    [Senate Hearing 107-498]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 107-498

              INDIAN TRIBAL DEVELOPMENT CONSOLIDATION FUNDING ACT
    =======================================================================

                                    HEARING

                                   BEFORE THE

                          COMMITTEE ON INDIAN AFFAIRS
                              UNITED STATES SENATE

                          ONE HUNDRED SEVENTH CONGRESS

                                 SECOND SESSION

                                       ON

                                     S. 343

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

                                   __________

                                  MAY 8, 2002
                                 WASHINGTON, DC
                            U.S. GOVERNMENT PRINTING OFFICE
    80-227                          WASHINGTON : 2002
    _____________________________________________________________________________
    For Sale by the Superintendent of Documents, U.S. Government Printing Office
    Internet: bookstore.gpo.gov  Phone: toll free (866) 512-1800; (202) 512-1800
    Fax: (202) 512-2250 Mail: Stop SSOP, Washington, DC 20402-0001

                          COMMITTEE ON INDIAN AFFAIRS

                       DANIEL K. INOUYE, Hawaii, Chairman

                BEN NIGHTHORSE CAMPBELL, Colorado, Vice Chairman

    FRANK MURKOWSKI, Alaska              KENT CONRAD, North Dakota
    JOHN McCAIN, Arizona,                HARRY REID, Nevada
    PETE V. DOMENICI, New Mexico         DANIEL K. AKAKA, Hawaii
    CRAIG THOMAS, Wyoming                PAUL WELLSTONE, Minnesota
    ORRIN G. HATCH, Utah                 BYRON L. DORGAN, North Dakota
    JAMES M. INHOFE, Oklahoma            TIM JOHNSON, South Dakota
                                         MARIA CANTWELL, Washington

            Patricia M. Zell, Majority Staff Director/Chief Counsel

             Paul Moorehead, Minority Staff Director/Chief Counsel

                                      (ii)

                                C O N T E N T S

                                  ----------
                                                                       Page
    S. 343, text of..................................................     3
    Statements:
        Campbell, Hon. Ben Nighthorse, U.S. Senator from Colorado,
          vice chairman, Committee on Indian Affairs.................     1
        DeLaCruz, James, council member, Quinault Indian Nation......    32
        Hall, Tex, president, National Congress of American Indians..    25
        Makil, Ivan, president, Salt River Pima-Maricopa Indian
          Community Council..........................................    27
        McCaleb, Neal, assistant secretary, Indian Affairs,
          Department of the Interior.................................    22
        Spilde, Katherine A., senior research associate, Harvard
          Project on American Indian Economic Development, Kennedy
          School of Government.......................................    38

                                    Appendix

    Prepared statements:
        DeLaCruz, James..............................................    50
        Hall, Tex....................................................    45
        Makil, Ivan..................................................    46
        McCaleb, Neal................................................    43
        Murkowski, Hon. Frank H., U.S. Senator from Alaska...........    43
        Spilde, Katherine A..........................................    48
    Additional material submitted for the record:
        Sovereignty and Nation-Building: The Development Challenge in
          Indian Country Today: Stephen Cornell and Joseph P. Kalt
          (report)...................................................    54
        The Economist (articles).....................................    87
        Public Papers of the Presidents of the United States: Richard
          Nixon, 1970................................................    90

              INDIAN TRIBAL DEVELOPMENT CONSOLIDATION FUNDING ACT

                                  ----------

                             WEDNESDAY, MAY 8, 2002

                                           U.S. Senate,
                                   Committee on Indian Affairs,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 10 a.m. in room
    485, Senate Russell Building, Hon. Ben Nighthorse Campbell
    (acting chairman of the committee) presiding.
        Present: Senator Campbell.

     STATEMENT OF HON. BEN NIGHTHORSE CAMPBELL, U.S. SENATOR FROM
          COLORADO, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

        Senator Campbell. Chairman Inouye is chairing another
    hearing this morning, so we'll proceed with this hearing.
    Welcome to the Senate Committee on Indian Affairs hearing on S.
    343, the Indian Tribal Development Consolidated Funding Act of
    2001, a bill that I introduced along with Chairman Inouye in
    February 2001.
        By now we're all too familiar with the unfortunate economic
    conditions in Indian communities, a jobless rate of 45 percent,
    and 80 to 90 among some of the Plains economies. The poorest
    health in the United States, with tuberculosis, diabetes,
    cancer almost in epidemic proportions. Substandard and crowded
    housing and an education system that traps Indian youngsters in
    hopelessness.
        Despite some of the recent successes with Indian gaming,
    natural resource development and other business opportunities,
    most tribes still remain mired in Third World poverty.
        There is a core group of conditions that any developing
    economy needs, and these are what we have been focusing on at
    the Federal level. One is solid physical infrastructure, two, a
    healthy, educated work force, and three, financial capital.
    There is one ingredient we can't legislate and that's tribal
    leadership. And I don't just mean someone who gets elected, I
    mean someone who is willing to work and make his or her tribe
    attractive to both Indian entrepreneurs and outside investors,
    and someone who is willing to do unpopular but necessary things
    like reforming constitutions, insisting on independent
    judiciaries and making sure contracts and agreements are
    honored by tribes even with changes in tribal administration.
        In December 2001, the GAO published a report showing that
    of the billions of dollars of Federal economic development
    assistance for Indian tribes and Indians, much of it goes
    unused. In the 1980's, Congress launched what became the highly
    successful Indian Tribal Self-Governance Act that grew out of
    intense Congressional dissatisfaction with the performance of
    the Indian agencies.
        Congress decided that agency reforms were not going to take
    place and that the only answer was to circumvent the agencies
    and provide the funds directly to the tribes themselves. I
    think that it is working. Generally, it's working very well. I
    know we've heard from many tribes who do their own contracting.
    They all seem to think that's the direction we should have been
    going all along. I'm sure there's enough blame to go around, I
    guess that's why I introduced S. 343.
        [Text of S. 343 follows:]

        Senator Campbell. We're going to try with this bill to make
    some changes in the way the Federal economic development
    assistance to Indian tribes is handled. S. 343 is modeled after
    the Tribal Self-Governance Act and would provide economic
    development funds directly to the tribes. The Indian Tribal
    Development Consolidated Funding Act of 2002 authorizes a pilot
    program for up to 24 Indian tribes to participate in projects
    to foster community, economic and business development in their
    communities.
        In addition to block granting economic development funds to
    tribes, this bill creates a clearinghouse of Federal Indian
    programs for information that will ensure that tribes take
    advantage of all Federal agency programs with little or no cost
    to the Government. My intention is to work with the
    Administration to produce an agreement on this bill or
    something that looks similar to it in this session of Congress,
    even though we don't have an awful lot of time. If we can't
    reach an agreement this session, then I will re-introduce this
    bill again next year.
        With that, I would introduce into the record two articles,
    one from the Economist and a copy of the GAO report dealing
    with Indian affairs.
        [Information appears in appendix.]
        Senator Campbell. With that, we'll start with Neal McCaleb.
    If you'd like to just come on up and sit down, Neal, and
    Aurene, if you have something to say with this too, please come
    up here and sit with him. Nice to have you here, Neal.

       STATEMENT OF NEAL McCALEB, ASSISTANT SECRETARY OF INDIAN
                  AFFAIRS, DEPARTMENT OF THE INTERIOR

        Mr. McCaleb. Thank you very much, Mr. Chairman. It's a
    pleasure to be here.
        Senator Campbell. All your written testimony will be
    included in the record.
        Mr. McCaleb. All right. I may just do that, rather than
    read it into the record.
        First of all, I want to make it clear that we're absolutely
    in support of both the concept and the letter of the bill,
    because it, I think, builds on some things that we've already
    accomplished in this consolidation and integration of Federal
    programs, due to single agency oversight to deal with Indian
    interests. We've seen the success of the legislation, Public
    Law 102-477, which integrated the training programs and the
    education programs. That's been very successful, it's been very
    enthusiastically endorsed by the tribes and this is very
    similar.
        We think there's a lot to be accomplished by the
    integration of these different programs. Right now we have
    these programs scattered across many different departments and
    agencies. The tribes have to make applications individually to
    these agencies. Then they have to have a report of financial
    accountability. This provides a streamlining so that they can
    make one application, and there's a bill that provides it
    through the Department of the Interior. It's coordinated for
    all different agencies. I think there's a lot of synergism and
    efficiency associated with the bill.
        There are some tweaks, I think, that some different
    departments are giving some different information to us, the
    Administration, they have some suggestions or tweaks to the
    bill. I'm sure that we'll visit with the committee about that
    at a later date. But the bill substantially is enthusiastically
    endorsed by the Administration. And I think with that, I'll
    just answer any questions.
        [Prepared statement of Mr. McCaleb appears in appendix.]
        Senator Campbell. Well, thank you. I appreciate that. It's
    rare that we get a bill that's enthusiastically endorsed by
    anybody. It's kind of nice. And whatever those tweaks are, if
    you would have Aurene or somebody get together with the staff
    and Senator Inouye's staff, we'll try and----
        Mr. McCaleb. And it's mentioned in the formal testimony.
        Senator Campbell. I see. Good.
        Conceptually, you think that it is time to extend self-
    governance to other areas like economic development, as this
    bill would do?
        Mr. McCaleb. Absolutely. As you indicated earlier, the
    self-governance legislation that was passed early in the last
    decade has been very successful, we may have 220 tribes that
    are contracting or compacting for their own self-governance,
    which amounts really to a block grant to tribes. That is a
    concept that's available in this bill and I think it will
    expand to other tribes under this bill. I think it will expand
    the concept of self-governance.
        Senator Campbell. In the past, whenever we have talked
    about self-governance, although I think the concept is becoming
    more acceptable now and a little easier to deal with with
    tribes, I can remember years ago when we would talk about it,
    there was always a worry that, is self-governance code for
    taking away the trust responsibility that we are obligated to
    provide and that tribes have a right to expect. But I don't
    seem to hear that quite as much now.
        Maybe I would ask you, how do we encourage tribes to expand
    self-governance? One of the other things that we hear, Neal, as
    you know, is that new tribes come in after we've put something
    in place, and it may be in place for 1 year or more, and people
    come in all the time and say, we didn't know about it. So there
    seems to be a vehicle of disconnect somewhere, by the time we
    put something in place, that they know they actually have
    available to them.
        Mr. McCaleb. Well, I think in Indian country, there's a
    general awareness of the opportunity of self-governance. Many
    tribes choose to continue and not be self-governance, but
    contract under 638 for a variety of programs. And then some
    tribes prefer to be direct service tribes, where the BIA
    provides all these services. And part of self-governance is
    letting tribes make their own decisions. That's happening, and
    I think that's probably good.
        I think there's a general awareness, you're right, though,
    that initially there was a lot of reserve about self-
    governance. I was privileged in 1983 to be a member of
    President Reagan's Commission on Indian Reservation Economies.
    One of the recommendations that we made is very similar to what
    we've done in self-governance, and that is to take the money
    that is ascribed to the tribes in a variety of programs and
    just divert it directly, or not divert it, but transmit it
    directly to the tribes in the form of a block grant. That's
    essentially what self-governance is. When we made that
    recommendation in that commission report, it was roundly
    repudiated in Indian country.
        So there is a kind of an educational process, a learning
    curve, if you please. We had a surge in self-governance when it
    started about in the 1995, 1996 through 1998 era, when it
    picked up. It's finally leveled off, but we're continuing to
    add self-governance tribes each year.
        Senator Campbell. From the time you were on that commission
    and you had considerable experience in Oklahoma before you came
    to the Federal Government, and the time you've been in your
    present position, have you noticed any correlation between
    self-governance and the economic success of tribes that have
    participated in self-governance?
        Mr. McCaleb. Yes; I think so.
        Senator Campbell. Can you say that the ones who have used
    it more have raised their standard of living for their people?
        Mr. McCaleb. I think so. The Harvard Project people have
    made the point that one of the real seed beds of economic
    growth is a stable, functioning, true self-governing tribe that
    has a strong tribal government. This process of self-governance
    would simply strengthen those aspects, both from the
    legislative and the administrative standpoint within the tribe
    that is conducive to strengthening those institutions within
    the tribal government that provides stability and would provide
    a good environment or a good seed bed for economic growth and
    economic development.
        Senator Campbell. Thank you. In fact, someone from the
    Harvard Project is going to be testifying a little later. Maybe
    they can inform and enlighten us a little bit more about that.
        Those are the only questions I have, Neal. Did Senator
    Inouye have anything he wanted me to ask?
        There may be some written questions from other members of
    the Committee, but we'll be looking forward to working with you
    in the next few weeks, if you can, on this bill. Hopefully
    we'll be able to get the thing through this year, if it meets
    with the approval of the tribes.
        Mr. McCaleb. I'll look forward to it, sir. Thank you for
    the privilege of being here today.
        Senator Campbell. Thank you very much.
        Our next witness panel is Tex Hall, president of the
    National Congress of American Indians; Ivan Makil, president of
    the Salt River Pima-Maricopa Indian Community Council; and
    James DeLaCruz, council member of the Quinault Indian Nation.
        We might say before we take testimony, James, I knew your
    dad well, he was a wonderful friend and great Indian leader.
    Like many other people in America, we were just terribly
    distressed when he unfortunately passed away. I was in an
    airport at the time, and had just bumped into another friend, a
    mutual friend between your dad and me. He's the one that
    actually told me about it. I want you to know that our hearts
    really went out to your family.
        Mr. DeLaCruz. I appreciate that.
        Senator Campbell. And Ivan, I'm sorry I didn't see you when
    you came in, or I would have come over and said hello. We've
    been friends for so long.
        Tex, nice to have you here. We'll start with you. I might
    tell you that--did you see that thing on a web site where you
    and I supposedly had some huge disagreement on a Friday in a
    committee hearing here which we have never had? We don't do
    committee hearings on Friday. It was not very complimentary
    about me or you. We're thinking about responding to that, it
    was so bad. It was fabricated.
        Mr. Hall. No; I didn't bother to look at it, based on what
    some of the folks had told me, that it was negative and it was
    pitting us against each other, and a derogatory remark. That is
    completely a fabrication.
        Senator Campbell. Totally false. We've been friends ever
    since we've known each other. I didn't know about it either
    until I got a call from the president of the Northern Cheyenne,
    where I'm enrolled. They were very upset with it. They said,
    did you see this? I said no, and they said they thought they
    were going to respond to that, too, because it was so bad.
        Mr. Hall. I got the same call from your tribe. I think it's
    important that we do. At least I will, Mr. Chairman.
        Senator Campbell. Thank you. Go ahead and proceed. And to
    all of you, your written testimony will be included in the
    record.

    STATEMENT OF TEX HALL, PRESIDENT, NATIONAL CONGRESS OF AMERICAN
                                INDIANS

        Mr. Hall. Thank you, Mr. Chairman and members of the
    committee. I appreciate the opportunity to present on S. 343
    today.
        Just a little background, we at NCAI, National Congress of
    American Indians, are really supportive of the concept of this
    bill. We've been working with Neil McCaleb, the Assistant
    Secretary for Indian Affairs, working on an overall economic
    development focus. Matter of fact, NCAI is meeting in Bismarck
    on June 16-19 and the whole conference is focused on economic
    development. So this bill is a great start, we think, toward
    putting some of those tracks down.
        Finally, we're looking toward even a White House initiative
    later on this fall. I think we even set the date, it's
    September 18 through 20. So obviously we want to work with the
    Committee as we move this forward. This bill is an example of
    the 477 program, which of course has been very successful in
    Indian country. It's like a one stop shop.
        The bureaucracy, I think, in line with your comments
    earlier, Mr. Chairman, about why some tribes don't, I think the
    bureaucracy discourages many tribes from developing their
    applications. And the one stop shop, especially if we can add
    that onto the portion of the bill that talks about the waiver
    of the provisions, the only thing I see now is what happens if
    the Federal agency does not want to waive its provisions. We've
    seen that in the bureaucracy, and some agencies are very
    willing to look at waiving certain red tape and regulations and
    others are not. So I think we need to have some sort of
    strength in the bill that says what happens if an agency does
    not want to waive.
        Those were just my general points. We have submitted our
    written testimony, Mr. Chairman, and just briefly in my verbal
    testimony, we definitely want to support this bill, again, not
    only for NCAI but for my tribe at the Fort Berthhold
    Reservation in North Dakota.
        At the BIA, we have a subcommittee on economic development.
    This really lays the groundwork for one of our recommendations
    for consolidation of Federal agencies. So we're really in line
    with that.
        I do have a concern on the number of applicants. The bill
    says 24, Mr. Chairman. I'm wondering if we couldn't increase
    that. Because one of our concepts as we're working for this
    national economic effort is that the World Bank, the World Bank
    has a goal in 15 years to reduce poverty by 50 percent. That's
    an aggressive goal, but I think it's a very worthwhile goal. I
    think it's something we should look at in Indian country and
    with the United States Congress, is a similar goal to reduce
    the 50 percent national unemployment in one-half by 15 years.
    That would reduce us down to 25 percent. But I think we need to
    even look at doubling the 24 tribes to 50.
        The second point I want to raise is that the criteria for
    eligibility for the demonstration project, again, there's going
    to be tribes, as you mentioned, Mr. Chairman, in self-
    governance, that are very capable. And I think we somehow have
    to think of those tribes that are the have-nots, those tribes
    that need the technical assistance, that probably need the
    funds the most. Somehow we need to think of criteria that
    doesn't eliminate those tribes. So I would strongly advocate
    that we look at some language to help those tribes that don't,
    I mean, the criteria doesn't exclude them, maybe is a better
    way for me to put that.
        Another point, a recommendation, Mr. Chairman, is that we
    believe that all Federal agencies should be required to create
    a catalog of programs for provisions. Right now the bill has
    language that says may, and we strongly support that provision
    of the bill, but I think it should require.
        So that's just some technical stuff. I think again that
    that would really be beneficial, to mandate the Federal
    agencies to comply.
        Also another recommendation is for legal reasons, if an
    agency does not want to comply, is there any oversight
    provision that could be provided here? Because I think it says
    after one year, the President shall do a report to Congress.
    That might be a little bit long. I'm just thinking of some sort
    of technical amendment that would require some sort of
    oversight. Again, some Federal agencies are very cooperative
    and very much want to do economic development. Others are not.
        So if an agency does not, and they're saying, well, for
    these legal reasons, we don't want to waive any sort of
    regulation provisions or the criteria, or they're just not
    cooperating, I think there could be some sort of a technical
    amendment or some sort of oversight that could spur them on to
    comply with working with a tribe. Because as we know, in Indian
    country, Mr. Chairman, and you know yourself, that if we're
    working on a housing project or a lagoon project, we may have
    five Federal agencies working on that single lagoon project for
    housing development for a tribe, with five different
    bureaucracies and five different regulations and five different
    sets of funds.
        Senator Campbell. Who don't talk to each other much.
        Mr. Hall. And we don't talk to each other very much. So
    again, the concept for this is a wonderful concept. We just
    think that's it's very important that we move forward on this.
        Just in line with your point about why some tribes aren't
    either using self-governance or using the legislation that is
    passed by Congress, you know, that's a difficult--and I was
    listening to your question on it, that's a very valid question.
    I think the bureaucracy sometimes affects tribes from even
    wanting to apply, because they know they're going to jump
    through many hoops. We just gave the example of one project, a
    lagoon project, using five Federal agencies.
        So I think if we can, once the bill hopefully passes and
    everything, with all the amendments from Indian country, and it
    goes forward, which I hope it does, we somehow, with NCAI and
    with the Department of Interior, we need to really market this.
    Because I think this is a wonderful opportunity. Obviously we
    will do that at the NCAI conference in June and we will do that
    at the summit later on in September. We will do our part to
    really market this bill, so that tribes are aware.
        But again, the criteria might scare some tribes. We've
    really got to look at that criteria so it doesn't exclude those
    tribes that need it the most. So that really does it for the
    gist of our comments, Mr. Chairman. I'd be happy to answer any
    questions later on.
        [Prepared statement of Mr. Hall appears in appendix.]
        Senator Campbell. I appreciate it. I might mention that I'm
    not wedded to the 24, by the way, we just picked 24 because
    it's 2 in each of the BIA areas. I thought that would make a
    nice, round number, but it certainly could be more. As you
    know, we do these things in two steps, the first one is a
    concept bill like this that sets up a demonstration project,
    and if we get some information back and it sounds good and if
    everybody's happy with it, then we move forward with the bill
    to expand it. That's probably the way this will be done, too,
    if the thing works out, why then we'll try to make it bigger.
    But the number 24 certainly can be changed if tribes think that
    it should be.
        Why don't you go ahead, Ivan.

     STATEMENT OF IVAN MAKIL, PRESIDENT, SALT RIVER PIMA-MARICOPA
                        INDIAN COMMUNITY COUNCIL

        Mr. Makil. Thank you, Senator Campbell, and other committee
    members. I really appreciate the time and especially the
    efforts in terms of this bill. It's really good to see,
    refreshing to see that we're finally beginning to see some
    creativity in how we draft legislation that benefits tribes.
        This is really important, particular to us at Salt River.
    Part of what I'm going to share with you today is just some
    experiences that we've had at Salt River to sort of explain how
    I think this program can be beneficial to other tribes, and had
    this program been in place years ago for us, I think we would
    have been much further along, as I think it will benefit other
    tribes in the future.
        Originally, Salt River was in an area where our ancestors
    made and developed an economy out of a river, Salt River, which
    the tribe was named after. But the Federal Government some time
    back dammed up that river and basically cut off the life blood
    of the community. We were primarily an agricultural tribe. So
    the agriculture pretty much went away without water.
        So that forced us to look at what alternatives we might
    have. At that time, we were quite a ways out from the Phoenix
    metropolitan area. Fifty years later, all of a sudden, the
    metropolitan area has started growing up to our boundaries. And
    as it grew up to our boundaries, it forced us to start looking
    at how we start to adapt to this more contemporary society and
    ways of generating revenue so that we could take care of our
    people. Not only take care of our people, but provide the kinds
    of housing, health care, etc., that was necessary for all
    communities.
        And I guess you'll see some of the slides that we have here
    that will show you and emphasize some of the things we're
    talking about. One of the things that we've been fortunate
    about is that we have realized that the decisions we make today
    are going to be really effective, affecting people in the next
    generation. They don't affect us directly today, but we know
    that what we do today is going to impact us. That concept of
    understanding how we create communities and make decisions for
    the next seven generations is really critical to all tribes. It
    puts us in a position so that we make better decisions.
        We're one of the, as Mr. McCaleb had mentioned, we're one
    of the 220 tribes that are a self-governance tribe. But we
    started in self-governance actually before self-governance
    became popular. Back in the Nixon era, when President Nixon
    first launched the self-determination efforts in 1970, Salt
    River contracted for its first program, before Public Law 93-
    638 was in effect. In 1970, we contacted for a police
    department.
        What that started allowing us to do was to start utilizing
    the revenue and understanding how, by supplementing it with our
    own resources, managing it ourselves, that we could create a
    better department. Today, that experience brought us down the
    road to where we contract for almost all the services. So when
    we made the conversion to self-governance, it was a real simple
    process.
        But I guess that experience and one of those main
    principles that are contained in your bill, S. 343, that
    authorizes that kind of expansion of this program, really is, I
    guess, sort of the next step for all tribes, especially for
    those that have never had the opportunity to do self-
    governance.
        But it's important that the funding to the community, the
    businesses and economic development is highlighted. Because it
    continues to be the foundation of what we consider both a
    systematic and a holistic approach. This systematic and
    holistic approach is really critical, because the systematic
    approach deals with functionality and efficiency. The holistic
    side of this effort really is consistent with how tribes do
    things anyway, how tribes think. So it gets to the cultural
    base of tribes.
        And it's important, as we move along and as tribes are
    growing, that we continue to bring these two portions together.
    Because without that, as was mentioned earlier, you have one
    agency doing one thing, trying to deal with something in health
    care or housing, and you have another that may be dealing with
    economic development. But for instance, infrastructure, whether
    it's through housing or some sort of economic development
    project, ought to be coordinated. The best people to do that
    are the tribes themselves.
        In the 1980's, Salt River first developed a shopping
    center. We were one of the first tribes to ever develop a
    shopping center of our size. And part of what that did was, we
    were able to do that because we had contracted for some of the
    services, particularly realty. What that did was it put us in
    control of that process. Public Law 93-638 gave us a process
    that allowed us to change and to manage more realistically the
    development process that was important.
        That development process was a very cumbersome process. We
    learned a lot of things over time. On the screen what you see
    is an example of our lease process. The yellow is the
    highlighted area of our process. I know it's difficult to see.
    But it talks about all of the various due diligence, the
    requirements of land issues, especially when you deal with a
    lot of land issues, that we had to develop over time. This is
    the process that we use today.
        So you see the involvement of the BIA, which is very
    minimal, those are where the trust responsibilities of the
    Bureau are still maintained.
        Senator Campbell. The green?
        Mr. Makil. It's the green. The BIA is in the green.
        On the next slide, if you compare this process, most tribes
    deal with this process or a similar process, where they have to
    get approval from the Bureau. You see all of the green here,
    versus the decisions that they really are in a position to make
    in the yellow. That is so important, and that process is so
    important to creating a foundation for revenue, so important
    for making decisions about what tribes can live with in terms
    of growth and development. Because if we can't control growth
    and development and how we grow, from health care to housing to
    economic development to infrastructure, then we will never meet
    the needs of our community.
        Because we have taken control of those resources and been
    able to establish this process, one of the things we've also
    been able to do in this process is create a data base of our
    land records. This sort of ties into the overall issues of how
    you manage trust lands and trust funds. Because part of what
    we've done in this process is because we had to have a system
    that helped us to understand ownership of those lands.
        This is a map of our community. With our system that we've
    developed, because we had to develop it for development
    purposes, we can go in and a landowner can come in and say, I
    have my allotment, here's my allotment, and we can break it
    down to each section. Then we can break it down even further,
    so that any landowner that walks in our realty office can walk
    out with a description of their land, the amount of interest
    they own in their land, no mater how severely fractionated, and
    we can even show them exactly where their land is on a map.
        Now, we've been able to do this because we've been able to
    manage these resources in a self-governance type of way. That's
    something that I think you won't find hardly anywhere in the
    country.
        Ten years ago, the community developed what we call a
    vision statement that would guide our community. What was
    important in that process is that it wasn't a process of
    individuals or of consultants or of even the council. It was a
    product of the whole community. The idea came from the
    administration and the council. But we had a series of public
    hearings where we brought in tribal members and we talked about
    housing, we talked about health care, we talked about
    development and the future growth of our community, what did we
    want to see our community look like.
        Through this public hearing process, it brought in and
    created ownership in this vision of our future, by the
    individual members. So that it wasn't an issue of tribal lands
    versus allotted lands, it was an issue where we were able to
    bring all of the parties together and have some agreement in
    general. Obviously, not everybody agrees. But in general, there
    was a significant amount of agreement and support in this way.
        This is where, by having control of those various services
    and being able to manage them internally, that although there's
    always a concern by the Bureau that there's a trust
    responsibility and that trust responsibility goes to individual
    allottees, that we've been able, because it's been important to
    bring this cohesiveness of community together, that the tribal
    members participate in this process.
        So when we talk about, and I think Tex brought up a really
    good point, we have concerns about it, too, in terms of waiving
    certain regulations. Too often, tribal governments are looked
    at as, well, we don't look out for the interest of the
    allottees. But the allottees are our constituents. Things only
    work if the allottees support what we're trying to do in terms
    of tribal government.
        So as long as we bring them into this process and we make
    them a part of the process, and they are a part of this
    process, then they have ownership in the vision of the future.
    That ownership in the vision of the future is what can come
    about when you can wrap your arms around all of these resources
    that are available to you. All of these Federal agencies have
    resources that tribes need.
        From our experience, I have no doubt that the creation of
    this bill was an extremely great idea. You sort of liken it to
    a fund where you can leverage other opportunities and you don't
    waste dollars. You get the biggest bang for your buck, so to
    speak, because you don't have duplication and you can avoid
    that kind of duplication.
        In this process, we were fortunate because we were forced
    to develop the kind of expertise internally. Our experience,
    and I personally have talked to a lot of tribes around the
    country about development and some of the things that we've
    been doing, we've been invited several times to share not only
    the things we've done in economic development but also the
    things we've done with, as you saw earlier, the management
    process of realty. We've been asked to share that program with
    other tribes.
        That was an evolutionary process. It didn't happen
    overnight. It happened starting in 1970 when we contracted for
    the first program. With the principles that are laid out in S.
    343, what you're doing is you're giving tribes the opportunity
    to start to develop that expertise. Because when they have the
    opportunity to start managing those resources, they also have
    to start developing the expertise. Or one of the things that we
    think that maybe should be considered in this demonstration
    project is, if the tribes do not have expertise, is making sure
    that within the bill there's the opportunity to gain that
    expertise or hire that expertise. That's really critical.
        Because one of the things that we've found as we've created
    enterprises, we now own and operate nine different enterprises,
    everything from a sand and gravel operation to a golf course
    that's one of the top 100 in the country, we own a cement plant
    in northern Arizona that's not even on our land, on tribal
    land, it's on land that we purchased. But all of these
    opportunities came about because we hired the expertise and we
    learned from that expertise.
        I realize that time is running short and I'm getting a
    little long here. But I guess what I mainly wanted to do is get
    across the point that what we see is a great opportunity that
    tribes really have never had before. Self-governance was the
    first effort. Expanding it, and you know, self-governance was
    really confined to whatever we had in the Bureau. It had a lot
    of limitations. When you expand it, you really give the
    opportunity for tribes to become self-reliant and self-
    sufficient.
        That's how tribes begin to re-instill and get back the
    dignity that we've always had. We've always had economies
    before the Federal Government was here. We still make decisions
    that we think about for the future.
        I thank you for the opportunity to be here to share some of
    these thoughts with you today. Obviously this is a project that
    I feel I have a lot of passion for, because we've seen how it
    works and I can show you the experiences that we've had and the
    growth that we've had and the opportunity that has been created
    for us. I see this as a huge opportunity for other tribes.
        If there's anything that we can do in terms of our
    experience to lend to this effort, I'm perfectly comfortable in
    committing myself as well as my staff to any efforts, and the
    experience that we have. Thank you.
        [Prepared statement of Mr. Makil appears in appendix.]
        Senator Campbell. Thank you. That was a very fine
    testimony. Between you and Tex, you make me feel good about
    this bill so far. [Laughter.]
        I wish I could take all the credit for writing it, but as
    you know, staff does an awful lot, and have put an awful lot of
    work and thought into this bill.
        I'll ask you questions in a few minutes, but I want to tell
    you, I think you're absolutely right when you talk about, if I
    can paraphrase it, there's more than one kind of growth when
    you have the growth of economic development, because you have
    the growth of people's ability to control their own future. We
    sometimes hear, well, you know, we can't very well set up that
    program, because we don't have the expertise to run it. But it
    seems to me they can go hand in hand. People grow at the same
    rate, maybe, or sometimes even faster than the business grows.
    If they're ever going to learn how to do it, then there's got
    to be some interconnection between the growth of the business
    and the growth of the skills to run it, too.
        You have certainly got over one hurdle. I was reminiscing,
    when you told me about the terrific inclusion you have in your
    tribe when you make decisions, I had a frustrated person one
    time, I was visiting a tribe and a fellow came out of a tribal
    council meeting, he was growling around and I asked him what
    was wrong, and he said, my gosh, you get two Indians in this
    tribe together, you can have three fights. [Laughter.]
        You've gotten over that hurdle pretty well with your tribe,
    I think, Ivan. It sounds like you have a model that tribes
    could use.
        James, if you'd like to proceed, please.

     STATEMENT OF JAMES DeLaCRUZ, COUNCIL MEMBER, QUINAULT INDIAN
                                 NATION

        Mr. DeLaCruz. Good morning, distinguished members of this
    committee and Mr. Chairman.
        If I could just add a personal note, thank you for your
    comments. Joe was my older brother, and we lost him on his way
    to a self-governance conference. I often wonder how he would
    look upon things today as they are. Maybe we can hear him
    rumbling in the background from time to time and think about
    what his positions would be in self-governance. I'll carry your
    message to our family and to the Quinault Indian Nation, and we
    appreciate that. Thank you.
        My name is James DeLaCruz. I'm a councilman with the
    Quinault Indian Nation. I'm honored to provide testimony on S.
    343, the Indian Tribal Development Consolidated Funding Act of
    2001. I am here today representing the six tribe self-
    governance consortium which administers the self-governance
    communication and education project. The members of this
    consortium include six of the original 10 tribes that
    participated in the self-governance demonstration project in
    1989, the Mille Lacs Band of Ojibwe Indians, the Jamestown
    S'Klallam Tribe, the Lummi Indian Nation, the Hoopa Valley
    Tribe, the Sac and Fox Nation, and the Quinault Indian Nation.
        Prior to self-governance, we as tribes could not easily
    function as the primary service provider on our reservation.
    That function had been assumed by Federal bureaucracies. The
    simple concept that sovereign tribal control at local level
    works better than Federal control hundreds and thousands of
    miles away is a hallmark of self-governance. In 1975, Nixon
    reformed policy of tribal self-determination allowed tribes to
    contract and reform Federal services. This was quickly limited
    with oppressive regulations and Federal contract oversight.
        Self-governance brought about many changes: Contract
    reform, the elimination of excessive regulations, the
    consolidation of funding and programs, the elimination of
    unnecessary supervision and the adherence to government-to-
    government relations. Consistent with the tribally driven self-
    governance initiative, tribes must take the leadership in
    structuring how the Federal Government carries out its trust
    responsibilities to Indian tribes. Economic self-sufficiency
    remains an unattained goal for most tribes.
        S. 343 focuses on one of the aspects of our problems in
    this arena, which is how to navigate through the available
    Federal resources and then to determine how to best utilize
    these resources. S. 343 uses the demonstration model of self-
    governance. S. 343 recognizes and builds on the premise that we
    are sovereign governing nations.
        This legislation allows tribes the opportunity to engage in
    a demonstration project and negotiate with Federal agencies to
    determine how best to make Federal programs a successful effort
    toward achieving economic self-sufficiency. This allows for a
    controlled experiment of inter-departmental cooperation and
    program consolidation without trying to set all the elements in
    advance. It allows tribes and the departments to negotiate. It
    allows tribes knowledgeable of the needs and resources that it
    has, to design an Indian program for economic development, it
    allows tribes to search among the menu of the various Federal
    programs as well as State programs where the State agrees to
    cooperate, to put together program elements and funds to
    support the programs designed by that tribe.
        In addition, it seeks to provide mechanisms of inter-agency
    administration, regulation, consolidation and one-stop
    shopping. S. 343 will serve to streamline economic development
    funds that tribes can access whether an individual tribe or a
    consortium. We recommend that tribes who seek to participate in
    this demonstration project develop tribal business codes. All
    too often, tribes enter into negotiations to allow outside
    vendors to bring their businesses to reservations, yet they are
    unaware of the need to have a tool in place such as the tribal
    business code to educate the outside parties about the Indian
    culture. All economies that we bring to our land must reflect
    our traditions and customs, which are the very nucleus of our
    existence.
        Just as the reemergence of tribal goverments again
    operating our own programs and administering services to our
    own people has occurred, we can break the cycle of
    institutional dependency and begin to seek ways to develop
    sustainable reservation economies for our people. To authorize
    24 tribes to enter into a demonstration project, to access
    economic development funds from all Federal departments is a
    very positive step and we applaud your efforts.
        Legislation such as the Indian Tribal Development
    Consolidation Funding Act of 2001 is a very good step. Thank
    you.
        [Prepared statement of Mr. DeLaCruz appears in appendix.]
        Senator Campbell. Thank you. I appreciate the testimony of
    all three of you. All three of you are well-known tribal
    leaders in your own area. And I was reflecting on your
    testimony, James, in particular. We find ourselves, I guess, in
    Indian country now at kind of a cross-roads that some people
    are having a little problem dealing with. Because traditional
    Indian people are not materialistic. That's what the potlatch
    and the giveaways are all about, to show disdain for
    materialism, to show that they're not tied to earthly goods,
    that they have a higher calling. Yet at the same time,
    everybody knows you've got to have some material things if
    you're going to have better schools for your youngsters or
    hospitals for your people or nutrition for people that need it.
    You've got to have that.
        But it's been my experience, at least with the vast
    majority of tribes that I've visited with and know, that the
    tribal leaders have found a way to balance one with the other.
    In fact, I don't know very many tribes that would elect
    somebody to tribal leadership that has just forgotten the old
    traditional ways in lieu of just making more money or building
    more buildings or something of that nature. Even the big casino
    tribes, they've tried to keep, in my view, have tried to keep a
    really close interaction between tribal beliefs and the ability
    to move ahead in the 21st century in terms of marketing.
        You also reminded me that many times in the past, the
    Indian thought at least in some areas was the way we create
    economic development is that we get a Federal grant, and with
    that Federal grant we provide jobs for our people. Somehow
    that's called ``economic development.''
        You know as well as I do, coming from very modern dynamic
    tribes, that's not the way it works on the outside. The way it
    works is you create a product or you create a service and you
    market that, and the profits from that then expand the job
    base. I think Indian tribes are really learning that there's a
    big difference between just creating jobs from a Federal grant
    which has to be renewed every couple of years or your economy
    falls apart, and doing something where you have created a
    service or a product.
        But I know all three of your tribes have done very well.
    But also I know in the process it's been kind of a step by step
    thing, you know, little by little.
        Let me ask you first, James, the time when you began, you
    mentioned something about tribal business plans, tribal
    business codes, I guess you called it. Who wrote that for you?
    Did you use somebody else's model for that, or did you just try
    to figure it out yourself, what is the best thing to have in a
    business code?
        Mr. DeLaCruz. The Quinault Tribe does have business codes
    and practices.
        Senator Campbell. Where did those originate? Did you just
    do them yourself or was there a model somewhere that you used
    from other tribes, or did the Bureau or somebody else at
    Federal agencies help you with it?
        Mr. DeLaCruz. I don't really have an answer to that. I know
    that we rely on our staff and we go through a committee
    process, develop them with a public hearing process.
        Senator Campbell. Maybe I could ask all three of you. There
    have been obstacles over a period of time, as this growth has
    gone and tribes are recognizing more and more that they can
    expand self-governance. Maybe you can answer this, Tex. What
    were the biggest obstacles you faced when you first started
    talking about expanding self-governance programs? Did you get
    those from the Federal Government? Was that where the biggest
    obstacles were, what they call ``white-tape'' sometimes?
    [Laughter.]
        Mr. Hall. So noted. I think your point is right on. I think
    it is the bureaucracy that hinders the development. In some
    instances, there's no regulations of time lines. It can take so
    long to get a business lease done. And we don't have the
    staffing or perhaps the expertise in some areas of leasing, for
    example. And there's no real time line that's business
    friendly.
        Obviously we can't sit for 1 year or 2 years or 3 years or
    4 years waiting for approval of a business lease. Economic
    development is just not going to happen.
        But in response to your point, Senator Campbell, I think we
    should look at a recommendation for a provision to, as
    President Makil and Mr. DeLaCruz were talking about their
    tribes, some sort of a tribal peer learning process. This is a
    demonstration project. And after 1 year or 2 years, there will
    be hopefully some successful tribes. There should be a
    provision that they have to help, maybe not have to, but they
    should be strongly encouraged to assist other tribes. Because
    really, tribes that need it most are really going to benefit
    from this.
        But I'm just really cautious and concerned that sometimes
    those tribes that are successful are the ones that will be
    there. And those tribes that need it the most maybe are not
    going to qualify. And maybe after the demonstration project,
    those tribes that President Makil just showed a big slide on,
    on the development and leasing and how he streamlined his
    process, if he was able to assist other tribes that are waiting
    to become a demonstration project tribe, I think that provision
    in here would really add to the legislation. I think it's
    really important.
        Senator Campbell. If tribes themselves don't, I wonder if
    we couldn't do that at the Federal level, take things that have
    made them successful and put something in place where we have a
    mentoring process, through legislation or through the agencies,
    where they can provide a road map of what was successful,
    what's needed to become a successful tribe. I know they're not
    all different, and I was thinking, Ivan's tribe is near a very
    large, metropolitan area, yours is much farther out, a little
    difficult to get to, the work force, transportation of goods,
    all that kind of thing is a little more difficult. I don't
    think we should transfer any wealth yet from Ivan's tribe.
    [Laughter.]
        But I know that there are different circumstances. But
    there's got to be some kind of a vehicle where some can learn
    from the experiences of others.
        Mr. Hall. I think it will be a cost savings, Mr. Chairman.
    Because we know there's certain instances where a tribe that
    maybe doesn't have the administrative capability will not be
    successful if that technical assistance or the tribal peer
    learning process is not provided. This would save money in the
    long run, I think, if we could add some provision of this type.
        Senator Campbell. No question about it.
        Ivan, does your tribe get water from the Central Arizona
    project which was completed a few years ago?
        Mr. Makil. Yes, it does.
        Senator Campbell. Is that factored into your economic
    development at Salt River?
        Mr. Makil. It sure is, and I'm glad you mentioned that.
    Because sort of relating to all this is, tribes naturally,
    because culturally that's how we think, look at the scope of
    things as the total picture. And water is just as critical as
    being able to get a loan to build a building or to do business.
    That's where Federal agencies, Federal agencies don't have the
    scope of vision that tribes do. Federal agencies have a
    tendency to deal with their issue. So they have blinders on
    because they're so focused on their issue.
        The blinders focus only on that one issue. Well, what the
    tribes have to do is we have to look at all of these different
    agencies and see what we can get the best and get the help. And
    it's difficult if you have duplication with agencies because
    they aren't talking to each other. What's really important and
    what has been helpful to our success is that when you start to
    get these Federal agencies, or when we can manage these things
    ourselves, and give ourselves the flexibility and enough time,
    and that's what this project needs to be able to do, it needs
    to have flexibility.
        You also need to be able to give time to have successes.
    You also can't do it without--I think what you need to have is
    almost a multi-year kind of thing. Because you're not going to
    do it in 1 year, in one project. You need to be able to show
    results.
        And I think you also need to have some sort of priority
    funding. That priority funding.
        Senator Campbell. This bill is a 3-year demonstration
    project. Do you think that ought to be lengthened, or does
    three give us enough time?
        Mr. Makil. I think it gives you a good start. It's going to
    depend on where a tribe is in terms of--see, the tribes look at
    how they create a program for the entire community. One of the
    things we've been able to do, and I think that a lot of tribes
    are doing now, there's an understanding that whatever
    development they do, whether it's in New Town, ND or in Salt
    River, is that there's--we look at it this way. When we do a
    development, whether it's for business purposes or it's for
    agricultural purposes or it's for residential purposes, we know
    that there's a physical impact in the community.
        Usually the reason that we're changing something is because
    of an economic impact. So we have a physical impact, we have an
    economic impact. With that economic impact comes a social
    impact. Because now, socially what you have is, you have more
    jobs, you have revenue, you're starting to create that economy.
    So there's a social impact. So now you have a physical, you
    have an economic and you have a social impact.
        What Federal agencies don't understand, but what tribes do
    understand very well, is that there's a fourth component.
    That's a spiritual impact. We have to be able to live with
    whatever we create, whether it's business development or
    residential development. Or it's the use of water. We need to
    make sure that how we use water for the next at least seven
    generations is figured into this equation. So tribes think of
    things in that way.
        When you get all of these agencies together and you create
    the opportunity for tribes to actually create a plan for the
    growth and the development and the future of that community,
    dealing with the physical impacts, the economic impacts, the
    social impacts and the spiritual impacts, you obviously want
    all those impacts to be positive impacts, not negative impacts.
    The way you do that is when you have control of those resources
    and you can manage them to meet your specific situation.
        Senator Campbell. Thank you. Maybe one last question, Ivan.
    You mentioned your tribe just developed a shopping center, did
    I hear that in your testimony? Was the financing done through
    private banks?
        Mr. Makil. Yes.
        Senator Campbell. Did you have any problem getting the
    capital you needed to develop that?
        Mr. Makil. Yes. [Laughter.]
        Senator Campbell. What were the main roadblocks to getting
    the money?
        Mr. Makil. Well, roadblocks were many. Obviously it's the
    perception that----
        Senator Campbell. Worried about unstable government and all
    that we've heard over and over?
        Mr. Makil. Exactly, stability in government.
        Senator Campbell. How long did it take you to finally get
    through the process and get the money?
        Mr. Makil. I think the process was at least 6 years in the
    making. We opened that shopping center in 1988. But that
    process was started like in the early 1980's.
        Senator Campbell. And it has been successful, with the
    growth of that town, Scottsdale, growing all around you. Have
    you found at all that the success you had with that shopping
    center has made it easier for you when you want to borrow money
    for other things, other developments?
        Mr. Makil. Yes; it has established a track record, and the
    one thing that we also did was, we had Federal legislation that
    dealt with arbitration issues. Those kinds of things were
    really important to bankers, so there was an assurance they
    could collect their money if there was a default. Those kinds
    of things that tribes have to get through.
        We have established a track record. We just did a
    renovation of our cement plant that was about a $118-million
    renovation. General Electric Credit Corporation was the company
    that funded that loan. When we talked with General Electric
    Credit Corporation, what we found was that this was the first
    loan they had ever made to an Indian tribe on an Indian
    reservation. Now that they found out it could be done, there
    was an interest in seeing what other projects they could begin
    to do.
        But it takes that kind of experience in Indian country with
    businesses, with finance companies, before we have any
    credibility with them.
        Senator Campbell. Well, this bill is the demonstration
    project bill, and as I mentioned a little while ago, it's in
    two parts. We're going to try to get this thing through and if
    it works good, we'll try to expand it and make it permanent.
    We've had some experience in the past where we tried to help
    tribes with demonstration projects that did work good, but we
    couldn't get an extended bill through, or we haven't yet.
        I'm thinking in terms of the bill we passed a few years ago
    that allowed tribes to self-insure, so that if there was some
    kind of a default, you mentioned that, Ivan, if there was a
    default, the investors wouldn't lose their money. I thought it
    worked great, and all we heard was that it was working good for
    the tribes that were in that demonstration project. But we
    haven't been able to get a permanent bill through yet to expand
    that. So hopefully we will.
        Well, thank you very much for your testimony. Any
    additional comments, please send them in or call them in.
        We will now hear from Katherine Spilde, Senior Research
    Associate with the Harvard Project on American Indian Economic
    Development at Cambridge, MA. Katherine, please proceed. Your
    complete written testimony will be included in the record.

     STATEMENT OF KATHERINE A. SPILDE, SENIOR RESEARCH ASSOCIATE,
       HARVARD PROJECT ON AMERICAN INDIAN ECONOMIC DEVELOPMENT,
                      KENNEDY SCHOOL OF GOVERNMENT

        Ms. Spilde. Thank you. Good morning. Thank you for the
    opportunity to appear here today. I'm Katherine Spilde, and I'm
    a Senior Research Associate at the Harvard Project for American
    Indian Economic Development, which is housed in the Kennedy
    School of Government at Harvard.
        The primary research objective of the Harvard Project is to
    understand the conditions under which sustained and self-
    determined social and economic development is achieved among
    American Indian nations. I'm here today to speak in support of
    the Indian Tribal Development Consolidated Funding Act of 2001.
    Basically I'm going to be testifying from my position as a
    researcher for the Harvard Project, which has produced numerous
    research studies regarding institutional and economic
    development in Indian country.
        My testimony today relies upon the research we have done at
    the Harvard Project, specifically applied here to analyze and
    recommend ways to facilitate the successful implementation of
    the goals and purposes of this important legislation. Just by
    way of background, I know that other folks from the Harvard
    Project have testified before the committee before, but to
    reiterate, the research evidence is clear on the overall
    direction of productive Federal-tribal relations. That is that
    self-determination is the only Federal policy in a century that
    has created conditions where American Indian tribal governments
    have been able to begin to reverse the legacy of poverty and
    economic suppression to which they have historically been
    subjected.
        For many Indian nations, and of course not all, economic
    development activities are now flourishing, often for the first
    time in a century. Most importantly, improvement in economic
    conditions in Indian country has been accompanied by improved
    social conditions. So consistent, then, with self-determination
    policies and the government-to-government relationship between
    Federal agencies and tribal governments, this legislation
    appropriately encourages and promotes coordination between
    Federal agencies and American Indian communities. S. 343 builds
    upon the principles of the Indian Employment Training and
    Related Services Act, also known as the 477 Program, which of
    course is considered one of the most successful economic
    development programs administered by the Bureau of Indian
    Affairs.
        As with the 477 program, S. 343 encourages the integration
    of funding across the Federal agencies for the benefit of
    tribal governments. The research at the Harvard Project
    supports the partnering of Federal agencies and tribal
    government with the purpose of a coordinated tribal economic
    development strategy. It would allow tribal governments to
    determine what their economic development priorities are and
    then how best to meet those needs.
        Again, this is consistent with the findings at the Harvard
    Project, and also with the success of tribal self-governance,
    which illustrates that when tribes themselves have the
    opportunity for self-rule, there are much better chances for
    economic stability and then the accompanying social health.
        Successful implementation of S. 343 has great potential.
    However, as the GAO report recently noted, tribes do face
    certain practical hurdles with regard to access to the benefits
    of some Federal funding programs. For example, the GAO report
    and some of the Harvard Project's own research found that many
    tribes often do not have the human capital needed to handle the
    administrative and paperwork requirements of Federal economic
    development programs. Consequently, they may either avoid using
    the program where the requirements seem onerous, or they may
    spend a large amount of the Federal funds that they do have
    fulfilling those requirement and leaving less for the actual
    implementation of the program.
        So I have listed a few things to consider in terms of the
    successful implementation of S. 343, both reflecting on Harvard
    research and on the GAO report. A couple of these have already
    been mentioned, both by the Assistant Secretary and some of the
    tribal leaders. But I am basically interested in looking at the
    structure for Federal agencies having incentives and clear
    mandates with regard to implementing this legislation.
        Also looking at the selection criteria in terms of having
    tribes demonstrate fiscal responsibility, which we would argue
    at least from the perspective of Harvard research, overlooks
    the research evidence about institutional capacity of tribes as
    a primary indicator of long term economic development
    stability.
        So in conclusion, successful implementation of S. 343 has
    great potential to strengthen tribal self-determination and
    reintroduce viable and sustainable economies in certain tribal
    communities. S. 343 would maximize tribal participation in
    Federal programs to foster community economic and business
    development for Indian communities.
        Certainly I think Harvard Project research strongly
    supports the concepts contained in S. 343, so thank you, Mr.
    Chairman, for the opportunity to provide testimony. Certainly I
    summarized my remarks, and if you have questions, I will be
    happy to answer them.
        [Prepared statement of Ms. Spilde appears in appendix.]
        Senator Campbell. Thank you.
        Well, I haven't read that GAO report, frankly. Paul has, I
    haven't. But I think in some cases it sells the tribes short a
    little bit, because it's based on documentation that's kind of
    clinical and found here in Washington. I don't know if they
    really took into consideration the huge success stories we've
    had in some places where the training went along with the
    development.
        I'm thinking in terms of a lot of casinos who did not have
    any management experience in managing a casino. But they got an
    investor and when they signed the agreements, many of the
    tribes, what they did, they also signed an agreement for
    training their own people. The first people that came in to
    manage the casinos were not Indian. They were from Reno or Las
    Vegas or wherever the money came from. They hired expertise.
        But written into the agreement was that within 3 years or 4
    years or so on, a certain number of the management people would
    be tribal members. So it's a bootstrap thing and a step by step
    thing. Many of those casinos now are totally managed by tribal
    members, as you probably know. So I'm still skeptical sometimes
    when anyone says ``Indians don't have the skills to be able to
    do this.'' Because you've got to start somewhere, holy smoke.
        I guess certainly there have been some mistakes made in the
    past, and I've seen some of the derelict buildings out on
    Indian reservations that were built by outside investors and it
    didn't work out and they lost a building. But those war stories
    or horror stories, I guess I should use a better word, are a
    lot fewer, in my way of thinking, than the success stories.
        Let me ask a couple of things. In all the experience you've
    had with the Harvard group, have you found that there is a
    correlation between commitments to government sovereignty,
    transparency, individual rights, strong tribal leadership and
    so on, and the economic development that benefits all the
    tribal members?
        Ms. Spilde. Absolutely.
        Senator Campbell. That sounds like a loaded question,
    because I would assume there ought to be. But you firmly
    believe that?
        Ms. Spilde. I know that the two founders and directors of
    the Harvard Project, Joe Kalt and Steve Cornell, have been
    doing research on that particular question, the relationship
    between governmental institutions and economic development.
    They've been investigating that for about 15 years. Their
    research consistently finds that there is a direct relationship
    between such attributes as separation of powers, checks and
    balances, the independence of dispute resolution mechanisms,
    and other capable self-governance institutions with economic
    development. There is a clear and direct relationship.
        Senator Campbell. Do you have any research that would show
    the difference between how we have done it in the past with 12
    individual agencies spending money independent of each other
    and somewhat disjointed and not much communication between them
    and any research that says if we do have something in place
    like S. 343, that there is a better use of money or a more
    efficient use of it, or better opportunities for the tribes and
    a less disjointed approach?
        Ms. Spilde. I think the general findings of the Harvard
    project indicate that coordinated efforts, and streamlined
    funding services produce less of a burden on tribes, both
    fiscally and administratively. Certainly the research would
    support that.
        I don't know of any specific research that has asked that
    particular question, but I can definitely look into it. I
    haven't personally conducted any.
        Senator Campbell. I would appreciate it if you would, to
    notify the committee. It hasn't been done very long, so I guess
    there's not very much information available.
        Also, do you know, in your own mind, about any particular
    incentives that we can offer Federal agencies to work with the
    tribal governments to implement this particular demonstration
    project? How do you suggest that we put this in place? If we
    put this in place in the law, how should the Federal agencies
    proceed to bridge that communication gap and that distrust gap
    and all the other things we've had in the past, the fear of
    decreased trust responsibility and so on?
        Ms. Spilde. I know the Assistant Secretary spoke to this
    issue as well, in terms of a memorandum of agreement, where the
    Department of the Interior would take the lead. I certainly
    would support that. I know in terms of, from a research
    perspective, there's a saying, measure it and you'll get it. In
    other words, having Federal agencies be accountable or report
    back in terms of what their efforts have been rather than--
    simply having a program which often isn't enough.
        Agencies would have to report back on how they are
    promoting, cooperating, educating tribes. As NCIA president,
    Tex Hall pointed out, cataloging and making available to tribes
    the available programs. As I said, measure it and you'll get
    it. If you have some sort of reporting mechanisms for the
    agencies, that might also be an incentive.
        Senator Campbell. Thank you. The last isn't a question, but
    a request. If you would help work with our staff on any
    recommendations in the weeks ahead as we try to refine this
    bill a little bit, if you could help us with that. Frankly, I
    guess I've sat through 20 committee hearings or more that the
    Harvard Group has been involved in, the Harvard Project. I've
    frankly never heard any testimony yet that I really disagreed
    with or didn't find very enlightening or educational or
    supportive. So if you could help us with this, I'd certainly
    appreciate it.
        Ms. Spilde. I'd be happy to. Thank you.
        Senator Campbell. And with that, we'll keep the record open
    for 2 weeks for any additional comments. And thank all the
    witnesses for being here today. This committee is adjourned.
        [Whereupon, at 11:15 a.m, the committee was adjourned, to
    reconvene at the call of the Chair.]
    =======================================================================

                                A P P E N D I X

                                  ----------

                  Additional Material Submitted for the Record

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

    Prepared Statement of Hon. Frank H. Murkowski, U.S. Senator from Alaska

        I would like to thank the Chairman and Vice Chairman for their
    tireless effort to promote the general welfare of this country's
    indigenous people. I look forward to reviewing the testimony from this
    hearing, and I want to thank them for participating today.
        As each of us here knows, we need to find ways that we can cut
    Government redtape, improve coordination and eliminate wasteful
    duplication of the many programs that are designed to help Indians and
    Alaska Natives. We have a duty to serve our native people, but we also
    have a duty to protect the interests of all taxpayers. Wasted money
    serves no one.
        Many Alaska Native entities are so small they simply lack the
    administrative personnel needed to complete and manage all of the
    complex regulations, the web of paperwork and other requirements in
    order to participate in many Federal programs. Even those native
    organizations that do have the administrative capacity needed to
    participate shouldn't have to waste valuable time and resources on
    needless bureaucracy.
        It seems to me that a proposal such as. this could actually save
    money by allowing agencies to delegate management authority to other
    agencies better equipped to manage certain programs. I hope this is the
    case. I welcome further consideration of the bill, and I remain
    committed to making government more responsible and efficient.
        Again, I would like to commend Chairman Inouye and Vice Chairman
    Campbell for your leadership and attention to these important issues. I
    certainly hope the intent of this legislation can be realized, and that
    we can streamline and simplify the process of assisting Alaska Natives
    and American Indians.
                                     ______

       Prepared Statement of Neal A. McCaleb Assistant Secretary--Indian
                       Affairs Department of the Interior

        Good Morning, Mr. Chairman and members of the committee. Thank you
    for the opportunity to appear before you today to present the views of
    the Department regarding S. 343, a bill to establish a demonstration
    project to authorize the integration and coordination of Federal
    funding dedicated to community, business and economic development of
    Native American communities.
        The Administration supports the goals of S. 343 to integrate and
    coordinate Federal funding dedicated to promoting economic development
    for Indian communities. The Administration, however, is still reviewing
    the legislation and has already identified a number of significant
    concerns with the bill, which we look forward to working with the
    committee to address.
        The Bureau of Indian Affairs is working with the Bureau of Indian
    Affairs' Tribal Budget Advisory Committee's Subcommittee on Economic
    Development to develop strategies to improve reservation economies.
    These strategies include actions the BIA and Federal agencies can take
    to be more effective in encouraging economic development for American
    Indian tribes. Integrating Federal economic development programs is one
    the Tribal Advisory Committee's priorities.
        S. 343 is intended to encourage more efficient use of Federal funds
    in the area of economic development. Once a tribe submits a plan which
    is approved by the Department, it is able to pool Federal funds they
    receive for economic and community development. These funds are
    disbursed to the tribe from one office and they submit one annual audit
    and report to the same office regarding its expenditures. This allows
    the tribe to be more flexible in its use of the funds, and more
    efficient because it reduces the amount paperwork, without reducing
    accountability.
        S. 343 is based on an existing program authorized under Public Law
    102-477, and which has enjoyed tremendous success. Public Law 102-477
    allows tribes to consolidate and integrate employment education and
    training programs. The program indicates that 89 percent of Indian
    participants in the program have reached their education and employment
    goals.
        Based on our experiences with Public Law 102-477, the integration
    of Federal programs initiative, we offer the following comments
    regarding S. 343:
        No. 1. Part of the success of our current program hinges on our
    ability to act as the lead agency. The administrative burden, and
    costs, are increased if tribes must go to every Federal agency
    independently. The process should be streamlined, allowing all tribal
    grant applications to be funneled through one agency. However, the bill
    must be revised to ensure that individual programs will be included in
    demonstrations only with the concurrence of the head of the Federal
    agency responsible for administration of those programs. The bill
    should be structured so as to allow the Secretary to enter into a
    memorandum of agreement with any other agency that provides assistance
    to tribes, as defined by the bill, as to which programs will be
    included in the demonstration project. Both the Secretary and the
    involved agencies should be required to consult with tribes prior to
    finalizing any MOA. Tribes would then come to Interior and request
    inclusion of any of those programs in their overall consolidated grant.
    This would lead to more effective coordination and would reduce burdens
    on and confusion for tribes. Section 4 of the bill should clarify that
    tribes seek approval/disapproval, and implementation and related tasks,
    through the Department, rather than requiring tribes to work with each
    agency separately.
        No. 2. We recommend that any project evaluations be coordinated
    rather than each Federal agency conducting separate reviews. Tribes are
    often overwhelmed by numerous duplicative review and analysis of
    project operations. One coordinated consolidated review will reduce
    burdens on the tribes.
        No. 3. We recommend that competitive economic development grant
    programs be implemented similar to formula funded grants for this
    project once an award has been made under this grant.
        No. 4. It has been our experience that consultation by an agency
    before implementation of the Public Law 102-477 program has minimized
    problems in implementation of the program. Accordingly, we believe it
    is important that all agencies conduct consultation prior to taking
    final agency action in regard to the provisions of this act.
        No. 5. The Administration is also concerned that the scope of the
    waiver provisions in section 6(c) of the bill is overly broad, and
    could have adverse consequences on the environment, civil rights, and
    other areas of important Federal policy. The provision provides for the
    waiver of any Federal statutory provisions, regulations, policies, or
    procedures that the applicant believes need to be waived in order to
    implement the project. A number of Departments and agencies within the
    Administration have raised serious concerns with the breadth of this
    section and its mandatory requirements.
        The Administration looks forward to working with the Committee on
    this important legislation. We also note that other Departments and
    agencies are still reviewing this legislation and may submit views to
    the Committee. For example, the Department of Justice has raised a
    constitutional concern with section 15 of the bill; the Department of
    Treasury would like section 11(a) to make clear that funds remain in
    the General Treasury until they are disbursed to Tribal Organizations;
    and the Office of Management and Budget is concerned section 6 may
    conflict with Public Law 106-107, the Federal Financial Assistance
    Management Improvement Act of 1999.
        This concludes my prepared testimony. I would be happy to answer
    any questions the committee may have.
                                     ______

      Prepared Statement of Tex G. Hall, President, National Congress of
                                American Indians

        Chairman Inouye, Vice Chairman Campbell, and other members of the
    committee, I would like to thank you for inviting me here to testify on
    this important and significant piece of legislation, the Indian Tribal
    Development Consolidated Funding Act. As you know, the National
    Congress of American Indians--the oldest, largest, and most
    representative Native American group in the Nation--is focused on
    economic development and helping tribes get the tools necessary to
    exercise their sovereignty. We believe that this bill is a step in the
    right direction to help tribes along the way to building successful
    economies and healthy communities.
        The aim of this bill is to give the tribes the ability to coalesce
    the programs from the various agencies they use to pursue development.
    In doing this, tribes increase the value of the assistance they receive
    because they are able to pool together resources that would otherwise
    make a smaller contribution to the tribes' initiatives. For instance,
    if a tribe were trying to put together a housing project, it would
    often apply for many different grants and technical assistance programs
    to help further the project. However, each grant and Government program
    used has its own set of application, implementation,and reporting
    requirements. These requirements, even though they all go to the same
    project, must be fulfilled separately. This often creates an undue
    hardship on those project managers who would be able to use the time
    they take to fulfill Government requirements more effectively in
    implementing the goals of the project. The Indian Tribal Development
    Consolidated Funding Act would assist tribes in cutting administrative
    tasks and costs, putting them more directly about the job of building
    sustainable tribal economies.
        This bill also focuses on one of the problems that tribes find when
    they attempt to move forward with their programs: The lack of
    cooperation between Federal agencies. Earlier this week there was a man
    in our offices meeting with some agency folks about wind energy. He
    said that coming to Washington was the hardest part of his job. When I
    asked him why, he replied that he has to make the 3,000-mile trip twice
    a year to, ``introduce people who work across the street from each
    other.'' Unfortunately, this is too often the case, even out in Indian
    country. When tribes try to move forward with a project that will help
    their people, we waste a lot of time with duplicative Federal
    requirements, and the agencies are often unwilling to cooperate with
    each other because they need all their regulations fulfilled,
    independent of the other agencies and independent of the best interests
    of the tribes. There are so many hoops to jump through in Indian
    country; we're running out of hoop dancers to hire for our project
    managers.
        This bill aims to remedy some of these problems. According to the
    legislation, instead of reporting to each agency separately, the tribe
    would be able to identify the programs and assistance that they planned
    to use, propose waivers of regulations and other requirement so that a
    unified application and report would fulfill the agencies I needs,and
    single out one agency to administer the tribe-specific program. This
    not only alleviates the reporting requirements on the tribe, but
    streamlines the process for the Federal representatives as well.
        In addition to lessening the burden on the agencies and the tribes,
    this legislation should increase the use of Federal programs that go
    largely unused. According the GAO report on Indian Economic Development
    programs, only about one-half of the survey participants used any of
    the 100 assistance programs. Some of the reasons that these programs
    lay fallow are because of the administrative costs to the tribe
    associated with the preparation and execution of the project and its
    application and low levels of funding. This bill will mitigate some of
    those circumstances by allowing the tribes to merge efforts to comply
    with multiple programs. Moreover--and this is an important incentive
    for our brothers and sisters in the government--this bill presents the
    agencies with an opportunity to comply with standing executive orders
    and agency plans that call for interagency cooperation with regard to
    Indian Economic Development. This bill is truly an example that this
    program will make the whole of the Federal assistance tribes receive
    greater than the sum of its parts.
        We are happy to see this bill, as it is a familiar concept to many
    of us in Indian country. This bill looks like an expansion of a
    consolidated funding program that came from this committee in the 102d
    Congress and that is very popular in Indian country: The 477 process.
    Though the 477 process is limited to four Federal agencies and programs
    related to employment and training, it has proven to be a good way for
    tribes to streamline the application and reporting processes involved
    in Federal programs. The basic premise and process of S. 343 is working
    currently, and we hope that this process can expand efficiently and
    easily into the rest of the Government agencies.
        However, this is a hope tinged with some caution. We feel that this
    committee, in this legislation must make it very clear that the
    agencies are to be willing to waive certain provisions when those are
    in the best interests of the tribe and covered elsewhere in the program
    functions. We know that it is not the intent of this committee to
    subject the tribes to interagency bickering or territorialism, which we
    fear may happen. As I said earlier, there is not a lot of cooperation
    between the agencies. Though provisions in subsection (c)(6) lay out
    the process in general, we don't want to see projects stalled when
    agencies refuse to waive provisions or requirements. Agencies function
    according to their interpretation of Congressional intent, and we urge
    you to make your intent clear that agencies are to waive provisions
    that tribes identify through the application or consultation process,
    excepting the limitations you have described. We think that this
    clarification and emphasis will make the process easier as applications
    move forward.
        We understand that this bill creates a demonstration project, and
    thus is not designed for a large-scale implementation. We think that
    the bill is good, and will be significantly useful to the tribes who
    already have some manner of expertise in government program
    administration and have the adequate infrastructure and resources to
    perform the accounting, audit, and application processes. However, many
    tribes do not yet have these resources. As the program moves forward,
    NCAI would like to see provisions that would provide some assistance
    for those tribes, especially in the form of peer learning processes.
    Our experience shows us that tribes learn best from other tribes who
    have already gone through the processes. When we are able to visit
    other tribes, who were often facing the same situations we are, and see
    what and how they have accomplished specific tasks, it helps us put a
    perspective on how our tribes should move forward. We think that after
    the first year or two of the project, those tribes who have
    participated will have the expertise to assist other tribes in the
    program. This peer-learning process requires nominal funding, and the
    outcomes of empowering tribes as examples, as well as the monies saved
    by this program in administration and related costs will be more than
    enough to offset the costs.
        In addition to adding a peer-learning provision, we ask that this
    committee also consider adding the following language as an additional
    section in the bill that would preserve funding levels: ``In no case
    shall the amount of Federal funds available to a tribal government
    involved in any demonstration project be reduced as a result of the
    enactment of this act.'' Such a provision would ensure that the various
    program funds are not lowered any further.
        We would like to single out section 14 for praise, as we feel that
    this provision-if implemented with the enthusiasm of the Federal
    agencies, states, and tribes-will bring this cooperative model out of
    its current disuse and install it as a keystone of new success. We have
    been working with the National Governors Association on building state-
    tribal relations for the past several years, and we believe that this
    will allow the states to invest in the wellness of tribal economies,
    which will in turn strengthen state economies, and will build state-
    tribal relationships.
        Overall, we support the passage of the bill, and we are available
    to work with the committee to insert and implement these suggestions
    and the legislation in whole. We commend the committee for its
    commitment to Indian country, and appreciate its focus of helpful
    legislation that, coupled with the exercise of our sovereign rights,
    will allow our tribes to best serve their people for generations to
    come. Thank you for your invitation to testify, and I welcome any
    questions you may have.
                                     ______

     Prepared Statement of Ivan Makil, President, Salt River Pima-Maricopa
                                Indian Community

        Chairman Inouye, Vice Chairman Campbell, members of the committee,
    fellow tribal leaders, and distinguished guests, I am Ivan Makil,
    president of the Salt River Pima-Maricopa Indian Community near
    Phoenix, AZ. Our community of some 7,800 members, predates Arizona as a
    State. Yet, in the last 50 years, urban growth has come to us.
        Today, we are surrounded by metropolitan Phoenix and border Tempe,
    Scottsdale, Mesa, and Fountain hills. A contemporary but still
    traditional Indian community, the Salt River Pima-Maricopa Indian
    Community is concerned about our physical, social, economic, and
    spiritual development. Like other tribal communities in this country,
    we are very aware that future generations of our people will live with
    the results of the decisions we make today. It is critical, therefore,
    that we make the very best decisions that we can.
        We are fortunate, because, as we plan for the world that the next
    Seven Generations will inherit, our community enjoys an important
    advantage. That advantage enables us to make better decisions. We are
    one of 260 tribes in this country that has self-governance.
        Our road to self-governance began at the same time that President
    Richard Nixon launched self-determination in 1970. That action, as you
    know, led to the Indian Self Determination & Education Act of 1975. We
    entered our first contract in 1970 for our Police Department. This act
    set us on track for self-determination and self-governance. Since that
    initial contract, we have grown to be an active self-governing tribe.
        Today, we have more than three decades experience with this system.
    I would like to take a few moments to talk to you about our experience
    and why we believe that the principles contained in S. 343, which
    authorizes a demonstration project for expanded self-governance, is
    such a necessary and positive step for tribes. As introduced by Senator
    Campbell, it establishes a demonstration project that authorizes the
    integration and coordination of Federal funding dedicated to the
    community, business, and economic development of Native American
    communities.
        It is significant that this approach is both systematic and
    holistic. Systematic is critical for functionality and efficiency.
    Holistic, however, is equally important, as our culture teaches us to
    view the world as an integrated place. This bill is systematic as it
    will create a block grant fund from revenues available in 15 different
    Federal agencies, agencies that do not have as their normal priority
    dealing with Native American tribes. It is holistic in that by
    combining diverse Federal agency dollars, it encourages tribes to take
    the wider, rather than narrow, view.
        Realistically, it would allow tribes to pool available Federal
    funds to meet the needs of their people in more effective ways. It
    would also put new resources into the hands of tribal leaders who can
    pool these dollars and use them more effectively to create
    opportunities and solve problems for their people.
        Over the past 30 years, the Salt River Pima-Maricopa Indian has
    done just that.
        In the 1980's, we were the first tribe to develop a major shopping
    center on our land in Arizona. To accomplish this, we put together more
    than 300 different landowners with a developer and created the
    Pavilions Shopping Center. We could not have done this without the
    opportunities available under the Indian Self-Determination and
    Educational Assistance Act. Wherever we have had an ability to
    integrate the process, we have done so and improved the process.
    Integration has enabled us to create more positive results.
        For example, the image you see compares our unique lease process to
    full-service tribes. The yellow highlighted areas show the steps that
    Salt River takes when securing leases such as for the Pavilions.
        Compare this process to the steps, marked in green that a non-self-
    governance tribe must go through. Even a quick glance shows that Salt
    River has taken over the functions in land development process
    previously handled by the Bureau of Indian Affairs. Moreover, we do
    this process more efficiently and effectively and in economic
    development, time is money.
        As we have taken over management of our own resources, we
    established a realty data base and a compatible geographic information
    system. As a result, we can track ownership for every fractionated
    piece of land owned by heirs.
        We can also show them exactly where their land is. And most
    importantly, we can--and do--issue lease payment checks to our members.
        Now, more than a decade after developing the Pavilions Shopping
    Center, the community council has embarked upon a sophisticated
    strategic planning process to help us determine our future. As part of
    this lengthy process, we are gathering information that is enabling us
    to identify our critical areas of interest. As the decisionmakers and
    managers for our community, our commitment to strategic planning is
    helping us design our future.
        To make sure that this future is healthy--physically, socially,
    economically and spiritually--we are setting priorities today that will
    guide our tomorrow. Because these priorities are consistent with our
    overall goal, we can be assured that everyone--the community as a whole
    and each individual member--will be best-served.
        From our experience, I have no doubt that each Federal program was
    an excellent idea when it was created. Problems began as each developed
    with its own set of blinders. Because each program grew as its own
    entity--without any way to leverage other like-minded programs or even
    an acknowledgment of duplication--Federal programs designed to help
    Indian people have often created new problems for us.
        The Salt River Pima-Maricopa Indian Community has created its own
    destiny. We saw opportunities and made things happen for ourselves.
    Over the years, our community has developed sophisticated expertise.
    But, not all tribes have this kind of knowledge close at hand.
        I urge you, as you design this demonstration program, to
    incorporate flexibility and time enough so this project can prove
    itself. Recognize that because not all tribes have local expertise,
    some will need to look outside their own membership for technical
    support and staffing. Given enough time and an assurance of
    flexibility, our tribes can grow their own economies and nurture the
    kinds of expertise they need to succeed.
        I urge you to fully support S. 343, which requires 15 Federal
    agencies to take an historic step to work together with tribes that
    wish to be part of this demonstration project. It is critical, however,
    that any tribe that joins this project be required to demonstrate how
    they are planning to use these revenues. Tribes must create a plan that
    serves their entire community.
        I know this bill may need to be amended to address certain concerns
    as it goes through the process. My staff stands ready to assist the
    Committee in making this the best possible legislation for Indian
    country.
        The Federal Government needs the ability to have a systemic and
    holistic approach to deal with tribes. Tribes need you as a partner. If
    you are going to take on this effort, I urge you to do it right. Make
    the demonstration real and make it multi-year so all of us have time
    enough to achieve results. I also urge you to established priority
    funding for this effort so that it has every chance for success.
        Both the integration of the 15 agencies and the holistic planning
    exercise are essential; the process cannot work unless both are in
    place. By supporting this systematic and holistic approach to planning
    and funding, S. 343 can become a valuable tool to help tribes design
    and develop their own destiny. I urge you to commit to this thoughtful
    and far-reaching bill.
        Mr. Chairman, thanks again for the opportunity to testify in
    support of S. 343. I would be happy to remain here to answer any
    questions you or the committee members may have.
                                     ______

       Prepared Statement of Katherine A. Spilde, Ph.D., Senior Research
      Associate, Harvard Project on American Indian Economic Development,
                Kennedy School of Government, Harvard University

        Good morning, Mr. Chairman, Mr. Vice Chairman and members of the
    committee. Thank you for the opportunity to appear here today. My name
    is Katherine Spilde. I am a Senior Research Associate at the Harvard
    Project on American Indian Economic Development, in the Kennedy School
    of Government, Harvard University. The primary research objective of
    the Harvard Project is to understand the conditions under which
    sustained, self-determined social and economic development is achieved
    among American Indian nations.
        I am here today to speak in support of the Indian Tribal
    Development Consolidated Funding Act of 2001 (S. 343), introduced by
    Senator Campbell and cosponsored by Senators Inouye and Johnson. The
    purpose of S. 343 is to establish a demonstration project that would
    authorize the integration and coordination of Federal funding dedicated
    to the community, business and economic development of American Indian
    communities. I will be testifying, from my position as a researcher for
    the Harvard Project, which has produced numerous research studies
    regarding institutional and economic development in Indian country. My
    testimony today relies upon the work we have done at the Harvard
    Project, applied here to analyze and recommend ways to facilitate
    successful implementation of the goals and purposes of this
    legislation.
        By way of background, the research evidence is clear on the overall
    direction of productive Federal-tribal relations: Self-determination is
    the only Federal policy in a century that has created conditions
    wherein American Indian tribal governments have been able to begin to
    reverse the legacy of poverty and economic suppression to which they
    have historically been subjected. For many Indian nations, but not all,
    economic development activities are flourishing, often for the first
    time in a century. Most importantly, improvement in economic conditions
    in Indian country has been accompanied by improved social conditions.
    Where we see this progress, it is invariably the case that tribes are
    building their own capacities to govern, manage, and implement economic
    development strategies that fit their ends and values.
        Consistent with self-determination policies and a government-to-
    government relationship between Federal agencies and tribal
    governments, this legislation appropriately encourages and promotes
    coordination between Federal agencies and American Indian communities.
    S. 343 builds upon the principles of the Indian Employment, Training
    and Related Services Act, also known as the ``477 program.'' As you
    know, the 477 program is considered one of the most successful economic
    development programs administered by the Bureau of Indian Affairs, as
    it authorizes tribal governments to consolidate job training funding
    from different agencies into one efficient program that meets the
    specific needs of the community. As with the 477 program, S. 343
    encourages the integration of funding across the Federal agencies for
    the benefit of tribal governments and their programs.
        The research of the Harvard Project supports the partnering between
    Federal agencies and tribal government with the purpose of a
    coordinated tribal economic development strategy. Consistent with the
    self-determination policy, S. 343 would allow tribal governments to
    determine what their economic development priorities were and how best
    to meet these needs. S. 343 is consistent with the findings of the
    research undertaken by the Harvard Project, and the successes of tribal
    self-governance illustrates that when tribes themselves have the
    opportunity for self-rule there are much better chances for economic
    stability and social health.
        Successful implementation of S. 343 has great potential; however
    tribes face certain practical hurdles that may limit effectiveness of
    this legislation. Recently, a GAO report\1\ was published in December
    2001 and it echoed what the Harvard Project's research has found with
    regard to the challenges that face tribes in securing financing,
    especially from Federal funding sources. The GAO report found that many
    tribes do not have the human capital or the expertise needed to handle
    the administrative and paperwork requirements of Federal economic
    development programs. Consequently, tribes may avoid using a program
    where the program's requirements seem onerous, or tribes may spend a
    large amount of the Federal funds they have on those requirements,
    leaving less for the actual implementation of the program.\2\ In
    addition to onerous requirements, the GAO reported that many tribes are
    discouraged from seeking funds from particular (unnamed) Federal
    agencies because they have never been successful in the past.\3\ It is
    important that tribes are not set up to fail under S. 343. Tribal
    capacity to administer a comprehensive economic development strategy as
    authorized by S. 343 must be present in order for a tribe to
    successfully carry out S. 343.
    ---------------------------------------------------------------------------
        \1\ ``Economic Development: Federal Assistance Programs for
    American Indians and Alaska Natives.'' General Accounting Office.
    December, 2001.
        \2\ Ibid. 13.
        \3\ Ibid. 14.
    ---------------------------------------------------------------------------
        Other recommendations necessary for successful implementation of S.
    343 are as follows:

       \\\\\\Federal agencies need incentives to work with tribal
            governments.

       \\\\\\Federal agencies need clear mandates with regard to
            implementing this legislation, as most agencies lack the
            expertise necessary to work with tribes on interagency
            projects.

       \\\\\\The legislation should balance devolution of Federal
            responsibility with a continued commitment to the Federal trust
            responsibility.

       \\\\\\Currently, the only selection criteria required is
            demonstration of fiscal responsibility, which overlooks
            research on capable institutions as a primary indicator of long
            term economic development stability.

        In conclusion, successful implementation of S. 343 has great
    potential to strengthen tribal self-determination and re-introduce
    viable and sustain economies in certain tribal communities. S. 343
    would maximize tribal participation in Federal programs to foster
    community, economic and business development for disadvantaged Indian
    communities. Our research supports the concepts contained in S. 343,
    although certain suggestions outlined in my testimony are meant to
    ensure successful implementation of S. 343. The very purpose of this
    legislation-to facilitate and maximize tribes' access to Federal
    funding for economic and community development--is integral to the
    economic viability of disadvantaged Indian communities.
        Thank you, Mr. Chairman for the opportunity to provide testimony
    before the Committee today. If there are any questions, I will be happy
    to answer them.
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