[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.
[GRAPHIC] [TIFF OMITTED] T0227.001

[GRAPHIC] [TIFF OMITTED] T0227.002

[GRAPHIC] [TIFF OMITTED] T0227.003

[GRAPHIC] [TIFF OMITTED] T0227.004

[GRAPHIC] [TIFF OMITTED] T0227.005

[GRAPHIC] [TIFF OMITTED] T0227.006

[GRAPHIC] [TIFF OMITTED] T0227.007

[GRAPHIC] [TIFF OMITTED] T0227.008

[GRAPHIC] [TIFF OMITTED] T0227.009

[GRAPHIC] [TIFF OMITTED] T0227.010

[GRAPHIC] [TIFF OMITTED] T0227.011

[GRAPHIC] [TIFF OMITTED] T0227.012

[GRAPHIC] [TIFF OMITTED] T0227.013

[GRAPHIC] [TIFF OMITTED] T0227.014

[GRAPHIC] [TIFF OMITTED] T0227.015

[GRAPHIC] [TIFF OMITTED] T0227.016

[GRAPHIC] [TIFF OMITTED] T0227.017

[GRAPHIC] [TIFF OMITTED] T0227.018

[GRAPHIC] [TIFF OMITTED] T0227.019

[GRAPHIC] [TIFF OMITTED] T0227.020

[GRAPHIC] [TIFF OMITTED] T0227.021

[GRAPHIC] [TIFF OMITTED] T0227.022

[GRAPHIC] [TIFF OMITTED] T0227.023

[GRAPHIC] [TIFF OMITTED] T0227.024

[GRAPHIC] [TIFF OMITTED] T0227.025

[GRAPHIC] [TIFF OMITTED] T0227.026

[GRAPHIC] [TIFF OMITTED] T0227.027

[GRAPHIC] [TIFF OMITTED] T0227.028

[GRAPHIC] [TIFF OMITTED] T0227.029

[GRAPHIC] [TIFF OMITTED] T0227.030

[GRAPHIC] [TIFF OMITTED] T0227.031

[GRAPHIC] [TIFF OMITTED] T0227.032

[GRAPHIC] [TIFF OMITTED] T0227.033

[GRAPHIC] [TIFF OMITTED] T0227.034

[GRAPHIC] [TIFF OMITTED] T0227.035

[GRAPHIC] [TIFF OMITTED] T0227.036

[GRAPHIC] [TIFF OMITTED] T0227.037

[GRAPHIC] [TIFF OMITTED] T0227.038

[GRAPHIC] [TIFF OMITTED] T0227.039

[GRAPHIC] [TIFF OMITTED] T0227.040

[GRAPHIC] [TIFF OMITTED] T0227.041

[GRAPHIC] [TIFF OMITTED] T0227.042

[GRAPHIC] [TIFF OMITTED] T0227.043

[GRAPHIC] [TIFF OMITTED] T0227.044

[GRAPHIC] [TIFF OMITTED] T0227.045

[GRAPHIC] [TIFF OMITTED] T0227.046

[GRAPHIC] [TIFF OMITTED] T0227.047

[GRAPHIC] [TIFF OMITTED] T0227.048

[GRAPHIC] [TIFF OMITTED] T0227.049

[GRAPHIC] [TIFF OMITTED] T0227.050

[GRAPHIC] [TIFF OMITTED] T0227.051

[GRAPHIC] [TIFF OMITTED] T0227.052

[GRAPHIC] [TIFF OMITTED] T0227.053

[GRAPHIC] [TIFF OMITTED] T0227.054

                               
