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Tribes ask 'What is the new issue?'

While Chairman Don Young's substitute amendment would not have the same impact as the Istook bill, it would have forced the federal government to collect unpaid state taxes from the tribes.

"If we don't do something in terms of a substitute, the someone else will do something more severe. In the long run, you will not only lose your scalps, but a lot more," the chairman said.

In years past the House has considered and rejected similar legislation, but this year retail trade groups such as the National Association of Convenience Stores and the Society of Independent Gasoline Marketers are leading an effort to revive the issue.

As a result, Young said he decided to consider the bill for mark-up. During that markup session, he introduced an amendment, in the nature of a substitute, which would instruct the Special Trustee for American Indians to investigate and, if deemed necessary, collect "covered state sales taxes" on motor fuels and cigarettes. If the Special Trustee was unable to collect said taxes, then the Department of Justice would be instructed to file a civil suit to collect the unpaid taxes.

Many tribal leaders and some in Congress said they believe such language is an intrusion on tribal taxing authority, a threat to tribal-state relations, and completely unnecessary.

"The bill ignores the federal government's trust responsibility to protect Indian lands," said Rep. Dale Kildee, D-Mich. "I also oppose the substitute because it allows the federal government to act as a tax collector for the state and the tribes."

Trade associations of motor fuels and cigarette retailers are targeting tribal governments all over the country with charges of "tax evasion," claiming that states are losing out because tribes are refusing to collect taxes. In states like New York, tribes have been battling the issue both with the federal government and the state.

"We don't believe the federal government or the state of New York has the right to impose these laws on our nation," said Harry Benedict, sub-chief of the St. Regis Mohawk Tribe in New York.

"At one time the Six Nations was stronger than the United States government, but we didn't impose laws on them. Why don't they go after the states or even the Canadian government when they have cheaper tax rates that the citizens of New York take advantage of all the time. Is it the color of our skin or what?"