[Senate Hearing 111-580]
[From the U.S. Government Publishing Office]
S. Hrg. 111-580
UNEMPLOYMENT ON INDIAN RESERVATIONS AT 50 PERCENT: THE URGENT NEED TO
CREATE JOBS IN INDIAN COUNTRY
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
JANUARY 28, 2010
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COMMITTEE ON INDIAN AFFAIRS
BYRON L. DORGAN, North Dakota, Chairman
JOHN BARRASSO, Wyoming, Vice Chairman
DANIEL K. INOUYE, Hawaii JOHN McCAIN, Arizona
KENT CONRAD, North Dakota LISA MURKOWSKI, Alaska
DANIEL K. AKAKA, Hawaii TOM COBURN, M.D., Oklahoma
TIM JOHNSON, South Dakota MIKE CRAPO, Idaho
MARIA CANTWELL, Washington MIKE JOHANNS, Nebraska
JON TESTER, Montana
TOM UDALL, New Mexico
AL FRANKEN, Minnesota
Allison C. Binney, Majority Staff Director and Chief Counsel
David A. Mullon Jr., Minority Staff Director and Chief Counsel
C O N T E N T S
Hearing held on January 28, 2010................................. 1
Statement of Senator Barrasso.................................... 58
Prepared statement........................................... 59
Statement of Senator Dorgan...................................... 1
Statement of Senator Franken..................................... 87
Statement of Senator Murkowski................................... 61
Statement of Senator Tester...................................... 2
Edwards, Conrad, President/CEO, Council for Tribal Employment
Prepared statement with attachments.......................... 69
Keel, Hon. Jefferson, President, National Congress of American
Prepared statement with attachments.......................... 15
Laverdure, Donald ``Del'', Deputy Assistant Secretary for Indian
Affairs, U.S. Department of the Interior....................... 3
Prepared statement........................................... 5
O'Neill, Gloria, President/CEO, Cook Inlet Tribal Council........ 61
Prepared statement........................................... 63
Spoonhunter, Hon. Harvey, Chairman, Northern Arapaho Business
Prepared statement........................................... 60
Gottlieb, Katherine, MBA, President/CEO, Southcentral Foundation,
prepared statement............................................. 109
Letters submitted by:
Hon. W. Ron Allen, Tribal Chairman/CEO, Jamestown S'Klallam
Hon. Robert C. Bear, Tribal Chairman, Shoshone-Paiute Tribes
of the Duck Valley Indian Reservation...................... 130
Hon. Henry M. Cagey, Chairman, Lummi Indian Business Council. 126
Hon. Frances Charles, Chairwoman, Lower Elwha S'Klallam Tribe 125
Hon. Norman J. Cooeyate, Governor, Pueblo of Zuni............ 127
Hon. Gus Frank, Tribal Chairman, Forest County Potawatomi
Hon. Dave Lopeman, Chairman, Squaxin Island Tribe............ 131
Thomas M. Moll, General Counsel, Seneca Free Trade
Hon. Charlene Nelson, Chairwoman, Shoalwater Bay Indian Tribe 129
Hon. Gregory E. Pyle, Chief, Choctaw Nation of Oklahoma...... 119
Hon. Larry Romanelli, Ogema, Little River Band of Ottawa
Paulette Schuerch, President/CEO, Copper River Native
Hon. Fawn Sharp, President, Quinault Indian Nation........... 128
Andy Teuber, President/CEO, Kodiak Area Native Association;
Chairman/President, Alaska Native Tribal Health Consorti 123, 132
Marina TurningRobe, President/Principal Partner, M.B.E.
Certified, Native American Enterprise, Sister Sky.......... 133
Miller, Lloyd B., Sonosky, Chambers, Sachse, Endreson & Perry,
LLP, prepared statement........................................ 110
Moran, Hon. E.T. ``Bud'', Tribal Council Chairman, Confederated
Salish and Kootenai Tribes, prepared statement................. 96
Philemonof, Dimitri, President/CEO, Aleutian Pribilof Islands
Association, prepared statement................................ 94
Sanchez, Hon. Merlene, Chairperson, Guidiville Indian Rancheria,
prepared statement with attachment............................. 112
Smith, Hon. Chad, Principal Chief, Cherokee Nation, prepared
Stafne, Hon. A.T. Rusty, Chairman, Assiniboine and Sioux Tribes,
Fort Peck Indian Reservation, prepared statement............... 106
Snyder, Sr., Barry E., President, Seneca Nation of Indians,
prepared statement............................................. 91
UNEMPLOYMENT ON INDIAN RESERVATIONS AT 50 PERCENT: THE URGENT NEED TO
CREATE JOBS IN INDIAN COUNTRY
THURSDAY, JANUARY 28, 2010
Committee on Indian Affairs,
The Committee met, pursuant to notice, at 2:48 p.m. in room
628, Dirksen Senate Office Building, Hon. Byron L. Dorgan,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
The Chairman. We will begin the hearing now on the issue of
unemployment on Indian reservations.
Let me make a brief comment about it. The urgent need for
job creation on Indian reservations is apparent to everybody.
Our Nation's unemployment rate has now spiked to 10 percent,
the highest in 30 years. And I will tell you, there are a lot
of people in a lot of areas on Indian reservations where they
would welcome 10 percent unemployment. For Native American
communities, in many cases the rate is far, far higher. The
national average is 50 percent unemployment. In the Northern
Great Plains, it is 77 percent unemployment. So we have places
in this Country that would very much welcome a 10 percent rate.
Unemployment on the Indian reservations is not seasonal. It
is chronic. It is an abiding unemployment that causes a lot of
difficulty. Of the 10 poorest counties in America, I will put
up a chart, eight of them are on Indian reservations. All eight
have very high Indian populations.
[The information referred to follows:]
Unemployment means poverty, in most cases, despair, high
suicide rates, dropout rates, poor health, poor housing
conditions. It all relates to chronic and very high
We have a lack of access to capital that has stunted
economic growth, outdated Federal policies, and some cumbersome
regulations. There are a whole series of things that we must do
to try to address this chronic and urgent problem.
So, we are holding a hearing on the issue of unemployment
on Indian reservations. We have two panels today. The first is
Donald ``Del'' Laverdure, who is the Deputy Assistant Secretary
for Indian Affairs. I am going to ask him to testify first. And
then with his permission, I am going to ask the other witnesses
to join him at the table, ask for their testimony, and then we
will ask questions.
The second panel will be the Honorable Jefferson Keel, the
President of the National Congress of American Indians; the
Honorable Harvey Spoonhunter, the Chairman of the Northern
Arapaho Business Council in Wyoming; Ms. Gloria O'Neill, the
President and CEO of Cook Inlet Tribal Council in Anchorage;
and Mr. Conrad Edwards, the President and CEO of the Council
for Tribal Employment Rights, Federal Way, Washington State.
Let me begin with Deputy Assistant Secretary Del Laverdure.
Would you please come forward? And your entire statement will
be part of the permanent record, and you may summarize.
Without objection, let me ask Senator Tester to provide a
more proper introduction of the Deputy Assistant Secretary.
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. No, you did great. I would just say thank
you, Mr. Chairman. Del is a member of the Crow Tribe in
Montana. Del is somebody that I have had the opportunity to
work with in my years as a State Senator in Montana, and years
as a U.S. Senator here in Washington, D.C. He is a straight-up
guy, quality fellow, knows his stuff, and I appreciate your
being here, Del. Thank you.
The Chairman. You may proceed. Your entire statement will
be part of the record and you may summarize. Thank you for
STATEMENT OF DONALD ``DEL'' LAVERDURE, DEPUTY
ASSISTANT SECRETARY FOR INDIAN AFFAIRS, U.S.
DEPARTMENT OF THE INTERIOR
Mr. Laverdure. Thank you, Mr. Chairman, Senator Tester,
distinguished Members of the Committee. I appreciate the
invitation to address your concerns regarding unemployment in
My name is Donald Laverdure and I serve as the Deputy
Assistant Secretary for Indian Affairs in the Department of the
Addressing job creation in Indian Country is one of
Assistant Secretary Echo Hawk's and Secretary Salazar's top
priorities, so I do very much appreciate this time. While the
nationwide unemployment rate hovers around 10 percent,
unemployment in Indian Country, as indicated by the charts, can
sometimes reach as much as 80 percent. Chronic joblessness
often seems endemic to many parts of Indian Country, plaguing
one generation to the next.
While the remoteness of many tribal communities may offer a
partial explanation, it doesn't explain why Indian joblessness
lingers for generations despite better economic situations in
some adjoining non-Indian communities. Undoubtedly, the need
for jobs in Indian Country is great and more work must be done.
We will continue at the Department to proactively work with
tribes, sister agencies in the Federal Government, this
Committee, NCAI, large land-based tribes, and everyone else to
try to tackle unemployment. It is Interior's goal that this
collaborative effort, with tribes leading the way, can initiate
some near-term and long-term solutions that can turn the corner
Some tribal nations, due to a variety of factors, have been
successful in launching business enterprises and fostering
entrepreneurship. We will utilize those successful business
experiences to inform the path forward for other tribal nations
if applicable, and businesses, by encouraging collaboration
tribal nation to tribal nation.
It is important, however, to acknowledge that the one size
fits all approach does not adequately address job creation in
tribal communities. The enduring lesson that the Department has
learned is that job development policies imposed on tribes
never succeed. Consequently, it is critical that tribes and
tribal organizations be the driving force behind Federal
However, there are longstanding challenges that are common
across Indian Country. They include lack of collateral access
to capital markets, as Mr. Chairman indicated; a lack of
sometimes business development environment, separating politics
from business; a need for improved physical and legal
infrastructure; difficulty in developing natural resources with
overlapping jurisdictions; lack of opportunities to develop a
skilled workforce; and lack of access to information
Many of these roadblocks are products of a history of the
Federal-State tribal relations and have tribe-specific nuances
that must be addressed on a tribe by tribe basis.
Perhaps the largest opportunity for economic development
and job creation in Indian Country today is development of
tribal energy resources. As the Members of this Committee are
well aware, Indian Country offers some of the highest renewable
and conventional resource potential in the Nation. Analogous to
the President's push toward a clean energy economy, the
Department is working with Members of this Committee and their
staff, as well as officials from the Departments of Energy and
Agriculture, to address barriers and hopefully kick start
Indian renewable energy.
Including energy, we are taking several approaches to
support Indian job creation, and as important, assist in
building a strong on-reservation economic foundation that
encourages small business development, establishes markets for
goods and services, and develops a skilled workforce.
After meeting with many tribal officials, we plan to
address broad issues that are common across Indian Country,
combined with a focused effort to provide individual tribes
with support that they need.
First, the President has stressed interagency cooperation
and moving beyond longstanding bureaucratic barriers. Like the
President's and Secretary Salazar's message to collaborate, the
Department recognizes the same time of leadership Members of
this Committee have provided. In specifics, we appreciate
Chairman Dorgan's communication with Secretary Salazar and
Secretary Chu in an effort to spur a collaborative and
comprehensive Federal effort to support energy development in
As a reflection of that cooperation, I have recently
participated in a roundtable discussion of jobs in Indian
Country between officials of numerous agencies, tribal leaders
and Indian entrepreneurs. In addition, I plan to attend
discussion with representatives from the Harvard Project who
have been working on these issues for Indian economic
development for some 20 years, as well as other Federal
agencies, including Commerce and USDA.
Second, we are looking to improve data collection to
clarify the picture of unemployment in Indian Country and
sharpen our efforts to address it. We have restructured the
Labor Force Report to more accurately reflect employment
conditions in Indian Country. For the first time, the Report
will collect information on part-time, seasonal and temporary
workers. Data can now be reported online and we can provide
technical assistance by telephone to assist tribal officials in
completing this report.
As a result of this work to restructure, the Labor Force
Report will be able to publish more accurate data and we expect
to publish a new report this summer.
Third, the Department of Interior and the Office of Indian
Energy and Economic Development will continue to deploy
financial and human resources proactively in Indian communities
to provide technical assistance, job training and workforce
development to address unemployment. We have initiated many
programs, and I will give you a small snapshot of those, and
The Indian Loan Guaranty, Insurance and Interest Subsidy
Program provides Federal guaranties and loan insurance for
Indian-owned businesses. In fiscal year 2009, the Office of
Indian Energy and Economic Development used $7 million in
appropriations to guarantee and insure $85 million of Indian
loans. With ARRA, the appropriation was $9.5 million and we are
seeking to insure $122 million.
Indian economic development incubators focus on job
training and development initiatives in a particular State or
region for a specific period of time. We have launched these in
South Dakota, Montana and Maine, and we look forward to
continuing those efforts.
We have a Native American Business Development Institute
which links tribes with businesses and engineering graduate
schools to work with tribal leaders to identify business
opportunities through feasibility studies and market studies.
Today, we work with 14 graduate schools to perform 24 separate
such studies. We are exploring the possibility of integrating
tribal colleges and universities who have ground level
understanding of these conditions.
In sum, Mr. Chairman and Members of the Committee, we look
forward to the continued collaboration working with this
Committee, tribal leaders, academic community and private
industry to address this chronic and very important problem.
This collaborative effort should yield progress toward some
solutions at the local level.
Through these partnerships and our Nation to Nation
relationship with Indian tribes, we can create more
opportunities and job growth.
Thank you for your time and I will be happy to answer any
[The prepared statement of Mr. Laverdure follows:]
Prepared Statement of Donald ``Del'' Laverdure, Deputy Assistant
Secretary for Indian Affairs, U.S. Department of the Interior
Good afternoon, Mr. Chairman and distinguished Committee Members.
Thank you for inviting me to address your concerns regarding
unemployment in Indian Country. My name is Donald Laverdure and I serve
as Deputy Assistant Secretary for Indian Affairs in the Department of
the Interior. Addressing the dire need for employment in Indian Country
is one of Assistant Secretary Echo Hawk's and Secretary Salazar's
priorities, in addition to law enforcement and education, so we very
much appreciate the opportunity to testify at this hearing.
While the nationwide unemployment rate hovers around a distressing
10 percent, some reservation face unemployment rates of up to 80
percent. Chronic joblessness often seems endemic to many parts of
Indian Country, resisting all antidotes, and plaguing one generation to
The need for jobs in Indian country is great, and more work must be
done. The Department is grateful for the leadership members of this
Committee have provided. In particular, we appreciate Senator Dorgan's
communication with Secretary Salazar and Secretary Chu in an effort to
spur a collaborative and comprehensive federal effort to support energy
development in Indian country.
We look forward to working with tribes, other federal agencies, and
this Committee to address unemployment in Indian country. The President
has stressed the importance of interagency cooperation, and moving
beyond longstanding bureaucratic barriers. It is our hope that this
effort will finally develop long-term solutions that break the
generational history of unemployment in Indian Country.
In the meantime, the Department of the Interior will continue to be
proactive with its resources. We have initiated many programs,
projects, technical conferences and training programs to address the
lack of employment, and intend to continue these efforts. Our economic
development efforts are two-pronged, with an effort to address broad
issues that are common across Indian country, combined with a focused
approach to provide individual tribes with support needed to facilitate
It is unacceptable for many tribal communities in the United States
to experience third-world living conditions, and this Administration is
unwilling to accept these conditions as the status quo in Indian
American Indians want to honor tribal traditions and culture while
achieving better lives for their families. Where provided
opportunities, they are willing to work hard to accomplish that goal.
Some tribal nations, due to a multitude of factors, have been
successful in launching various business enterprises and fostering
Indian entrepreneurship. The Harvard Project on American Indian
Economic Development (``Harvard Project'') at the John F. Kennedy
School of Government honors many of these tribes each year.
Despite the success of some tribes, the 2000 Census tells us that
real per capita income of Indians is about half of the U.S. level. Many
tribes must overcome the sheer remoteness or isolation of their
reservations to attract private and public capital to their
communities. There is no doubt that this is certainly a factor for
tribes that are trying to build a strong on-reservation economic
foundation that encourages small business development, establishes
markets for goods and services, and develops a skilled workforce.
Although the remoteness of many reservations from markets and
services is a partial explanation, it does not explain why Indian
joblessness lingers for generations, despite better economic situations
in some adjoining non-Indian communities.
While success in improving the economies of Indian communities has
been uneven, we believe that we have a clearer, albeit preliminary,
understanding of how many have fallen behind the rest of America.
One thing we know for certain is that a ``one size fits all''
approach does not adequately address unemployment and under-employment
on reservations. That is why we are also taking a focused, approach to
provide individual tribes with the support needed to identify and
nurture economic development opportunities that best fit their
resources, workforce, markets, and culture. The soundness of this
approach is supported by the work of the Harvard Project.
While each tribal economy is unique, there are a number of common
factors that have inhibited tribal job creation. Primary job-
development roadblocks include: (1) lack of collateral with which
tribes and reservation businesses can obtain capital; (2) lack of a
business development environment; (3) lack of physical and legal
infrastructure; (4) difficulty in developing natural resources due to
multiple governments have regulatory and taxing jurisdiction over
development; (5) lack of educational and training opportunities to
develop a skilled work force; and (6) lack of access to modern
technology. Many of these roadblocks are products of the history of
federal-state-tribal relations, and have tribe-specific nuances that
must be addressed on a tribe-by-tribe basis.
As history has shown, poverty and joblessness in Indian Country is
not predisposed to a ``quick fix''. It cannot be solved by simply
investing dollars and then counting the number of jobs spawned. Many
communities need assistance to create a foundation, with economies and
jobs from the ground up. Indian reservations often lack the legal and
physical infrastructure that are common in non-Indian communities.
Until these underlying and pervasive issues are addressed, reservation
unemployment will likely remain intractable.
One of the lessons we have learned is that job development policies
imposed on tribes never succeed. Therefore, tribes must be the driving
force behind federal policies targeted toward job creation in Indian
Country, which is consistent with the policy of Indian self-
The Department recently participated in a national roundtable
discussion on job creation in Indian Country. This discussion included
representatives across various agencies in the Federal Government,
reflecting the President's priority of interagency collaboration to
address problems in Indian country. More importantly, the discussion
included tribal leaders, representatives from intertribal
organizations, Indian business developers, and labor organizations.
These leaders presented us with their vision and ideas for creating
jobs in Indian country.
This administration is seeking guidance and a buy-in from tribal
leaders for our job creation and economic development programs;
soliciting their counsel regarding which policies are working, and
which are foundering. The Office of the Assistant Secretary-Indian
Affairs, through its Office of Indian Energy and Economic Development
(IEED), is working diligently to mitigate roadblocks that stifle
business development and job creation in Indian Country. We have put in
place many approaches to provide tribes and Indian entrepreneurs with
the knowledge, tools, and resources necessary to create sustainable
businesses and good-paying jobs.
Measuring the Problem and Documenting Success
For the United States to adequately identify and focus on
unemployment in Indian country, we must first collect reliable data
that will allow us to track progress over time. The Department needs a
dedicated Indian Affairs economist who can work with tribal leaders and
academics to assess, document, and address unemployment in Indian
country. At present, the only tool available to us to measure
unemployment on reservations is the national Indian Labor Force Report
(LFR), which is intended to be published every other year.
In FY 2009, the Assistant Secretary asked IEED to evaluate,
restructure, and publish the LFR in a form that is more accurate and
relevant to employment conditions in Indian country. A committee
composed of tribal representatives and federal program staff was formed
to design a web-based data collection tool to improve the quality of
the report. For the first time, the report will collect information on
part-time, seasonal, and temporary workers. Previous reports only
identified tribal members as employed or unemployed, resulting in
incomplete data. The data can now be reported electronically and on-
line, and we plan to provide immediate technical assistance by
telephone to assist tribal officials in completing the report.
We have provided training for tribes to familiarize them with the
new reporting tool and to explain how local data should be collected.
The revamped report will be published in a timely manner, will reflect
seasonal employment, and will require all tribes to provide current
information. As a result of our work to restructure the LFR, we will be
able to publish accurate Indian country employment data on an annual
basis, which will offer better resolution of employment trends in
Indian country. We expect to publish the improved LFR this summer.
In addition to the need for accurate Indian country employment
data, there is also a need for adequate information on the underlying
causes of unemployment in Indian Country, so we can devise appropriate
In May 2007, the Department of the Interior, in partnership with
the National Congress of American Indians (NCAI), sought the input of
tribal leaders to ascertain employment conditions in Indian country and
provide recommendations on economic development at the first-ever
National Summit on American Indian Economic Development. This event
attracted over 500 tribal and federal leaders, who developed an
economic development report that contained 100 policy reform
These recommendations have served as a roadmap for developing new
programs, providing training, and conducting conferences and workshops.
However, we believe that it is time to revisit the report to assess our
progress and reaffirm the findings. Therefore, on July 20-22 of this
year, we will again join with NCAI to conduct Economic Summit II in
Minneapolis, Minnesota, to update tribes on our progress in carrying
out their prescriptions for economic progress and job creation. We will
also use this event to evaluate progress on Indian country economic
development, determine if our approaches remain valid, and develop
Attracting Private Investment to Indian Country
A critical component of job creation in Indian Country is improving
tribal access to capital. Ready access to capital markets facilitates
business development--both large and small--in virtually all other
sectors of the American economy. Access to capital in Indian Country,
however, is difficult to obtain because of certain factors related to
tribal land and the status of Indian tribes as governments.
Historically, it has been difficult for American Indians to obtain
financing. Much of tribally-owned and individual Indian-owned land is
held in trust by the United States. While trust land preserves a tribal
land base and is essential to Indian economic development, it creates
difficulties for using the land as collateral for capital transactions.
Moreover, lenders are reluctant to enter into financing agreements with
tribes and tribal corporations because of both real and perceived
concerns over the status of Indian tribes as sovereigns. Financing
options for tribes and their members are often limited by lack of
financial expertise, credit, and financial resources sufficient to
support business dealings.
The Department of the Treasury (Treasury) conducted a series of
workshops, surveys and roundtables to examine Indian access to capital
and financial services. Twenty-four percent of American Indians
interviewed told the government that business loans were ``impossible''
to obtain. Treasury's report estimated that the ``investment gap''
between American Indian economies and the U.S. overall totaled $44
billion. The report also found that, despite the fact that 85 percent
of financial institutions on or near Indian lands offer deposit
accounts to American Indian residents, half of those institutions
provide only ATMs and personal consumer loans.
The Department's Indian Loan Guaranty, Insurance and Interest
Subsidy Program seeks to narrow this gap by providing federal
guaranties and loan insurance for Indian-owned businesses. It has been
in existence since 1974 to help Indian businesses secure financing for
economic development. In FY 2009, IEED received subsidy appropriations
of $7 million to support guarantees and insurance covering
approximately $85 million of Indian loans. This program is the single
greatest Federal resource used by tribes and Indian-owned businesses to
secure lender financing, despite the availability of other, larger
The Loan Guaranty Program accomplishes a lot with a modest amount.
For every $1 million in appropriation it allows approximately $13
million in loan guarantees to be issued. One of the requirements of the
program is that the loan guarantee must positively impact reservations
or tribal service areas. Therefore, any Indian-owned enterprises
obtaining a loan guarantee creates job opportunities in areas of high
unemployment. Based upon past performance, each additional $80 million
that the program has offered for guaranteed loans can be expected to
generate 50 new businesses and create or sustain 1,500 jobs to benefit
Over the course of 36 years under the Indian Financing Act, the
Loan Guaranty Program has administered more than $1.3 billion in loans
and loan guarantees. Jobs are sustained when existing businesses have
access to capital.
The Loan Guaranty Program has been targeted to reach those Indian
borrowers showing the greatest potential for spurring their local
economies, whether those borrowers are tribes, Indian individuals, or
The historic mix of program uses has included many important
elements of tribal community development, such as starting or expanding
businesses that provide goods and services. They have also included
helping borrowers construct and renovate buildings, develop
recreational and resort facilities, refinance debt, obtain permanent
working capital, and purchase everything from manufacturing facilities
to key equipment, real estate, and inventory.
The Loan Guaranty Program helps Indian businesses whether they are
starting new businesses, expanding operations at an existing business,
revitalizing operations in a changing industry, or rebounding from
business troubles. The payoff for all this activity is the creation and
retention of jobs with decent wages, and opportunities for advancement
in communities not often accustomed to growth and expansion.
By strengthening the economic base of tribal communities, tribal
governments located near these businesses tend to progress towards
greater independence and self determination. Economic growth on the
reservation benefits neighboring non-Indian communities as well.
Indian Energy as an Economic Development Engine
Perhaps the largest opportunity for economic development and job
creation in Indian Country today is through development of tribal
energy resources. As the members of this Committee are well-aware,
Indian Country offers some of the highest renewable and conventional
resource potential in the nation. The Department is working with
members of this Committee and their staff, as well as officials from
the Departments of Energy and Agriculture, to address structural
barriers to Indian energy development posed by federal policies.
This Committee has provided great leadership on this issue, and we
appreciate Sen. Dorgan's outreach to the Department of the Interior and
the Department of Energy to identify points of contact to lead a
collaborative effort to address barriers to tribal energy development.
Access to transmission facilities and capital markets are the
lynchpins of successful tribal energy development. Historically, tribes
have often been relegated to being merely landlords in business
projects involving natural resources on tribal lands, as tax and
financial regulations provided disincentives to tribal ownership. Many
tribes want to share as a partner in sustainable natural resource
The Department values the input of tribal leaders. Through many
different forums, tribal leaders have communicated to the Department
that it is difficult for renewable energy projects in Indian Country to
realize the full value of tax incentives Congress put in place to
promote their development. Tribal leaders say that because tribal
nations, like states, are not taxable entities under the federal tax
code, their presence as an equity partner in renewable energy
development projects means that fewer tax incentives are available to
attract other partners and investors. And, because renewable energy
projects rely on tax incentives to be competitive, tribal assumption of
an equity stake in renewable projects on their land actually
discourages development. The Department continues to listen to tribal
leaders and will collaborate with other federal agency partners to
address issues related to energy development projects. The
Administration would like to find a solution that would allow tribes to
monetize these tax incentives, and become full partners on renewable
energy projects developed on tribal land. A solution in this area would
spur immediate and significant development of renewable energy
resources for the entire nation, and quickly increase job growth in
Indian country. The Administration is exploring ideas for how to
address these issues.
In addition to lacking access to capital for energy investments,
many tribes also lack ready access to energy transmission facilities.
Again, this dearth of transmission infrastructure in Indian Country
impedes job growth, as well as development of rich energy resources.
The Administration has made building a cleaner, safer, and more
efficient national energy grid a top priority. This effort will
directly generate countless jobs and facilitate the growth of private
businesses, including Indian-owned businesses. Tribal nations will and
should play an integral role in improving our energy system.
On January 11th, Assistant Secretary Echo Hawk announced a series
of tribal energy transmission system planning workshops over the next
several months in Albuquerque, NM; Portland, OR; Bismarck, ND; and
Phoenix, AZ. These workshops will be conducted by IEED and the Bureau
of Indian Affairs Office of Trust Services, working in partnership with
the Argonne National Laboratory.
These workshops will help tribal leaders and tribal resource
managers develop energy transmission corridors, so that tribes can be a
major player in building a 21st Century power transmission grid. These
two-day workshops will provide information and guidance on planning and
developing corridors for energy transmission system projects on tribal
lands, including both electricity transmission and pipeline projects.
IEED has also joined with the Inter-Tribal Council on Utility
Policy (ICOUP) to provide training and assistance on the installation
of wind machine towers and turbines. And we have collaborated with
ICOUP to provide tribal members with training on building affordable,
green, energy-efficient housing using straw-bales--an agricultural
waste product readily available in the Great Plains. One of our
objectives with these initiatives is to spur the development of Indian-
owned ``green'' businesses.
Tribal Development of Natural Resources
In addition to energy development, sustainable development of other
natural resources on tribal lands is another bright prospect in the
Indian economic development landscape. Development of these natural
resources can provide good, long-term jobs in tribal communities.
Indian Affairs manages 18.5 million acres of forests on Indian
trust land, of which 5.7 million acres is being developed for
commercial purposes. In FY 2008, 485 million board feet of timber was
harvested which resulted in $50 million in Tribal and individual Indian
income. Eighty percent of this work was performed via P.L. 93-638
contracts and self-governance compacts with tribes.
The Indian Forestry Program is renowned for its sustainable
operations. In addition, this program serves as the driving economic
force in many communities. Some tribes own their own sawmill
operations. When a sawmill component is added to the forestry
preparation work, logging, trucking and follow-up forestry activities,
tribal forestry and related activities can be the largest employers of
some regions. However, like other forestry efforts, tribal forest
programs have suffered from a dampened demand for raw wood products.
The Department is looking for ways to sustain these job skills until
the market rebounds.
In addition, some tribes have developed additional forest products
companies, such as plywood plants, that allow tribes to climb higher on
the value chain and generate more jobs. Also, if a tribe builds an
associated biomass cogeneration facility for wood waste, it can enhance
the economics of the project by producing some or all of the energy it
Supporting Indian Entrepreneurship on Reservations
Tribal leaders say that fostering Indian entrepreneurship is a
critical component to successful economic development. Small businesses
are the nation's leading generator of jobs. But this has not been the
case for American Indians. Unfortunately American Indians have not been
able to establish a significant number of small businesses. According
to a 2003 report by the Kauffman Center for Entrepreneurial Leadership,
``Native American owned and started the fewest small businesses of all
minority groups in the U.S.''
The Assistant Secretary's Office, through IEED, is developing
reservation entrepreneurship on several fronts by: (1) Assisting tribes
to improve legal infrastructure that will foster business creation; (2)
Educating Indian youth in entrepreneurship and financial literacy; and
(3) Providing training and other technical assistance to Indian
To facilitate tribal business formation, IEED sponsors workshops to
inform BIA tribal operations personnel, and tribal managers and
attorneys how Indian Reorganization Act (IRA) Section 17 corporate
charters are prepared and approved. These charters enable tribal
businesses to preserve tribal assets while maintaining tax immunity. In
addition, we are working with tribes to develop long-term,
comprehensive community plans to pave the way for business start-ups.
Last fiscal year, we collaborated with the NCAI to hold a series of
conferences throughout Indian country on reservation planning that will
provide us information to develop technical assistance programs for
tribes. We anticipate publication of a report on the findings of these
conferences in the next few months.
As described above, myriad factors impede the success of Indian
entrepreneurs. The report from the 2007 Economic Summit recommended
that all American Indian youth learn basic financial and business
concepts, beginning as early as kindergarten. In response to these
recommendations, IEED has funded a Native Community Development
Financial Institution (CDFI) to develop a financial literacy and
entrepreneurship training curriculum for American Indian K-12 students
in South Dakota.
To date, the program has established teacher training institutes at
five reservation schools. Forty-seven South Dakota American Indian
students have completed financial literacy internships. More than 1,000
Native American students took part in the Program's Youth
Entrepreneurship Fair, where they learned hands-on business start-up
IEED also sponsored entrepreneurial training projects at seven
Native American high schools and funded students from the Pine Ridge
and Cheyenne River Sioux reservations to attend the Native American
Youth Entrepreneurship Camp, conducted by the Udall Center's Native
Nations Institute at the University of Arizona. This camp teaches
students how to build private-sector enterprises in Indian country,
while conducting student visits to Indian-owned businesses and
arranging meetings between students and business owners.
We have been working one-on-one with Indian business owners to open
their doors--and keep them open. For example, the Native American
Natural Foods (NANF), manufactures the Tanka Bar and other bison-meat-
based products on the Pine Ridge Reservation in Kyle, South Dakota.
IEED provided an Indian Affairs Loan Guaranty that helped NANF launch a
national brand. In addition, we provided funding for 16 tribal members
to receive management and marketing training. Twelve of these trainees
have since obtained jobs with NANF, while the others were hired by a
non-profit organization. All of these jobs are located on the Pine
Ridge Reservation, one of the poorest areas in America.
NANF is just one example out of hundreds, where IEED has provided
Indian CEOs and entrepreneurs an opportunity to attend an intensive,
three-day executive education courses offered by the top-rated Tuck
School of Business at Dartmouth College. These courses focus on helping
Indian CEOs recognize and overcome common operational and financial
pitfalls encountered by small business owners. This fiscal year, 2010,
we are offering these training sessions in Boston, Dallas, and
Anchorage and expect to reach from 100 to 150 Indian CEOs and
IEED has also conducted workshops in Indian country on how to form
Small Business Administration 8(a) businesses and capitalize on federal
procurement and Buy-Indian opportunities.
The Office of the Assistant Secretary has worked with the CDFI Fund
within the Treasury Department to promote the establishment of CDFIs in
tribal communities. CDFIs are an effective means to provide seed money
to entrepreneurs in tribal communities. They also allow tribes the
flexibility to meet business lending needs that are unique to their
communities. Through our own programs, we are able to provide support
to tribes seeking to establish these lending institutions, in addition
to providing direct support to the CDFIs themselves.
Lastly, we have delivered some of these job development programs by
way of what we call ``Indian economic development incubators,''
focusing all of our job training and development initiatives on a
particular state or region for a specific period of time. We have
launched these ``incubators'' in South Dakota, Montana, and Maine. We
have found this to be an effective means of jump-starting entrepreneurs
in finite geographic areas. In FY 2011, we will be selecting another
area of Indian Country in which to launch these incubators, and hope to
continue to expand this program throughout Indian country as resources
Supporting Tribal Business Development
The Department is also helping tribes develop market and
feasibility studies to determine which kinds of reservation business
start-ups are likely to prosper in their respective environments. To
that end, we initiated the Native American Business Development
Institute (NABDI) to link tribes with distinguished business and
engineering graduate schools to study proposed projects before tribal
members invest time and money in them, and work with tribal leaders to
identify legitimate business opportunities. To date, we have worked
with 14 graduate schools to perform 24 separate marketing and
feasibility studies. These studies have assisted tribal leaders in
making sound decisions on start-ups, and avoiding mistakes that might
otherwise lead to marketplace failure. We are exploring the possibility
of expanding this program by integrating tribal colleges and
universities, which have a ground-level understanding of the economic
conditions in Indian Country.
Improving Information Infrastructure and Legal Infrastructure in Indian
The Department recognizes as well, that reservation entrepreneurs
are hard-pressed to succeed without access to information technology
and the skills to take advantage of that technology that will allow
them to compete on a global playing field. Information technology is
critical to mitigate the geographic isolation of many tribes.
Nevertheless, many remote tribes do not enjoy access to high speed
broadband internet use.
The Department of Commerce, Department of Agriculture and Federal
Communications Commission have several current initiatives to provide
broadband access in rural America. The Department of the Interior
supports these efforts for Indian Country and we will work to assure
that rights-of-way for broadband facilities are quickly evaluated and
approved on trust land administered by our offices.
We have also teamed with IBM, Wal-Mart, and the Burlington Northern
Santa Fe Railroad to develop computer technology centers at seven
reservations. At each of these locations, IEED-sponsored trainers use
computer hardware and software donated by corporate sponsors to provide
tribal members with training that will help them take advantage of
information technology and compete in a global marketplace. These
centers have become valuable assets for these tribes and we are
continuing to look for other partners in the private sector to continue
With respect to legal infrastructure, many potential investors in
Indian Country are deterred by real and perceived concerns about tribal
political systems. Attracting private business investment in Indian
Country requires a continuous process of educating developers and
investors about basic legal principles applicable to tribal nations and
their lands. Many tribal leaders and Indian business developers have
successfully worked with private companies, from large investment firms
to smaller businesses, to allay their concerns and attract business
development--and jobs, to Indian Country.
Nevertheless, sound legal systems are critical to establishing a
climate in which job growth is possible. IEED has provided funding for
a dozen tribes to explore adopting the model tribal secured
transactions code developed by the Committee on Liaison with Native
American Tribes of the National Conference of Commissioners on Uniform
State Laws, which is an association that encourages uniformity of
certain laws. Tribes can adopt and amend this code to fit their own
needs and values, while providing commercial legal systems familiar to
As a result of this funding, the Oglala Sioux Tribe signed a
ground-breaking agreement with the State of South Dakota for
administration of commercial transaction filings under the tribe's new
code. This was the first such tribal agreement in the history of the
state. We believe that other tribes will follow the Oglala Sioux
Tribe's example by adopting their own commercial codes.
We will continue to use small grants to enable tribes to evaluate,
modify and, ultimately, adopt uniform commercial codes into tribal law,
smoothing the flow of commerce on reservations.
Training Skilled Work Forces
We are developing partnerships with tribes-through the Pub. L. 102-
477 initiative--on a nation-to-nation basis to develop creative and
innovative training programs that provide participants with work skills
that lead to well-paying careers. The ``477'' initiative allows tribes
to develop their own employment, training, education, job creation, and
related services programs for their own communities. Tribal Nations
develop their own programs based upon their own needs. In addition,
U.S. Department of Labor provides funding to the 53 tribal grantees
administered by the U.S. DOI's PL 102-477 to develop tribal employment
and training programs on Indian reservations and Alaska Native
communities. The U.S. Department of Labor's Employment and Training
Administration, under Section 166 of the Workforce Investment Act of
1998, funds and administers more than 178 employment and training
grants to Indian Tribes, Tribal Consortiums, and Tribal Non-profits.
Rebuilding America's infrastructure will require the skills of
thousands of working men and women. To address this opportunity, IEED
and the United Association of Plumbers and Pipefitters entered into a
partnership agreement to initiate a pilot project to train tribal
members to become certified welders, plumbers and pipefitters. This
project is a demonstrated success.
Chicago's Local 597 and Phoenix's Local 469 were the first to
provide hybrid welding training for Indian apprentices. The payoff has
been enormous. Graduates of these programs are rated as two-year
apprentices. They have a 100 percent job placement rate, earning about
$20 per hour to start. One of the recent graduates of the construction
training went from being on general assistance to a job that paid him
$27 per hour.
IEED has also been part of a long-term collaboration with the
National Indian Iron Workers Training Program to conduct training in
four, 12-week long sessions, graduating about 100 Native Americans
annually who are qualified for skilled employment. Since 1972, this
program has trained, graduated and placed 2,084 individuals in well-
paying jobs that currently rebuild our Nation's infrastructure. As with
the plumbers and pipefitters program, placement is 100 percent.
IEED estimates that it can train and place about 450 American
Indians and Alaska Natives per year for the next four years to fill
these jobs in the skilled trades. IEED's data indicates that it costs
between $5,000 to $10,000, depending on location, to supply the job
skills necessary to move an individual from general assistance to a
The Department is working to expand this pilot project into the
other 13 building trades, in partnership with the National Association
of Building Construction Trades. This agreement encourages work with
all of the 13 building construction trades to train and place American
Indians and Alaskan Natives in life-long careers--not just short-term
jobs. Billions of dollars of work on and near Indian reservations are
pending and tribal representatives want their tribal members to be
prepared to take on those jobs.
As a result of our work with the National Association of Building
Construction Trades, we have developed a formal agreement with the
United Association of Plumbers, Pipe Fitters, Sprinkler Fitters and
allied trades, (UA).
Now that we have demonstrated its value and have gained some
experience, we are beginning to work in cooperation with tribal
colleges and provide training on reservations. Our Energy Auditor
Training program, funded by the American Recovery and Reinvestment Act
started on January 4, 2010, and is located at the United Sioux Tribes
Technical College, attracting students from across the country. Upon
successful completion of the training, graduates will be placed to work
on Indian reservations on residential and commercial projects to reduce
reliance on nonrenewable energy sources. Another example is our project
on the Lummi Nation Reservation--a tribally-owned welding training
Our work with tribes and the skilled trades has expanded to the
International Union of Bricklayers and Allied Craftworkers, the United
Union of Roofers, Waterproofers and Allied Workers, and the
International Brotherhood of Electrical Workers. We are currently
meeting with other skilled trades in hopes of creating training
opportunities for Native American commercially licensed drivers and
heavy equipment operators.
The skilled trades provide real wages for real work with benefits
such as annual and sick leave, medical insurance, on-going training and
life insurance. These projects provide services to the community that
lack careers with nationally certified skills.
Our job-training efforts are being done in partnership with the
Council for Tribal Employment Rights and the Native Construction
Careers Institute, both of which have been active leaders in supporting
job creation throughout Indian country. The U.S. Department of Labor,
U.S. Department of Education and the U.S. Department of Health and
Human Services are also active leaders in supporting job creation in
We are also planning to include additional advanced training
programs to include other occupations, such as Advanced Certified
Nursing Assistance. We know that there is a vast shortage of medical
professionals in Indian country, which is continuously confirmed by
Once again, the Department looks forward to working with other
federal agencies, this Committee, tribal leaders, and the academic
community to address chronic joblessness in Indian country. This
collaborative effort will allow us to implement solutions at the
national, regional, tribal, and community level. It is only through
this type of collaboration, and a nation-to-nation relationship with
Indian tribes, that we can succeed in spurring economic development and
job growth in Indian country.
This concludes my statement. I would be happy to answer any
questions the Committee may have.
The Chairman. Deputy Assistant Secretary Laverdure, thank
you very much for your testimony. With your permission if it is
all right, I would like to call up the other four witnesses to
join you, and then have them present testimony, and then ask
questions of all of them. That is a little bit of a departure
from the way we would normally do it, but I think in light of
the two votes that will occur soon, I want to do it that way.
Jefferson Keel, President, NCAI. Jefferson, thank you very
much for being with us today. The Honorable Harvey Spoonhunter,
Ms. Gloria O'Neill, Mr. Conrad Edwards. I have previously
introduced the four of you.
Let me begin with Jefferson Keel, the President of the
NCAI. Thanks for all of your work, Mr. Keel. It is so nice to
have you in front of the Committee again.
I will say for all of you that your permanent statement
will be made a part of the permanent record, and you may
summarize your testimony today.
Mr. Keel, welcome. Why don't you proceed?
STATEMENT OF HON. JEFFERSON KEEL, PRESIDENT, NATIONAL CONGRESS
OF AMERICAN INDIANS
Mr. Keel. Thank you. Senator, Members of the Committee,
thank you for holding this important hearing. This is, indeed,
an important event for Indian Country and I want to thank you
on behalf of the National Congress of American Indians.
I also want to thank you for your continued championship of
and your support for Indian Country. It is very important to
us. I am very sorry to hear you leaving, Senator, but hopefully
it will be a Bret Favre move and you can change you mind
Mr. Keel. Senator, as you mentioned in your opening
remarks, the creation of jobs in Indian Country is an important
event. This Committee is certainly aware of the severe
unemployment crisis in Indian Country. The Congress and the
Administration needs to know as they move to address the
Nation's unemployment crisis, as you mentioned, that the
unemployment rate exceeds 50 percent in Indian Country.
So getting to 10 percent that the President mentioned last
night in his State of the Nation address, the 10 percent crisis
or unemployment rate in America, getting to that rate would be
a recovery of historic proportions for Indian Country.
Indian reservations have been dealing with the ripple
effects of depression-like unemployment rates for decades.
Effects like high suicide rates, poor health and high crime,
all have been frequent topics of this very Committee's agenda.
We need a long-term fix. It is absolutely imperative that a
jobs bill developed with the help of this Committee consider
placing reservation economies on the road to recovery. Now is
not the time to simply create short-term jobs that run out when
the grants expire or the funding dries up.
We must put forward bold solutions that match the severity
of the crisis. We need to make sure that infrastructure monies
are spent on programs that put our ready labor force to work,
while building long-term foundations for future growth,
programs like putting our people to work on building our
schools that will educate tomorrow's leaders, or programs that
put our people to work building roads that will pave the way
for attracting businesses to our communities, and finally
making sure our workers are building tomorrow's infrastructure
to meet the competitive demands of the new economy in areas
like energy and telecommunications.
Creating jobs and building our infrastructure for future
growth is vital. However, sustaining the growth beyond the
Federal investment means access to capital and incentives. We
can no longer accept seeing wealthy county governments receive
taxpayer-subsidized rates and terms when they borrow money for
economic development, while tribal governments have to receive
higher rates with shorter terms; or private investors reaping
the rewards of accelerated depreciation and tax credits, while
tribes come to the table empty handed.
We can no longer accept insurance company redlining of
reservations for surety bonding purposes or rating agencies'
increasing our payments simply because they are unfamiliar with
tribal governments and the meaning of sovereignty. We need loan
guaranties for tribal governments that will, at the very least,
open the door to credit, reasonable rates, and the ability to
repay tax-exempt debt.
Finally, Congress should consider simple and long overdue
legislative fixes that will open existing programs and services
to tribal governments. These low-cost solutions would ensure
tribes are included in the programs and services that other
governments use to benefit their citizens and grow their
Tribes have been inadvertently left out of programs to
advance energy independence, create and maintain clean water
resources, and core education initiatives like the
Administration's Race To The Top. These fixes are needed now to
give our governments the same tools and advantages that other
governments of our great Nation receive.
When Congress invests in Indian Country, we have proven to
be good investments. We can put our labor force to work right
away, build our infrastructure for future growth, and that
benefits the surrounding communities as well.
Most important, it improves the health and well being of
our citizens. That is the goal of every government. Senators,
the time is now to boldly place our reservation economies on
the path to recovery with the rest of the Nation.
I want to thank you for your time.
[The prepared statement of Mr. Keel follows:]
Prepared Statement of Hon. Jefferson Keel, President, National Congress
of American Indians
The Chairman. Mr. Keel, thank you very much, and thanks for
your leadership at NCAI. We appreciate that and are happy to
work with you.
Next, we will hear from the Honorable Harvey Spoonhunter. I
know that because of the votes that are going to occur, I
didn't call for opening statements. I know some of my
colleagues have some, so when I recognize them for questions,
perhaps we can integrate opening statements as well.
Mr. Spoonhunter, you have come a fair distance to be with
us. We appreciate your being here.
Senator Barrasso, did you want to say a word about Mr.
Senator Barrasso. Well, yes, I would.
STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Thank you very much, Mr. Chairman. I want
to thank you for holding this oversight hearing today, and I
want to begin by welcoming my friend Harvey Spoonhunter, who is
Chairman of the Northern Arapaho Business Council in our home
State of Wyoming.
And I want to welcome also our other guests. I thank all of
you for being here.
Mr. Chairman, I asked Chairman Spoonhunter to testify today
because, as a tribal leader on the Wind River Indian
Reservation, he struggles daily with the problems of high
unemployment among his people. According to a 2005 Bureau of
Indian Affairs report, the Northern Arapaho Tribe's
unemployment rate was 73 percent and Eastern Shoshone's was 84
percent. Well, that was five years ago, before the current
recession gripped our Nation.
The employment situation on the Wind River Reservation is
not unusual. Other reservations have similar or even higher
rates of unemployment. While not everyone agrees on how to
address this problem, there does seem to be a consensus on what
some of the contributing factors are.
Mr. Chairman, with your permission, I will add the rest of
my statement to the record, but I would like to once again join
the Committee in welcoming our good friend Harvey Spoonhunter.
Thank you, Mr. Chairman.
The Chairman. Without objection, we will include the rest
of the statement.
[The prepared statement of Senator Barrasso follows:]
Prepared Statement of Hon. John Barrasso, U.S. Senator from Wyoming
Thank you, Mr. Chairman, for holding this oversight hearing today.
Let me begin by welcoming Harvey Spoonhunter, Chairman of the
Northern Arapaho Business Council in my home state of Wyoming. Thank
you, Chairman Spoonhunter, for traveling so far to be with us here
today, and the same thanks go to President Keel of NCAI and Gloria
O'Neill of Cook Inlet Tribal Council in Anchorage. I thank all of you
for traveling such great distances to give us your views.
Mr. Chairman, I asked Chairman Spoonhunter to testify today because
as a tribal leader on the Wind River Indian Reservation, he struggles
daily with the problem of high unemployment among his people. According
to a 2005 BIA report, the Northern Arapaho Tribe's unemployment rate
was 73 percent and the Eastern Shoshone's 84 percent. That was 5 years
ago, long before the current recession gripped our country.
Sadly, the employment situation on the Wind River reservation is
not at all atypical. Other reservations have similar or even higher
rates of unemployment.
While not everyone agrees on how to address this problem, there
does seem to be a consensus on what some of the contributing factors
are. One example is lack of adequate physical infrastructure--good
roads and bridges, public water supply and sanitation facilities, and
adequate housing. Another factor, which is not unrelated to the
infrastructure problem, is access to private capital.
As recent events have reminded us all, the financial sector is a
critical component of a healthy, vibrant economy. And yet during the
19th and most of the 20th Centuries, there was almost no financial
sector in Indian Country. That has changed in recent years, but barely.
Again, no doubt there are many explanations for the lack of private
capital on Indian reservations, but we should do all we can to identify
those reasons and then propose solutions. Simply putting a new paint
job on old government programs will not be enough.
In fact, Congress alone cannot solve the problems of unemployment
and lack of economic development in Indian Country. We must work with
tribal governments and organizations to find new ways to incentivize
private sector investment, to give them the tools they need to attract
investment in energy projects and other non-gaming enterprises with
long-term economic viability.
I hope the witnesses can provide the Committee with ideas on how
the Congress can help turn reservation economies around.
Thank you, Mr. Chairman.
The Chairman. Mr. Spoonhunter, welcome. You may proceed.
STATEMENT OF HON. HARVEY SPOONHUNTER, CHAIRMAN, NORTHERN
ARAPAHO BUSINESS COUNCIL
Mr. Spoonhunter. Chairman Dorgan, Vice Chairman Barrasso,
Members of the Committee, thank you for the opportunity to
share with you some of the information that will hopefully be
helpful to you as you look for ways to assist Indian Country
reduce the unemployment rate and help Native people free
themselves from the bonds of poverty and, in some cases,
I know that the time of the Committee is limited, so my
remarks will be brief, but I hope helpful. Let me begin by
providing some basic facts about the Wind River Indian
Reservation. The Wind River Indian Reservation is located on
2.2 million acres in central Wyoming. It is the only
reservation in the State of Wyoming. We share the reservation
with our neighbors to the west, the Eastern Shoshone Tribe.
The unemployment rate on the reservation exceeds 73
percent, as stated by Mr. Barrasso, and over 60 percent of the
households live below the poverty line. With the opening of our
three relatively small casinos, the marketing of our organic
beef from the Arapaho Ranch to Colorado-based food stores, and
our sponsorship of the tribally-chartered Wind River Health
Systems, a federally supported rural health system, we have
begun to provide meaningful jobs outside of tribal government
for our members.
Obviously, there are many issues that are specific to the
Wind River Reservation that I could discuss with you that would
help my specific tribe and reservation. However, I would like
to take my time with you this afternoon to discuss two
important issues that affect all reservations throughout Indian
The Northern Arapaho believe that two changes to the tax
code would be most helpful in creating jobs in Indian Country.
We would like to see an elimination of the sunset provisions in
the property depreciation schedule and the Indian employment
Specifically, section 168(j) of the Internal Revenue Code
has for many years provided an accelerated property
depreciation schedule for certain property on Indian
reservations. The property tax provision allows businesses to
depreciate that property twice as quickly as it could be
depreciated outside a reservation.
Second, the Indian employment tax credit allows businesses
to take a 20 percent employment tax credit on the first $20,000
of qualified wages and health insurance costs paid to a tribal
member or their spouse who live on or near a reservation. Both
provisions have been renewed several times, but usually on an
Large capital investments are seldom made on the basis of
short-term planning. Without a fixed, long-term extension,
businesses will be reluctant to factor the accelerated
depreciation schedule or employment tax credits into their
investment plans. The benefits of doing business on
reservations needs to be seen by private enterprise as steady
and predictable. In order to help encourage significant
investment in Indian Country, businesses need to rely on long-
Although these are not high profile issues and are not
commonly discussed solutions, ultimately economic development
cannot occur unless the private sector is encouraged to do
business in Indian Country.
Mr. Chairman, Vice Chairman Barrasso, Members of the
Committee, again thank you for this opportunity to discuss with
you these important issues.
[The prepared statement of Mr. Spoonhunter follows:]
Prepared Statement of Hon. Harvey Spoonhunter, Chairman, Northern
Arapaho Business Council
Chairman Dorgan, Vice Chairman Barrasso, Members of the Committee.
Thank you for the opportunity to share with you some information that
will hopefully be helpful to you as you look for ways to assist Indian
Country reduce the unemployment rate and help native people free
themselves from the bonds of poverty and in some cases despair. I know
that the time of the committee is limited and so my remarks will be
brief but I hope helpful.
Let me begin by providing some basic facts about the Wind River
The Wind River Reservation is located on 2.2 million acres in
The unemployment rate on the Reservation exceeds 70 percent and
over 60 percent of households live below the poverty line.
With the opening of our three relatively small casinos, the
marketing of our organic beef from our Arapaho Ranch to Colorado based
food stores and our sponsorship of the tribally chartered Wind River
Health Systems, a federally supported rural health system; we have
begun to provide meaningful jobs outside of tribal government for our
Obviously, there are many issues that are specific to the Wind
River Reservation that I could discuss with you that would help my
specific Tribe and Reservation. However, I would like to take my time
with you this afternoon to discuss two important issues that affect all
reservations throughout the country.
The Northern Arapaho believes that two changes to the tax code
would be most helpful in creating jobs in Indian Country. We would like
to see an elimination of the ``sunset'' provisions in the property
depreciation schedule and the Indian Employment Tax Credit.
Specifically, Section 168(J) of the Internal Revenue Code has for
many years provided an accelerated property depreciation schedule for
certain property on Indian Reservations. The property tax provision
allows businesses to depreciate that property twice as quickly as it
could be depreciated outside a Reservation.
Second, the Indian employment tax credit allows businesses to take
a 20 percent employment tax credit on the first $20,000 of qualified
wages and health insurance costs paid to a Tribal member or their
spouse who live on or near a reservation.
Both provisions have been renewed several times, but usually on an
Large capital investments are seldom made on the basis of short-
term planning. Without a fixed long-term extension businesses will be
reluctant to factor the accelerated depreciation schedule or employment
tax credits into their investment plans. The benefits of doing business
on Reservations needs to be seen by private enterprise as steady and
predictable. In order to help encourage significant investment in
Indian Country, businesses need to rely on long-term incentives.
Although these are not high profile issues and are not commonly
discussed solutions, ultimately economic development cannot occur
unless the private sector is encouraged to do business in Indian
Mr. Chairman, Vice-Chairman Barrasso, Members of the Committee
again thank you for this opportunity to discuss with you these
The Chairman. Mr. Spoonhunter, thank you very much for your
testimony. We appreciate your being here.
We will next hear from Gloria O'Neill, President and CEO of
Cook Inlet Tribal Council in Anchorage, Alaska.
Senator Murkowski, would you like to say a word about your
STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman.
I am honored to welcome Gloria O'Neill to the Committee
here this afternoon. Ms. O'Neill has been an outstanding
leader, not only within our Alaska Native community in the
Anchorage area, but throughout the State, and also at the
national level working on the census issues, as so many. But
she is an incredible advocate in so many different areas, and I
am pleased and privileged to call her a friend as well.
So it is good to be able to welcome her to the Committee.
The Chairman. Ms. O'Neill, you have traveled a long way to
be with us. You may proceed.
STATEMENT OF GLORIA O'NEILL, PRESIDENT/CEO, COOK INLET TRIBAL
Ms. O'Neill. Thank you, Chairman Dorgan.
And before I start, I have to tell you that as I was flying
here, I came down with a case of laryngitis, so I ask you for
your patience while I get through my testimony.
Again, my name is Gloria O'Neill, and I serve as President
and CEO of Cook Inlet Tribal Council, an Alaska Native tribal
organization that serves as the primary education and workforce
development center for Native people in Anchorage.
We accomplish our mission by connecting people to their
potential through partnership. Our program serve Southcentral
Alaska, with an Alaska Native and American Indian population of
more than 42,000, or 40 percent of the Native population of the
State. Anchorage is the fourth largest Native community in the
CITC serves approximately 12,000 to 13,000 participants
annually, administering over 85 grants and contracts funded by
the Federal, State and private agencies. Our programs address
many of the social, economic and educational challenges faced
by Native people.
Alaska Native students are twice as likely to drop out as
their non-Native peers. The Alaska Native employment rate was
only 54 percent in the first half of 2009. A disproportionate
number of Native families live in poverty and find it
increasingly difficult to make a living in rural Alaska due to
the high costs of energy and food.
Without job opportunities, a large number are moving to
Anchorage and other urban areas at an accelerated rate. Fifty-
nine percent of CITC's participants have been in Anchorage for
less than five years.
As we respond to many challenges and needs of our growing
community population, CITC ensures wise community investment of
government dollars. Our model is one of partnership, creativity
and leverage. The most important tool we have in connecting
Native people to their potential is our ability to utilize and
leverage Public Law 102-477. Administered from DOI since 1992,
477 allows tribes and tribal organizations the ability to
consolidate funding streams from various Federal agencies into
a single employment and jobs training program. Public Law 477
has allowed CITC to transform employment and training programs
from entitlement-based to an approach that fosters personal
responsibility and leads to opportunity, choice and ultimately
In order for us to truly meet this mission of creating
pipelines of people who are trained and ready for work, we
start with our young people by making a significant investment
in education. Over 1,000 kindergarten through 12th grade Native
students are enrolled in CITC core content classes that range
from basic English, math, science to advanced subjects such as
calculus and chemistry. We know an educated workforce is key to
promoting economic prosperity.
The results? We place 1,200 to 1,500 in unsubsidized jobs
each year in industries across the State. This equates to a
conservative estimate of placing 13,000 Native people in jobs
over the past decade. Of these, 1,800 families moved from
welfare to work in the last three years.
CITC has also been able to successfully utilize 477 funding
to create job opportunities through social enterprise. The
benefit of these operations is twofold: allowing us to create
businesses that are supported by earned income, while providing
a longer term opportunity for participants to develop good job
Through the leverage of funding and social enterprise, we
have created approximately 75 community jobs on an annual
basis. The value of this law is that it requires a high level
of accountability, while allowing tribal organizations to plan
according to community needs, minimize administrative
duplication, and maximize outcomes, while still adhering to
high GPRA accountability standards.
As a result, nationally, the 477 Program achieved the
highest OMB PART rating in Indian Affairs. Unfortunately, HHS
is seeking to terminate participation and the transfer of funds
within 477 without tribal consultation. In addition, OMB
recently released 2009 mid-year audit compliance guidelines
that require tribes and tribal organizations to track each
funding stream under 477 separately and retroactively. This
contradicts the intent of the 477 language and effectively
undermines the administrative efficiency and flexibility of the
In summary, on behalf of CITC and the 264 tribes who
participate in 477 and the communities we serve, whose needs
grow more critical each day due to the current economy, I urge
this Committee to consider, one, a no cost item that should be
placed in the proposed jobs bill; amended 477 legislation and/
or a legislative rider that, one, establishes the program as
permanent; two, ensures full flexibility that allows
efficiency, while maintaining high accountability standards;
and three, utilizes funding vehicles such as 638 contracts and
As a result of the demonstrated success over the past 18
years, I ask you for your support of the 477 Program. It is in
the best interest of tribes, tribal organizations, Native
people and taxpayers.
[The prepared statement of Ms. O'Neill follows:]
Prepared Statement of Gloria O'Neill, President/CEO, Cook Inlet Tribal
Chairman Dorgan and Members of the Committee, I am grateful for the
opportunity to speak before you today.
My name is Gloria O'Neill and I am the President and CEO of Cook
Inlet Tribal Council (CITC), an Alaska Native tribal organization which
serves as the primary education and workforce development center for
Native people in Anchorage. CITC has been designated tribal authority
through Cook Inlet Region Inc., organized through the Alaska Native
Claims Settlement Act and recognized under Section 4(b) of the Indian
Self-Determination Act and Education Assistance Act, P.L. 93-638. CITC
builds human capacity by partnering with individuals to establish and
achieve both educational and employment goals that result in lasting,
positive change for themselves, their families, and their communities.
Demographics and Expanding Service Population
Both directly and indirectly, CITC's programs serve the Cook Inlet
Region with an Alaska Native/American Indian population of more than
42,000, which is approximately 40 percent of the Native population of
the state of Alaska; some programs reach statewide. In Anchorage alone,
the Native population is approximately 30,000 about 20 percent of the
total Native population in the state. Anchorage is the fourth largest
Native community in the nation.
CITC's FY10 operating budget is $43 million, consisting of 85
grants and contracts from state and federal agencies, as well as
corporate and individual support. CITC's programs address many of the
social, economic, and educational challenges faced by Alaska Native
people. For example, Alaska Native students are twice as likely to drop
out as their non-Native peers; 33 percent of Alaska's unemployed are
Alaska Native people, and almost 20 percent of Alaska Native people
have incomes below the federal poverty line--nearly three times the
rate of non-Native people.
As reflected in the chart below, in-migration is accelerating as
Alaska Native people find it increasingly difficult to make a living in
rural Alaska. Fifty-nine percent of CITC's participants have been in
Anchorage for five years or less; and employment, training, and
education are frequently cited as reasons for moving to Anchorage. In
contrast, the current Bureau of Indian Affairs funding formula for CITC
is based on the population figure of 14,569--from the 1990 Census--
which leaves CITC deficient in funding the needs of the 42,000 Alaska
Natives and American Indians currently residing in our service region.
With the support of Bureau of Indian Education Johnson-O'Malley
funding, CITC's educational programs provide strength-based,
culturally-focused educational support services in partnership with the
Anchorage School District. CITC currently serves approximately 1,000 K-
12 Native students and their families. Our programs encompass K-12
classrooms, focusing on increasing literacy and math skills as well as
offering supplemental programs in high-level mathematics and science
classes, and health and wellness. Our purpose is to impact overall
academic achievement while decreasing the dropout rate of Native
students, both of which are essential to job development and success.
Given the projected increase in the Alaska Native population over the
next years and the extent to which Alaska Native people will be the
backbone of the state's workforce, an educated workforce is key to
promoting economic prosperity.
With the support of the P.L. 102-477 program, CITC's employment and
training programs are based on the premise that effective solutions to
workforce development require integrated approaches to ensuring job
readiness, training, and placement--approaches that are capable of
moving people from welfare to work. Programs involve active cooperation
between schools, social service agencies, job trainers, state and
federal agencies, Native and non-Native for-profit employers, and CITC-
owned microenterprises--all of which build ladders of opportunity for
our participants. Since the inception of CITC's Tribal TANF Program in
July 2005, 1,800 TANF participants have transitioned to unsubsidized
CITC has been able to successfully utilize 477 funding to create
job opportunities through social enterprise. The benefit of these
operations is two fold: allowing CITC to create businesses that are
supported by earned income while providing a longer-term opportunity
for participants to develop good job skills. Through the leverage of
funding and social enterprise, CITC has created approximately 75
community jobs on annual basis.
In close collaboration with our workforce development program, CITC
is the sole provider of Temporary Assistance for Needy Families (TANF)
and Bureau of Indian Affairs Welfare Assistance for Alaska Native/
American Indian families in Anchorage. CITC has transformed TANF and
welfare assistance from entitlement-based programs to programs of self-
determination and personal responsibility. In CITC's TANF and welfare
assistance programs, participants develop a mutual plan of action with
their case manager that outlines their responsibilities: to get a job
and to participate in various training and support services to achieve
that goal. As a result, the number of families dependent upon TANF and
welfare assistance has decreased, with families making major strides
Program opportunities, such as Tribal TANF, require rigorous
standards that are reflected in our organizational commitment to
accountability. We have a mandate from the people we serve, from CITC's
Board of Directors, from the federal and state sponsors of our
services, and from our community as a whole, to provide the highest
quality services possible. This is demonstrated by our history of
stellar audits and a commitment to quality that can only be realized by
rigorously and continually re-assessing how we do business to determine
how we may do better. CITC utilizes Continuous Quality Improvement
(CQI) to enhance and improve the quality of CITC's services by
gathering and analyzing an extensive set of statistics on program
performance, as well as identifying areas for improvement. The
resulting data is tracked through digital dashboards that provide
powerful, at-a-glance overviews of program performance; highlighting
areas needing improvement.
FY 2009 Cook Inlet Tribal Council Employment & Training Dashboard
CITC consistently beats TANF goals by combining outcome-
directed case management with a career center that links
employers to work-ready employees.
Job seeker numbers exceeded targets that were based on the
prior year. Rising unemployment and urban migration were both
significant contributing factors in fiscal year 2009.
The need for supportive services was markedly higher than
the prior year.
Public Law 102-477
Administered from the Office of Indian Energy and Economic
Development, located in the Department of the Interior, Public Law 102-
477 (or the ``477 program'') provides a critical foundation for
maximizing the effectiveness of CITC's programs. The law allows the
consolidation of funding streams from Department of Interior,
Department of Health and Human Services, and Department of Labor, into
a single employment and training program. The 477 program enables
flexibility on the part of the receiving organization to plan the
programming to best fit the needs of the community and minimize
administrative redundancy by merging reporting requirements, while
still adhering to the Government Performance Results Act's stringent
CITC has demonstrated that the 477 program is very successful in
allowing the leverage of funding to increase effectiveness and
innovation. As a result of our 477 program, for example, we have been
able to put between 1,000 and 1,500 people to work each year and
effectively reinvest TANF savings into related essential programs. In
short, the 477 program is a ``win-win'' for the federal funders and
CITC, since it eliminates wasteful inefficiency while maximizing
program outcomes. 477 has succeeded in, and has even greater potential
to allow tribes and tribal organizations to achieve economic prosperity
for their people. In addition to being successful on the ground, the
477 program is fully accountable. Reflective of the national success of
the program, the 477 program achieved the highest Office of Management
and Budget PART (Program Assessment Rating Tool) rating in Indian
However, the Department of Health and Human Services stopped
transferring funding through the Department of Interior and P.L. 93-
638. There has been no tribal consultation regarding this change in
policy. The interruption of funding resulting from DHHS's decision to
discontinue the transfer of funds puts our community and others at
risk. Not only is this potential funding interruption injurious to our
organization, and particularly to the people we serve, it is not in the
best interests of taxpayers who have a right to expect the
administrative efficiencies that the 477 program achieves.
In addition, the Office of Management and Budget released 2009 mid-
year A-133 Circular compliance guidance that requires tribes and tribal
organizations to track each funding stream under 477 separately and
retroactively. This contradicts the intent of the 477 legislation and
effectively dismantles the administrative efficiency and flexibility of
the 477 program.
On behalf of Cook Inlet Tribal Council and the community we serve--
whose needs grow more critical each day due to the current economy--I
urge this Committee to consider the amended 477 legislation and
legislative rider. This legislation is in the best interest of tribal
programs and participants, as well as taxpayers. It is imperative to
maintain the high level of efficiency, effectiveness, and
accountability that has been the hallmark of the 477 program. I would
also ask the Committee to fully support the aforementioned Department
of Interior Indian Affairs programs that are vital to our participants'
Thank you for your time and consideration.
The Chairman. Ms. O'Neill, thank you very much. Your voice
held up just fine.
Ms. O'Neill. It was tough.
The Chairman. All right. You did fine.
Mr. Conrad Edwards, President and CEO, Council for Tribal
Employment Rights at Federal Way, Washington.
Mr. Edwards, thank you for being with us. You may proceed.
STATEMENT OF CONRAD EDWARDS, PRESIDENT/CEO, COUNCIL FOR TRIBAL
Mr. Edwards. Mr. Chairman, Honorable Members of the
Committee, my name is Conrad Edwards. I am a member of the
Colville Confederated Tribes of Washington State.
I am known to my people as Hoolia, which translates roughly
to Earth Runner. I am the President of the Council for Tribal
Employment Rights and Chairman of the Advisory Board of the
newly chartered Native Construction Careers Institute.
On behalf of the CTER Board of Directors and our
construction trades union partners in the NCCI, I would like to
thank you for holding this hearing today and inviting our
testimony. We feel it presents a tremendous opportunity to
address the unacceptably high unemployment rates that we have
been talking about here today, and the deplorable social and
economic conditions that it puts our Indian people in and we
continue to endure.
Today, Indians and Native Alaskans are developing and are
in control of more of our economic destiny than at any time in
our history. We are becoming major contributors to the local,
State, regional, national and international economies. We have
strong tribal governments and growing tribal enterprises and
industries, and yet our tribal workforce is still largely
We feel this is due to the focus on business and
governance, and not inclusive of labor, which is the final
element of any successful social and economic development
equation. The facts are that our average tribal workforce is 50
percent to 70 percent non-Indian and our unemployment rates are
still 50 percent to 80 percent, depending on what reservation
you are on and what time of the year it is.
In the midst of all of our economic strides, Indian
employment is still just an after thought. Knowing what we know
from our field of experience, we have chosen to approach the
problem head on, utilizing Indian preference and tribal
employment rights enforced at the tribal level.
The Tribal Employment Rights offices have done a very
effective job of capturing public sector jobs and gaining
compliance for many reservation employers while they are
working in the community. Our experience shows us the problem
is still much broader than that, requiring new initiatives,
taking our tribal strategy to the next level of development.
Our expanded approach is detailed in our written testimony.
Suffice to say here that we chose what is still the largest
industry in Indian Country today, construction, as our arena.
With $430 billion plus in vertical and horizontal construction
scheduled to occur on or within 10 miles of an Indian
reservation over the next 10 years, it presents plenty of
With organized labor seeking to replace tens of thousands
of retiring Baby Boomers and having the capacity to train and
field qualified workers in a cost-efficient manner, they make a
Our approach involves several key elements that when
brought together have proven effective and cost-efficient, and
at the same time are responsive and responsible to the tribes'
project needs, values and priorities. The first element is
tribal project labor agreements. It is an agreement between
organized labor and the tribe. It can be project-specific or
reservation-wide. It covers tribal sovereignty, tribal
sovereign jurisdiction, wages, benefits, Indian preference,
training, no strike, no lockout, dispute resolution, after
project placement. And it was piloted at the Tulalip Indian
Tribe when we built a $170 million casino on an 18-month
Mr. Chairman, on that project, there were 2 million hours
worked, and 70 percent of those hours were worked by Native
employees, contractor, or subcontractors. The project finished
on schedule, on budget, and there were no disputes that either
went to court or left the project. Now, the tribal labor
agreement applies reservation-wide and Tulalip.
We now use that same model to develop these tribal project
labor agreements in Minnesota, Wisconsin, New York, Alaska,
Washington, Canada, Wyoming. And we include all crafts, all of
the construction trades. Again, I will refer you to the details
in our written testimony.
The second element is Native Construction Trades Institute.
It provides career-focused training onsite on tribal projects
at game speed. We are doing actual construction projects and we
are building actual buildings and facilities. And it is not
practice. It is not pre-apprentice. It is actual construction
Union training curriculum for 100, 200, 300 hours by
certified trainers, and it includes a 100 hour entrepreneurial
element to create subcontractors and contractors at the same
time we are training crafts people and develop small
businesses. It has been piloted on the Blackfeet, Spirit Lake,
Cheyenne River, and Wind River Reservations.
Thus far, we have trained 66 individuals. Fifty-nine of
them have graduated and we have placed 89 percent of those
graduates into actual projects and jobs. In the process, we
have developed seven new small businesses on those
The tribes provide the materials, recruitment, support
services. CTER provides onsite coordination with the project's
budget and schedule, and with the Interior Energy and Economic
Development Administration providing administration and
The third element is entrepreneurship. Seventy percent of
all jobs in America are created by small businesses. Our
strategy is to create small businesses to address the
unemployment problem. We encourage the Committee to consider it
in the construction of the jobs bill. And as Chairman of the
NCCI, we are requesting the following.
We are requesting that $1 million be provided to NCCI
construction training to 10 more tribes. We are requesting that
$600,000 for pilot projects to expand the NCCI approach into
other areas such as forestry and health jobs. We are requesting
$500,000 to enable NCCI to establish a Center for Indian Jobs
Creation. We are requesting $75 million be put in there for
green job training projects through Indian Pathways Out of
Poverty, a Labor grant program.
Small business development, $5 million to SBA for
innovative Indian small business pilot projects on reservations
in such areas as grass-fed beef, information technology, oil/
gas development, small business development in connection with
large development projects on and near the reservations; $5
million to SBA for Tribal Business Assistance Centers. This is
to provide small business training and technical assistance to
all levels of small business development, not just the cream of
Increase the BIA Loan Guaranty Program ceiling to $300
million; funding to the Department of Commerce, to establish an
Indian Surety Bond Guaranty Program and to develop
infrastructure, including specifically identified funding for
Indian tribes on all infrastructure portions of the larger jobs
In conclusion, this bill comes at a critical time when
Indian tribes are transitioning between grants-driven economies
to diverse capital economies. As a part of that transition, and
adding the final element, is creating a tribal private sector.
And that tribal private sector consisting of Indian small
businesses is critical. It is the final element to that
And finally, Mr. Chairman, Members of the Committee, I
express our appreciation to you and Congressman Dicks for your
presentations at the NCCI launch last September because it was
one of the highlights of our launch. And we thank you also for
your leadership in addressing this critical issue. And we thank
you for the opportunity to provide our perspective today in
this testimony, and I have done so for all our relations.
[The prepared statement of Mr. Edwards follows:]
Prepared Statement of Conrad Edwards, President/CEO, Council for Tribal
The Chairman. Mr. Edwards, thank you very much. We
Mr. Laverdure, thank you for being patient. I know it was
probably helpful also for you to hear the testimony from
My understanding is that you are re-working a report on the
issue of unemployment on Indian reservations. It has been some
while since a report has been issued, and you are scheduled to
release the new report this summer.
Do you expect, based on what you know, to see any
substantial difference between this report and its conclusions,
and unemployment results from previous reports on Indian
Mr. Laverdure. Thank you, Mr. Chairman.
The report that is supposed to come out, which I know is to
be every year or every other year. I recall in 2005 being
referenced in this hearing on a couple of occasions. The labor
force report that we are putting together is going to be more
accurate because prior to that, it was either whether you were
employed or unemployed. And so it could have exaggerated who
was employed at any given time and erred perhaps on the side of
The other factors are going to be seasonal and temporary
workers, and those will be factored in. So I think it will give
a more complete and accurate picture this time around of
oftentimes whether it is forest fighting season, summer
contract worker or the like, and I think that more information
is better to provide on exactly what types of jobs are there
and how temporary they are.
The Chairman. Let me ask you very quickly, the issue of
trying to develop incentives for renewable energy production. I
am talking about renewable energy on Indian reservations
because reservations have great capability to provide
additional energy from fossil energy, oil, coal and so on. But
are you focusing some as well on, or are there programs
focusing on development of additional renewable energy?
Mr. Laverdure. I would love to discuss parts of the budget,
but I am not allowed to until next week's rollout. Secretary
Salazar on Monday is going to have a press conference and the
Indian Affairs budget will be in there as well. But I think
Secretary Salazar himself has said that he has supported
increased funding for climate change and renewable energy, and
the Assistant Secretary's Office has had a seat at the table
for all of those to try to join that initiative, such as the
MOU they have in California to fast track various renewable
projects. We are pushing to have comparable things happen in
Our biggest challenge is going to be access to the grid on
the transmission because it is such a large infrastructure
piece to be part of the energy corridors. So we are looking to
be part of all of that renewable energy initiative and have
fast track projects. We have identified 10 that we think could
be fast tracked over the near term, and 66 total.
The Chairman. Thank you very much.
I am going to truncate my questions and submit questions in
writing to the witnesses because the vote has started, and I
want to make sure Senator Franken and Senator Murkowski have
opportunities to ask questions.
Senator Franken first.
STATEMENT OF HON. AL FRANKEN,
U.S. SENATOR FROM MINNESOTA
Senator Franken. Thank you, Mr. Chairman.
I am going to go back to something I brought up earlier for
There are a couple of tribes in Minnesota, Red Lake and
White Earth, that have been waiting for years to build schools
that they thought had been commissioned. And they were on some
list that they can't get hold of, that no one can get hold of
on where they are in order on school construction. And there
just seems to be a lack of transparency in the Bureau of Indian
Affairs on that.
Can you tell me something about it?
Mr. Laverdure. Thank you, Senator Franken, for the
question. I recall from the Federal acknowledgment hearing you
brought that issue up and have now pressed it even further. I
did talk to the Program Director of the Office of Facilities
Construction and asked him if he had submitted it, and he said
he had submitted a list to your office two weeks ago, but it
may not have been complete. It may not have had all of the
rankings within that list.
The thing that I learned through the Director of the office
was that it said on the No Child Left Behind rulemaking from
2003, 2004, there is a set of factors that are followed. And
with those factors, which are largely based on a set formula
for type of school and the amount that construction costs would
be, the size of the rooms, a certain standard, that as the
conditions of schools over time deteriorate, then some of those
schools either move up or down that list.
And so he said when you send it out, it is like a financial
statement where it is a snapshot, and then it changes depending
on the schools that are in worse condition and they rise to the
top. But I certainly will sit down and talk to him about that.
Senator Franken. One of the schools that I am talking about
that needs to be replaced at Leech Lake has like waterfalls in
it because of the plumbing doesn't work. I mean it is, believe
me, it would rise to the top of the list. And I asked my staff
here if they recall getting this list, and they don't recall
getting it. So we will follow up with that, okay? Okay.
Mr. Edwards, I just want to talk about a potential
alternative energy, green energy development on reservations,
which seems--in Minnesota, we have a lot of wind. But one of
the reasons is just a lack of private investment that we don't
have the kind of projects we need.
For example, the Mille Lacs Lake Indian Reservation in
Minnesota has been trying for the past year to access funding
for a single wind turbine. They initially got low interest
financing through a clean renewable energy bond, but in
December the bond house hiked up the interest or said they
would have to lift the interest so they can't actually sell the
I would like to ask you about the Indian Guaranty Loan
Program under the Office of Indian Energy and Economic
Development. I understand that the loan program guarantees and
insures loans. Is that right?
Mr. Edwards. Yes.
Senator Franken. And that is supposed to reduce the risk to
private investors to invest in Indian businesses. This program
received $8.2 million in fiscal year 2010, is that correct? Did
I hear that, Mr. Laverdure?
Mr. Edwards. I believe so.
Senator Franken. Is that right? What does that allow tribes
to do, $8.2 million for all of Indian Country?
Mr. Edwards. Not very much. I think that these loan
guaranty programs I think are a critical element, but at this
point are very much under-funded. And I think that the
accessibility of them is something that is critical to small
businesses to be able to act and to move quickly and nimbly in
the process of developing small businesses.
So I think that that is an area that we would be happy to
work conjunctively with Interior Department and the other
partners at this table to make that process more efficient,
Senator Franken. Well, I hope we can do more. When you are
having 50 percent nationwide unemployment in Indian Country,
you almost don't know where to start, on education, on
training, on credit, on and on.
So thank you all for being here today.
The Chairman. Senator Franken, thank you very much.
Senator Franken. I have run out of time. Thank you.
The Chairman. Senator Murkowski?
Senator Murkowski. Thank you, Mr. Chairman.
Ms. O'Neill, thank you for outlining some of the challenges
that we face in providing those employment opportunities for
Alaska Natives, and the recognition that Anchorage's role as
the center, the home for so many is just growing by leaps and
We have had an opportunity to talk about the new OMB audit
requirements for the 477 Program, and really how that
dismantles this whole program and what the consequences are. We
had a chance to talk about that these past couple of days.
Can you, for purposes of the Committee record here, just
lay out what will happen if tribes are unable to comply with
these new OMB requirements? I understand that, for instance
with CITC, you are probably able to go back and retroactively
deal with this, but that in fact we will have some of our
tribes that are unable to meet these requirements. And if you
can just outline the consequences, please.
Ms. O'Neill. Well, most tribes and tribal organizations are
preparing to engage in their 2009 audits. We are just finishing
our field work. It cost us about I would say $20,000 in extra
audit costs, along with staff time, so it is probably $20,000
to $30,000. And we had to take many, many hours and resources
to go back and realign the funding sources.
What the OMB circular says is that they would like us to
categorize all of our funding sources by CFDA numbers. So that
means if you have a 477 contract or compact, you could be
pulling in three to four, in our case 11 different funding
sources. The beauty of 477 is that we stay within the broad
parameters of the law where it relates to service dollars. With
the administrative costs that are associated with providing
those services, we are able to commingle the funds in a very
effective and efficient manner.
And I had an opportunity to meet with OMB this morning,
along with staff from Department of Interior. We did not have
staff from HHS at the meeting. There was agreement reached that
we will work in partnership to try to resolve this issue for
2009, and we look forward to what kind of solution we can bring
But it is an issue. We do not want tribes and tribal
organizations to get into this and realize as they are in their
audit that the circular applies to them in this last fiscal
and to have an audit finding as a result. It is very
detrimental to our programs and to the standards that we are
trying to adhere to.
Senator Murkowski. And we know those audit findings can be
fiscally damaging to the tribes.
Mr. Laverdure, just in so far as what the plans of Interior
and HHS are as you move forward to resolve these interagency
disputes here, what is on the table?
Mr. Laverdure. Thank you, Senator Murkowski.
Actually, Bob Middleton, the Director of IEED, who has the
477 program, and I, are the agency lead. We met with HHS folks
yesterday, in fact, and went over this issue. There are several
different components to zeroing in on the OMB side, but there
is also the Navajo Nation case that came up on 638 contracting
issues. And we have talked to HHS and have relayed all the
tribal concerns and will continue to relay the tribal concerns
on having Interior as the lead and having these 638 and self-
governance vehicles still be useful to try to access those TANF
funds and minimize the reporting requirements.
So that has been our position. We are trying to work with
HHS on the issue for an agreement.
Senator Murkowski. Let me ask you, do you believe that HHS
agrees and sees the merit in the efficiencies that we have
gained through these 477s?
Mr. Laverdure. I think that they have. I think it is more a
legal issue from the legal side of things, with the Office of
General Counsel interpretation of the case and how far it goes.
Senator Murkowski. Isn't it true, though, that the
interpretation that has been out there has been in place for
some 16, 17 years and now all of a sudden we are seeing a
reinterpretation? I don't know if that is the right word.
Mr. Laverdure. Yes. Well, I will continue to foster good
relations with HHS and say that we will work with them and try
to do our best to resolve the issues so that the tribal
communities can continue the way they have been.
Senator Murkowski. Well, I appreciate that. I know that
people like Ms. O'Neill and so many around the Country are
anxious to have this resolved favorably and to be able to
continue to utilize these efficiencies.
We recognize that the dollars are scarce and when we pull
it all together, we are going to get more bang for our buck.
Thank you, Mr. Chairman.
The Chairman. Senator Murkowski, I am told that there is no
time left on the clock for this vote, so you and I will have to
I think this requires a much longer discussion, and I
apologize for having to truncate it. I don't want to call a
recess for 45 minutes. So what I think we will do is engage
with all of you through submitted written questions to complete
the hearing record, and for two weeks we will accept additional
comments from those who wish to submit comments to this
We thank you very much for your testimony. This Committee
will take this issue very seriously.
This hearing is now adjourned.
[Whereupon, at 3:40 p.m., the Committee was adjourned.]
A P P E N D I X
Prepared Statement of Barry E. Snyder, Sr., President, Seneca Nation of
Mr. Chairman and members of the Committee, I submit this written
testimony on behalf of the Seneca Nation of Indians and ask that it be
included in the record of this hearing.
I want to commend the Senate Indian Affairs Committee for holding
this vitally important hearing on unemployment in Indian Country. Now
more than ever, preserving jobs is a top priority. With the national
unemployment rate at 10 percent, the unemployment rate in Indian
Country has climbed to 50 percent or higher. On many reservations and
territories there is declining hope of meaningful job creation.
For generations it has been the policy and practice of the Seneca
Nation leadership and government to encourage a robust private sector
economy. The Seneca Nation has created a tax-free economy on our
Territories which, like an enterprise zone, fosters local growth where
it would not otherwise take place and where it is vitally needed. As a
result, there is a vibrant entrepreneurial private sector economy in
the Seneca Territories.
Unfortunately, all of this progress is at risk due to the Prevent
All Cigarette Trafficking Act, S. 1147 (``PACT Act'') which recently
was favorably reported by the Senate Judiciary Committee. Known to many
as the ``Marlboro Monopoly Act of 2009'', this bill would eliminate the
vibrant private sector economy of the Seneca Nation.
The irony of your important hearing taking place at the same time
the Judiciary Committee leadership is seeking to put a bill on the
floor that will kill many jobs in Indian Country should not be lost on
the members of the Senate Indian Affairs Committee.
The Proposed PACT (``Prevent All Cigarette Trafficking'') Act Threatens
to Violate Seneca Treaty Law
The U.S. House of Representatives has twice passed a form of the
PACT Act. And a version, S. 1147, is pending action on the U.S. Senate
calendar, having been reported by the Committee on the Judiciary on
November 19, 2009.
The PACT Act would break new ground in Federal Indian law by
vesting State governments with far-reaching Federal authority over
economic activity on Indian lands. It would apply and enforce excise
taxes of State and local governments on sales conducted on or from
Indian Country. The bill would empower State Attorneys General to reach
into Indian Country to sue individuals to enforce Federal and state
law. Collectively, these new Federal law provisions likely will operate
to induce State governments to abandon long-standing Tribe-State
compacts and tax agreements, bringing to a halt what has become for
some Tribal governments a substantial revenue stream. In breadth and
scope, the PACT Act is to State tax power over all of Indian Country
what Public Law 83-280 was to State criminal jurisdiction over some
parts of Indian Country.
The PACT Act would make cigarettes non-mailable except within or to
Alaska and Hawaii, effectively banning Internet sales being made from
Indian Country by making it impossible to deliver the product.
Given the history of state-tribal tax compact negotiations, if
enacted the PACT Act provisions will empower states to use their new
Jenkins Act enforcement authority to forcibly re-negotiate changes to
tax and enforcement Tribe-State Compacts or agreements throughout
Indian Country and to continue to refuse to share Master Settlement
Agreement payment and in lieu revenues with Tribes. The PACT Act will
operate to induce State governments to abandon long-standing Tribe-
State Compacts and tax agreements, bringing to a halt what has become
for some Tribal governments a substantial revenue stream.
The PACT Act Would Swiftly Suffocate the Unique Economy of the Seneca
Territories and Throw Our Region Into a Deep Depression
The Seneca Nation stands apart from the rest of Indian Country with
a superlative private sector that dominates the commercial economy of
the Seneca Reservations. About 240 private businesses, owned and
operated by Seneca citizens, function on the Seneca Territories. Given
that there were 1,176 Indian households on the three Seneca Nation
Territories recorded in the 2000 Census, it is clear that most of the
Indian households are receiving direct employment benefit from the
Seneca private sector. This private sector Seneca economy provides
income and investment capital typically not seen elsewhere in Indian
Country, with Seneca entrepreneurs typically owning hotels, stores,
franchises, and other small businesses that elsewhere are typically
tribally owned or not Indian-owned at all.
A study in 2007 by Harvard University economist Jonathan Taylor
found that $68 million in value-added (regional gross domestic product)
in Western New York is associated with Seneca tobacco sales and $71
million state-wide. When gasoline and other non-tobacco sales are
added, this number soars, with secondary sales generating more than $10
million in sales and excise taxes in neighboring jurisdictions as
Seneca private sector demand for goods and services in the broader
economy is taxed by New York State.
If the PACT Act were enacted, it would completely disrupt the
tobacco product market on Seneca Nation Territories by removing the tax
immunity guaranteed under the Seneca Nation's treaties with the United
States. And it would completely shut down the Internet cigarette market
that operates from Seneca Nation Territory.
The impact on the Seneca Nation economy would be devastating if the
PACT Act were enacted into law. Likewise, the PACT Act would throw the
entire economy in western New York into a tailspin. Thousands of jobs
would be lost within 90 days of enactment. Hundreds of households would
be thrown on to the unemployment and welfare lines.
The Senate Should Reject the PACT Act as a Job-Killer in the Middle of
The Seneca private sector economy arises from two primary sources:
the Seneca Nation's sovereign exercise of authority over regulatory and
tax policy that applies on the Seneca Territories; and the Seneca
Nation's choice to have a tax-free and lightly regulated economy. Under
the guise of protecting children from the dangers of smoking, the PACT
Act would impose State taxing authority on treaty-protected Seneca
It is cruelly ironic that at the height of a recession the United
States Senate is considering both a jobs creation bill and a job-
killing bill. This Committee on Indian Affairs must not stand by idly
while consideration of the PACT Act threatens to destroy tribal
economies. It is even more ironic that this comes at a time when
increased Seneca Nation regulation and lessening market demand is
having the effect of shrinking tobacco sales.\1\
\1\ In 2005, the State of New York estimated that retailers on
Seneca Nation Territories sold 27.5 million cartons of cigarettes. From
March 2007 through February 2008, the Seneca Import-Export Commission
recorded sales of 17.3 million cartons as average prices declined.
The Seneca Nation of Indians calls upon this Committee on Indian
Affairs to actively exercise its function to protect Federal-Indian law
and its foundation in Federal Treaties such as our Treaty of
Canandaigua of 1794, 7 Stat. 44.
The Seneca Nation of Indians (``Nation'') is recognized by the
United States and the State of New York as a sovereign tribal
government. The Nation is a signatory to numerous treaties and
agreements with the United States which govern the relations between
the Nation, the United States, and the State of New York, including
matters regarding commerce and taxation. These treaties and agreements
have their origins in deals under which vast land holdings were
transferred out of Seneca Nation control in exchange for specific
security and protection guarantees by the United States for the
remaining Nation lands.
The Seneca Nation's Territories Are Immune From State Taxation
The Seneca Nation, our people and our lands, have been immune from
State taxation since the United States was formed. Agreement after
agreement has reiterated this tax immunity and the inherent, sovereign
right of the Seneca Nation to regulate conduct within our Territories.
This tax immunity is most notably protected by the United States
through the Treaty of Canandaigua of 1794, 7 Stat. 44.
All legislation under consideration by the U.S. Congress, whether
its purpose is to create jobs or to regulate the economy, must honor
the tax immune integrity of our Territory. The federal treaty
obligation--to protect the immunity of the Seneca Nation and its
Territories from the reach of taxation by the State of New York and to
protect our inherent, sovereign right to regulate conduct within our
Territories--should be supported, not undermined by the U.S. Congress
in every piece of legislation it writes.
The Seneca Nation Regulates Its Own Tax-Free Economy as an Expression
of Its Tribal Sovereignty
In the exercise of its sovereignty over its Territories, the Seneca
Nation enforces a comprehensive Import-Export Law it enacted in 2006 to
regulate sales of tobacco and other products on its Territories. The
Nation's Import-Export Commission regulates all aspects of tobacco and
other product sales on Seneca Nation Territory. Among other functions,
Prevents the importation of tobacco products into Nation
Territories only by licensed stamping agents;
Prevents the sale of tobacco products without the affixation
of a Nation import stamp and payment of the required import
Defines unstamped cigarettes as contraband;
Requires accurate accounting of all stamps issued to Nation
authorized stamping agents;
Prohibits cigarette sales in excess of 9,800 cigarettes
(lower than the Federal threshold);
Imposes severe penalties, including loss of business
license, for trafficking in contraband cigarettes; and
Prevents the sale of tobacco products to minors under age
As a result of the enactment and enforcement of its own tribal law,
the Nation has gained regulatory control of tobacco and other sales
activities on its Territories.
The rapidly growing Seneca Nation economy provides substantial
benefits to the Western New York regional and State economy. In 2007,
the Seneca Nation directly employed more than 6,300 workers in
government and enterprise, giving them $191.3 million in compensation.
The Nation's government, enterprises, and private sector brought in
$1.1 billion in revenue in 2007, generating indirect and induced demand
totaling an estimated additional $820 million and yielding an estimated
$6 million in state and local taxes, over and above the $109.7 million
exclusivity payment the Seneca Nation provided to the State of New York
under its Gaming Compact. The Seneca Nation's tax-immune economy
provides livelihoods for hundreds of Seneca households and the many
businesses in the surrounding private sector of Western New York that
meet their needs.
We ask that this Committee gather accurate, relevant, and reliable
information regarding the Seneca Nation's regulation of tobacco sales
taking place in our Territories. Our market competitors have fed great
distortions to the U.S. Congress which need to be corrected before they
are relied upon to make federal policy.
The Seneca Nation also asks that this Committee ensure that the
United States Congress honor our treaties and protect our inherent,
sovereign right to regulate conduct on our Territories, including our
immunity from State taxation. Otherwise, there will be many more jobs
to create than can ever possibly be created. Thank you for this
opportunity to provide testimony and we ask that it be made part of the
record of this hearing.
Prepared Statement of Dimitri Philemonof, President/CEO, Aleutian
Pribilof Islands Association
Prepared Statement of Hon. E.T. ``Bud'' Moran, Tribal Council Chairman,
Confederated Salish and Kootenai Tribes
Prepared Statement of Hon. A.T. Rusty Stafne, Chairman, Assiniboine and
Sioux Tribes, Fort Peck Indian Reservation
Prepared Statement of Katherine Gottlieb, MBA, President/CEO,
Prepared Statement of Lloyd B. Miller, Sonosky, Chambers, Sachse,
Endreson & Perry, LLP
This testimony is submitted jointly on behalf of the National
Tribal Contract Support Cost Coalition, comprised of the Shoshone
Bannock Tribes of Idaho, the Cherokee Nation and Choctaw Nation of
Oklahoma, the Shoshone-Paiute Tribes of Nevada and Idaho, the Riverside
San Bernardino County Indian Health Consortium of California, the
Pueblo of Zuni of New Mexico, the Spirit Lake Nation of North Dakota,
the Confederated Salish and Kootenai Tribes and Chippewa Cree Tribe of
Montana, the Forest County Potawatomi Tribe of Wisconsin, the Little
River Band of Ottawa Indians of Michigan, and the Copper River Native
Association, Alaska Native Tribal Health Consortium, Arctic Slope
Native Association, Kodiak Area Native Association, and Yukon-Kuskokwim
Health Corporation of Alaska.
The National Coalition believes that in advancing jobs legislation
in the coming weeks Congress should seriously consider enhanced funding
for ``contract support costs,'' because contract support cost monies
directly fund jobs in Indian country.
As this Committee is aware, contract support costs represent the
fixed costs which Tribes and tribal organizations must incur when they
carry out self-determination contracts and self-governance compacts
with either the Bureau of Indian Affairs or the Indian Health Service.
Contract support costs cover such federally-mandated costs as annual
independent audits, but also other necessary costs including liability
and property insurance, accounting costs and the like. The majority of
contract support costs are set by an indirect cost rate that is
established by either the National Business Center within the
Department of the Interior or the Division of Cost Allocation within
the Department of Health and Human Services, and the remainder of those
costs are set directly by the BIA and IHS.
As this Committee is also aware from its extensive work over three
decades in amending the Indian Self-Determination Act, when the BIA or
IHS underfund fixed tribal contract support costs, the tribal
contractors are left with no choice but to leave program positions
unfilled to make up for the difference. Contract support cost
underpayments thus cost jobs.
By contrast, restoring contract support cost payments that are due
under contracts and compacts permits Tribes and tribal organizations
carrying out BIA and IHS programs to restore jobs. This is why Tribes
and tribal organizations have repeatedly explained to Congress that,
despite its somewhat oblique name, the ``contract support cost'' issue
is a jobs issue. Indeed, at even a high estimate of $100,000 per full-
time equivalent employee, every $10 million increase in contract
support cost payments produces 100 additional jobs (and even more jobs
under contracts with IHS, where healthcare services lead to additional
revenues from Medicare, Medicaid and other third-party payers).
The National Contract Support Cost Coalition requests this
Committee's assistance in securing an immediate infusion of contract
support cost funding in an amount equal to the amounts which President
Obama will shortly announce in his Budget for fiscal year 2011. By
including such one-time funds in the new jobs legislation, Tribes and
tribal organizations administering IHS and BIA programs will be able to
hire the additional staff which the President's increases will permit,
not in the summer of 2011, but this summer in the year 2010. This
acceleration in hiring in Indian country is critically necessary to
help immediately combat some of the country's highest unemployment
For instance, if the President proposes an FY 2011 increase in BIA
contract support cost payments of $20 million-sums which would, in due
course, eventually be transferred under tribal contracts in the summer
of 2011, $20 million in BIA contract support cost funds should also be
added to the jobs bill so that those positions can be hired now,
without further delay. The same action is warranted in connection with
the IHS budget where the President may propose a contract support cost
increase of $45 million for FY 2011.
Including contract support cost funding in the new jobs bill meets
every identified criteria for stimulus funding. It will directly lead
to increased employment; the funds can be immediately obligated within
a few days after apportionment into existing contracts, and without the
negotiation of any additional or supplemental terms; and contract
support cost funds (together with other contracted funds) are already
subject to rigorous and transparent annual independent audits.
Thank you for the opportunity to present these views on behalf of
the National Contract Support Cost Coalition. Coalition member Tribes
and tribal organizations will be supplementing this testimony with
their own individual statements.
Prepared Statement of Hon. Chad Smith, Principal Chief, Cherokee Nation
Prepared Statement of Hon. Merlene Sanchez, Chairperson, Guidiville