From Wounded Knee to Capitol Hill.

As Congress surrenders more powers to Indian tribes, the reverberations trouble many state officials. But lawmakers are finding that states can profit from good relations with tribes.

The year was 1973 - not 1873. But as members of the American Indian Movement took control of Wounded Knee for 71 days - complete with armed guards it was reminiscent of the bloody era that spanned the 18th and 19th centuries as native peoples and recent European arrivals clashed over the land that became the United States.

Times have changed. Recently, 275 tribal leaders from around the nation met in Washington, D.C., to prepare for this year's legislative calendar and push their political concerns. On the agenda are issues such as casinos, taxes and natural resources, all needing to be cooperatively addressed by tribes, states and the federal government.

Native Americans have traveled a long and bumpy trail since Europeans came to this country. Over the years, the federal government has endorsed widely varying, often conflicting, policies in dealing with the natives of North America. Today, the angle is "self-determination" - a push toward autonomous tribal governments. And in some cases, it's working. The trails are becoming smoother for many American Indians, and many are now running parallel to the main streets of state-federal governance. Tribal governing capacities are expanding as more and more tribes seek to preserve their cultures and govern themselves. The tribes are at a "convergence of economic strength, legal muscle and political will," says New York Times reporter Timothy Egan.

But states are uneasy with this convergence. As the federal government continues to work out details of its relationships with tribes, state governments - the tribes' closest neighbors - have a separate relationship with them, and it's often strained. The lack of state jurisdiction over Indians and reservations, federal controls and inherent tribal sovereignty have all resulted in ongoing disputes between tribes and states. Native Americans are not only citizens of the tribe, but also of the United States and the state in which they reside. This "triple citizenship" creates an ambiguous matrix of regulatory and other jurisdictional requirements for Indians, on and off their reservations. Jurisdiction over non-Indians on Indian land also is murky.

But as Native Americans gain more and more clout, state leaders are learning that it is more productive and mutually beneficial to work with, not against, the tribes.

TRIBES AND THE STATES

Many states have dealt successfully with tribes on specific issues, but others have resorted to the courts. Terry Williams, director of the Tulalip Tribal Environmental Program in Washington, calls state-tribal relations a "roller coaster ride."

It's not that states and tribes don't have mutual interests - they do. Human services, environmental protection and economic well-being create opportunities to cooperate and develop solutions, while maintaining autonomy. The Hualapai Indian Nation and the Arizona Department of Environmental Quality, for example, recently signed an agreement to protect water quality on and off tribal lands. The move will "help the state and tribe work closely with one another to protect water quality resources," says Russell Rhoades, director of ^DEQ. Such agreements can be effective tools. In Akron, Ohio, a university nursing school teamed up with an American Indian cultural center to open a free medical clinic. While the clinic's mission is to treat the Native Americans of the area, African Americans make up 40 percent of the clinic's patients and whites make up 30 percent.

And certainly, in many cases, states have a chance to profit economically from good relations with tribes. In Wisconsin, where sport fishing is a business worth nearly a billion dollars a year, Native and non-Native fishing guides are trying to learn from each other and work together to make sure the limited natural resource is managed wisely. Agreements can set up revenue sharing from tribal gas, liquor and cigarette taxes or that contentious cash cow - gambling.

Wisconsin businesses rake in nearly $150 million a year providing goods and services to Indian casinos. Two Wisconsin tribes reported 30 percent drops in welfare caseloads as a result of casino jobs, resulting in taxpayer savings of $470,000. In Minnesota, Indian gaining has become the state's seventh largest employer, creating more than 10,000 new jobs - 7,500 of which are held by non-Indians.

Wisconsin Senator Bob Jauch recognized back in 1990 that states and tribes "need to sit down and try to work out together what their mutual needs and concerns are, and find a system by which they can, harmoniously and jointly, cooperate to reach some common ground." The same is true today. But before such cooperation will be effective, lawmakers must understand how tribes are becoming more self-sufficient and politically savvy and how these changes affect state governance.

TRIBES AND POLITICS

Tribes are adapting their inherent sovereignty to the present-day federal system. On Capitol Hill, some tribes make full use of their economic clout. The Mississippi Band of Choctaw spent more than $4.2 million in 1996 successfully lobbying Congress to protect gambling interests. Tribes contributed $1.7 million to political parties and candidates in the 1996 elections. And they will continue to pour money into lobbying efforts to defeat controversial measures that would tax revenues from tribal businesses, limit jurisdiction within their reservations and limit sovereign immunity.

Tribes also are becoming more savvy in their efforts to lobby state legislatures. In Montana, the past session saw the most Indian participation ever - through lobbying, hearings and an overall presence, according to Representative Bill Whitehead, who is from the Fort Peck Reservation. Efforts to limit tribal civil jurisdiction on reservations were defeated, but the state continues to challenge a tribe's right to set water quality standards. "We knew we had to get involved," Whitehead says. "Lawmakers must realize that the state has a responsibility to individual members of tribes."

In Alaska, one of the most contentious issues ever before the Legislature - subsistence hunting and fishing - still isn't solved after two special sessions this year. Alaska Natives continue to lobby the lawmakers and are today more sophisticated in their efforts than they were 20 years ago when the debate first began.

Some tribes have representation in state legislatures. At least 40 legislators in at least 10 states are Native American. Theirs is a unique position. Montana Representative George Heavy Runner, a Blackfoot tribal leader, points out that he feels he is "sitting on the fence rail" when trying to balance the needs of his Indian and non-Indian constituents. But in Alaska, where 13 lawmakers make up the largest native delegation in any state, Senator Georgianna Lincoln believes native legislators have an obligation to make sure the Indian way of life is not eroded. "We must all fight to get that message out," she says.

MONEY MAKES A DIFFERENCE

Where does the money come from for the tribes' political efforts? Tribal wealth is uneven, of course. Many tribes struggle with poverty and high unemployment. A disproportionate number of Native Americans fall below the poverty line. But other tribes are focusing on economic development. Tribes are marketing natural resources and sport hunting and fishing. Some are coaxing industry to the reservation. Tribes in Arizona, for instance, own a national frozen yogurt distributorship. And the Narragansett Tribe in Rhode Island is looking at a bottling plant for spring water. The Mississippi Band of Choctaw Indians is one of the state's top 10 employers, with 10 manufacturing plants, a hotel and casino, and a large tribal government. Tourism is growing. Some tribes, in fact, are thinking globally, as evidenced by recent attendance of the Umatilla and Warm Springs Tribes, the Eastern Band of Cherokees and the Blackfeet at the International Tourism Exchange.

The ingenuity of tribal entrepreneurship is evident. In Idaho, despite significant state and federal concerns, the Coeur d'Alene Tribe started an international on-line lottery with million dollar jackpots. (Wisconsin and Missouri have sued to stop the practice and the U.S. Senate recently voted to make Internet gambling illegal.)

For a few tribes, the most lucrative economic venture is gambling. Contrary to popular belief, only a quarter of federally recognized tribes operate casinos, and less than 9 percent earn enough to provide direct payments to members. Hopi tribal chairman Wayne Taylor Jr. worries that the few American Indian tribes with successful casinos could potentially hurt other tribes by reinforcing the myth that all tribes are rich with casino profits. However, the success of that handful of tribes, while not always permanent, can be large - and shared with the states. Tribal casinos in New Mexico, for instance, share revenues of up to $50 million with the state. Minnesota welfare payments in counties with casinos dropped 14 percent between 1987 and 1991 (while statewide payments increased 17 percent), resulting in a savings to the state of an estimated $7 million. Similarly, unemployment on the Tulalips' reservation near Everett, Wash., dropped 55 percent since the tribe began a gaming operation in 1991. Also in Washington, the Muckleshoot Tribe is the second-largest employer in South King County, employing 1,300 people, 60 percent of whom are non-Indians. The White Mountain Apaches in Arizona have new police facilities and cars. The Fort McDowell Tribe in Arizona funded health insurance for its people.

The Confederated Tribes of the Grand Ronde in Oregon opened a casino in 1996 that generated a $30 million profit its first year Not only did it boost the local economy by providing jobs (200 Native Americans and 1,000 non-natives), it also paid for improvements to schools, roads, water and sewer systems; a new medical facility for the region; and college scholarships for tribal youths. Studies found that the employment benefit represents a $7.5 million annual savings for Oregon in welfare, unemployment payments and other related costs. Furthermore, the tribe has worked with the surrounding counties to support law enforcement and comply with county building, health and safety codes. "The Grand Ronde Tribe wants to work with neighboring governments to solve regionwide problems," said Kathryn Harrison, tribal chair.

But tribal gaming success and resulting state benefits haven't always come easy. States and tribes continue to struggle with gaming compacts, including revenue-sharing agreements. Earlier this year, Wisconsin Governor Tommy Thompson and 11 tribes were at loggerheads for months over compact renewals. Thompson wanted the tribes to share more of their wealth with the state. (It had been a flat $350,000 a year.) And, say tribal representatives, he unsuccessfully attempted to use the compact renewals as leverage to settle other issues - off-reservation fishing and hunting, and tribal water quality rules. Settlement did come, however, and most compacts have been agreed upon and renewed. The Lac Courte Oreilles, for instance, will pay the state a minimum of $420,000 per year beginning in 1999. The Stockbridge-Munsee Tribe agreed - although reluctantly - to pay the state $650,000 a year for five years. The St. Croix Chippewa will pay the state $2.2 million a year until 2003.

Wisconsin Governor Thompson, the National Governors' Association and the Western Governors Association have all called for more state control over Indian gambling within their boundaries.

Regardless of who has control, it's not only the tribe that gains from all economic development on Indian land. Tribes successful at gaming are diversifying their economic ventures. Some tribes consider gaming as a means to an end. "Ultimately we'd like gaming to be a footnote to our history," said David Matheson, the Coeur d'Alene Tribe's chief executive officer for gaming. It behooves surrounding communities and states to understand tribal economic diversity and work with them to develop mutually beneficial programs. This same understanding could pay off for states in which Congress is delegating authority to tribes for administering federal programs.

GIVING POWER BACK TO TRIBES

Authority to regulate the reservation environment allows tribes to protect their sovereignty and their lands as economies are strengthened. Yet such tribal authority can worry states. If regulations are more stringent than the state's rules, businesses beyond tribal boundaries may be affected. If tribal regulations are more lenient, industries could be enticed to tribal lands.

The National Governors' Association has fought against such environmental authority for tribes, warning that the move could actually stop economic development in areas where tribes are aggressive. A 1996 NGA policy spoke against tribes having the power to make decisions on natural resources and environmental issues and called on Congress and the U.S. Environmental Protection Agency to enact "specific processes, standards and criteria that respect state authority." The states want the EPA to promote cooperation between states and tribes, especially when tribal decisions could affect areas beyond the reservation.

Despite state concerns, a recent congressional trend allows the EPA to delegate environmental programs to Indian tribes. For instance, EPA has issued a long-awaited final rule giving tribes authority to develop their own air quality programs. The rule went into effect in March and allows tribes to manage and regulate reservation air quality, including the air above land owned by non-members within the boundaries of a reservation.

Increasing tribal authority is the source of significant tension between states and tribes. For example, even before their new air quality authority, tribes have been able to ask EPA to designate a reservation as a Class I area under the Clean Air Act - an area with the cleanest air quality levels that cannot be allowed to deteriorate. The designation could subject facilities outside reservation boundaries to tribal regulation. Despite state opposition, the Yavapai-Apache Tribe in Arizona received such a designation for their land in 1996. A district court upheld EPA's action, and the case is currently in the federal court of appeals. Wisconsin is facing the same issue with the Forest County Potawatomi tribal lands. That tribe proposed a Class I designation, and the state opposed it. An EPA decision is pending as Wisconsin agency officials and tribal representatives attempt to work together to resolve it. In the meantime, the Legislature passed a bill that requires the agency to keep lawmakers informed when tribes make such requests.

Water rights and quality standards also have caused substantial quarrels between states and tribes. The Isleta Pueblo in New Mexico won a legal battle against the city of Albuquerque to use its own more stringent water quality standards. The 9th Circuit Court of Appeals recently upheld the right of the Confederated Salish and Kootenai Tribes in Montana to set their own water quality standards for the reservation, including standards for non-Indians within the reservation. "This is a cutting edge case in the United States," said Chris Tweeten, the state's chief deputy attorney general, of the case expected to land before the U.S. Supreme Court.

PROMOTING TEAMWORK

How can states and tribes move away from conflict and toward collaboration? The first step is understanding. State legislators must accept the growing tribal presence within the federal system so they can effectively address policy questions about shared governing. "We are governments first, and racial entities second," points out Anthony Pico, chairman of the Viejas Band of Kumeyaay Indians in California.

And tribes need to understand the effects of their actions on states. "States and tribes need to learn mutual respect for each other and realize the benefits of working together," says Senator Kelly Haney of Oklahoma, a Seminole/Creek Indian.

Terry Williams of the Tulalip Tribe says that ideally, state legislatures would provide the setting for state and tribal governments to work together to resolve issues. Legislation could be written to address state-tribal negotiations in general, or specific issues such as health and human services, natural resources or gaming.

Representative James Roger Madalena from New Mexico, a member of the San Felipe Pueblo, says that many gaming disputes could be resolved if "both the state and the pueblos had the means to change compacts if need be. Right now, there's no set process." Representative Madalena did introduce legislation to do so this past session, but was unsuccessful in getting it passed.

Several states and tribes already have developed intergovernmental agreements addressing a variety of issues. Seventeen states have entered into tax agreements with tribes. Many legislatures have established Indian affairs commissions or programs in state agencies that address state-tribal issues. For example, the Idaho Legislature directed state agencies to negotiate with the Shoshone-Bannock Tribe for water fights in the Snake River. Legislation can establish a protocol for state agency personnel to collaborate with tribes on issues of mutual concern. Several states, including Montana, Washington and Nebraska, have passed such legislation.

David Lester, executive director of the Council of Energy Resource Tribes, described his Indian vision: ". . . to effectively govern our own land and participate in the governance of America; to master the tools of modern technology to protect our cultural heritage; and to develop strong local economies that give expression to our tribal values in economic terms."

Tribes are permanent players in the federal system - and they need not always be on opposite sides from the states. State and tribal government workers need to develop ways to understand, communicate and collaborate with one another.

As Montana Representative George Heavy Runner reminds us, "If Indians aren't allowed to govern themselves, it will be left up to states to solve their significant and costly problems."

TRIBAL SOVEREIGNTY

When Columbus "discovered" America, more than 5 million Indians lived in the area that is now the United States. More than 600 independent tribes, bands and groups had thriving social, political and cultural institutions. Although tribes shared certain cultural characteristics and attitudes toward life, each tribe was distinct from another. Tribes exercised inherent powers of sovereign nations by forming compacts, treaties and military alliances.

Unlike the states,t his inherent sovereignty is not derived from a United States constitutional provision. Rather, tribal sovereignty is the supreme inherent power of an Indian people and predates the United States' birth.

In a trilogy of foundation Indian law cases in the early 1800s, Chief Justice John Marshall established that Indian tribes possess powers of inherent sovereignty that arise from their status as independent nations before and at the time of European arrival: "Indian nations [are] distinct political communities, having territorial boundaries, within which their authority is exclusive, and having a right to all lands within these boundaries, which is not only acknowledged, but guaranteed by the United States." That guarantee is the basis for the tribes' "trust status" - meaning that the federal government has an obligation to assist tribes in becoming self-sufficient.

Today, sovereign Indian nations are composed of at least four distinct, yet interwoven, attributes: a secure land base, a functioning economy, self-government and cultural vitality. The tribes' continued existence and autonomy depend upon maintaining all four attributes of sovereignty.

EXPANSION OF INDIAN COUNTRY 

Tribes may buy land and request the secretary of the interior to grant "trust status" - which would make the land legally equivalent to a reservation - invoking tribal jurisdiction and avoiding state taxation. Minnesota, for example, is currently fighting efforts by the Shakopee Mdewakanton Sioux to have 593 prime acres of land in the Minneapolis-St. Paul suburbs placed in trust and come under tribal jurisdiction. Local governments say they will lose nearly $100 million in property taxes over the next 12 years. Minnesota Governor Arne Carlson fears that such land would not be subject to zoning laws, street and sewer development plans or state environmental regulation. The tribe's current reservation is 813 acres, and it has grown from 33 members in 1969 to 254 today.

TRIBAL WELFARE PROGRAMS

States aren't the only ones that have been laboring to design new welfare programs. Federal welfare legislation signed into law in 1996 gives tribes new flexibility to develop welfare and child support programs.

To date, 22 tribes have submitted Temporary Assistance to Needy Families (TANF) plans to the U.S. Department of Health and Human Services, and 12 (in Arizona, California, Oklahoma, Oregon, South Dakota, Wisconsin and Wyoming) have been approved. Whether tribes elect to run their own programs or tribal members decide to remain in state systems, both tribes and states will benefit from cooperating on such issues as tracking time limits and meeting work requirements in areas of high unemployment.

The new welfare law has many tribal provisions. Tribes with approved programs will receive funding directly from the federal government based on data provided by the relevant states. A tribe, state, county or nonprofit organization may operate tribal programs and a tribe can agree to operate a welfare program for two or more tribes.

Because of extreme unemployment on many reservations, work participation requirements and time limits need not be as strict as in state welfare programs. Tribes can continue to operate job training and child care programs. Child welfare funding for tribes has increased. Welfare-to-work money, which is separate from TANF funds, also is available. Although amounting to only 1 percent of the $3 billion available for welfare-to-work grants nationally, $30 million is earmarked for tribal programs over 1998 and '99. Eighty-seven tribes currently have grants.

Several potential problems loom for states when tribes operate their own welfare programs. Primarily, a state's TANF block grant will be reduced by the amount used for a tribal program. The tribe will determine the service area - this would generally involve everyone living within the reservation, including non-natives. States are not required to contribute a human services match to the tribes, but the health and human services department suggests that they do so, because the contributions can be counted toward maintenance of effort requirements.

Thirty-three states have federally recognized tribal governments that could be affected by tribal welfare programs. The interdependence between state and tribal programs demands cooperation in welfare reform - and there are opportunities for doing this, such as agreeing on or negotiating:

* Methods of calculating the historical tribal case-loads.

* Definitions and standards - those of the Bureau of Indian Affairs, the Indian Health Service or the tribe itself - regarding who is an Indian and defining tribal membership.

* The service area and service population of tribes in remote and rural areas and issues of transportation, child care and other necessary services.

* State provision of some services under contracts with a tribe.

NCSL, STATES AND TRIBES

The National Conference of State Legislatures (NCSL) has a history of working with states and Indian tribes to improve intergovernmental relations. The National Council of Native American Legislators, for instance, was formed in 1992 with the support of NCSL and meets at most NCSL meetings Council objectives include:

* Providing a way to increase communication among Native American legislators.

* Increasing lawmakers' awareness of the diverse Native American cultures in the United States.

* Encouraging open dialogue, understanding and cooperation between states and tribes.

* Acting as an advisory body for NCSL on issues affecting Native Americans.

Susan Johnson tracks tribal issues for NCSL.