But I wanted to say that there has been considerable pressure on the enrolled membership in the Colville Confederated Tribes as to this matter of termination, and also the payments in lieu of taxes to be paid out of tribal funds. And I believe it was appropriately put yesterday by Congressman Westland that the contractual agreement could be looked upon as a county income tax instead of being in lieu of taxes, because of that clause in there which provides for negotiation after every third year. If the tribal income is higher because of the uranium mineral potential on the Colville Reservation, those annual payments would have to be higher because of the terms agreed to in that contract.

Mr. ASPINALL. Mr. Chairman, if I may, What you are saying is that the services remained the same, but the charges increased? Mr. GEORGE. Yes, that is right, Congressman Aspinall.

In this matter, if the tribe is opposed to termination, why should we contract for the services at this time? And in a statement yesterday, one of the council members said that the Indian Bureau did not enter into the negotiations or the meetings that were held between the Colville Business Council and the County Commissioners of Ferry County and Okanogan County.

But yet in the 82d Congress there were 2 measures pending before the Congress, 1 of them in the form of H. R. 2388, which was a bill for the payment in lieu of taxes out of Federal moneys on the tribal land on the Colville Indian Reservation.

There was another bill, S. 1200, which was introduced by Senator Cain.

One June 13, 1951, the Acting Commissioner of Indian Affairs wrote to the area director of the Bureau of Indian Affairs at Portland, Oreg., in which he stated that "you are well aware what this type of legislation, if enacted, would invite several hundred other counties to demand the same type of treatment, and eventually the Federal Government would be committed to making payments which would be extremely difficult to terminate."

Then he goes on to sav

This office is of the firm conviction that eventually all Indian groups should be placed in exactly the same statu; as any other group of citizens. This means that they would obtain the same local services and pay the same taxes as any other citizens. Enactment of legislation which would obligate the Federal Government to make payments in lieu of taxes would, in my opinion, discourage both the Indians and the local governmental units from making this long-range adjustment.

While I have not visited the Colville Reservation, I am informed that the Indians generally are progressive and should be handling most of their own affairs. I believe that you and Superintendent Phillips should review the situation at Colville with a view of setting up a program of gradual withdrawal of Federal services.

While I am not certain as to whether this withdrawal period should cover a period of 1 year, 10 years, or 30 years, I think the planning with the Indians should start. As an initial move, I suggest that you discuss the problem of the financial plight of Ferry, Stevens, and Okanogan Counties with the tribe. It is entirely possible that the tribe might be able and willing to make some contribution toward the services which they are now obtaining from these counties.

Now, when the statement was made yesterday that the Indian Bureau did not enter into this, they did, on June 13, 1951, when that letter was directed to the regional director, asking him to contact the superintendent of the Colville Reservation.

Mr. HALEY. Does that complete your statement?

Mr. GEORGE. Yes, sir.

Mr. HALEY. Are there any questions?

I might state that it is a little disturbing to the chairman-and I am sure it is to the committee-that this proposed agreement with the county might have opened up unlimited possibilities. We might not be just legislating here for 1 or 2 counties, but for many counties in the State and for many of the other tribes of Indians. Also, there is the unlimited possibility of additional revenue that might be payable under this proposed contract.

Are there any further questions?

Thank you very much, gentlemen.

We have here yet Mr. William Zimmerman.

Mr. SHERMAN. Pardon me, I had something to present here, if you do not mind.

Mr. HALEY. You may proceed.

Mr. SHERMAN. We have here a report of the State auditor, setting forth in detail the amount of Federal contributions to Okanogan County and the purposes to which such contributions were credited. There was much discussion here on the expenses of the county building county roads. The principal source of revenue there is from State remittances from the motor-vehicle fund. In 1953 they received $315,780. Now, the Indians are taxed for gas and oil, and out of that fund the Indians certainly bore a proportionate share toward the maintenance of county roads.

If I may, I would like to present this document, if you will allow me. I might say this, further, in that connection, that Indian lands never formed a part of the tax base of counties. Counties were carved out of Indian territory. From the beginning of their existence they should have been able to adjust themselves to their situation, as far as the nontaxability of Indian land is concerned.

There are, no doubt, offsetting advantages that the counties receive for building county roads through Indian land. Trade goes to the cities. The public uses those roads, and that is always of some advantage to the counties.

At a meeting in January 1954 between the Colville Business Council and the commissioners, Commissioner Brown broke down a statement of the expenses that may be said as rendered for services to Indians. He stated:

Estimated amount of money spent each year by Okanogan County chiefly and the State, because of Indian activities in this county.

This document that I am presenting to you sets forth Federal contributions for expenses incurred by the counties for Indians-for schooling, for health, for Indian school lunches. Likewise, the document shows the apportionment made to the county from taxes collected by the State for excise taxes. There were about $1 million returned to the county.

Now, no doubt, out of that money you can consider that Indians have really paid for the services rendered to them by the counties. I have here a report of the Washington State Board of Equalization, minutes and official proceedings for the 1954 sessions. Figures there given show that the total taxable personal property in Ferry

County was estimated at about $1 million. Now, assessments are going on on the reservation for the purpose of taxing personal property. The remark was made here yesterday that possibly the county commissioner may drop the activity because they think that the expense involved may not justify trying to collect those taxes. Actually, the question of taxing personal property of Indians is being tested in the Montana courts. If the decision there goes against the Indians we may rest assured that Okanogan and Ferry Counties will proceed toward taxing personal property belonging to Indians.

The 1950 census showed about 4,000 non-Indians in Ferry County and 800 Indians. With that ratio, the amount of taxable Indian personal property would amount to about $200,000. Actually, the amount collected in taxes would be considerably less, but we think it would be certainly in excess of $40,000.

I want to present this for whatever use you may want to make of it.

Mr. HALEY. Without objection, these two documents will be made a part of the file.

(The documents referred to were filed with the committee.)

Mr. SHERMAN. I think we said before that this question of taxation should be related to and integrated with the studies now going on on taxes and other in-lieu payments on Federal properties.

It is a question of national policy and we do not think it should be decided solely for Indians in one bill.

Mr. HALEY. Thank you, sir. Does that complete your presentation?

Mr. SHERMAN. That is correct.

Mr. HALEY. Are there any questions?

Thank you very much, gentlemen.

I might say to the committee that we have Mr. Zimmerman here, who has been here 2 days now.

Mr. Zimmerman, we have you listed as a witness. I wonder if it would be agreeable to you if, at some later time, we might call you?

I also see Mrs. Peterson here. We have yet five members of the business council who testified yesterday. They agreed to stay over until today so that if the committee had any questions it could ask them.

I wonder if it would be all right to hear you later, Mr. Zimmerman. STATEMENT OF WILLIAM ZIMMERMAN, JR., FIELD DIRECTOR, ASSOCIATION ON AMERICAN INDIAN AFFAIRS, INC., WASHINGTON, D. C.

Mr. ZIMMERMAN. May I make this suggestion, Mr. Chairman.

I have a prepared statement. I realize that much of what I would like to say has been said before. I think it is not fair either to the committee or the other witnesses to repeat, but I have two suggestions which I would like to make orally because they have not been made, so far as I know, by any of the other witnesses.

Mr. HALEY. You may proceed.

Mr. HORAN. Mr. Chairman, if he has the statement prepared, I think his suggestions are in the statement.

Mr. ZIMMERMAN. First, I want to make it clear that I favor the enactment of H. R. 6154 or 7190. I do not like the idea of having the

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land restoration combined with the other features, while I recognize that that may be essential to passage of the bill.

I will not develop my argument but want to call particularly attention to two proposals in my document; first, that with respect to payment to counties, you insert an amendment to this effect:

Provided, That the total payment to each county in any 1 year under the terms of this agreement or any succeeding agreements shall not exceed the real property tax which would be due and payable if the Indian properties were taxable at the full rates prevailing for other, similar property in the respective counties. I believe, Mr. Chairman, that language to that effect would eliminate a great deal of the misunderstanding and complaint that seems to be current.

Finally, as to the proposed amendment that the Department has suggested, namely, a referendum on all the provisions of the bill, I say that I believe it is wholly unfair to require an amendment on the restoration and make the restoration conditional upon acceptance of the other provisions.

I think it is clear from the testimony that there is a great deal of confusion about the meaning of this so-called termination provision in this bill, which merely is an authorization or a request for a plan.

So I would suggest that there be language added to the bill to provide that it is the intent of the Congress that during the 5-year period provided in this section there shall be no reduction in the Federal services to the Consolidated Tribes and that no termination or readjustment legislation shall be considered until the Indians have submitted their plans.

Those are the only two points I wish to make, and I would be very happy, Mr. Chairman, to make myself available at any time to the committee to answer questions as to the statement.

Mr. HALEY. Without objection, the written statement of Mr. Zimmerman will be made a part of the record at this point.

Thank you very much.

Mr. ZIMMERMAN. Thank you.

(Statement referred to follows:)

STATEMENT OF WILLIAM ZIMMERMAN, JR., FIELD DIRECTOR, ASSOCIATION OF AMERICAN INDIAN AFFAIRS, INC., WASHINGTON, D. C.

Mr. Chairman and gentlemen of the committee, I appear in support of H. R. 6154, a bill introduced by Representative Horan, and H. R. 7190, a bill by Representative Magnuson, to restore to tribal ownership certain lands within the Colville Indian Reservation in the State of Washington, and for other purposes. I wish to make clear at the outset that I am wholly in accord with the major purpose of these bills, as stated in the titles, but I have doubts as to the propriety of joining to this major purpose certain other features.

First, as to the restoration of tribal ownership, I feel strongly that this action is no more than justice to the Colville Indians. Some opponents of this proposed restoration in earlier years have argued that the Indians have no title to these lands. I shall not review the legal arguments, but merely state my own conclusion, which is that the Congress, beginning with the act of March 22, 1906, has certainly recognized the equitable or beneficial interest of the Indians in this property. Section 3 directed the Secretary of the Interior to sell the unallotted, unselected lands and pay the proceeds to the Colville Indians. In section 9 of the act the Congress seems to have disclaimed any Federal interest in the property, for it states that the purpose of this act is to have the United States act as trustee for the Indians in the disposition and sale of these lands, and further provides that the United States expend or pay over to the Indians the net proceeds derived from the sale of the lands. Certainly this is a clear recognition of the Indians' interest.

The act of 1906 directed the classification of the unallotted lands into irrigable, grazing, timber, mineral, and arid lands. The Presidential proclamation of May 3, 1916, opened to homestead entry all the irrigable, grazing, or arid lands, but exempted the lands classified as timber or mineral. In other words, as early as 1916 the Government recognized the value of the timbered areas and withheld them from entry. Nevertheless, since that date the threat that these unsold lands might be lost to the tribe has been constantly in the minds of the Indians. These lands are essential to the economy of the Indians and to the economy of the surrounding area. In particular, the fact that the timber on the reservation is being harvested in accordance with the principles of sustained yield contributes to the stability of the region. The forced sale of any considerable part of these lands would be disastrous.

I should much prefer to see the bill pass without sections 4 and 5 included. In my opinion, a majority of the Colville Indians are definitely opposed to termination legislation at this time. They are willing to accept section 4 only because they believe that without it the bill would meet departmental opposition. My own view is that section 4 is not itself necessarily harmful, but I do not like to see the Colville Indians placed under this kind of pressure, when they are told. in effect, that they cannot regain full title to property which is theirs unless they yield to the present policy with respect to terminaion.

Section 5 of the bill would ratify and approve an amendment between the Indians and the two counties of Okanogan and Ferry. The agreement provides for an annual payment to the counties in the nature of a subsidy for providing various services. This agreement is the result of voluntary action by the Indians, in effect a recognition of their rights and obligations as citizens, without in any way modifying their insistance that their lands be held exempt from taxation. Some opponents of this agreement have argued that the Colville Business Council exceeded its authority when it signed this agreement. Even if that argument is sound, I have no doubt that inclusion of section 5 in the legislation would effectively validate the agreement. Another objection offered to the agreement is that the amount of the payment to the counties is tied to the net annual income of the Colville people. I suggest that the possibility of excessive payments to the counties could be avoided by a simple amendment, by adding at the end of section 5 (or sec. 4 of H. R. 7190) the following language:

Provided, That the total payment to each county in any one year, under the terms of this agreement or any succeeding agreements, shall not exceed the real property tax which would be due and payable if the Indian properties were taxable at the full rates prevailing for other similar property in the respective counties.

The Department of the Interior, in its report on H. R. 6154, recommends the addition of a new section, section 6, to provide a referendum on all of the provisions of this bill. In the form proposed by the Department, it would be another example of pressure or coercion, for it would make the restoration of title to the lands conditioned on approval of all the provisions of the act. I see no need for a referendum on the return of the lands, for the Indians have both a legal and a moral claim to them. There may be reason for a referendum on the agreement with the counties, but as I have already stated the approval of this legislation unquestionably makes the agreement legal. As to the third point, if the Indians are to agree by referendum that they will submit a plan within 5 years, then section 4 should be further amended by adding language similar to the following:

"It is the intent of the Congress that during the 5-year period provided in this section there shall be no reduction of Federal services to the Consolidated Tribes, and that no termination or readjustment legislation shall be considered until the Indians have submitted their plans."

Although I should prefer, as I said at the outset, to omit sections 4 and 5 from this bill, I recognize that its enactment into law may be impossible unless these sections are included. I believe that the benefits which the Indians would derive from the enactment of sections 1, 2, and 3 far outweigh the disadvantages of sections 4 and 5. I recommend, therefore, favorable action by your committee. Mr. HALEY. Are there any questions?

We have, as I say, the Business Council here. Does the committee care to question them?

Mr. METCALF. Mr. Chairman, I feel that surely there must be a better justification for this agreement for the tribe entering into the payment of taxes than this payment of $40,000 in lieu of taxes.