[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

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

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            JANUARY 28, 2010

                               __________

         Printed for the use of the Committee on Indian Affairs



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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

                              ----------                              
                                                                   Page
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

                               Witnesses

Edwards, Conrad, President/CEO, Council for Tribal Employment 
  Rights.........................................................    66
    Prepared statement with attachments..........................    69
Keel, Hon. Jefferson, President, National Congress of American 
  Indians........................................................    13
    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 
  Council........................................................    59
    Prepared statement...........................................    60

                                Appendix

Gottlieb, Katherine, MBA, President/CEO, Southcentral Foundation, 
  prepared statement.............................................   109
Letters submitted by:
    Hon. W. Ron Allen, Tribal Chairman/CEO, Jamestown S'Klallam 
      Tribe......................................................   122
    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 
      Community..................................................   121
    Hon. Dave Lopeman, Chairman, Squaxin Island Tribe............   131
    Thomas M. Moll, General Counsel, Seneca Free Trade 
      Association................................................   135
    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 
      Indians....................................................   124
    Paulette Schuerch, President/CEO, Copper River Native 
      Association................................................   120
    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 
  statement......................................................   111
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


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    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 
unemployment.
    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 
being here.

         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 
Indian Country.
    My name is Donald Laverdure and I serve as the Deputy 
Assistant Secretary for Indian Affairs in the Department of the 
Interior.
    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 
with unemployment.
    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 
policies.
    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 
technology.
    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 
Indian Country.
    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 
then conclude.
    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 
questions.
    [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 next.
    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 
job creation.
    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 
Country.

Background
    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-
determination.
    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 
mitigation strategies.
    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 
recommendations.
    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 
additional recommendations.

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 
Federal programs.
    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 
reservations.
    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 
Indian-owned businesses.
    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 
development.
    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 
will require.

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 
business owners.
    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 
skills.
    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 
entrepreneurs.
    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 
become available.

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 
        Country
    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 
this effort.
    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 
many job-creators.
    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 
well-paying job.
    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 
company.
    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 
Indian Country.
    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 
Tribal leaders.

Conclusion
    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 
anytime.
    [Laughter.]
    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 
economies.
    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. 
Spoonhunter?
    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, 
despair.
    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 
Country.
    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 
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 
annual basis.
    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 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 
Reservation.
    The Wind River Reservation is located on 2.2 million acres in 
Central Wyoming.
    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 
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 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 
annual basis.
    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 
Country.
    Mr. Chairman, Vice-Chairman Barrasso, Members of the Committee 
again thank you for this opportunity to discuss with you these 
important issues.

    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 
constituent?

               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 
                            COUNCIL

    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 
Nation.
    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 
self-determination.
    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 
skills.
    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 
program.
    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 
self-government compacts.
    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.
    Thank you.
    [The prepared statement of Ms. O'Neill follows:]

Prepared Statement of Gloria O'Neill, President/CEO, Cook Inlet Tribal 
                                Council

    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.


Program Opportunities
    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 
employment.
    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 
toward self-sufficiency.

Accountability
    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 
accountability standards.
    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 
Affairs.
    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.

Specific Requests
    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' 
success.
    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 
                       EMPLOYMENT RIGHTS

    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 
unemployed.
    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 
opportunity.
    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 
viable partner.
    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 
schedule.
    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 
work.
    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 
reservations.
    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 
technical assistance.
    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 
the crop.
    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 
bill.
    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 
transition.
    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.
    Thank you.
    [The prepared statement of Mr. Edwards follows:]

Prepared Statement of Conrad Edwards, President/CEO, Council for Tribal 
                           Employment Rights






































    The Chairman. Mr. Edwards, thank you very much. We 
appreciate it.
    Mr. Laverdure, thank you for being patient. I know it was 
probably helpful also for you to hear the testimony from 
others.
    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 
reservations?
    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 
favoring unemployment.
    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 
Indian Country.
    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 
Mr. Laverdure.
    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 
bond.
    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, 
more cost-effective.
    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 
bounds.
    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 
for 2010.
    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 
year
    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 
be speedy.
    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 
hearing.
    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 
                                Indians

Introduction
    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 
        a Recession
    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 
Territory.
    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, 
the Commission:

   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 
        fee;

   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 
        18.

    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.
Conclusion
    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, 
                        Southcentral Foundation





                                 ______
                                 
   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 
rates.
    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 
                            Indian Rancheria















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