot be completed overnight; it is inevitably 
the product of a long series of words and actions. But we can 
contribute significantly to such a relationship by responding 
to just grievances which are especially important to the Indian 
people.
    One such grievance concerns the sacred Indian lands at the 
near Blue Lake in New Mexico. From the fourteenth century, the 
Taos Pueblo Indians used these areas for religious and tribal 
purposes. In 1906, however, the United States Government 
appropriated these lands for the creation of a national forest. 
According to a recent determination of the Indian Claims 
Commission, the government ``took said lands from petitioner 
without compensation.''
    For 64 years, the Taos Pueblo has been trying to regain 
possession of this sacred lake and watershed area in order to 
preserve it in its natural condition and limit its non-Indian 
use. The Taos Indians consider such action essential to the 
protection and expression of their religious faith.
    The restoration of the Blue Lake lands to the Taos Pueblo 
Indians is an issue of unique and critical importance to 
Indians throughout the country. I therefore take this 
opportunity wholeheartedly to endorse legislation which would 
restore 48,000 acres of sacred land to the Taos Pueblo people, 
with the statutory promise that they would be able to use these 
lands for traditional purposes and that except for such uses 
the lands would remain forever wild.
    With the addition of some perfecting amendments, 
legislation now pending in the Congress would properly achieve 
this goal. That legislation (H.R. 471) should promptly be 
amended and enacted. Such action would stand as an important 
symbol of this government's responsiveness to the just 
grievances of the American Indians.

4. Indian Education

    One of the saddest aspects of Indian life in the United 
States is the low quality of Indian education. Drop-out rates 
for Indians are twice the national average and the average 
educational level for all Indians under Federal supervision is 
less than six school years. Again, at least a part of the 
problem stems from the fact that the Federal government is 
trying todo for Indians what many Indians could do better for 
themselves.
    The Federal government now has responsibility for some 
221,000 Indian children of school age. While over 50,000 of 
these children attend schools which are operated directly by 
the Bureau of Indian Affairs, only 750 Indian children are 
enrolled in schools where the responsibility for education has 
been contracted by the BIA to Indian school boards. 
Fortunately, this condition is beginning to change. The Ramah 
Navajo Community of New Mexico and the Rough Rock and Black 
Water Schools in Arizona are notable examples of schools which 
have recently been brought under local Indian control. Several 
other communities are now negotiating for similar arrangements.
    Consistent with our policy that the Indian community should 
have the right to take over the control and operation of 
federally funded programs, we believe every Indian community 
wishing to do so should be able to control its own Indian 
schools. This control would be exercised by school boards 
selected by Indians and functioning much like other school 
boards throughout the nation. To assure that this goal is 
achieved, I am asking the Vice President, acting in his role as 
Chairman of the National Council on Indian Opportunity,\1\ to 
establish a Special Education Subcommittee of that Council. The 
members of that Subcommittee should be Indian educators who are 
selected by the Council's Indian members. The Subcommittee will 
provide technical assistance to Indian communities wishing to 
establish school boards, will conduct a nationwide review of 
the educational status of all Indian school children in 
whatever schools they may be attending, and will evaluate and 
report annually on the status of Indian education, including 
the extent of local control. This Subcommittee will act as a 
transitional mechanism; its objective should not be self-
perpetuation but the actual transfer of Indian education to 
Indian communities.
---------------------------------------------------------------------------
    \1\ Executive Order 11551, dated August 11, 1970, provided for 
additional Indian members on the National Council on Indian 
Opportunity. A White House release dated August 31, announcing the 
appointment of eight new members to the Council, is printed in the 
Weekly Compilation of Presidential Documents (vol. 6, p. 1132).
---------------------------------------------------------------------------
    We must also take specific action to benefit Indian 
children in public schools. Some 141,000 Indian children 
presently attend general public schools near their homes. 
Fifty-two thousand of these are absorbed by local school 
districts without special Federal aid. But 89,000 Indian 
children attend public schools in such high concentrations that 
the State or local school districts involved are eligible for 
special Federal assistance under the Johnson-O'Malley Act.\2\  
In Fiscal Year 1971, the Johnson-O'Malley program will be 
funded at a level of some $20 million.
---------------------------------------------------------------------------
    \2\ Public Law No. 638, June 4, 1936 (49 Stat. 1458; 25 U.S.C. 452-
455).
---------------------------------------------------------------------------
    This Johnson-O'Malley money is designed to help Indian 
students, but since funds go directly to the school districts, 
the Indians have little if any influence over the way in which 
the money is spent. I therefore propose that the Congress amend 
the Johnson-O'Malley Act so as to authorize the Secretary of 
the Interior to channel funds under this act directly to Indian 
tribes and communities. Such a provision would give Indians the 
ability to help shape the schools which their childrenattend 
and, in some instances, to set up new school systems of their own. At 
the same time, I am directing the Secretary of the Interior to make 
every effort to ensure that Johnson-O'Malley funds which are presently 
directed to public school districts are actually spent to improve the 
education of Indian children in these districts.

5. Economic Development Legislation

    Economic deprivation is among the most serious of Indian 
problems. Unemployment among Indians is ten times the national 
average; the unemployment rate runs as high as 80 percent on 
some of the poorest reservations. Eighty percent of reservation 
Indians have an income which falls below the poverty line; the 
average annual income for such families is only $1,500. As I 
said in September of 1968, it is critically important that the 
Federal government support and encourage efforts which help 
Indians develop their own economic infrastructure. To that end, 
I am proposing the ``Indian Financing Act of 1970.''
    This act would do two things:
    1. It would broaden the existing Revolving Loan Fund, which 
loans money for Indian economic development projects. I am 
asking that the authorization for this fund be increased from 
approximately $25 million to $75 million.
    2. It would provide additional incentives in the form of 
loan guarantees, loan insurance and interest subsidies to 
encourage private lenders to loan more money for Indian 
economic projects. An aggregate amount of $200 million would be 
authorized for loan guarantee and loan insurance purposes.
    I also urge that legislation be enacted which would permit 
any tribe which chooses to do so to enter into leases of its 
land for up to 99 years. Indian people now own over 50 million 
acres of land that are held in trust by the Federal government. 
In order to compete in attracting investment capital for 
commercial, industrial and recreational development of these 
lands, it is essential that the tribes be able to offer long-
term leases. Long-term leasing is preferable to selling such 
property since it enable tribes to preserve the trust ownership 
of their reservation homelands. But existing law limits the 
length of time for which many tribes can enter into such 
leases. Moreover, when long-term leasing is allowed, it has 
been granted by Congress on a case-by-case basis, a policy 
which again reflects a deep-rooted pattern of paternalism. The 
twenty reservations which have already been given authority for 
long-term leasing have realized important benefits from that 
privilege and this opportunity should now be extended to all 
Indian tribes.
    Economic planning is another area where our efforts can be 
significantly improved. The comprehensive economic development 
plans that have been created by both the Pima-Maricopa and the 
Zuni Tribes provide outstanding examples of interagency 
cooperation in fostering Indian economic growth. The Zuni Plan, 
for example, extends for at least five years and involves a 
total of $55 million from the Departments of Interior, Housing 
and Urban Development, and Health, Education and Welfare and 
from the Office of Economic Opportunity and the Economic 
Development Administration. I am directing the Secretary of the 
Interior to play an active role in coordinating additional 
projects of this kind.

6. More Money for Indian Health

    Despite significant improvements in the past decade and a 
half, the health of Indian people still lags 20 to 25 years 
behind that of the general population. The average age at death 
among Indians is 44 years, about one-third less than the 
national average. Infant mortality is nearly 50% higher for 
Indians and Alaska natives than for the population at large; 
the tuberculosis rate is eight times as high and the suicide 
rate is twice that of the general population. Many infectious 
diseases such as trachoma and dysentery that have all but 
disappeared among other Americans continue to afflict the 
Indian people.
    This Administration is determined that the health status of 
the first Americans will be improved. In order to initiate 
expanded efforts in this area, I will request the allocation of 
an additional $10 million for Indian health programs for the 
current fiscal year. This strengthened Federal effort will 
enable us to address ourselves more effectively to those health 
problems which are particularly important to the Indian 
community. We understand, for example, that areas of greatest 
concern to Indians include the prevention and control of 
alcoholism, the promotion of mental health and the control of 
middle-ear disease. We hope that the ravages of middle-ear 
disease--a particularly acute disease among Indians--can be 
brought under control within five years.
    These and other Indian health programs will be most 
effective if more Indians are involved in running them. Yet--
almost unbelivably--we are presently able to identify in this 
country only 30 physicians and fewer than 400 nurses of Indian 
descent. To meet this situation, we will expand our efforts to 
train Indians for health careers.

7. Helping Urban Indians

    Our new census will probably show that a larger proportion 
of America's Indians are living off the reservation than ever 
before in our history. Some authorities even estimate that more 
Indians are living in cities and towns than are remaining on 
the reservation. Of those American Indians who are now dwelling 
in urban areas approximately three-fourths are living in 
poverty.
    The Bureau of Indian Affairs is organized to serve the 
462,000 reservation Indians. The BIA's responsibility does not 
extend to Indians who have left the reservation, but this point 
is not always clearly understood. As a result of this 
misconception, Indians living in urban areas have often lost 
out on the opportunity to participate in other programs 
designed for disadvantaged groups. As a first step toward 
helping the urban Indians, I am instructing appropriate 
officials to do all they can to ensure that this 
misunderstanding is corrected.
    But misunderstandings are not the most important problem 
confronting urban Indians. The biggest barrier faced by those 
Federal, State and local programs which are trying to serve 
urban Indians is the difficulty of locating and identifying 
them. Lost in the anonymity of the city, often cut off from 
family and friends, many urban Indians are slow to establish 
new community ties. Many drift from neighborhood to 
neighborhood; many shuttle back and forth between 
reservationsand urban areas. Language and cultural differences compound 
these problems. As a result, Federal, State and local programs which 
are designed to help such persons often miss this most deprived and 
least understood segment of the urban poverty population.
    This Administration is already taking steps which will help 
remedy this situation. In a joint effort, the Office of 
Economic Opportunity and the Department of Health, Education 
and Welfare will expand support to a total of seven urban 
Indian centers in major cities which will act as links between 
existing Federal, State and local service programs and the 
urban Indians. The Departments of Labor, Housing and Urban 
Development and Commerce have pledged to cooperate with such 
experimental urban centers and the Bureau of Indian Affairs has 
expressed its willingness to contract with these centers for 
the performance of relocation services which assist reservation 
Indians in their transition to urban employment.
    These efforts represent an important beginning in 
recognizing and alleviating the severe problems faced by urban 
Indians. We hope to learn a great deal from these projects and 
to expand our efforts as rapidly as possible. I am directing 
the Office of Economic Opportunity to lead these efforts.

8. Indian Trust Counsel Authority

    The United States Government acts as a legal trustee for 
the land and water rights of American Indians. These rights are 
often of critical economic importance to the Indian people; 
frequently they are also the subject of extensive legal 
dispute. In many of these legal confrontations, the Federal 
government is faced with an inherent conflict of interest. The 
Secretary of the Interior and the Attorney General must at the 
same time advance both the national interest in the use of land 
and water rights and the private interests of Indians in land 
which the government holds as trustee.
    Every trustee has a legal obligation to advance the 
interests of the beneficiaries of the trust without reservation 
and with the highest degree of diligence and skill. Under 
present conditions, it is often difficult for the Department of 
the Interior and the Department of Justice to fulfill this 
obligation. No self-respecting law firm would ever allow itself 
to represent two opposing clients in one dispute; yet the 
Federal government has frequently found itself in precisely 
that position. There is considerable evidence that the Indians 
are the losers when such situations arise. More that that, the 
credibility of the Federal government is damaged whenever it 
appears that such a conflict of interest exists.
    In order to correct this situation, I am calling on the 
Congress to establish an Indian Trust Counsel Authority to 
assure independent legal representation for the Indians' 
natural resource rights. This Authority would be governed by a 
three-man board of directors, appointed by the President with 
the advice and consent of the Senate. At least two of the board 
members would be Indian. The chief legal officer of the 
Authority would be designated as the Indian Trust Counsel.
    The Indian Trust Counsel Authority would be independent of 
the Departments of the Interior and Justice and would be 
expressly empowered to bring suit in the name of the United 
States in its trustee capacity. The United States would 
waiveits sovereign immunity from suit in connection with litigation 
involving the Authority.

9. Assistant Secretary for Indian and Territorial Affairs

    To help guide the implementation of a new national policy 
concerning American Indians, I am recommending to the Congress 
the establishment of a new position in the Department of the 
Interior--Assistant Secretary for Indian and Territorial 
Affairs. At present, the Commissioner of Indian Affairs reports 
to the Secretary of the Interior through the Assistant 
Secretary for Public Land Management--an officer who has many 
responsibilities in the natural resources area which compete 
with his concern for Indians. A new Assistant Secretary for 
Indian and Territorial Affairs would have only one concern--the 
Indian and territorial peoples, their land, and their progress 
and well-being. Secretary Hickel and I both believe this new 
position represents an elevation of Indian affairs to their 
proper role within the Department of the Interior and we urge 
Congress to act favorably on this proposal.

                          CONTINUING PROGRAMS

    Many of the new programs which are outlined in this message 
have grown out of this Administration's experience with other 
Indian projects that have been initiated or expanded during the 
last 17 months.
    The Office of Economic Opportunity has been particularly 
active in the development of new and experimental efforts. 
OEO's Fiscal Year 1971 budget request for Indian-related 
activities is up 18 percent from 1969 spending. In the last 
year alone--to mention just two examples--OEO doubled its funds 
for Indian economic development and tripled its expenditures 
for alcoholism and recovery programs. In areas such as housing 
and home improvement, health care, emergency food, legal 
services and education, OEO programs have been significantly 
expanded. As I said in my recent speech on the economy, I hope 
that the Congress will support this valuable work by 
appropriating the full amount requested for the Economic 
Opportunity Act.
    The Bureau of Indian Affairs has already begun to implement 
our policy of contracting with local Indians for the operation 
of government programs. As I have noted, the Salt River Tribe 
and the Zuni Tribe have taken over the bulk of Federal 
services; other projects ranging from job training centers to 
high school counseling programs have been contracted out to 
Indian groups on an individual basis in many areas of the 
country.
    Economic development has also been stepped up. Of 195 
commercial and industrial enterprises which have been 
established in Indian areas with BIA assistance, 71 have come 
into operation within the last two years. These enterprises 
provide jobs for more than 6,000 Indians and are expected to 
employ substantially more when full capacity is reached. A 
number of these businesses are now owned by Indians and many 
others are managed by them. To further increase individual 
Indian ownership, the BIA has this month initiated the Indian 
Business Development Fund which provides equity capital to 
Indians who go into business in reservation areas.
    Since late 1967, the Economic Development Administration 
has approvedapproximately $80 million in projects on Indian 
reservations, including nearly $60 million in public works projects. 
The impact of such activities can be tremendous; on the Gila River 
Reservation in Arizona, for example, economic development projects over 
the last three years have helped to lower the unemployment rate from 56 
to 18 percent, increase the median family income by 150 percent and cut 
the welfare rate by 50 percent.
    There has been additional progress on many other fronts 
since January of 1969. New ``Indian Desks'' have been created 
in each of the human resource departments of the Federal 
Government to help coordinate and accelerate Indian programs. 
We have supported an increase in funding of $4 million for the 
Navajo Irrigation Project. Housing efforts have picked up 
substantially; a new Indian Police Academy has been set up; 
Indian education efforts have been expanded--including an 
increase of $848,000 in scholarships for Indian college 
students and the establishment of the Navajo Community College, 
the first college in America planned, developed and operated by 
and for Indians. Altogether, obligational authority for Indian 
programs run by the Federal Government has increased from a 
little over $598 million in Fiscal Year 1970 to almost $626 
million in Fiscal Year 1971.
    Finally, I would mention the impact on the Indian 
population of the series of welfare reform proposals I have 
sent to the Congress. Because of the high rate of unemployment 
and underemployment among Indians, there is probably no other 
group in the country that would be helped as directly and as 
substantially by programs such as the new Family Assistance 
Plan and the proposed Family Health Insurance Plan. It is 
estimated, for example, that more than half of all Indian 
families would be eligible for Family Assistance benefits and 
the enactment of this legislation is therefore of critical 
importance to the American Indian.
    This Administration has broken a good deal of new ground 
with respect to Indian problems in the last 17 months. We have 
learned many things and as a result we have been able to 
formulate a new approach to Indian affairs. Throughout this 
entire process, we have regularly consulted the opinions of the 
Indian people and their views have played a major role in the 
formulation of Federal policy.
    As we move ahead in this important work, it is essential 
that the Indian people continue to lead the way by 
participating in policy development to the greatest possible 
degree. In order to facilitate such participation, I am asking 
the Indian members of the National Council on Indian 
Opportunity to sponsor field hearings throughout the nation in 
order to establish a continuing dialogue between the Executive 
branch of government and the Indian population of our country. 
I have asked the Vice President to see that the first round of 
field hearings are completed before October.
                                ------                                

    The recommendations of this Administration represent an 
historic step forward in Indian policy. We are proposing to 
break sharply with past approaches to Indian problems. In place 
of a long series of piecemeal reforms, we suggest a new and 
coherent strategy. In place of policies which simply call for 
more spending, we suggest policies which call for wiser 
spending. In place of policies which oscillate between the 
deadly extremes of forced termination and constant paternalism, 
wesuggest a policy in which the Federal government and the 
Indian community play complementary roles.
    But most importantly, we have turned from the question of 
whether the Federal government has a responsibility to Indians 
to the question of how that responsibility can best be 
fulfilled. We have concluded that the Indians will get better 
programs and that public monies will be more effectively 
expended if the people who are most affected by these programs 
are responsible for operating them.
    The Indians of America need Federal assistance--this much 
has long been clear. What has not always been clear, however, 
is that the Federal government needs Indian energies and Indian 
leadership if its assistance is to be effective in improving 
the conditions of Indian life. It is a new and balanced 
relationship between the United States government and the first 
Americans that is at the heart of our approach to Indian 
problems. And that is why we now approach these problems with 
new confidence that they will successfully be overcome.

                                                     Richard Nixon.
    The White House, July 8, 1970.

    Note.--On the same day, the White House released a summary 
of the message and the transcript of a news briefing on it by 
Vice President Spiro T. Agnew and Leonard Garment, Special 
Consultant to the President.



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