[Senate Hearing 109-579]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 109-579
 
                NATIVE AMERICAN INDIAN HOUSING PROGRAMS

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

                                HEARING

                               BEFORE THE

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                                   ON

OVERSIGHT HEARING TO REVIEW THE NATIVE AMERICAN INDIAN HOUSING PROGRAMS

                               __________

                             JUNE 28, 2006
                             WASHINGTON, DC



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                      COMMITTEE ON INDIAN AFFAIRS

                     JOHN McCAIN, Arizona, Chairman

              BYRON L. DORGAN, North Dakota, Vice Chairman

PETE V. DOMENICI, New Mexico         DANIEL K. INOUYE, Hawaii
CRAIG THOMAS, Wyoming                KENT CONRAD, North Dakota
GORDON SMITH, Oregon                 DANIEL K. AKAKA, Hawaii
LISA MURKOWSKI, Alaska               TIM JOHNSON, South Dakota
MICHAEL D. CRAPO, Idaho              MARIA CANTWELL, Washington
RICHARD BURR, North Carolina
TOM COBURN, M.D., Oklahoma

               John Tahsuda, III, Majority Staff Director

                Sara G. Garland, Minority Staff Director

                                  (ii)

  
                            C O N T E N T S

                              ----------                              
                                                                   Page
Statements:
    Adams, Jason, executive director, Salish and Kootenai Housing 
      Authority..................................................    17
    Boyd, Rodger, deputy assistant secretary, Native American 
      Programs, Department of Housing and Urban Development......     3
    Cabrera, Orlando J., assistant secretary, Office of Public 
      and Indian Housing, Department of Housing and Urban 
      Development................................................     3
    Dorgan, Hon. Byron L., U.S. Senator from North Dakota, vice 
      chairman, Committee on Indian Affairs......................     1
    Ellis, A.D., principal chief, Muscogee Creek Nation, 
      Okmulgee, OK...............................................    16
    Green, Pattye, senior business manager for Rural Native 
      American Initiatives, Fannie Mae, Tishomingo, OK...........     5
    McCain, Hon. John, U.S. Senator from Arizona, chairman, 
      Committee on Indian Affairs................................     1
    Murkowski, Hon. Lisa, U.S. Senator from Alaska...............     2
    Shuravloff, Marty, chairman, National American Indian Housing 
      Council, Washington, DC....................................    13
    Steele, James Jr., chairman, Confederated Salish and Kootenai 
      Tribes of the Flathead Indian Nation.......................    17

                                Appendix

Prepared statements:
    Cabrera, Orlando J...........................................    25
    Ellis, A.D...................................................    23
    Green, Pattye (with attachment)..............................    43
    Shuravloff, Marty............................................    54
    Steele, James Jr. (with attachment)..........................    58


                    NATIVE AMERICAN HOUSING PROGRAMS

                              ----------                              


                        WEDNESDAY, JUNE 28, 2006


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 9:30 a.m. in room 
485, Senate Russell Office Building, Hon. John McCain (chairman 
of the committee) presiding.
    Present: Senators McCain, Dorgan, and Murkowski.

   STATEMENT OF HON. JOHN McCAIN, U.S. SENATOR FROM ARIZONA, 
             CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    The Chairman. Good morning. The committee will come to 
order.
    Welcome to the oversight hearing on Indian housing. It has 
been nearly 10 years since Congress first passed the Native 
American Housing Assistance and Self-Determination Act. Since 
then, we have seen progress in home construction and ownership. 
Yet the Committee is troubled to hear that overcrowding and 
homelessness still exist in Indian communities. Indeed, the 
president of the NCAI reported to this committee at our budget 
hearing in February that in some cases, as many as 25 to 30 
people were living in homes with no more than 3 bedrooms.
    As chairman of this committee, I am concerned that these 
conditions may have far-reaching negative impacts on other 
important aspects of the lives of Indian people, such as 
education, economic development, and health. Adequate housing 
is a fundamental need that must be met to support improvements 
in these other areas.
    I welcome the witnesses and look forward to their 
testimony.
    Senator Dorgan.

  STATEMENT OF HON. BYRON L. DORGAN, U.S. SENATOR FROM NORTH 
       DAKOTA, VICE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS

    Senator Dorgan. Mr. Chairman, first of all, thank you for 
calling this hearing. I extend a welcome to our witnesses and 
appreciate their being with us.
    As I have indicated before, I think there is a bona fide 
crisis in health care, housing and education. Today we are 
talking about housing on Indian reservations. The U.S. 
Commission on Civil Rights has indicated that 40 percent of the 
on-reservation housing structures are substandard. That 
compares with 6 percent nationwide.
    One in five reservation homes lacks complete plumbing; 
90,000 Indian families are homeless or under-housed. I have 
toured some housing developments on some Indian reservations 
that are absolutely shocking with respect to their disrepair. I 
have told the story about Sarah Swifthawk who died in her house 
because she froze to death in a home that didn't have windows. 
They had plastic sheeting, for windows at tempertures of 35, 40 
below zero, while sleeping on a cot. That is not America. That 
is not the best of what we ought to be offering in America, to 
all Americans.
    So we deal today with housing, housing policy, with respect 
to Native Americans. We need to consider reauthorization of the 
Native American Housing Assistance and Self-Determination Act 
of 1996. This hearing will provide some very important 
groundwork for those deliberations.
    So Mr. Chairman, I look forward to, as always, working with 
you on these issues, and thank you for conducting these 
hearings.
    The Chairman. Thank you very much.
    Our first panel is Orlando J. Cabrera, who is the assistant 
secretary of the Office of Public and Indian Housing, 
Department of Housing and Urban Development. He is accompanied 
by Paula Blunt, general deputy assistant secretary, Office of 
Public and Indian Housing, and Rodger Boyd, deputy assistant 
secretary of Native American Programs.
    If they would like to come to the witness table, you are 
welcome to do so. Do you want them there or not, Mr. Cabrera?
    Mr. Cabrera. No, Mr. Chairman; Ms. Blunt has a medical 
emergency, nothing critical, and my staff is with me.
    The Chairman. I am sorry to hear that, and please send our 
best and our condolences to Ms. Blunt.
    The Chairman. Thank you.
    And Pattye Green, who is a senior business manager for 
Native American Initiatives of Fannie Mae. Before I ask you to 
proceed, I would ask Senator Murkowski if she has any opening 
comments she would like to make.

   STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR FROM ALASKA

    Senator Murkowski. Thank you, Mr. Chairman, and good 
morning. I appreciate your calling the hearing today and 
appreciate those who have taken their time this morning to 
present to us.
    As you know, we have some issues in my State of Alaska that 
we care about a great deal. We have issues that relate to the 
high cost of housing primarily caused by transportation issues, 
as is specific up in Barrow, which is the northernmost 
community in the State. You essentially have one barge a year 
coming in to bring the supplies. If you miss the barge, the 
only way to get it there is to fly it hundreds and hundreds of 
miles, adding to the expense. So we have some logistical issues 
that cause us concern.
    So the NAHASDA funding is very, very critical to my State, 
as well as it is to the rest of the Nation. So I am pleased 
that we are seeing some increases or some improvements in 
there.
    I also want to just mention briefly, it is not just the 
expenses associated with the construction of the homes, but in 
many of our remote Alaska Native communities, we have water and 
sewer conditions that often rival third world countries. And we 
have great concerns with how we provide potable water, how we 
provide sewer facilities for those in the communities. I have 
talked in this committee and in others about an unsophisticated 
sewage system which consists of a honey bucket, nothing more 
than a bucket with a toilet seat on top of it, and the disposal 
of the waste is walking it down somewhere outside the 
community, usually in a lagoon and dumping it there.
    Federal funding for water and sewer projects in rural 
Alaska is separate from NAHASDA, but I want to mention these as 
challenges that we deal with on a daily basis, to really 
underscore the very unique challenges that we face in providing 
housing and related service.
    I do appreciate the fact that the National American Indian 
Housing Council led a delegation of Congressional staffers to 
several of these remote communities last year. I think it is 
important that we be able to observe first-hand some of the 
conditions. I am thankful that they were able to attend, and 
would certainly welcome any of you to come up on a similar 
field trip.
    Mr. Chairman, again, I appreciate your conducting the 
hearing, and I look forward to the testimony of the witnesses.
    The Chairman. Thank you very much.
    Mr. Cabrera, please proceed. Welcome.

STATEMENT OF ORLANDO J. CABRERA, ASSISTANT SECRETARY, OFFICE OF 
                   PUBLIC AND INDIAN HOUSING,
          DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT,
         ACCOMPANIED BY RODGER BOYD, DEPUTY ASSISTANT 
              SECRETARY, NATIVE AMERICAN PROGRAMS

    Mr. Cabrera. Thank you, Mr. Chairman.
    Mr. Chairman, Mr. Vice Chairman, and members of the 
committee, good morning and thank you for inviting me to 
comment on HUD's Indian Housing and Community Development 
programs. My name is Orlando Cabrera, and I am HUD's assistant 
secretary for Public and Indian Housing. It is a pleasure to 
appear before you again, and I wanted to express my 
appreciation for your continuing efforts to improve the housing 
conditions of American Indian, Alaska Native, and Native 
Hawaiian peoples.
    From HUD's perspective, much progress is being made. 
Momentum needs to be sustained as we continue to work together 
toward creating a better living environment throughout Indian 
country. At the outset, let me reaffirm HUD's support for the 
core principle of government to government relations, with 
federally-recognized Indian tribes. HUD is committed to 
honoring this fundamental concept in our work with American 
Indians and Alaska Natives.
    I would like to share with you my perspective on how to 
help tribal communities succeed. My background is in housing, 
so I would like to focus most of my tools on my profession, I 
should say my former profession.
    Today there are more ways to leverage Federal funds than 
ever before. Tribes should look beyond HUD's Indian Housing 
Block Grant and title VI programs. All these new efforts 
involve some risk, but without risk fewer families are 
assisted. We have engaged in marketing and outreach activities 
designed to make tribes and TDHEs more familiar with our 
programs, particularly those with Federal guarantees to lower 
the risks that have traditionally made the private sector shy 
away from partnering with tribes.
    We are also examining a bond financing initiative that has 
worked well for public housing authorities, to see if it can do 
the same for tribes. Another way we seek to help is by 
encouraging TDHEs to leverage private sector capital to create 
more housing on reservations.
    President Bush and Secretary Jackson have made their 
commitment to home ownership clear. Home ownership and the 
ability to build equity in one's home is an important component 
in the development of strong tribal communities for generations 
to come.
    Creating home ownership opportunities continues to rank at 
the top of the Administration's priorities for the American 
people. And nowhere is this more important than in the Native 
American community.
    HUD section 184, Indian Housing Loan Guarantee program, has 
made a significant contribution to the overall success of the 
Administration's home ownership initiatives. Section 184 
activity for the past fiscal year shows that tribes and TDHEs 
are using this program with increasing frequency. In total, HUD 
has completed $380 million in loan guarantees through the 
inception of the 184 program.
    During the first 8 months of fiscal year 2006, HUD approved 
804 loans, obligating $123.8 million, representing a 400-
percent increase in volume since 2001. The rate of loan 
obligations, which we estimate to reach $180 million to $200 
million by the end of the fiscal year, for this fiscal year, 
confirms that the section 184 program is bringing home 
ownership to more and more tribal members at very little cost 
to the Federal taxpayer.
    When I think of leveraging, the word collaboration comes to 
mind. NAHASDA's Indian Housing Block Grant program continues to 
be the largest single source of housing capital in Indian 
country. The IHBG program, which came online at the beginning 
of the fiscal year 1998, has now distributed over $5.7 billion 
in funding to tribes or their TDHEs.
    But relying on IHBG funding alone without leveraging those 
dollars misses a significant opportunity. We are committed to 
exploring new ways to combine HUD resources with those of other 
Federal agencies, the States and the private sector.
    In a combined effort to increase the home ownership rate in 
Indian country, address affordable housing needs and promote 
mortgage financing, PIH's former assistant secretary, BIA's 
assistant secretary and USDA's rural development acting under 
secretary signed a memorandum of understanding to work together 
with tribes to provide housing development and related 
assistance to all sectors of the Native American community. A 
major aim of the memorandum of understanding, which was signed 
in September of 2004, was to obtain a commitment from the BIA 
to expedite the production of title status reports, or TSRs, a 
necessary document for mortgaging of trust or restricted Indian 
lands.
    Despite these advances, the TSR approval process is not 
where we want it to be. In an effort to reach our common goals, 
I am meeting tomorrow with Interior Deputy Associate Secretary 
Cason to determine if there is more that we can do together.
    Land assignment law is a big issue for us. In an effort to 
use the government to government relationship collaboratively 
and to increase the private sector housing market presence on 
reservations, ONAP and the BIA have worked with the 
Mashantucket-Pequot Tribe to establish a tribal land assignment 
law. Interior's Solicitor's office has approved the process and 
issued an opinion that individual assignments governed by 
tribal land assignment law do not require BIA approval or 
recordation. ONAP will issue program guidance on land 
assignments for the section 184 program in the coming months, 
and we expect other tribes to take advantage of this process.
    This concludes my prepare remarks. Again, thank you for 
your time. Thank you for allowing me to testify. Again, I 
encourage the active participation of all tribes to share 
innovative approaches to housing development in Indian country.
    I would be happy to answer any questions that you may have.
    [Prepared statement of Mr. Cabrera appears in appendix.]
    The Chairman. Thank you very much.
    Ms. Green, welcome.

 STATEMENT OF PATTYE GREEN, SENIOR BUSINESS MANAGER FOR RURAL 
    NATIVE AMERICAN INITIATIVES, FANNIE MAE, TISHOMINGO, OK

    Ms. Green. Thank you, Chairman McCain, Vice Chairman Dorgan 
and members of the committee. My name is Pattye Green, and I am 
the senior business manager for Rural Native American 
Initiatives with Fannie Mae, and I have over 28 years of 
mortgage lending experience. Prior to coming to Fannie Mae, I 
was the home finance director of the Housing Authority of the 
Choctaw Nation of Oklahoma, and I am a member of the Choctaw 
Nation of Oklahoma.
    I am pleased to be here today to discuss the barriers to 
capital access that we see on tribal lands and to share with 
you the steps that Fannie Mae is taking to help overcome those 
barriers, expand home ownership and affordable housing for 
rental opportunities in tribal communities. Fannie Mae's 
Congressionally granted mission, to create affordable housing 
opportunities for Native American families living on tribal 
lands, is one of the toughest challenges we face. According to 
the National American Indian Housing Council, we have seen some 
improvement, but we still see homes on tribal lands that are 
overcrowded, that are not connected to public sewer systems, 
lack indoor plumbing. Almost one-half of Indian households pay 
more than 30 percent of their income for housing expenses, 
compared to 23 percent of all households in the United States.
    The home ownership rate on reservations are 41 percent and 
stated by NAIHC, is 33 percent, well below the national average 
of approximately 68 percent. An absence of conventional 
mortgage lending is a major factor behind the gap. The most 
stubborn and overwhelming barrier to capital access in Indian 
country is a lack of economic opportunity. Poverty rates are 26 
percent for Native Americans, over double the national average 
of 12 percent.
    In Navajo country, 43 percent of people live below the 
poverty level. The average per capita income is $7,300 and the 
unemployment rate reaches almost 25 percent.
    In light of these severe socio-economic conditions, Fannie 
Mae is taking a three-pronged approach to expanding affordable 
housing on tribal lands. First, by developing the right 
mortgage products that make it easier for our lender partners 
to do business on the tribal lands. Second, by working with 
developers and tribal housing authorities to address the 
critical shortage of affordable housing units that currently 
exist. And finally, to develop broad partnership throughout the 
housing finance and tribal communities to focus on the long-
term, systematic barriers to housing and community development 
that exists in Indian country today.
    One of the groups that is important to this effort is the 
National American Indian Housing Council. We would like to 
encourage you to continue Congressional funding to this group. 
Against this backdrop of extreme poverty, it is not surprising 
that the Native American home ownership rate lags far behind 
the national rate, and that Native Americans are pessimistic 
about the lending process.
    A 2000 survey by the Treasury Department found that 65 
percent of tribal members viewed conventional home mortgages as 
difficult or very difficult to obtain. Fannie Mae has 
customized its suites of community lending products to respond 
to the unique needs of Native American communities. Our 
community lending products are designed to help borrowers 
overcome the two primary barriers to home ownership: Lack of 
down payment funds and qualifying income, through lower cash 
requirements for down payment and closing, reduced qualifying 
income requirements and higher acceptable debt to income and 
loan to value ratios that are required for traditional, 
conventional mortgages.
    We have worked with tribes to add unique features to this 
product, including tribally provided home buyer eduction, down 
payment assistance programs and intervention programs for 
borrowers who get into trouble. We work with each individual 
tribe to understand their culture and to help them to 
understand the needs that they have and to customize programs 
that are necessary for their tribes.
    We currently have relationships with 112 lenders to make 
loans to Native Americans on tribal lands. Since 2001, Fannie 
Mae has helped our lender partners serve over 8,535 Native 
American families by providing more than $839 million in 
affordable mortgage financing on tribal lands.
    Perhaps the most serious challenge to affordable housing in 
the near term is the critical shortage of affordable housing on 
tribal lands. According to the National American Indian Housing 
Council, there is an immediate shortage of 200,000 units on 
tribal lands. The Navajo Housing Authority estimates that it 
alone needs 21,000 new housing units to satisfy the unmet needs 
of all Navajo families, including 12,000 new homes for 
purchase.
    Fannie Mae has worked closely with tribes and other housing 
partners, such as the Blackfeet Reservation in Montana, the 
Standing Rock Reservation in South and North Dakota, both with 
the construction of new units and rehabilitation of existing 
units through investments in low income housing tax credit 
investments, collateralized revenue bonds and HUD-guaranteed 
Native American Housing Assistance and Self-Determination Title 
VI loans. We have also begun to provide tribal housing 
authorities with additional financing via our community lending 
business channel to help bridge funding gaps through the 
construction phase of their development.
    Nationwide, we have invested over $160 million in low 
income housing tax credits. We have helped with over $51 
million in title VI loans and $1.5 million in additional 
financing to support construction and rehabilitation units in 
tribal land since 2001.
    Finally, financial experience poses a barrier to capital 
access for Native Americans. Many Native Americans do not have 
banking relationships, and in many Native American economies, 
financial transactions have long been conducted in cash. As a 
result, many Native Americans have little regular familiarity 
with banking, credit reporting and the loan qualification 
process and standards. And unsurprisingly, they have difficulty 
obtaining credit through traditional means.
    In 2002, the conventional loan denial rate for Native 
Americans was 23 percent. The lack of experience and 
familiarity with bank practices and products also leaves many 
Native American communities vulnerable to unscrupulous 
financial practices that undermine communities. In 2003, 53 
respondents believed that lenders based on race and identified 
predatory lending and that is why they were being denied.
    Lastly, Mr. Chairman, I would like to briefly mention our 
own efforts to institutionalize our commitment to Native 
American housing issues. In January of this year, Fannie Mae 
created a new business unit that focuses on addressing the 
toughest housing challenges in our distressed urban areas, 
rural communities and tribal lands. In addition to supporting 
our business units, as they seek to make investments in these 
areas, we are also developing targeted, place-based strategies 
to create long-term solutions that are both transformative and 
scaleable.
    Ultimately, our goal is not to just make investments in 
short-term, but also to play a meaningful role in transforming 
these distressed areas into healthy and vibrant markets where 
access to private capital is indistinguishable from other, more 
established areas of the United States. I hope that with these 
comments, Fannie Mae has begun to make progress in expanding 
home ownership for Native Americans. But it is important to 
recognize that we have so much more to do, and we will continue 
to listen closely to Indian country leaders to build long-term 
partnerships and to address the tough housing and economic 
challenges facing Native American communities today.
    Thank you and I would be happy to answer any questions.
    [Prepared statement of Ms. Green appears in appendix.]
    The Chairman. Thank you very much.
    Secretary Cabrera, I understand you recently notified 
tribal leaders that HUD will not process any further fiscal 
year 2006 Indian Housing Block Grant awards until a stay is 
ordered in the Fort Peck Housing Authority v. HUD case, wherein 
the court ordered HUD to take such action necessary to include 
certain housing units in determining funding formulas for only 
Fort Peck. What is the impact of not processing these awards?
    Mr. Cabrera. The impact is that currently there are no 
awards, no money going to any of the tribes until one of two 
things happen. I think the second is more likely than the 
first.
    The first is to get a stay from a Federal judge in 
Colorado, which we suspect we probably would not get, at least 
that is what our legal counsel is telling us. The second is to 
come to essentially a stipulation with the plaintiff in this 
case, Fort Peck, in which case that would give us the room that 
we would need to go ahead and allocate. We believe that is a 
more likely outcome. We certainly hope it is a more likely 
outcome.
    Yesterday afternoon, I received word that they are close 
but not perfectly aligned and most of the issue has to do with 
a commitment that HUD was asked to make with respect to 2007 
appropriation that we cannot, because it would essentially 
infringe upon this prerogative, which is the budget. I think 
that can be bridged. So my sense of life is we are closer than 
not.
    The Chairman. Well, I am not sure that if you agree to 
request certain funds from the Congress that that would be an 
infringement upon our prerogatives. There is no budget that is 
submitted that is not subject to the review or modification by 
the Congress.
    Mr. Cabrera. No; I am sorry, Mr. Chairman, I wasn't clear. 
This isn't about an amount of money. What they were asking us 
to do was essentially commit to an amount of money in the 
context of a legal settlement where we can, certainly we can 
preface it, and I believe that is what our lawyers are going to 
do, they are going to do precisely what you have just 
recommended, which is to say, if Congress approves something, 
then great. But we can't have a breached settlement by virtue 
of it being a predicate to the settlement.
    The Chairman. How many tribes or housing entities are being 
affected by this?
    Mr. Cabrera. As I recall, all 561.
    The Chairman. Whew. It seems to me that would lend some 
urgency to resolving this situation.
    Mr. Cabrera. Very much so. I would love to resolve this 
situation.
    The Chairman. What kind of help are you getting?
    Mr. Cabrera. We have, our legal counsel and the Department 
of Justice are working very intently with Fort Peck's counsel 
in order to come to some resolution.
    The Chairman. How much money are we talking about here in 
the Fort Peck situation?
    Mr. Cabrera. Mr. Chairman, may I please consult with my 
staff?
    The Chairman. Yes; sure. Roughly.
    If your staff would just like----
    Mr. Cabrera. It is okay, I am sorry. It is $400,000. And I 
believe there are a few other tribes, one that comes to mind is 
Arapaho, that also agrees with Fort Peck's position on this. I 
don't recall what that number is.
    The Chairman. You are talking about $400,000?
    Mr. Cabrera. Yes.
    The Chairman. Holding up hundreds of millions of dollars?
    Mr. Cabrera. Yes; because the issue is the way that the 
formula grant is administered. So by virtue of undertaking the 
lawsuit and getting this particular order, that is the 
regrettable precise effect.
    The Chairman. Senator Dorgan.
    Senator Dorgan. Mr. Chairman, let me also ask the same line 
of questions. You would not be required to hold up funding to 
other tribes. I am sure because this deals with Fort Peck and a 
decision with respect to Fort Peck. I understand that you may 
have to recalculate the funds. But you could assume, create 
reserves that would allow you to do that at some point, such as 
reserve a body of funds and at least distribute some portion of 
the housing funds, could you not?
    Mr. Cabrera. As I understand it from our legal counsel, the 
very incomplete answer to that is no. And the reason is because 
of the nature of the formula distribution inside of the 
appropriation. I remember actually expressly asking that 
question, and the answer was that this particular order throws 
the entire formula into question.
    Senator Dorgan. Tell me the quantity that is now frozen? Do 
you know off-hand?
    Mr. Cabrera. Mr. Vice Chairman, may I again consult with my 
staff?
    Senator Dorgan. Yes; please.
    Mr. Cabrera. Thank you.
    Approximately $300 million.
    Senator Dorgan. You know, I don't understand the answer you 
have received from lawyers, nor why you would accept that 
answer. A $400,000 discrepancy issue here is holding up in, did 
you say in, did you say $300 million?
    Mr. Cabrera. Yes.
    Senator Dorgan. In a $300-million pool of money, you are 
certainly able to reconcile whatever is judged to be done to 
recalculate that formula within the context of a portion of 
that $300 million. But there is no reason at all to be holding 
up all of the housing money in anticipation of having to find 
an answer here. You certainly could be moving some of that 
housing money out now. Are you saying you are prevented by your 
attorneys from doing that?
    Mr. Cabrera. No; I am saying that our attorneys are 
counseling that based upon this particular Federal judge's 
order, that if we did, we would be in contravention of the 
order. And more to the point, the issue, and I respect that, I 
respect the idea that proportionally, the $400,000 in terms of 
the relative amount, the $400,000, no, the $300 million, it 
appears very small.
    The issue isn't the money. The issue is the formula.
    Senator Dorgan. I understand.
    Mr. Cabrera. And this particular order basically said, the 
entire administrative mechanism that you are using is invalid.
    Senator Dorgan. I understand all of that. But do you think 
the judge would have anticipated that you should hold up all of 
the funding going out for housing in order to reconcile the 
$400,000?
    Mr. Cabrera. Forgive me, I didn't mean to interrupt.
    I think what the judge thought was that this was just a 
Fort Peck issue. And so I don't think that, I think that is why 
we have some hope on this day, but we are not certain on this 
day, and that is because I am not entirely sure the judge was 
aware that it would affect basically the other 560 tribes. That 
is why we are seeking the stay and that is why we would like to 
resolve this.
    Senator Dorgan. But do you agree it would minimally affect 
most of the other tribes?
    Mr. Cabrera. No; in some cases it is a significant effect. 
As I recall, there is a significant effect to both the Cherokee 
and the Navajo Tribe.
    Senator Dorgan. How many tribes do we have in this country 
that are eligible for housing funds?
    Mr. Cabrera. 561.
    Senator Dorgan. So you are saying that three of them would 
be affected?
    Mr. Cabrera. No; those are the only ones that I remember.
    Senator Dorgan. Oh, all of them because of the formula 
distribution?
    Mr. Cabrera. Yes; it would basically redistribute the way 
the formula is undertaken.
    Senator Dorgan. What if you don't get this resolved in the 
coming days or weeks? You just hold up all the housing funds 
for Native Americans for the rest of the year?
    Mr. Cabrera. No; I think what I would ask, or I have asked 
our lawyers to do is visit the idea of asking the judge for 
greater clarity with respect to how it is he would have us 
proceed.
    Senator Dorgan. Why hasn't that been done already?
    Mr. Cabrera. I believe it has. I believe that effort has 
begun.
    Senator Dorgan. How has the judge responded?
    Mr. Cabrera. I don't know. That I don't know as of today. I 
believe the other major effort really has been to have the 
parties deal with it and then go to the judge and say, look, we 
agree, we can proceed.
    Senator Dorgan. You know, I bet these lawyers that are 
giving you this advice are pretty well housed. So the issue 
here is the urgency to get housing money to Native Americans. 
And we have authorized and appropriated funding for housing. I 
am not trying to badger you here. I think you have gotten some 
bad advice from some place. And I think there must be room 
administratively to continue a program, especially a program 
that responds to an urgent need, even if you probably hold a 
reserve back to recalculate this formula at some point.
    I can't believe the judge would render a decision that 
says, okay, in order to resolve this, you need to hold up all 
the housing funds nationally. I can't believe that would be the 
intent of the Federal court.
    Mr. Cabrera. No; and that is what I was trying to say 
earlier, maybe I didn't say it as perfectly as I should have. 
We believe that the judge's order focused on these two 
particular parties, and that is why we want to revisit the 
issue of the order with the judge.
    We are working on a separate and equivalent track to deal 
with it within the parties themselves. We are hopeful that that 
would happen. But certainly we are trying to resolve this 
issue. Once we get clarity, as I noted earlier, we would very 
much like to proceed. Our issue is not feeling comfortable with 
what or how the order approaches the entire formula issue. It 
only deals really with Fort Peck.
    And at the same time, maybe, hopefully, probably, Fort Peck 
and HUD would come to some agreement on how to proceed in the 
interim, so that we can go ahead and move. In either case, we 
are moving quickly.
    Senator Dorgan. Mr. Cabrera, I confess I don't understand 
the formula or perhaps the nuances of the judge's order. But I 
do know that the housing funds that we have provided have now 
been shut off for a month. Indian leaders are very concerned 
about that, and should be, because they are, in their 
Government, trying to develop housing programs to deal with a 
very serious problem. One only needs to look at some of the 
housing stock that exists to see how much disrepair there is, 
and then understand how many people need housing and don't have 
access to it.
    So I hope you will understand the urgency of this and I 
hope that the agency will go back to those lawyers who have 
told you that you have to hold it all up. I can't conceive that 
would be the case. I hope you will report back on a weekly 
basis to this committee. My hope is the first weekly report 
will be to say that we have resolved this and we have gotten 
the money out there and are starting to build housing stock.
    Mr. Cabrera. Mr. Vice Chairman, if that report would come 
this afternoon, nobody would be happier than me. I would like 
to resolve this. I have an enormous amount of empathy for the 
situation. But at the end of the day, we are moving steadfastly 
to resolve this. And I will be happy to report weekly on this. 
I deal with Fort Peck or the Fort Peck situation if not every 
day, then very nearly every other day. So we are moving 
diligently to resolve this in the best legal way possible.
    Senator Dorgan. Ms. Green, just briefly, Mr. Chairman, Ms. 
Green, thank you for your testimony. I know that you have a 
program you have been doing with respect to North and South 
Dakota at the Standing Rock Reservation.
    Ms. Green. Yes.
    Senator Dorgan. Could you just give us a very brief 
description of that program and your results?
    Ms. Green. Yes; at the Standing Rock Reservation is one of 
what we are calling our deep dives, where we are going into the 
reservations and bringing in all of our parts of Fannie Mae, 
where we do single family projects. We are doing low income 
housing, bringing in multi-family, bringing in bridge loans, 
whatever we can do to help the reservations to bring in 
whatever they need to transform their reservations, any type of 
housing needs.
    Standing Rock is a great example of what we are doing 
there. For example, we have done low income housing tax 
credits, we have done a single family project there. For 
instance, we have done 248 units on Standing Rock Reservation, 
affordable rental housing in the past 5 years. That has been a 
great, great project that we are doing there. We are there for 
a long term, we are not just going in and doing a one time 
project. We are there for 10 years, 20 years, whatever they 
need us for. So we go back every year and do an update.
    Our CBC there is working on an ongoing basis with Standing 
Rock. We have done grants, we give them grants for revolving 
loan projects, whatever it is that they need to do. But as of 
date, we have helped them, investing with the 248 rental 
projects that they have got going there.
    Senator Dorgan. Thank you very much, Ms. Green.
    Mr. Cabrera, thank you for being with us today as well.
    Mr. Cabrera. Thank you, Senator.
    The Chairman. Senator Murkowski.
    Senator Murkowski. Thank you, Mr. Chairman.
    I just want to follow up very briefly on the comments made 
by my colleagues about the litigation and the status of it. I 
think it has been made clear the urgency to this. I guess I am 
somewhat surprised that perhaps the judge is not aware of the 
ramifications, potentially, to all of these tribes, 500 some 
odd tribes out there. I would certainly hope that that 
clarification is made very, very quickly.
    Just one quick question for you, Mr. Cabrera. I wanted to 
ask you about the Indian housing, the cost study, which is 
already underway, a study that is certainly going to have a 
long-term effect on the allocation of Indian housing 
nationwide. We are a little bit concerned, from Alaska's 
perspective. Because if the housing study goes in a way that 
unfortunately we feel it might, it could have a very negative 
impact to the housing authorities in the State of Alaska. As I 
mentioned in my opening statement, we have some unique 
challenges that we face when it comes to construction of 
housing in the State. And so it is very important for HUD to be 
taking a look at this very wide cross-section of data from the 
various housing authorities in the State.
    We also recognize that it is very important from the 
national perspective to be getting a wide cross-section of 
data. Recognizing that compilation of all this can take some 
time, has there been any thought given to allocating additional 
time to complete the study, to ensure that the study is going 
to be very complete, accurate and fair?
    Mr. Cabrera. Yes; as I recall, it was already extended by 
another 6 months. Further, Senator, I think that we have had 
the University of Illinois Urban Center working very closely 
with Blake Azama, as I recall, and other corporations or 
corporation representatives in Alaska on this issue. So I 
believe that there has been progress. I understand precisely 
how seriously you take the issue.
    Senator Murkowski. Well, we understand that you are looking 
to come up to the State some time in August, so hopefully we 
would have an opportunity to talk with you a little bit more 
about the issue and to give you the first-hand tour of some of 
the issues. We appreciate your willingness to come up.
    Mr. Cabrera. I look forward to it, thank you.
    Senator Murkowski. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Mr. Cabrera, we will be trying to get involved in this, 
because we think that it needs to be resolved quickly. We are 
going to begin by, Senator Dorgan and I, and other members of 
the committee, sending a letter to the Secretary saying we want 
his personal involvement in this. We can't hold up housing for 
500 tribes because of a $400,000-dispute.
    And I understand it is more complicated than that. I fully 
understand that. It is a policy problem. But we just can't do 
that. We owe more than that to Native Americans.
    So we are going to start out with a letter, and then we are 
going to have to maybe look at something legislatively or 
something, I don't know exactly what, but we need to explore 
all the options to get this issue resolved quickly. I hope you 
will join us in that effort.
    Mr. Cabrera. Mr. Chairman, absolutely. I would say this is 
not relating to the letter, but with respect to the 
legislation. I think that by the time this gets resolved, 
either in the context of getting a clarified order or getting 
an arrangement with Fort Peck, whatever that might be, that 
will probably preempt any need for legislation. This is not an 
unreasonable judge, this is someone whom most practicing 
lawyers respect greatly, including me.
    So I think at the end of the day this will probably work 
out. I know in the interim it is painful, not the least of 
which for me. I just wanted to make sure you were aware, I will 
report weekly going forward.
    Senator Dorgan. Could I, Mr. Chairman, say, and I can't 
speak for the Chairman, I don't believe there ought to be an 
interim. In the interim, there should not be a shut-off of 
funds. These are critically needed funds for housing and we can 
recalculate or you can recalculate some sort of reserve to deal 
with this formula issue. But the funding should not have been 
shut off to hundreds of tribes.
    Mr. Cabrera. I understand.
    The Chairman. And unfortunately, probably is not good 
enough. So we urge you to act as quickly as possible, and we 
will be paying close attention. I thank you very much. Thank 
the witnesses.
    Our next panel is Marty Shuravloff, who is the chairman of 
the National American Indian Housing Council; A.D. Ellis, 
principal chief of the Muscogee Creek Nation; and James Steele, 
who is the chairman of the Confederated Salish and Kootenai 
Tribes of the Flathead Reservation, and Mr. Steele is 
accompanied by Jason Adams, who is the executive director of 
the Housing Authority.
    Mr. Shuravloff, am I pronouncing your name correctly?
    Mr. Shuravloff. You are, Mr. Chairman.
    The Chairman. Thank you. Please proceed.

  STATEMENT OF MARTY SHURAVLOFF, CHAIRMAN, NATIONAL AMERICAN 
             INDIAN HOUSING COUNCIL, WASHINGTON, DC

    Mr. Shuravloff. Good morning, Chairman McCain, Vice 
Chairman Dorgan, Senator Murkowski and distinguished members of 
the Senate Committee on Indian Affairs.
    My name is Marty Shuravloff, and I am honored to appear 
before you today as the recently elected chair of the National 
American Indian Housing Council, the oldest and largest Indian 
housing organization in the Nation, representing the housing 
interests of more than 460 tribes. I am an enrolled member of 
the Village of Leisnol and also serve as the executive director 
of the Kodiak Island Housing Authority.
    Now in its 32d year, the NAIHC is the major capacity 
building organization providing guidance, technical assistance, 
training and other services. NAIHC trains thousands of Indian 
housing and other staff per year, offering most of its training 
for free. NAIHC also uses state of the art technology to save 
tribes time and travel costs, by offering training by webcast 
and video. In addition, NAIHC provides scholarships that help 
offset travel costs, ensuring that the poorest tribes receive 
training. In 2005, 200 different tribes and TDHEs benefitted 
from 751 scholarships granted by NAIHC.
    For 32 years, NAIHC has provided invaluable assistance to 
Indian tribes and TDHEs, and in no small way has made the 
difficult implementation phase of NAHASDA a success. Along the 
way, NAIHC has endured many difficulties, including a Federal 
housing agency that may, due to paternalistic tendencies, 
create the opposite of self-determination. Additionally, NAIHC 
has dealt with Congressional appropriators who are unaware of, 
or worse, unmoved by, the dire economic conditions that 
characterize Native communities.
    The impact of Federal funding for the Native American block 
grant has been steadily eroded by inflation. It has gone from 
$600 million in 1998 to $624 million this fiscal year, an 
actual decline when adjusted for inflation. During the same 
time, Federal funding made available to the NAIHC for technical 
assistance and training to Indian tribes and their TDHEs has 
also declined, threatening its very existence.
    The Department of Housing and Urban Development maintains 
that NAIHC has undisbursed funds left over from fiscal year 
2004 and 2005, and unobligated funds left over from fiscal year 
2006 that somehow NAIHC is unable or unwilling to spend. The 
truth of the matter is that NAIHC expends funds on a 
reimbursement schedule and what HUD says is in the pipeline has 
been expended but not yet billed to HUD as of March 2006.
    If NAIHC continues to expend funds at the same rate as in 
2005, the pipeline funds will be completely gone by February 
2007. The erroneous perceptions have been caused by the many 
administrative delays in NAIHC's work contract with HUD. NAIHC 
receives its funds on a reimbursement basis, after incurring 
costs for HUD-approved activities. NAIHC's current contract 
with HUD took months to complete. While HUD shows these funds 
as unused, NAIHC can show that the funds will be exhausted by 
the work of the NAIHC throughout the year.
    If House-passed levels of technical assistance funding 
prevail, NAIHC shuts down. It is that simple. For fiscal year 
2007, the House has proposed $990,000 for technical assistance 
and training services for NAIHC. And it is no exaggeration to 
say that with this or a similar level of funding in the next 
fiscal year, NAIHC will close its doors in or around January 
2007. We hope this committee will not let this happen.
    Under the leadership of Senator McCain, NAHASDA was created 
and rests on a firm foundation of Indian self-determination, 
reflecting the time tested principles of local tribal decision 
making and tribal economic self-sufficiency. That means that 
Indian tribes themselves, not HUD, design, implement and 
conduct housing and related programs for their members.
    In passing NAHASDA, Congress intended HUD's role to be 
minimally intrusive. NAIHC, tribes and TDHEs have established a 
legislative working group to identify and address legislative 
and regulatory issues of tribal concern with the statute as it 
now stands. Their issues include the impediments of the program 
assessment rating tool process and how to improve the data 
collection and reporting elements.
    The severe problem with methamphetamine in Indian 
communities, the insufficient or non-existent infrastructure in 
Indian communities, addressing the problem of mold in 
federally-assisted tribal homes, the establishing of 
development reserve accounts as an eligible activity under 
NAHASDA, replacing the 30 percent income rule with fair market 
rents, Federal procurement issues related to housing materials, 
the elimination of Secretarial approval for long-term leases, 
and overdue and necessary reforms to the Bureau of Indian 
Affairs tribal status report process.
    NAIHC is committed to finding resolutions to these 
problems. To address the infrastructure deficiencies in Indian 
country, NAIHC is collaborating with Federal agencies in the 
development of an infrastructure memorandum of understanding 
that will encourage agencies to assist tribes with 
infrastructure development. Additionally, NAIHC has established 
two internal working groups to deal with issues related to 
NAHASDA reauthorization and the formula allocation.
    The Native American Block Grant program is the main program 
for funding tribal housing under NAHASDA. Historically, 
decennial census numbers have been one element in the 
calculation of distribution of Native American housing block 
grant funds. A change in the census collection technique in the 
2000 census led to a change in distribution patterns, causing a 
question to be raised regarding the use of a specific set of 
census data.
    A failure of the negotiated rulemaking committee to arrive 
at a consensus on which census data to use caused HUD to use a 
data set that has led to a disagreement among tribes concerning 
the formula. To help resolve this issue, NAIHC has established 
a task force with the goal of arriving at a position that is 
agreeable to all tribes regarding the accounting of American 
Indian and Alaska Natives in the formula.
    And finally, Mr. Chairman, members of the committee, NAIHC 
also is gravely concerned about HUD's recent decision to 
potentially withhold allocation of the remaining fiscal year 
2006 funds if the Department is unable to obtain a stay pending 
appeal of the court's decision in the Fort Peck Housing 
Authority v. U.S. Department of Housing and Urban Development. 
While we understand the difficulties presented by the Fort Peck 
decision, this decision could cause severe hardships on 
recipients whose funding may be inappropriately withheld.
    As you are aware, most tribal and TDHE recipients are 
dependent on such funding to continue operating and providing 
services to their low income members. Such disruption in 
funding could lead to some completely shutting down.
    Additionally, many tribes have pledged their Native 
American Housing Block Grant funds as security for title VI or 
section 184 loans, and HUD's proposed course of action could 
result in default on these loans, requiring the United States 
to assume the payment of these loans. NAIHC urges this 
committee to persuade HUD to reconsider its decision and seek 
an alternative solution, if at all possible.
    In conclusion, I would like to thank you for giving us this 
opportunity to speak. We look forward to working with the 
committee on all issues affecting Indian housing programs.
    [Prepared statement of Mr. Shuravloff appears in appendix.]
    The Chairman. Thank you.
    Chief Ellis.

   STATEMENT OF A.D. ELLIS, PRINCIPAL CHIEF, MUSCOGEE CREEK 
                      NATION, OKMULGEE, OK

    Mr. Ellis. Good morning, Mr. Chairman, distinguished 
committee. It is a great honor to be invited here this morning 
to represent my nation.
    My name is A.D. Ellis, I am presently principal chief of 
the Muscogee Creek Nation, the fourth largest tribe in America, 
with over 62,000 members. Our housing program has basically 
been a successful program. We now have over 100 employees in 
our housing division. Since 1970, we have built 2,900 homes, 
240 low rent apartments and the biggest thing that has helped 
the tribe was the initiation of NAHASDA.
    Before that, I heard the Vice Chairman mention 
reservations. The misconception is all Federal funding goes to 
reservation tribes. The distinction of the Oklahoma tribes is 
different. Out of the 39 tribes in Oklahoma, 38 of them do not 
have reservations.
    All the housing authorities in Oklahoma fall under State of 
Oklahoma law. All the Housing Authority employees, the board of 
directors and funds, up until NAHASDA, was submitted to the 
Housing Authority. In the last 3 years I came into office, I 
petitioned the State of Oklahoma to exercise the sovereignty of 
the Muscogee Nation. We got the Senate and House of 
Representative to agree. In March of this year, the Governor 
signed a bill relinquishing all State housing laws and assets 
to the Muscogee Nation. We received $43 million in assets and 
cash and the State of Oklahoma no longer exists in the Creek 
Housing Authority.
    Now, the Housing Authority is run by tribal government, 
totally tribal government, no interference. We know what our 
people need. We live among them. I received a HUD home in 1988. 
I waited 6 years to get the house. I ran into all the 
roadblocks. I know what the people need, I know what they go 
through in trying to get these.
    Since the NAHASDA program was initiated, in the last two 
years we have gone from tribal boundaries to statewide mortgage 
assistance program. At the present time, we purchase modular 
homes from an Oklahoma prison system at a great reduction in 
price.
    In Oklahoma, most of our people are under one-quarter 
blood. Out of our 62,000 people, about 42,000 are less than 
one-quarter. So what we call the full-blood people are very 
reluctant to ask for anything. We put them first choice, 
referencing the elderly. We use proceeds of sale that the State 
turned over to us for emergency next-day assistance.
    We now build homes on restricted lands. We are purchasing a 
building company to build our own modular homes. And I didn't 
bring my housing director with me today due to budget sessions, 
but I assure you, I am not an expert in housing, I only control 
the housing.
    But he did say that we oppose the voting that the housing 
council took in Hawaii previously on the using the census of 
the count of tribal members. I think if it passes, I think the 
Navajo Nation will probably accumulate another 7 million. The 
tribes in Oklahoma will probably lose about 15 million. So we 
are going to address that a little later.
    Again, Mr. Chairman, I appreciate being here on behalf of 
the Oklahoma tribes. Thank you, sir.
    [Prepared statement of Mr. Ellis appears in appendix.]
    The Chairman. Thank you very much, Chief.
    Chairman Steele, welcome.

 STATEMENT OF JAMES STEELE, Jr., CHAIRMAN, CONFEDERATED SALISH 
AND KOOTENAI TRIBES OF THE FLATHEAD INDIAN NATION, ACCOMPANIED 
     BY JASON ADAMS, EXECUTIVE DIRECTOR, HOUSING AUTHORITY

    Mr. Steele. Good morning. I would like to greet you in the 
language of the Salish and Kootenai Tribes. [Greeting in native 
tongue.]
    Good morning, Chairman McCain, Vice Chairman Dorgan, 
Senator Murkowski, and members of the committee. My name is 
James Steele. I am the chairman of the Confederated Salish and 
Kootenai Tribes of the Flathead Indian Nation in present day 
western Montana. I appreciate the opportunity to speak before 
you today. With me here today is Jason Adams, executive 
director of the Salish and Kootenai Housing Authority.
    I have submitted a detailed written statement and will now 
summarize my remarks.
    The Confederated Salish and Kootenai Tribes are one of the 
original 10 self-governance tribes in the United States, and we 
are the only tribes in the country to operate both our IAM 
program and our title plant. We were the first tribe in the 
country to organize under the Indian Reorganization Act.
    My testimony discusses two interesting things we are doing 
on the reservation involving the issuance of private mortgages 
by utilizing the HUD 184 program. Our housing authority has 
partnered with several of the local lenders on the Flathead 
Reservation to provide this home ownership program to our 
membership. We have over 80 mortgages that have been completed, 
with the majority of those loans being on trust land.
    In all of the transactions, the tribal council placed our 
housing authority in a position of essentially an additional 
guarantor over and above HUD's guarantee. We are also quite 
proud of our home buyer education program. In the last year, we 
have had over 80 families graduate from the classes with 56 of 
those families going on to obtain a mortgage through either the 
HUD 184 program or our own tribal credit program.
    The housing issues that I would like to touch on today are 
the Native American Housing Assistance and Self-Determination 
Act reauthorization, the NAHASDA funding formula and funding 
levels for fiscal year 2007, the funding level for the National 
American Indian Housing Council and the issue of HUD freezing 
NAHASDA funds to recipients that have not received their fiscal 
year 2006 funds.
    When you reauthorize NAHASDA, it is important that you 
address the 30 percent rule. The 30 percent rule is a mandate 
in the act that requires all tenants in units supported by 
NAHASDA funds to have to pay no more than 30 percent of their 
adjusted income in rent. The intent behind this rule may have 
been admirable, but as cited in my testimony, is simply not 
working, in great part because it is too rigid. Our position is 
that our tribes could benefit from discretion in this regard, 
and that we could design and implement a rental fee schedule 
that provides an incentive to those who have lived in poverty 
historically and who then go on to work.
    From a tribal leader's perspective, the problem is that the 
rule doesn't allow us to self-determine the structure of the 
housing program that we provide. We think that the assistant 
secretary of HUD erred in 2003 when he arbitrarily changed the 
use of census data from the single race data set to the multi-
race data set. As I understand, this decision was made without 
consulting with tribes and without giving tribes the 
opportunity to provide input back to HUD on the effects that 
such a decision would have to the recipients of NAHASDA.
    I am encouraged by the work that has begun at NAIHC to work 
within its membership to convene a task force to study this 
issue and work toward common ground with its membership to find 
an answer to this issue. I believe that when tribes come to the 
table with the expectation for solving an issue themselves, it 
will happen.
    I would ask this committee to assist the NAIHC with the 
proposal that comes forth from the task force. The funding 
level for NAHASDA is totally inadequate. I would ask that this 
committee support a substantial increase in the fiscal year 
2007 appropriation far above what the President's budget 
proposal contains.
    If funding levels from fiscal year 2002 had been maintained 
with modest inflation, the fiscal year 2007 appropriation for 
NAHASDA should be approximately $748 million, not $625 million 
as contained in the President's budget. Without some increase 
in funding, housing authorities and many others are forced to 
make tough decisions on cutting programs, decreasing the level 
of maintenance of existing units and not being able to leverage 
funding to create new, affordable housing opportunities.
    I support funding for the National American Indian Housing 
Council. It is very discouraging to see that the President's 
budget proposal does not contain any funding for the council. I 
would ask that this committee fully support funding for the 
council and its membership of 265 tribes, including funds 
needed to keep up with the cost of providing the services.
    The final issue I would like to discuss today is the recent 
decision from HUD to freeze all allocation of the NAHASDA block 
grant funds to those tribes that have not yet received their 
fiscal year 2006 funding. HUD is apparently reacting to a court 
decision stemming from a lawsuit filed by the Fort Peck Housing 
Authority. The court ruling declared a NAHASDA regulation 
invalid, which therefore changed the NAHASDA funding formula. I 
understand HUD is appealing the decision and has decided to 
freeze funding until the outcome of their appeal.
    While we understand HUD's need to protect itself, should 
they lose this lawsuit, freezing all unobligated NAHASDA 
funding to 141 tribes is not the answer. It is not clear how 
these tribal housing authorities are going to operate without 
this funding. We ask this committee to promptly consult with 
the Appropriations Subcommittee on HUD, the Banking, Housing 
and Urban Affairs Committee, about a possibility of a joint 
communication to HUD to obligate these funds. If HUD loses this 
lawsuit, they should be required to submit a supplemental 
appropriations request or to access the DOJ judgment fund, the 
same way any other agency would if they lost a lawsuit
    It has been an honor to be invited to testify before this 
committee. Thank you for having this hearing and for providing 
an opportunity for a panel of tribal representatives to come 
and give our perspective on some of the important issues facing 
Indian Country in the area of housing. Thank you.
    [Prepared statement of Mr. Steele appears in appendix.]
    Senator Murkowski [presiding]. Thank you, Mr. Steele, and 
thank you to all of you who have joined us here this morning.
    The chairman had to excuse himself, he had another 
committee that began at 10:30, and he had to make an 
introduction of another individual. So he apologizes that he 
had to leave before the hearing was able to conclude.
    But I do appreciate the perspective that the three of you 
have been able to give us, and to hear the concerns raised by 
the panel as to the effect that tying up these funds through 
the Fort Peck situation can have. We recognize that, and the 
Chairman and Vice Chairman clearly stated the need to act in 
this area and to do so very quickly.
    Mr. Shuravloff, you had mentioned the working groups or the 
task force that has been pulled together in anticipation of the 
NAHASDA reauthorization coming up. I understand that you have 
been working, or NAIHC has been working with the Native housing 
authorities nationwide to gather some suggested changes to this 
act. I do understand that you have not yet formalized the 
report. Can you give us any preliminary insight as to the 
findings that you can disclose at this point in time?
    Mr. Shuravloff. Senator Murkowski, at this point we are in 
the process of gathering both regulatory and statutory issues 
that we may want to look at during the reauthorization of the 
act. We hope to have that concluded here in the very near 
future.
    Senator Murkowski. What does that mean, in the very near 
future? When do you anticipate you will be done with this?
    Mr. Shuravloff. Well, what the work product, the product 
that is coming out is, we hope to have done it within the next 
couple of months. Then in our December meeting, we hope to have 
a business meeting to ratify any amendments that the membership 
would like to move forward with the reauthorization process.
    Senator Murkowski. So at this point, it is too early, too 
premature to indicate what some of the preliminary findings 
might be?
    Mr. Shuravloff. Yes; it is.
    Senator Murkowski. All right. You mentioned in your 
comments the issue of mold. We are finding that, particularly 
in many of our villages in western Alaska, mold is a tough 
issue for us, it is a significant issue. Can you give me some 
indication the extent of the problem, beyond what I am aware 
of, in Alaska? How big of an issue is this as it relates to our 
housing for Native Americans and Alaska Natives?
    Mr. Shuravloff. It has become a large issue nationwide. I 
think we see it a lot in Alaska, especially because of our 
housing building techniques. I think most people realize that 
mold is a product of not enough air movement through the house, 
and the moisture that gathers, of course, creates the mold.
    I know in Alaska there is a study that has been going on 
and I think is being concluded on developing some different 
building techniques. But I have been hearing of problems all 
across the Country on mold issues. It is definitely a big 
issue.
    In terms of numbers, I don't have that available. But I 
know across the country everybody seems to be dealing with it 
in just about every State.
    Senator Murkowski. Certainly from the health perspective, 
it is something that should cause us concern. We don't want to 
be building housing that is going to cause health problems for 
those that are living in them. We know that when you have any 
significant degree of mold in a home, it can.
    We had a hearing about 1\1/2\years ago on teacher housing 
out in rural Alaska, and heard testimony from a young woman 
that became very ill and learned that it was not necessarily 
the housing techniques that had failed, they had installed the 
vapor barrier inside out or on the wrong side. So what had 
happened was a level of mold buildup in the house, the house 
looked pretty good from the outside. But it was not a liveable 
structure, because of some of the construction issues.
    So yes, we need to work to make sure that we have got good 
construction techniques. But we also need to remember that we 
can't move forward with just shoddy workmanship, either. I 
think in that situation, that was exactly what was happening.
    Mr. Shuravloff. Yes, Senator; if I might add, I think a lot 
of the problem is education on the homeowner's part. 
Ventilation is one of the main issues when you deal with mold. 
One of the things we have found is that our own residents 
continually have to be educated on the requirements of leaving 
windows open or turning fans on to keep some ventilation within 
the unit.
    That seems to be one of the big problems we are dealing 
with, is education. It may not necessarily be the building 
itself, but just the education of the residents within the 
unit.
    Senator Murkowski. Well, the education is certainly 
important. When Ms. Green was testifying, speaking to the fact 
that there are so many of our Alaska Natives, Native Americans, 
who have not had certain background in financing, understanding 
the financing, having built a credit record. Because they 
basically operate using cash, having no bank account.
    There is an educational process that comes with home 
ownership that does not just relate to the management and 
operation of the home itself, but also even prior to getting 
into the home. I think we recognize that we have many issues 
that we need to deal with. And we are not going to be able to 
resolve them all overnight. But working together, with 
committed individuals, we will make some progress.
    I appreciate the time that you have taken, and the time 
that you have taken to travel here to Washington to give us 
your perspectives. With that, we will adjourn the Committee. 
Thank you.
    [Whereupon, at 10:40 a.m., the committee was adjourned.]


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                            A P P E N D I X

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              Additional Material Submitted for the Record

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  Prepared Statement of A.D. Ellis, Principal Chief, Muscogee Nation, 
                                Oklahoma

    My name is A. D. Ellis and I am presently Principal Chief of the 
Muscogee [Creek] Nation of Oklahoma. I have 15 years in elected office 
which included 8 years on the National Council and 4 years as second 
chief.
    Housing and Health issues in the Muscogee Nation are a top priority 
as it probably is for every tribal nation. With the increased funding 
in the last 15 years, we have been able to keep up with the yearly 
demand but it seems to always have a waiting list of 500 to 700 people. 
The Muscogee [Creek] Nation is situated in the most depressed area in 
Oklahoma and has had this distinction for many years.
    In 1997 with the introduction of the NAHASDA Program and the 
funding sent directly to the tribe instead of the Housing Authority, we 
were able to serve our peoples needs more efficiently. Unknown to most 
everyone in Oklahoma and especially State leaders such as Senators, 
Representatives and even the Governor, all Tribal Housing Authorities 
were controlled by State laws. This was a great opportunity for tribal 
citizens to balk against elected tribal leaders as they served on 
housing boards under State law and not tribal law. These housing boards 
were formed in the late 1960's before tribal government and 
constitutions were formed. Great amounts of money and other assets were 
controlled by housing authority boards that would not cooperate with 
tribal leaders. Even under these unfavorable circumstances, we have 
built approximately 50 new homes per year and probably another 50 homes 
purchased, called `acquisition homes'.
    Another program that came with NAHASDA is the 184 Program and 
Mortgage Assistance. Mortgage Assistance provides up to $25,000 for 
down payment and closing costs for those that qualify for a loan from a 
lender that participates in the program. This is a no payback benefit 
if the homebuyer stays in the home for a period of years.
    We have about 100 employees in our new housing division which is a 
new arm of my administration. My first year in office I terminated the 
entire board of directors and top management and formed the new housing 
division controlled by the tribal government. This is the third year of 
trying to exercise our tribal sovereignty and was successful.
    A friendly State Senator carried a specially crafted piece of 
legislation to the Oklahoma Senate and House to unanimously pass the 
legislation to allow the Muscogee Nation to assume all programs and 
assets of the Creek Nation Housing Authority of Oklahoma. The State of 
Oklahoma ceased to exist with the Creek Nation Housing Authority.
    Since assuming complete control we have made many policy changes to 
better serve our citizens. One is to lower the income requirements to 
own a HUD of NAHASDA home.

   \\\\\\Previously a person had to earn over $15,000 to 
        qualify. This left out the very people that needed help the 
        most. By lowering the earning requirements to $5,000 annually 
        the most needy and lower income people could qualify.
   \\\\\\A policy giving the full blood citizen priority along 
        with tribal elders has been implemented.
   \\\\\\Mortgage assistance was restricted to tribal 
        boundaries and has been changed to state boundaries. Now any 
        Creek citizen living in the State of Oklahoma can receive 
        assistance.

    Progress is moving slowly forward and if we continue to receive 
funds at this level we plan to serve our present housing needs within 7 
years.
    Our present funding needs are now being challenged by reservation 
tribes from other States. The funding is based on the 2000 census count 
which was based on Indian and Multi-race Indians as listed on the 
census card.
    A change in the numbers by a different census count, ``Indian 
Only'', could reduce the funding for all Indians in Oklahoma and 
increase it for all Reservation Tribes. The Indian population in 
Oklahoma is near 600,000 with most belonging to the Five Tribes of 
Eastern Oklahoma being the Cherokee, Choctaw, Chickasaw, Seminole, and 
Creek. If this formula has to be changed we hope it could wait until 
the 2010 census count.
    Over all the NAHASDA program is working and the Native American 
population is being served by a professional and capable housing 
division dedicated to serve the Muscogee [Creek] people. Any support 
from the U.S. Congress and the U.S. Senate is always appreciated and we 
need the funding levels to remain as they are or more.

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  Prepared Statement of Marty Shuravloff, Chairman, National American 
                         Indian Housing Council

    Good morning Chairman McCain, Vice Chairman Dorgan, Senator 
Murkowski, and distinguished members of the Senate Committee on Indian 
Affairs. My name is Marty Shuravloff and I am honored to appear before 
you today to discuss matters related to the delivery of safe, decent, 
and affordable homes to Native people from across our great Nation.
    I am also honored to have been elected last month to serve as 
chairman of the National American Indian Housing Council [NAIHC] the 
oldest and largest Indian housing organization in the Nation, 
representing the housing interests of more than 460 tribes. I am an 
enrolled member of the Leisnol Village, serve my people as executive 
director of the Kodiak Island Housing Authority, and serve all Alaskans 
by holding a variety of appointed posts such as with the Alaska Housing 
Finance Corporation.
    Begun in 1974, 4 years after President Nixon issued his now-famous 
Special Message to Congress on Indian Affairs, the NAIHC is the major 
capacity building organization for Indian tribes and tribally 
designated housing entities [TDHEs] by providing guidance, technical 
assistance, training and related capacity-building services. The NAIHC 
trains thousands of Indian housing and other staff per year, offering 
most of its training without charging a fee. The NAIHC provides a full 
range of programs and services such as technical assistance to TDHEs 
and Indian tribes that include onsite visits, telephone and e-mail 
assistance, structured training classes for regional associations and 
housing Boards of Commissioners, and topic-specific training courses at 
both its Annual Convention and Legal Symposium. These tailored training 
courses include a new crime prevention and safety initiative launched 
in April 2005.
    NAIHC also uses modem technology to save tribes time and travel 
costs by offering training by both web cast and video. For training 
courses and services that require travel, NAIHC offers a scholarship 
program that helps tribes and TDHEs offset the cost of sending 
individuals to much-needed and beneficial training that they may not 
otherwise be able to afford. In 2005, 200 different tribes and TDHEs 
benefited by the granting of 751 scholarships by the NAIHC. In addition 
to offering onsite training, NAIHC maintains a comprehensive, highly 
visited website and is developing a premier state-of-the-art website to 
help Native people educate themselves about the benefits and mechanics 
of homeownership. The ``Native American Homebuyer'' website and a 
technical Indian housing library are both scheduled to go online this 
summer.
    Beginning in the early 1990's, Indian tribes, housing authorities 
and others came together to share their vision of how housing and 
related community development ought to be carried out in Native 
communities in the era of Indian Self Determination. The NAIHC was 
instrumental in shaping these discussions and helping to draft, in both 
spirit and letter, what would ultimately become the Native American 
Housing Assistance and Self-Determination Act [NAHASDA] 25 U.S.C. 
Sec. Sec. 4101 et seq.
    In 1996, this committee--under the leadership of Chairman McCain--
approved legislation that revolutionized the way Federal housing 
programs and services are designed and implemented in Native 
communities. A Republican Congress approved and President Clinton 
signed the NAHASDA. The NAHASDA rests on a firm foundation of Indian 
Self Determination and reflects the time-tested principles of local 
tribal decisionmaking and tribal economic self-sufficiency.
    Unlike previous Federal housing approaches, the NAHASDA is distinct 
in four ways: It stresses the trust responsibility of the U.S. 
Government to house Native Americans; it replaces categorical grant 
programs with a block grant that affords tribes more flexibility to 
design housing to meet each community's unique needs; it encourages 
tribes to develop a long-term comprehensive housing strategy through 
the preparation of housing plans; and it enables tribes unprecedented 
opportunities to use different sources of financing to meet housing 
needs in their community.
    NAHASDA is scheduled for reauthorization in 2007. Although we have 
made some great strides since the inception of the act, further 
refinements are necessary to make it an even more powerful tool for 
Native communities. The NAIHC has taken a proactive role in gathering 
input from tribes across the Nation on the effectiveness of the act in 
meeting its intended purpose of providing quality, affordable housing 
to Native people. We respectfully request congressional support for 
reauthorization of the act and this committee's active and vigorous 
assistance in eliminating unnecessary and overly burdensome obstacles 
that frustrate the intent of Congress and detrimentally impact Indian 
housing programs.
    For nearly 32 years the NAIHC has provided invaluable assistance to 
Indian tribes and TDHEs and in no small measure has made the often-
difficult implementation phase of the NAHASDA a success. Along the way, 
the NAIHC has endured many difficulties including a Federal housing 
bureaucracy more concerned with its own preservation and well-being 
than in meeting its obligation to Native people; and Congressional 
appropriators who are unaware of--or worse, unmoved by--the dire 
economic conditions that characterize Native communities.
    The potency of Federal funding for the Native American Block Grant 
[NAHBG] has been steadily eroded by inflation. Funding for the NAHBG in 
the past 9 fiscal years is as follows:

        Fiscal Year 1998 $600 million.
        Fiscal Year 1999 $620 million.
        Fiscal Year 2000 $620 million.
        Fiscal Year 2001 $650 million.
        Fiscal Year 2002 $648.2 million.
        Fiscal Year 2003 $644.8 million.
        Fiscal Year 2004 $650.3 million.
        Fiscal Year 2005 $622.0 million.
        Fiscal Year 2006 $623.7 million.

    During the same time, Federal funding made available to the NAIHC 
for technical assistance and training to Indian tribes and their TDHEs 
has also steadily eroded.
    The Department of Housing and Urban Development [HUD] maintains 
that the NAIHC has at its disposal $3,921,282.32 in ``undisbursed 
funds'' left over from fiscal year 2004 and fiscal year 2005, and $1, 
980.000.00 in ``unobligated funds'' left over from fiscal year 2006, 
adding up to a total of $5,901,282.32 that in the minds of HUD we are 
unable or unwilling to spend. The truth of the matter, as you know 
Chairman McCain, is often not as simple as the Department would have 
you believe.
    Funds appropriated to the National American Indian Housing Council 
[NAIHC] are being used to provide critical housing related services to 
Indian tribes, TDHEs and their staff and, just as important, the funds 
are being expended in a timely manner. For the most recent fiscal year, 
the NAIHC expended $5,369,365 on HUD-approved, federally funded 
programs and services. According to HUD, $5,965,637.28 in prior 
appropriated funds were ``in the pipeline'' as of March 2006. At that 
time, however, no invoices had been submitted to HUD for 2006 
expenditures. If the NA1HC were to continue to expend funds at the same 
rate as in 2005, the ``pipeline'' funds would be fully exhausted by 
January 2007, and any suggestions that there is sufficient funding ``in 
the pipeline'' to last through the end of fiscal year 2007 are simply 
inaccurate.
    The main factors contributing to the ``in the pipeline'' perception 
are the many administrative delays which accompany the Cooperative 
Agreement entered into by HUD and the NAIHC. The NAIHC receives its 
funds on a reimbursement basis after incurring costs for HUD-approved 
activities. The NAIHC's current Cooperative Agreement with HUD took 6 
months to complete from March 4, 2005, when NAIHC submitted a Statement 
of Work to HUD to September 14, 2005, when it was executed. This 
process includes eight different steps within HUD before approval to 
the NAIHC is granted. While HUD shows these funds as unused, NAIHC can 
show that the funds will be exhausted by the activities of the NAIHC 
throughout the year.
    If House passed levels of technical assistance funding prevail, 
NAIHC shuts down, it is that simple. For fiscal year 2007, the House 
has proposed $990,000 for technical assistance and training services 
for the NAIHC and it is no exaggeration to say that, with this or a 
similar level of funding in the next fiscal year, the NAIHC will close 
its doors in or around January 2007. Perhaps HUD intends to satisfy the 
demand for technical assistance and training by tribes and TDHEs 
thereafter, Mr. Chairman, but this is the stark reality for the NAIHC.
    The NAHASDA defines a clear government-to-government relationship 
between the U.S. Government and Indian tribes for purposes of providing 
housing and sets forth the trust responsibility of the U.S. Government 
to assist tribes in providing housing and improve economic development 
to their members. Indian Self-determination, to be meaningful, means 
that the Indian tribes themselves, not HUD, design, implement, and 
conduct housing and related programs for their members. Under this 
policy, tribal governments plan, conduct and administer Indian housing 
programs and services for their own people. In passing the NAHASDA, 
Congress intended HUD's role to be residual and to be minimally 
intrusive into tribal decisionmaking when it comes to housing. HUD's 
extensive and often heavy-handed oversight of Indian housing programs 
undermines the ability of tribal governments to make their own 
decisions about how to house and protect their people and manage their 
affairs. Rather than promoting Indian Self-Determination, tribes are 
subjected to severe and overly burdensome regulations that not only 
hinder their housing programs but, more significantly, the regulations 
harm the welfare of their people.
    In an attempt to resurrect the original intent of NAHASDA, the 
NAIHC, tribes and TDHEs have established a legislative working group to 
identify and address legislative and regulatory issues of tribal 
concern with the statute as it now stands. Their issues include: the 
impediments of the Program Assessment Rating Tool [PART] process and 
how to improve the data collection and reporting elements as they 
relate to Indian housing; the severe problem with methamphetamine in 
Indian communities; the insufficient or non-existent infrastructure in 
Indian communities; addressing the problem of mold in federally 
assisted tribal homes; the establishment of development reserve 
accounts as an eligible activity under NAHASDA; replacing the 30 
percent income rule with fair market rents; Federal procurement issues 
relating to housing materials; the elimination of secretarial approval 
for long term leases and; overdue and necessary reforms to the Bureau 
of Indian Affairs Title Status Report process.
    The NAIHC is committed to finding resolutions to these problems and 
is developing creative solutions to deal with these issues. For 
example, the Title Status Report process can be improved if tribes were 
broadly authorized and encouraged to contract these functions such as 
under the Indian Self-Determination and Education Assistance Act of 
1975, as amended, 25 U.S.C. Sec. Sec. 450 et seq. NAIHC has offered 
several training sessions on this topic for its members. In order to 
address the insufficient or non-existent infrastructure in Indian 
country, the NAIHC is collaborating with Federal agencies in the 
development of an infrastructure Memorandum-of-Understanding that will 
encourage agencies to assist tribes with infrastructure development. In 
addition, NAIHC has established a second internal working group to deal 
with issues related to the Native American Housing Block Grant 
Allocation Formula. The NAIHC recognizes the importance of 
collaboration and is committed to working with tribes and TDHEs across 
the Nation to address these issues and reach resolutions on them.
    The Native American Housing Block Grant program is the main program 
for funding tribal housing under NAHASDA. NAHASDA relies on definitions 
of ``Indian'', ``Indian tribe'' and ``Indian area'' for the purpose of 
designating allocations. The definitions of ``Indian'' and an ``Indian 
tribe'' are included in the NAHASDA at section 4, paragraph 9. The term 
``Indian'' means any person who is a member of an Indian tribe and the 
term Indian tribe means a tribe that is federally recognized or state 
recognized.
    Historically, decennial census numbers have been one element in the 
calculation of distribution of Native American Housing Block Grant 
funds. A change in the census collection technique in the 2000 
decennial census led to a change in distribution patterns causing a 
question to be raised regarding the use of a specific set of census 
data. A failure of the negotiated rulemaking committee to arrive at a 
consensus on which census data to use caused HUD to utilize a specific 
data set and has led to a disagreement among tribes concerning the 
formula for distribution.
    The NAIHC membership recently passed a resolution to endorse the 
use of ``single-race data'' in the formula calculations for the Native 
American Housing Block Grant allocation. However, this committee knows 
that there remains disagreement among NAIHC membership concerning the 
way in which American Indians and Alaska Natives are counted by the 
U.S. Census Bureau. In an attempt to reach consensus on this issue, the 
NAIHC has established a Task Force with the goal of arriving at a 
position that is agreeable to all tribes regarding the counting of 
American Indian and Alaska Natives in the formula. The Task Force is to 
formulate a position which they will then present to the NAIHC 
membership for approval. Because this issue is unresolved at many 
levels, we request the active support of the Committee on Indian 
Affairs in these efforts.
    The NAIHC is gravely concerned about HUD's recent decision to 
potentially withhold allocation of the remaining fiscal year 2006 funds 
if the department is unable to obtain a stay pending appeal of the 
Court's decision in the Fort Peck Housing Authority v. U.S. Department 
of Housing and Urban Development (Civ. Action No. 05-CV-00018-RPM-CBS, 
May 25, 2006). While we understand the difficulties presented by the 
Fort Peck decision, responding to what is a narrow decision possibly 
only affecting the Fort Peck Tribe by withholding funds for hundreds of 
tribes may be outside of HUD's legal authority to do. Even more 
fundamental is the severe hardship such a decision by HUD will have on 
recipients whose funding is inappropriately withheld. As you are aware, 
many if not most tribal and TDHE recipients are dependent on such 
funding to continue operating and providing service to their low-income 
members. Disruption of funding will impose substantial limitations on 
these tribes and TDHEs, conceivably leading to some completely shutting 
down.
    Additionally, many tribes have pledged their Native American 
Housing Block Grant funds as security for title VI or section 184 loans 
and HUD's proposed course of action would result in default on those 
loans, requiring the United States to assume the payment of these 
loans. Placing the tribes and TDHEs at risk of an adverse credit rating 
is unacceptable. NAIHC urges this committee to persuade HUD to 
reconsider its decision and seek an alternative solution for the 
situation at hand.
    In conclusion, I would like to thank you, Chairman McCain, Vice 
Chairman Dorgan, Senator Murkowski, and the members of the committee 
for your continuing support of Native people and their housing 
programs. The NAIHC is eager to work with the committee on all the 
issues affecting Indian housing programs--no matter how difficult--so 
that together we can achieve objectives we both share, for example, 
more and better housing for Native people, increasing homeownership in 
Native communities, and building stronger tribal economies along the 
way.

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