B-129336, FEB. 4, 1957

B-129336: Feb 4, 1957

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TO THE SECRETARY OF THE INTERIOR: REFERENCE IS MADE TO LETTER DATED DECEMBER 19. OUR DECISION IS REQUESTED WHETHER. IT IS REPORTED THAT ON MAY 18. HELD THAT THE CALIFORNIA DEPARTMENT OF EMPLOYMENT WAS WITHOUT AUTHORITY TO REQUIRE PAYMENT OF CONTRIBUTIONS BY A "TRIBAL INDIAN" EMPLOYING WORKERS ON RESERVATIONS. THIS REQUEST FOR ELECTIVE COVERAGE WAS APPROVED. DEDUCTIONS MADE FROM THE SALARIES OF EMPLOYEES PAID FROM THE TRIBAL TRUST FUNDS OF THE AGUA CALIENTE INDIANS OF PALM SPRINGS AND EMPLOYER CONTRIBUTIONS FROM THE SAME TRIBAL TRUST FUNDS WERE PAID TO THE CALIFORNIA UNEMPLOYMENT BUREAU IN THE AMOUNTS OF $959.79 AND $2. A REQUEST FOR ELECTIVE COVERAGE WAS FILED FOR THE TULE RIVER INDIAN TRIBE AND APPROVED BY THE CALIFORNIA DEPARTMENT OF EMPLOYMENT.

B-129336, FEB. 4, 1957

TO THE SECRETARY OF THE INTERIOR:

REFERENCE IS MADE TO LETTER DATED DECEMBER 19, 1956, FROM THE ADMINISTRATIVE ASSISTANT SECRETARY, CONCERNING A CLAIM FILED WITH THE DEPARTMENT OF EMPLOYMENT, STATE OF CALIFORNIA, BY THE BUREAU OF INDIAN AFFAIRS, FOR REFUND OF EMPLOYER'S CONTRIBUTIONS AND EMPLOYEES' SALARY DEDUCTIONS PAID TO THE STATE OF CALIFORNIA. OUR DECISION IS REQUESTED WHETHER, UNDER THE FACTS AND CIRCUMSTANCES HEREINAFTER RELATED, THE CLAIM MAY BE WITHDRAWN.

IT IS REPORTED THAT ON MAY 18, 1950, THE SACRAMENTO AREA OFFICE, BUREAU OF INDIAN AFFAIRS, SACRAMENTO, CALIFORNIA, FILED A STATE REGISTRATION FORM WITH THE CALIFORNIA DEPARTMENT OF EMPLOYMENT FOR ITS EMPLOYEES PAID FROM THE TRIBAL TRUST FUNDS OF THE AGUA CALIENTE INDIANS OF PALM SPRINGS AND ON THE BASIS OF THE FORM THE CALIFORNIA DEPARTMENT OF EMPLOYMENT ASSIGNED AN ACCOUNT NUMBER TO THE TRIBE. THEREAFTER, THE SACRAMENTO AREA OFFICE SUBMITTED THE REQUIRED REPORTS AND PAID TO THE STATE OF CALIFORNIA THE EMPLOYER'S CONTRIBUTIONS FROM EMPLOYEES THROUGH PAYROLL DEDUCTIONS FOR THE CALIFORNIA UNEMPLOYMENT TAX IMPOSED ON EMPLOYERS AND EMPLOYEES. THE CALIFORNIA UNEMPLOYMENT APPEALS BOARD IN TAX DECISION 1083, DELMAR T. MEJO, DATED DECEMBER 21, 1950, HELD THAT THE CALIFORNIA DEPARTMENT OF EMPLOYMENT WAS WITHOUT AUTHORITY TO REQUIRE PAYMENT OF CONTRIBUTIONS BY A "TRIBAL INDIAN" EMPLOYING WORKERS ON RESERVATIONS. AS A RESULT OF THE TAX DECISION, AND AFTER DISCUSSING THE MATTER WITH A REPRESENTATIVE OF THE DEPARTMENT OF EMPLOYMENT, THE SACRAMENTO AREA OFFICE, BUREAU OF INDIAN AFFAIRS, FILED A FORM WITH THE DEPARTMENT OF EMPLOYMENT ON JULY 18, 1951, REQUESTING ELECTIVE COVERAGE RETROACTIVE TO JANUARY 1, 1950. THIS REQUEST FOR ELECTIVE COVERAGE WAS APPROVED. DURING THE PERIOD JANUARY 1, 1950 THROUGH DECEMBER 1954, DEDUCTIONS MADE FROM THE SALARIES OF EMPLOYEES PAID FROM THE TRIBAL TRUST FUNDS OF THE AGUA CALIENTE INDIANS OF PALM SPRINGS AND EMPLOYER CONTRIBUTIONS FROM THE SAME TRIBAL TRUST FUNDS WERE PAID TO THE CALIFORNIA UNEMPLOYMENT BUREAU IN THE AMOUNTS OF $959.79 AND $2,879.40, RESPECTIVELY. LIKEWISE, A REQUEST FOR ELECTIVE COVERAGE WAS FILED FOR THE TULE RIVER INDIAN TRIBE AND APPROVED BY THE CALIFORNIA DEPARTMENT OF EMPLOYMENT. DURING THE PERIOD JANUARY 1953 THROUGH DECEMBER 1954, DEDUCTIONS MADE FROM THE SALARIES OF EMPLOYEES PAID FROM THE TRIBAL TRUST FUNDS OF THE TULE RIVER INDIAN TRIBE AND EMPLOYER CONTRIBUTIONS FROM THE SAME TRIBAL TRUST FUND WERE PAID TO THE CALIFORNIA UNEMPLOYMENT BUREAU IN THE AMOUNTS OF $176.52 AND $476.39, RESPECTIVELY.

UPON ENACTMENT OF PUBLIC LAW 767, 68 STAT. 1130, WHICH EXTENDED UNEMPLOYMENT BENEFITS TO FEDERAL EMPLOYEES AS OF JANUARY 1, 1955, WITHOUT SUBJECTING THE EMPLOYER TO THE FEDERAL UNEMPLOYMENT TAX, THE SACRAMENTO AREA OFFICE REALIZED THAT THE CONTRIBUTIONS AND SALARY DEDUCTIONS PAID TO THE STATE OF CALIFORNIA WERE IN ERROR INASMUCH AS THE EMPLOYEES FROM WHICH DEDUCTIONS WERE MADE WERE APPOINTED BY THE BUREAU OF INDIAN AFFAIRS PURSUANT TO CIVIL SERVICE REGULATIONS, WERE SUBJECT TO SUPERVISION AND CONTROL OF THE BUREAU OF INDIAN AFFAIRS (AS DISTINGUISHED FROM INDIAN TRIBES OR MEMBERS THEREOF), WERE PAID FROM INDIAN TRIBAL TRUST FUNDS ON THE BASIS OF OFFICIAL PAYROLLS CERTIFIED BY GOVERNMENT OFFICIALS, AND ARE CONSIDERED FEDERAL EMPLOYEES. A CLAIM WAS FILED FOR REFUND OF THE CONTRIBUTIONS AND SALARY DEDUCTIONS BUT WAS DENIED AND ON JULY 7, 1955, A PETITION OF REVIEW WAS FILED WITH THE CALIFORNIA UNEMPLOYMENT INSURANCE APPEALS BOARD.

INASMUCH AS REPORTS FROM THE CALIFORNIA UNEMPLOYMENT BUREAU INDICATED THAT APPROXIMATELY $1,500 HAS BEEN PAID TO THE EMPLOYEES IN UNEMPLOYMENT INSURANCE BENEFITS, AND ADDITIONAL AMOUNTS HAVE BEEN PAID FOR DISABILITY INSURANCE, THE DEPARTMENT OF LABOR, IN AN INTERMEDIARY CAPACITY, REQUESTED THAT THE BUREAU OF INDIAN AFFAIRS CONSIDER WITHDRAWING ITS CLAIM. THE CALIFORNIA UNEMPLOYMENT BUREAU HAD FURTHER INDICATED THAT SHOULD THEY REFUND THE INSURANCE PAYMENTS THEY COULD NOT, IN GOOD FAITH, ASK THE RECIPIENT OF THE BENEFITS TO MAKE RESTITUTION OF THE AMOUNTS RECEIVED WHICH WOULD MEAN FREE INSURANCE HAD BEEN PROVIDED THE EMPLOYEES AT THE COST OF THE INSURANCE FUNDS.

THE FUNDS FROM WHICH THE EMPLOYEES IN QUESTION WERE PAID WERE ANNUAL AUTHORIZATIONS OF INDIAN TRIBAL TRUST FUNDS FROM THE UNITED STATES CONGRESS TO BE EXPENDED FOR THE BENEFIT OF INDIANS AND INDIAN TRIBES. IS STATED THAT THE BUREAU OF INDIAN AFFAIRS IS RELUCTANT TO WITHDRAW THE CLAIM BECAUSE OF THE POSSIBILITY THAT CLAIMS MAY BE MADE TO THE GOVERNMENT BY THE INDIAN TRIBES AND EMPLOYEES FOR RECOVERY OF THE CONTRIBUTIONS AND SALARY DEDUCTIONS WHICH HAVE BEEN PAID TO THE CALIFORNIA UNEMPLOYMENT BUREAU AND OUR ADVICE IS REQUESTED IN THE MATTER.

IN ADDITION TO THE FACTS AS STATED IN THE ADMINISTRATIVE ASSISTANT SECRETARY'S LETTER, INFORMATION MADE AVAILABLE TO OUR OFFICE SHOWS THAT APPROVAL OF THE SACRAMENTO AREA OFFICE'S APPLICATION DATED JULY 18, 1951, WAS BASED UPON THE UNDERSTANDING THAT THE EMPLOYMENT FOR WHICH COVERAGE WAS SOUGHT WAS NOT EMPLOYMENT WITH RESPECT TO AN INSTRUMENTALITY OF THE UNITED STATES. A NOTATION BY A STATE OFFICIAL INDICATES THAT SUCH UNDERSTANDING WAS BELIEVED CONSISTENT WITH A TREASURY DEPARTMENT RULING REGARDING TAXES IMPOSED BY THE FEDERAL UNEMPLOYMENT TAX ACT. THE RULING IN QUESTION WAS THE SUBJECT OF LETTER DATED JANUARY 10, 1950, TO THE SECRETARY OF THE INTERIOR FROM THE ACTING SECRETARY OF THE TREASURY, AND INVOLVED SERVICES PERFORMED IN THE EMPLOY OF INDIAN TRIBES.

THE INSURANCE COVERAGE HERE INVOLVED IS TO BE DISTINGUISHED FROM THAT CONSIDERED IN THE ABOVE MENTIONED RULING SINCE IT WAS EXTENDED TO EMPLOYEES APPOINTED BY THE BUREAU OF INDIAN AFFAIRS IN ACCORDANCE WITH CIVIL SERVICE REGULATIONS, SUBJECT AT ALL TIMES TO SUPERVISION AND CONTROL OF THE BUREAU, AND PAID ON THE BASIS OF OFFICIAL PAYROLLS CERTIFIED BY GOVERNMENT OFFICIALS. SECTION 632, DEERING'S CALIFORNIA UNEMPLOYMENT INSURANCE CODE, ANNOTATED, PRECLUDES COVERAGE OF EMPLOYEES OF THE UNITED STATES GOVERNMENT OR ANY INSTRUMENTALITY OF THE UNITED STATES UNLESS CONGRESS PERMITS THE STATES TO REQUIRE INSTRUMENTALITIES TO MAKE PAYMENTS INTO THE FUND. SINCE NO PERMISSIVE AUTHORITY WAS GRANTEDBY CONGRESS DURING THE PERIOD AND FOR THE EMPLOYMENT HERE INVOLVED, IT IS APPARENT THAT THE SACRAMENTO AREA OFFICE ERRED IN FILING AN APPLICATION FOR ELECTIVE COVERAGE FOR EMPLOYEES OTHER THAN THOSE EMPLOYED BY THE TRIBES OR INDIVIDUAL INDIANS.

SINCE THE BUREAU OF INDIAN AFFAIRS HAD NO AUTHORITY TO DISBURSE THE TRIBAL TRUST FUNDS IN THE ABOVE CIRCUMSTANCES, AND IN VIEW OF THE POLICY OF THE UNITED STATES TO PROTECT THE INDIAN TRIBES BY STATUTE FROM THE MISAPPLICATION OF TRIBAL TRUST FUNDS, THE PERTINENT PROVISIONS BEING SET FORTH IN 25 U.S.C. 122, 126, AND OF THE DUTY TO PROVIDE EVERY REASONABLE SAFEGUARD FOR THE PROTECTION OF INDIANS AND SECURITY OF THEIR POSSESSIONS, IT IS CONCLUDED THAT THE CLAIM MAY NOT BE WITHDRAWN.