[Senate Hearing 111-630]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-630

 DISCUSSION DRAFT OF THE INDIAN ENERGY PROMOTION AND PARITY ACT OF 2010

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

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 22, 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 April 22, 2010...................................     1
Statement of Senator Barrasso....................................     4
Statement of Senator Dorgan......................................    35
Statement of Senator Franken.....................................     5
Statement of Senator Johanns.....................................     6
Statement of Senator Murkowski...................................    25
Statement of Senator Tester......................................     1
Statement of Senator Udall.......................................    46
    Prepared statement...........................................    46

                               Witnesses

Andersen, Ralph, CEO, Bristol Bay Native Association; Co-Chair, 
  Alaska Federation of Natives Human Resources Committee.........    25
    Prepared statement...........................................    29
Box, Hon. Matthew J., Chairman, Southern Ute Indian Tribe........    12
    Prepared statement...........................................    14
Garcia, Hon. Joe, Southwest Area Vice President, National 
  Congress of American Indians; Chairman, All Indian Pueblo 
  Council, Albuquerque, NM.......................................     7
    NCAI prepared statement......................................     9
Marchand, Hon. Michael, Chairman, Economic Development Committee; 
  Energy Committee Member, Affiliated Tribes of Northwest 
  Indians; Councilman, Confederated Tribes of the Colville 
  Reservation....................................................    21
    Prepared statement of Brian Cladoosby........................    22
Stricker, Peter, Vice President, Strategic Asset Development, 
  Clipper Windpower, Inc.........................................    36
    Prepared statement...........................................    38

                                Appendix

Blackfeet Tribe, prepared statement..............................    58
Cesspooch, Curtis R., Chairman, Ute Indian Tribe Business 
  Committee, Uintah and Ouray Reservation, prepared statement....    61
Crawford, Jeff, Attorney General, Forest County Potawatomi 
  Community, prepared statement..................................   103
Finley, Hon. Michael, Chairman, Confederated Tribes of the 
  Colville Reservation, prepared statement.......................    82
Metcalf, Hon. Edward L., Chairperson, Coquille Indian Tribe, 
  prepared statement.............................................   108
Miskwish, Michael Connolly, paper, entitled ``Why Wind and Solar 
  Taxes Should Stay on the Reservation...........................   111
Pueblo of Laguna, prepared statement.............................    87
Shuravloff, Hon. Marty, Chairman, National American Indian 
  Housing Council, prepared statement............................    90
Suppah, Hon. Ron, Chair, Confederated Tribes of the Warm Springs 
  Reservation Tribal Council, prepared statement.................    98
Wu, Hon. David, U.S. Representative from Oregon, prepared 
  statement......................................................    55
Yazzie, Vincent, Flagstaff, AZ, letter, dated May 5, 2010........   111
Yerington Paiute Tribe, letter...................................   103

 
 DISCUSSION DRAFT OF THE INDIAN ENERGY PROMOTION AND PARITY ACT OF 2010

                              ----------                              


                        THURSDAY, APRIL 22, 2010


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:15 p.m. in room 
628, Dirksen Senate Office Building, Hon. Byron L. Dorgan, 
Chairman of the Committee, presiding.

             OPENING STATEMENT OF HON. JON TESTER, 
                   U.S. SENATOR FROM MONTANA

    Senator Tester. [Presiding.] I want to call this hearing to 
order on the discussion draft of the Indian Energy Promotion 
and Parity Act of 2010.
    We are conducting this hearing to abolish the obstacles to 
Indian energy development. I am sitting in for the Chairman, 
Senator Dorgan, that is obvious, and I will put forth to you 
some of the ideas that he has in his opening statement.
    Over the past two years, the Committee investigated these 
obstacles. There have been two hearings, a concept paper that 
was released proposing solutions, and the Committee staff has 
held a series of roundtables throughout Indian Country.
    We have a good idea of what the obstacles are. They are 
outdated laws that create a bureaucratic maze, a lack of 
infrastructure, a lack of financing for Indian energy projects. 
Based on the comments of the tribes and their industry 
partners, Senator Dorgan released a draft Indian Energy 
Promotion and Parity Act of 2010 on March 12th. The draft bill 
is our launching point for this hearing, along with additional 
draft provisions that Vice Chairman Barrasso released.
    Let me get right to the point of today's hearing. Indian 
tribes have vast energy resources that could provide 
substantial economic development for their communities, while 
increasing this Country's energy independence. The need for 
economic development in Indian communities is urgent and 
obvious. Many struggle with 49 percent unemployment and poverty 
rates that the rest of America wouldn't tolerate for a moment.
    Likewise, the Nation has an urgent need for greater energy 
independence. Energy production on Indian lands can be a big 
part of the answer to both problems, even though Indian lands 
make less than five percent of the United States, it is 
estimated that about 10 percent of the Nation's traditional and 
renewable energy resources are on those Indian lands, yet much 
of that potential is left undeveloped.
    Indian energy resources are locked up by a century of 
Federal law and policy that discourage development. This has 
had a direct impact on the lives of American Indians and our 
Nation's energy supply.
    I would like to share some of the stories with you today. 
First chart, and this is a chart of the oil and gas activity on 
the Fort Berthold Reservation in North Dakota. On the chart, 
the reservation is outlined in red and all the dots and blues 
represent oil and gas activity. It has been more than two years 
since oil and gas activity in this area took off and still most 
of the activity is to the north, south, and west of the 
reservation.
    [The information referred to follows:]
    
    
    Things are improving. Senator Dorgan has asked the 
Department of Interior to open up an oil and gas one stop shop. 
A year later, the number of producing wells went from 10 to 49, 
and more than $180 million have been paid to the tribes and its 
members. But this is no comparison to the hundreds of wells in 
surrounding counties. Obviously, we still have a long way to 
go.
    Now, Senator Dorgan's draft bill would create more of these 
one stop shops around Indian Country and streamline the 
bureaucratic 49-step process used to approve a single oil and 
gas lease.
    The next chart shows the renewable wind potential in the 
Lower 48 States. Wind turbines could be producing electricity 
in all of the pink, the purple and the red areas. Many of these 
areas overlap Indian Country, which are outlined in green on 
the chart. On these reservations, tribes are trying to develop 
wind projects, including the Blackfeet Nation up in 
Northwestern Montana.
    [The information referred to follows:]
    
    
    The tribe has 1,000 megawatts of wind capacity, enough 
energy to power about 250,000 homes, but the tribe's wind 
project is stuck on the drawing board, like so many tribal wind 
projects. Energy companies are interested in working with the 
tribe, but are worried that the Federal approval process will 
take too long and lease terms on Indian lands are too short. 
Meanwhile, the tribe is left out of regional electric 
transmission planning. Senator Dorgan's draft bill specifically 
addresses these issues.
    The last chart shows the weatherization needs of homes on 
the Cheyenne River Sioux Reservation in South Dakota. You don't 
have to be an energy auditor to see the energy benefits that 
new windows, doors and insulation could provide this family. 
But under current law, the weatherization needs of Indian 
tribes are barely an afterthought. The Recovery Act provided $5 
billion for weatherization and annual appropriations are in the 
hundreds of millions, yet only a tiny fraction of this gets to 
Indian tribes.
    [The information referred to follows:]
    
    
    In 2009, the Cheyenne River Sioux Tribe received $3,000 for 
its weatherization program. The tribe was able to buy some 
plastic wrap to help a few of their members tape up their 
windows for the winter. The weatherization assistance tribes 
receive is so small that the Department of Energy does not even 
know what it is. The Department told Senator Dorgan's staff it 
would ``take a really long time and an awful lot of effort to 
figure this out.''
    Tell that to the members of the Cheyenne River Sioux Tribe 
who may have to decide between buying food and heating their 
homes when winter temperatures on the Great Plains drop to 30 
below zero.
    Senator Dorgan's draft bill changes the law so that the 
weatherization funding gets to those who need it most, to 
provide more domestic energy and stimulate economic growth in 
Indian Country. We need the laws that will support Native 
American energy and I want to thank our witnesses that are here 
today for traveling here to share your ideas and we look 
forward to your testimony.
    Senator Barrasso?

               STATEMENT OF HON. JOHN BARRASSO, 
                   U.S. SENATOR FROM WYOMING

    Senator Barrasso. Thank you very much, Mr. Chairman. Thank 
you for holding this very important hearing on one of the 
Committee's highest priorities.
    Each time I meet with the leaders of the Eastern Shoshone 
and Northern Arapaho Tribes, we discuss how important energy 
development is to Wyoming's Indian communities, because in the 
Wind River Reservation energy development means jobs. Energy 
development on the Wind River Reservation means incomes for 
families. It means paying the heating the bill. It means food 
on the table.
    We know that many Indian communities have more than their 
share of challenges: unemployment, crime, alcohol, drug abuse. 
Far too often, I think we turn to government programs to 
address the problems. And I am not saying that there is no role 
for government. We do need more police in Indian Country. We do 
need drug and alcohol programs. But many of these problems are 
also aspects or features of something much larger: a pervasive 
lack of opportunity to earn a good living.
    Creating strong economies in Indian communities would have 
a broad and lasting impact on all of these problems. Economic 
development and employment opportunities, those are the keys to 
healthy, well-educated, productive communities.
    So I want to thank our witnesses for traveling long 
distances to be here today, and I look forward to hearing your 
testimony.
    Thank you, Mr. Chairman.
    Senator Tester. Thank you, Senator Barrasso.
    Senator Franken, do you have any opening statement?

                 STATEMENT OF HON. AL FRANKEN, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Franken. Yes, thank you, Mr. Chairman.
    I want to thank Chairman Dorgan for prioritizing the issue 
of energy development in Indian Country. Our Country is in the 
midst of a major transition in the way we produce and use 
energy. There is no doubt that a clean energy revolution is the 
key to creating jobs and fostering economic development in 
communities all across the Country. That chart on the wind 
potential is a beautiful illustration of that.
    No where is this need more urgent than in Indian Country, 
where unemployment rates are 40 percent, 50 percent and higher, 
and I so much agree with the Vice Chairman that economic 
development has got to be the answer.
    Energy development is a huge opportunity for Indian 
Country. As Senator Tester said, and I will repeat it because 
it bears repeating. Tribal areas comprise only five percent of 
the land in the United States, but have 10 percent of our 
conventional and renewable energy resources. And yet, as you 
saw on the chart on oil production in that North Dakota 
reservation, around it really, that potential is not being 
tapped.
    Tribes in Minnesota fully understand this potential, the 
potential that energy development presents for job creation and 
economic development. For example, the White Earth Reservation 
is actively pursuing recommendations from a 2008 University of 
Minnesota study on the potential of biofuels development on the 
reservation. The Shakopee Sioux community has built a 12.5 
megawatt combined heat and power plant that runs on waste 
agriculture biomass from the local area. In Northwestern 
Minnesota, the Fond du Lac Band of the Chippewa has built a 25-
kilowatt biomass pilot project using waste woody biomass from 
surrounding forest lands.
    There are many more examples like this from tribes in 
Minnesota and they are a testament to the fact that they are 
engaged in energy development and looking for ways to scale up 
these projects. But while there are successes of energy 
development in Indian Country on a small scale, broader energy 
development on tribal lands has so far just been a missed 
opportunity.
    As I have talked to Minnesota tribes about energy 
development, I keep hearing the same issues again and again: 
lack of access to financing, regulatory hurdles, and lack of 
technical assistance.
    So I want to thank this Chairman and Chairman Dorgan for 
bringing these critical issues before the Senate through this 
legislation, and I look forward to digging into the issues 
today.
    Thank you.
    Senator Tester. Thank you, Senator Franken.
    We have five witnesses here today. I will introduce you as 
a group and then we will start with you, Joe.
    We have the Honorable Joe Garcia, Southwest Area Vice 
President, National Congress of American Indians, Washington, 
D.C., and Chairman, All Indian Pueblo Council, Albuquerque, New 
Mexico.
    Along to his right, we have the Honorable Matthew J. Box, 
Chairman of the Southern Ute Indian Tribe in Ignacio, Colorado.
    Next to him, we have the Honorable Michael Marchand, 
Economic Development Committee Chairman, Energy Committee 
Member, Affiliated Tribes of the Northwest Indians, Portland, 
Oregon, and Colville Business Council, Omak District 
Representative, Confederated Tribes of Colville Reservation, 
Nespelem, Washington.
    I hope I didn't butcher that too bad.
    And next to him is Mr. Ralph Andersen, CEO of Bristol Bay 
Native Association, Co-Chair of the Alaska Federation of Native 
Human Resources Committee in Dillingham, Alaska.
    And finally, last but not least, Peter Stricker, Vice 
President of Strategic Asset Development, Clipper Windpower, 
Incorporated in California. Let's just put it there.
    In want to thank you all for being here. Before we get to 
your testimonies, and Senator Johanns has come in.
    Do you have an opening statement, Senator?

                STATEMENT OF HON. MIKE JOHANNS, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Johanns. Just very briefly.
    I had the most remarkable experience. I walked in here and 
everything you were saying, Senator Franken, I think I agree 
with, so this is really good.
    [Laughter.]
    Senator Franken. What is the date today? Can we write this 
down?
    [Laughter.]
    Senator Johanns. No, that was an excellent opening 
statement. And actually in all sincerity, so many of the points 
that have been made by Senator Franken are points that I have 
heard from Native Americans in my State. We just had a summit 
where I brought all the tribes together. We spent a half day 
talking about economic development and healthcare and the 
issues that impact our reservations so much.
    I will just say, I think this is an opportunity for us to 
maybe open up an avenue of economic development that has been 
untapped, and in some respects a bit unexplored. If we can get 
the right combination going here, then maybe there are some 
jobs that can be created, and that is enormously positive.
    So thank you, Mr. Chairman, for conducting the hearing. I 
look forward to the testimony of the witnesses.
    With that, I will be that brief.
    Thank you.
    Senator Tester. Thank you, Senator.
    I once again want to thank the witnesses for being here 
today. I would ask you to keep your testimony to five minutes. 
Your entire statement will be a part of the official record, 
but if you could keep it to five minutes, this is a very 
important subject and I know you can't cover everything you 
want in five minutes, but if you are concise, we will get it 
done and we will get to some good questions.
    Joe Garcia, do you want to start out?

 STATEMENT OF HON. JOE GARCIA, SOUTHWEST AREA VICE PRESIDENT, 
  NATIONAL CONGRESS OF AMERICAN INDIANS; CHAIRMAN, ALL INDIAN 
                PUEBLO COUNCIL, ALBUQUERQUE, NM

    Mr. Garcia. Yes, sir. Thank you so much, Senator Tester and 
Vice Chairman Barrasso. We appreciate the Members of the 
Committee for also sitting in.
    On behalf of the National Congress of American Indians, 
thank you for the opportunity to testify about our views on the 
discussion draft on the Indian Energy Promotion and Parity Act. 
NCAI is appreciative of the Committee's efforts to address our 
concerns about tribal energy development.
    The discussion draft establishes a solid foundation which 
we wish to build upon to overcome the massive and complex 
obstacles to tribal energy development. We need to move these 
ideas forward and to enact them now.
    As you are aware, tribal lands contain about 10 percent of 
the Nation's energy resources. Tribal renewable energy 
potential can meet the Nation's electricity demands several 
times over. Tribal energy is critical to the Nation's efforts 
to achieve energy independence and reduce greenhouse gases. 
Tribes located in some of the poorest counties in America have 
vast renewable energy resources that can help overcome this 
persistent poverty.
    I wish to share with you some examples of the tremendous 
challenges Indian tribes confront, challenges that can become 
opportunities. First is the DOE programs. NCAI fully supports 
the discussion draft's elevation of the Department of Energy as 
the major player in tribal energy and energy efficiency. Tribes 
do not receive direct funding under some DOE Programs. Under 
the Recovery Act alone, State governments received nearly $8 
billion under DOE's Weatherization program and the State Energy 
Conservation Plan Program.
    However, only two tribes, the Navajo Nation and Northern 
Arapaho Tribe, received a mere $10 million. Under the 
Weatherization program a tribe cannot receive direct funding 
unless it proves to DOE that the State is not serving its 
people. And so let us be clear. Tribes are sovereign nations 
with a direct nation to nation relationship with the Federal 
Government. Tribal governments therefore should have the option 
to work directly with DOE to address these conditions our 
people face.
    Second, challenges to large scale renewable energy 
projects. Tremendous challenges confront tribal efforts to 
develop commercial scale renewable energy projects. Similar 
projects just outside of Indian Country have a huge competitive 
advantage. The map demonstrates that. They have simpler, faster 
and cheaper approval processes, better access to the grid, and 
easier access to financing. And setting up a renewable energy 
project on tribal lands takes three to five years. Whereas on 
non-tribal lands, this may take only two to three years. Which 
one would you choose?
    And another challenge is the imposition of State and county 
taxes. State and county taxation on renewable energy projects 
such as those being imposed on the Campo Band of Kumeyaay 
Indians and Rosebud Sioux Tribe are affronts to tribal 
sovereignty and tribal self-determination. They hurt the tribes 
economically. We urge the Committee to develop additional 
provisions within the discussion draft that will prevent States 
and counties from imposing taxes upon tribal energy projects.
    Third, opportunity for small scale energy projects. Small 
scale energy projects, particularly in remote areas, can 
address the tribe's disproportionate lack of access to 
electricity and high cost of home heating. We applaud the 
discussion draft's provision to fund demonstrations projects 
for distributed energy and community transmission, but we also 
urge the establishment of a long-term program with consistent 
funding to support these efforts.
    There are additional issues. We have issues such as 
transmission. We must include transmission as part of the 
Indian Energy Development Plan because you can generate all the 
energy in the world, but if you can't get it on the 
transmission, on the grid, then it is useless. So we need to 
worry about that.
    Applications for permitting to drill. Tribes should not 
have to pay large fees in the neighborhood of $6,500 imposed by 
the Bureau of Land Management to drill on Indian lands, whereas 
off Indian land, the numbers are a lot less.
    Fuel cells, this is a new technology in terms of energy 
generation. Fuel cell driven energy plants are not part of the 
discussion, but I think it needs to be. It is an important 
opportunity for new efforts in tribal energy development.
    Energy storage, it is another opportunity for tribes to 
develop the storage capability. For instance, if you generate a 
lot of solar energy, you have no place to store it until the 
time that it is needed onto the grid and onto the distribution 
and to meet the customer base. You have to have storage 
capability. And again, it is an opportunity for the tribes to 
develop that.
    In conclusion, tribal governments must be able to exercise 
the inherent right of self-government, including fair 
opportunities to develop their energy resources. We urge the 
enactment of the Indian Energy Promotion and Parity Act. We 
look forward to working with you and the Committee to ensure 
that the needs of Indian Country for energy development and 
economic development are addressed.
    Thank you so much for the opportunity.
    [The prepared statement of the NCAI follows:]

 Prepared Statement of the National Congress of American Indians (NCAI)
I. Introductory Comments
    The National Congress of American Indians wishes to thank Chairman 
Dorgan for his interest in and leadership on Indian energy development, 
and in particular, for recognizing the need to overcome historic and 
present day inequities in tribes' ability to harness their vast energy 
potential for the benefit of all Americans. We hope that this effort 
will be part of the long and outstanding legacy that Senator Dorgan has 
secured championing legislation that meets the needs of Indian tribes.
    We are grateful for the significant tribal outreach that Chairman 
Dorgan and Vice Chairman Barrasso have conducted. Since May of 2009, 
the Committee has developed a concept paper, hosted roundtable sessions 
to solicit tribal comments, and held hearings in first session of 111th 
Congress. We look forward to working with all members of the Committee 
to ensure passage of this important legislation.
    This discussion draft of the Indian Energy Promotion and Parity Act 
(IEPPA) reflects the Committee's efforts. We believe it is a 
commendable effort to remove obstacles for tribally-driven energy 
development. As tribal lands are estimated to contain 10 percent of the 
nation's traditional and renewable energy resources, realizing this 
potential is critical to the nation's efforts to achieve energy 
independence, promote clean energy, and create jobs. Such efforts are 
especially needed in Indian Country, where unemployment rates are many 
times higher than the national average. Further, energy projects 
represent the most meaningful and sustainable economic development 
opportunities to ever arise for some tribes that have been mired in 
endemic poverty.
    However, the challenges are massive. For example, the vast majority 
of large scale renewable energy projects on tribal lands, even those 
which have made it through the maze of federal bureaucratic processes, 
are stuck in the pre-development phase among other things, for lack of 
financing, transmission access, and unfavorable tax structures. 
Furthermore, states and counties are increasingly keen on taxing tribal 
energy projects, threatening their very viability and siphoning off 
revenue that should be going to tribal governments for needed programs 
and services. If the nation seeks energy independence, it must call 
upon, and support, Indian tribes in their energy development efforts.
a. Legislative Process
    The number of legislative days remaining in the 111th Congress is 
few. We urge the Committee to move quickly to take action on a 
legislative proposal. We understand that a new climate bill, which 
contains energy provisions, is being drafted by Senators Kerry, Graham, 
and Lieberman, may be rolled out as early as next Monday. We look 
forward to working with the Committee, in collaboration with other 
Senate Committees, such as the Energy and Natural Resources Committee 
and the Finance Committee, to attach provisions from the IEPPA 
discussion draft into this and other suitable legislative vehicles as 
quickly as possible.
b. Tribal Process
    NCAI has been working with tribal leaders, tribal representatives, 
and tribal energy resource development organizations, including the 
Council of Energy Resource Tribes, the Indian Country Renewable Energy 
Consortium, and the Intertribal Council on Utility Policy, to provide 
comments to Committee staff on the IEPPA discussion draft. Our outreach 
and collaboration in the tribal community is ongoing, and we look 
forward to continuing to provide input as the legislation develops.
    The IEPPA discussion draft includes provisions to streamline and 
eradicate some of the 49 bureaucratic steps that tribes currently must 
go through to undertake energy development projects on tribal lands, 
and to ensure equitable access to the transmission grid, financing 
mechanisms, and federal programs for energy development and energy 
efficiency. It is important the Committee moves to remove these 
barriers to ensure that tribes are placed on a level playing field to 
facilitate the realization of their energy potential for the benefit 
not only of tribal governments and peoples, but the entire nation.
II. Comments on the IEPPA Discussion Draft
    In this context, NCAI is pleased to provide general comments on 
issues not yet adequately addressed in the IEPPA discussion draft and 3 
specific comments about Department of Energy (DOE) programs.
a. General Comments
i. Transmission
    Opportunities for large scale energy development on tribal lands 
are moot if tribes do not have access to the transmission grid. While 
IEPPA calls for a study on tribal inclusion in infrastructure planning, 
more robust language is needed to ensure that tribal projects already 
in development, as well as those which may be developed in the future, 
have equitable and appropriate consideration in the transmission queue.
    We believe that there should be a priority in the transmission 
queue for energy emanating from federal lands, including tribal lands, 
and look forward to working with the Committee to provide language to 
that effect.
ii. State Taxation
    A critical issue not currently addressed in the IEPPA is state and 
county taxation of tribal renewable energy projects. The Campo Band of 
Kumeyaay Indians has perhaps the only large-scale renewable project in 
Indian Country. Yet for the first part of that project, the state and 
county received more revenue than the tribe, through the imposition of 
three kinds of taxes: (1) state sales tax, (2) county property tax, and 
(3) county possessory interest tax. Notably none of the taxes collected 
are shared with the tribe. This practice sets a dangerous precedent. 
The State of South Dakota has told the Rosebud Tribe that it intends to 
impose taxes on renewable energy projects located on tribal trust 
lands, reversing a position the State held several years prior. Other 
states are contemplating similar actions.
    In the past, states and counties have justified this incursion into 
the Native tax base on the grounds that non-Indians engaging in 
commercial operations on Native lands are users of state services and, 
as such, should not get a ``free ride'' by working on tribal lands 
located within the state. But commercial scale wind energy brings very 
little impact to schools, law enforcement, roads, or other 
infrastructure. These taxes siphon revenue away from the tribes, 
prevent the tribe from enacting their own taxes, and, in the future, 
will place even more financial burdens upon projects. It is estimated 
that states can net approximately $65 million in state sales, property, 
and corporate income taxes from a 200 MW tribal project worth nearly 
half a billion dollars in construction costs. This is revenue 
rightfully due to the tribe, and for which the states and counties 
provide no reciprocal services. Therefore, we urge the Committee to 
develop legislation that will prevent states and counties from imposing 
taxes upon tribal energy projects.
iii. Leasing and Siting Provisions
    Many of the IEPPA discussion draft provisions related to Department 
of the Interior processes, such as leasing and siting on tribal lands, 
address or have the potential to address the broader issues, such as 
the overall trust relationship between the federal government and the 
tribes, and economic development opportunities beyond energy. We look 
forward to working with the Committee to broaden and narrow the 
parameters of those provisions as appropriate.
iv. Appraisals
    In general, we strongly support the appraisals provisions of the 
IEPPA discussion draft found in Section 106. Delays in BIA appraisals 
have been a severe detriment to many economic development projects. 
NCAI has long supported reforming the appraisals requirement to allow 
tribes to perform their own appraisals. We believe however, that the 
proposed 60-day Secretarial review and approval process of an already 
certified appraisal--conducted by the Secretary or by a tribe or 
through a third-party appraiser--is an unnecessary step that only adds 
further delay. In addition, we believe that the proposed options for 
conducting appraisals should extend to other transactions involving 
Indian land or Indian trust assets, and not just energy-related 
transactions. We urge the Committee to consider broader language 
involving land transactions.
v. Leases and Rights-of-Way
    Section 201 of the IEPPA discussion draft would make helpful 
improvements in the area of leases and rights-of-way. However, with 
respect to leases by Section 17 Indian Reorganization Act corporations 
(subsection (d)), we are concerned that certain 99-year leases can 
amount to a de facto sale of tribal land (for example, non-Indian 
residential housing). Historic experience has shown that it is very 
difficult for a tribe to recover its property once a non-Indian 
residential community is established. A period of 50 years should 
suffice for energy projects--including wind energy--and we recommend 
that the Committee consider making those changes to the language of the 
bill prior to introduction.
    In addition, we would ask that the Committee consider including in 
IEPPA provisions which would expand the Navajo Leasing Act to all 
tribes, similar to the provisions of H.R. 2523, the Helping Expedite 
and Advance Responsible Tribal Homeownership (HEARTH) Act. This 
legislation would permit each tribe to lease surface properties without 
Secretarial approval under tribal regulations that are approved by the 
Secretary. This legislation is supported by NCAI Resolution PSP-09-016.
vi. Financing
    Regarding the title on Energy Financing, Title III of the IEPPA 
discussion draft, Indian tribal governments have long supported and 
advocated for many of these provisions in other contexts, such as 
tribal assignability of production and investment tax credits. We look 
forward to working with this Committee and the Finance Committee to 
develop creative solutions for the implementation of a tax credit 
transfer program. At the same time, the Committee should pursue 
alternatives to offset the additional cost of money for tribal 
investments, such as providing grants, rebates, or payroll tax credits 
(which tribes can use) in lieu of income tax credits (which tribes 
cannot use). In addition, the Committee should encourage energy 
development by facilitating greater tribal access to the Renewable 
Energy Production Tax Incentive program. Such measures will help put 
tribal energy projects on an equal competitive footing with other 
energy projects.
vii. Definitions of ``Indian Tribe'' and ``Indian Land''
    We note that the IEPPA discussion draft contains different 
definitions of ``Indian tribe'' and ``Indian land.'' It is important to 
ensure use of the most appropriate definition in the specific context. 
For example, the definition of Indian tribe as it relates to leasing 
will likely be different from that used in the context of a 
Weatherization program. We look forward to working with the Committee 
to ensure that these definitions are appropriate to the specific 
issues, underlying statutes, and programs.
b. Provisions Related to DOE Programs
    We are pleased to provide comments on provisions related to federal 
programs, especially those at the Department of Energy, as they have 
not been fully addressed in previous forums.
    The Department of Energy's (DOE) Tribal Energy Program provides 
tribes with an impressive degree of knowledge and professionalism, to 
the extent they are able given the modest resources provided. DOE's 
efforts to work with tribes, however, are hampered by outmoded laws, 
regulations, and programs that have resulted in tribal exclusion and 
dramatically inequitable levels of funding, compared to other 
governments. As the nation moves resolutely towards energy independence 
and reductions in greenhouse gas emissions, now is the time for DOE to 
partner more fully and meaningfully with tribes, especially as DOE 
possesses unique and unparalleled expertise to work in partnership with 
tribes to tap tribal energy potential.
    We are pleased that the IEPPA discussion draft seeks significant 
changes to DOE's Weatherization Program, State Energy Conservation Plan 
Program, tribal loan guarantee program, and the Office of Indian Energy 
Policy and Programs, including the provision of funding directly to 
tribes and funding to build tribal institutional capacity to carry out 
energy development and energy efficiency programs. Tribes are sovereign 
nations with a direct nation-to-nation relationship with the federal 
government. Arrangements that exclude tribes, or compel tribes to work 
through the states in order to access federal programs are demonstrably 
unfair and obsolete.
i. Support for the Committee's Views and Estimates Regarding DOE's 
        Tribal Budget
    We support the Committee's sentiments related to DOE's budget 
request. The Committee has asked for $50 million more than the 
President's FY 2011 budget request for DOE's Tribal Energy Program, for 
a total of $61 million.
ii. State Energy Program
    DOE's State Energy Program and DOE's Weatherization Program were 
created 35 years ago, providing financial and technical support 
directly to states for energy and home efficiency initiatives. Tribes 
cannot receive funding directly from DOE under these programs. In the 
case of the State Energy Program, tribes receive funding only at the 
state's discretion. The equivalent DOE Tribal Energy Program was only 
established in 2002. Not including the 35 years of disparate federal 
funding, the Recovery Act alone provided states through the State 
Energy Program with $3.1 billion, and the Tribal Energy Program $0. 
Tribal access to the State Energy Program will ensure consistent 
support for tribal energy and energy efficiency endeavors.
iii. Weatherization
    Under the Weatherization Program (Wx), tribes cannot receive direct 
funding from DOE, unless they prove that to DOE that the state is 
failing to serve tribal members. Tribal homes in remote areas are often 
beyond the reach or awareness of state Wx programs. Direct state 
support of tribal needs varies by state. Even if a tribe does 
demonstrate the state's failure, the funding is often too paltry to 
justify the creation of a tribal program. DOE has helped state and 
local Wx networks and services for decades. In contrast, only the 
Navajo Nation and Northern Arapaho Tribe have tribal Wx Programs.
    The impact of this awkward statutory and regulatory arrangement 
upon tribes is significant. The Recovery Act alone provided the states 
with nearly $5 billion through the Wx Program with no assurances that 
tribes could receive some of this funding directly. The IEPPA 
discussion draft provisions to make Wx funding directly available to 
tribal governments will help address decades of exclusion.
    These historic program and funding inequities and omissions result 
in present day unpreparedness to undertake those programs. Therefore we 
are heartened by the IEPPA discussion draft provision to allow DOE's 
Office of Indian Energy Policy and Programs funding to help tribes 
build the institutional capacity undertake this programs.
    We look forward to working with all Committee members to improve 
upon the IEPPA discussion draft, so that tribal governments can develop 
their energy resources for the benefit of their peoples and all 
Americans, and to ensure that tribes meaningful participants in 
national energy efficiency initiatives. We urge quick action to ensure 
that these important measures are adopted during this Congressional 
session. We are thankful that the Committee, through the IEPPA 
discussion draft, is working toward this goal.

    Senator Tester. Thank you, Mr. Garcia.
    Chairman Box?

STATEMENT OF HON. MATTHEW J. BOX, CHAIRMAN, SOUTHERN UTE INDIAN 
                             TRIBE

    Mr. Box. Good afternoon, Chairman Tester, Vice Chairman 
Barrasso, Members of the Senate Committee on Indian Affairs.
    My name is Matthew Box. I am the Chairman of the Southern 
Ute Indian Tribe. I am honored to be here today. I appreciate 
that.
    On Tuesday, my written testimony was submitted to the 
Committee, and it contains detailed responses to the March 12th 
discussion draft and the April 16th discussion draft of 
legislation addressing Indian energy development. The written 
testimony was prepared with the assistance of our legal counsel 
who communicates regularly with your legal counsel. And even 
though I appreciate attorneys, I do not intend to duplicate 
that written statement this afternoon.
    Our tribe has a national reputation as a leading energy 
tribe. Our reservation in Southwestern Colorado contains 
significant natural gas resources. With the foresight of tribal 
leaders, we rely and have maintained our very core government 
and benefits for our tribal membership through that foresight. 
We have relied on this for our financial engine.
    As outlined in our previous testimony, our oil and gas 
activities extend well beyond our reservation. We have overcome 
many institutional obstacles to get where we are today.
    Your legislative efforts make our path easier and for all 
tribes who view energy development as a vehicle for improving 
economic conditions of their community and the future of their 
members.
    I would like to focus on key provisions of this draft 
discussion. Perhaps the most important provision in the March 
12 the discussion draft relates to tax matters addressed in 
Title III. Some of these provisions relate to renewable energy 
projects, while others are more general in scope. We strongly 
support the provisions and we commit to have our lawyers work 
with your lawyers to help refine whatever language may be 
needed for formal legislation to be introduced.
    I would like to describe why these provisions are so 
important. The first provision, Section 301, would encourage 
taxpaying partners to join with tribes in building and 
operating renewable energy facilities. Because most tribes do 
not have significant investment capital, financial partners are 
critical to the development of energy resources in Indian 
Country. Without good partners, we would not have taken the 
steps toward building our own energy businesses.
    In most cases, what tribes have to offer are the right to 
use their lands. Unlike energy leasing of the past, most tribes 
today want to be directly involved with the ownership of the 
project, but also to share in the profits of a successful 
renewable energy project. Current tax laws create an economic 
disincentive for such partnerships with regard to renewable 
energy projects.
    Production tax credits are a key economic component to 
developing renewable energy. If a taxpaying entity has an 
Indian tribe as a partner, those credits are lost in direct 
proportion to the tribe's ownership percentage. Sections 301 
and 302 dealing with incentive tax credits would encourage 
effective partnerships by allowing tax credits associated with 
the tribe's ownership to be used by the taxpaying partner. We 
urge that this approach be extended to the accelerated 
depreciation provisions and be made permanent under Section 303 
by removing huge financial penalties associated with keeping 
the tribes, the landowner, actively involved in ownership and 
operation of the business.
    This proposed tax treatment will encourage taxpaying 
entities to join with tribes in developing energy on Indian 
lands. We anticipate that other Senate or Congressional 
committees will initially object to any measures that involve 
marketing or disproportionate allocation of tax credit 
deductions. However, the tax code was not written with the idea 
that tribes would be financial partners in developing their 
lands and their resources. Again, we hope that you will provide 
the leadership on these tax issues needed to change existing 
law.
    Our written comments also support provisions that reduce 
the involvement of the Secretary of Interior when not 
necessary. We strongly support Section 103, which would allow 
installation of temporary energy testing facilities on tribal 
lands without secretarial approval. We also support Section 
106, which would provide statutory relief from existing 
appraisal requirements for land use transactions in Indian 
Country.
    My final comments are directed to the provisions of the 
April 16th draft that would improve Title V of the Energy 
Policy Act of 2005. The proposed provisions reduce the need for 
secretarial approval of transactions involving tribes with 
proven track records of land management. The proposed 
amendments to Title V also make it more likely that tribes will 
enter into agreements with the Secretary. We believe that the 
TERA options are the right approach in balancing self-
determination and trust responsibility.
    In conclusion, I thank you for this opportunity to be here 
and hope that these comments are helpful in your great effort.
    Senator Tester. They are.
    [The prepared statement of Mr. Box follows:]

   Prepared Statement of Hon. Matthew J. Box, Chairman, Southern Ute 
                              Indian Tribe
I. Introduction
    Chairman Dorgan, Vice Chairman Barrasso, and members of the 
Committee on Indian Affairs, I am Matthew Box, the Chairman of the 
Southern Ute Indian Tribe. I am honored to appear before you today to 
provide testimony regarding the discussion draft of the ``Indian Energy 
Promotion and Parity Act of 2010,'' initially distributed to the public 
on March 12, 2010. The discussion draft is another step forward in our 
longstanding effort to level the playing field of opportunity when it 
comes to Indian energy development. We have also reviewed a second 
discussion draft of possible Amendments to the Energy Policy Act of 
1992 dated April 16, 2010, which also contains some very positive 
suggestions. This statement presents our comments to each of those 
discussion drafts.
II. Background
    The Southern Ute Indian Reservation (``Reservation'') consists of 
approximately 700,000 acres of land in southwestern Colorado within the 
Four Corners area. Our Reservation, which is a checkerboard of land 
ownerships, is located in the northern San Juan Basin, a prolific 
natural gas producing region. We collect royalties and severance taxes 
from our leased lands; however, we also generate substantial revenues 
from our oil and gas operating company and our gas gathering and 
treating companies, which conduct activities both on and off the 
Reservation. We are also actively involved in renewable energy 
development both on and off the Reservation.
    In October of last year, our testimony outlined the challenges that 
we have faced and overcome in developing our energy resources. We have 
worked closely with this Committee to identify institutional obstacles 
to the successful development of energy resources in Indian country. We 
appreciate your willingness to address these issues. As we have stated 
repeatedly to anyone who will listen to us, ``We are the best 
protectors of our own resources and the best stewards of our own 
destiny; provided that we have the tools to use what is ours.'' Both of 
the discussion drafts reflect steps forward for energy development in 
Indian country.
III. General Comments to Discussion Draft of March 12, 2010
    The following comments reflect our general reaction to each of the 
three titles set forth in the March 12th discussion draft. We also 
believe that it may be helpful to the Committee to understand the 
context for our reaction to different sections of the discussion draft.
A. Findings and Purpose
    Initially, we agree with the findings and purposes set forth in 
Section 2 of the discussion draft. We agree that outdated laws and 
regulations have impeded the development of energy resources in Indian 
country. We also believe that the principal purposes of this 
legislation should be to remove those legislative and regulatory 
obstacles and to provide incentives for the development of renewable 
and non-renewable energy resources in Indian country.
B. Title 1--Energy Planning
    With respect to Title 1 of the discussion draft, there are some 
provisions of this title that we believe are critical improvements, 
others that are interesting, and some that we would oppose in their 
current form. We strongly support and urge you to retain Title 1, 
Section 103 (Predevelopment Feasibility Activities). This section 
allows temporary facilities to be installed on Indian land for purposes 
of data collection, without approval of the Secretary of the Interior 
or the Secretary of Energy, so long as the facilities will be removed 
and the testing activities concluded within two years. Inclusion of 
this section responds directly to testimony at field hearings regarding 
the bottleneck in obtaining Federal approval for the installation of 
temporary facilities on Indian land needed to evaluate the feasibility 
of wind power facilities. We would, however, suggest that the duration 
of the testing period be subject to renewal if needed to complete 
feasibility studies.
    We also strongly support Title 1, Section 106 (Appraisals), 
although we would expand its provisions. This section would eliminate 
the requirement for the Secretary of the Interior to conduct appraisals 
of trust assets to be used in Indian energy development transactions if 
such appraisals are being conducted by a tribe pursuant to a contract 
under the Indian Self-Determination and Education Assistance Act (``638 
Contract'') or by a certified third party appraiser under a contract 
with the tribe. The issue addressed by this section relates to current 
Interior regulations that call for a federal appraisal for many real 
property transactions, including the granting of rights-of-way across 
Indian lands. From a staffing perspective, the scope of the task makes 
prompt compliance impossible, which causes inordinate delays in 
processing rights-of-way needed in the conduct of ordinary business.
    Additionally, however, the federal appraisal standards are 
inflexible. For example, a number of years ago our Tribe consented to 
the grant of a right-of-way to a telecommunications company that 
paralleled a major public highway leading to our headquarters. Our 
compensation was to be the exclusive use of strands of high-speed, 
fiber optic cable for transmission of electronic information needed to 
serve our extensive governmental and commercial operations. Obviously, 
this form of compensation did not fit easily into standard Federal 
valuation methodologies. Only through extraordinary efforts were we 
able to convince the BIA to grant the right-of-way, and, even then, the 
BIA was extremely reluctant to proceed. Our use of those fiber optic 
cables, however, has been extensive. In order to avoid similar delays 
in the future, we urge the Committee to expand the instances in which 
Federal appraisals can be avoided to include situations in which the 
tribal government expressly waives an appraisal. Additionally, we 
believe that individual appraisals are unnecessary when a tribe has 
legislatively adopted compensation schedules for categories of land 
that correspond to area land values. Our Tribe generally uses surface 
damage compensation fees based on different land classifications, which 
the BIA now allows us to rely upon in lieu of actual appraisals. 
Statutory confirmation of the acceptability of this approach would be 
helpful.
    We also support Title 1--Sections 105 (Department of Energy Indian 
Energy Education Planning and Management Assistance), 107 (Technical 
Assistance and National Laboratories), 108 (Preference for 
Hydroelectric Preliminary Permits), and 109 (Study on Inclusion of 
Indian tribes in National and Regional Electric Infrastructure 
Planning). Each of these sections would be useful measures for tribes 
seeking to expand energy resource development.
    We question the need for Title 1--Section 101 (Indian Energy 
Development Offices), which would authorize the creation of up to three 
offices as one stop shops of multiple Department of the Interior 
agencies with administrative jurisdiction over aspects of Indian energy 
development, including the BIA, the BLM, that National Park Service, 
the U.S. Fish and Wildlife Service, the Bureau of Reclamation, the MMS, 
and the Office of Special Trustee. The Indian Energy Development 
Offices would be set up in regions of significant Indian energy 
resource activity or potential, and, through centralized staffing, the 
Indian Energy Development Offices would presumably be better able to 
handle Indian energy development than current administrative 
structures. Although the establishment of Indian Energy Development 
Offices has been advocated by others in the Indian community, we 
seriously question the need for or the long-term viability of these 
multi-agency offices. All of the administrative agencies at the 
Department of the Interior share the federal trust responsibility. With 
the exception of the BIA, all of those offices also have 
responsibilities for activities on a variety of federal lands. Our 
experience indicates that when dealing with officials from non-BIA 
agencies, such as the BLM or the MMS, much can be accomplished through 
officials held in high regard and occupying positions of broad 
authority within their agencies, who have an awareness and sensitivity 
to Indian matters. We fear that, because of their value to their 
agencies for dealing with multiple issues, such officials would not be 
the ones selected to fill positions in Indian Energy Development 
Offices. With guidance from the Secretary, we believe that 
prioritization of Indian trust matters and inter-agency cooperation can 
be effectively addressed without the creation of Indian Energy 
Development Offices.
    We are concerned that this legislation may not be the appropriate 
vehicle for considering matters addressed in Title 1--Section 102 
(Indian Energy Program Integration Demonstration Projects). Section 102 
establishes an elaborate process under which multiple federal agencies 
would be compelled to survey and report to the Secretary regarding 
Indian related programs within their departments. Following publication 
of these multiple programs, an Indian tribe could present a plan to the 
Secretary under which the tribe would propose to carry out those 
multiple programs in an integrated fashion with funding derived from 
the multiple agencies. In some respects, Section 102 appears to be an 
expansion of the 638 Contract process beyond the Department of the 
Interior with respect to community development and energy related 
matters. It is ambitious in scope and would clearly require greater 
inter-agency cooperation and coordination with respect to Indian-
related programs. While Section 102 reflects worthwhile objectives, we 
are concerned that this proposal will require the involvement of 
multiple congressional committees and, because of its scope, may result 
in delays in congressional approval of other provisions in this 
legislation that are long overdue with respect to Indian energy 
development.
    Our greatest concern extends to Title 1--Section 104 (Comprehensive 
Energy Resource Planning). In our view Section 104 undermines the 
fundamental underpinnings of the Indian Tribal Energy Development and 
Self-Determination Act of 2005, particularly the amendments to the 
Title XXVI of the Energy Policy Act of 1992 now found at 25 U.S.C. 
Sec. 3504. In order to understand our position on Title 1--Section 104 
of the discussion draft, it is helpful to review what Congress and 
Indian tribes attempted to achieve in Title V of the Energy Policy Act 
of 2005.
    Because Indian energy leases, business agreements, and rights-of-
way generally require the approval of the Secretary, and because such 
approval constitutes Federal action, consideration of such a Federal 
action triggers compliance with the National Environmental Policy Act 
of 2005 (``NEPA''). NEPA is a procedural statute designed to ensure 
that Federal agencies evaluate alternatives to a proposed Federal 
action, taking into consideration the potential environmental and 
social impacts of the alternatives and the views of the public. Except 
for the United States Government, no owner of land in the United 
States, other than an Indian tribe or an Indian allottee, is subject to 
NEPA with respect to land use transactions. Unlike Indian lands, which 
are owned beneficially by Indian tribes or Indian individuals, other 
Federal and public lands are generally owned for the benefit of the 
public at large. Many tribal representatives have felt that application 
of NEPA to tribal land use decisions unfairly encroaches on tribal 
sovereignty. To be sure, Indian tribes are bound to substantive 
environmental protection laws of general application when Congress has 
indicated its intent to bind tribes. So long as a proposed energy 
lease, business agreement, or right-of-way was to be performed in 
compliance with those substantive laws, however, the evaluation of 
multiple alternatives to a tribal land use decision and inclusion of 
the public in second-guessing a tribe's decision were objectionable. 
Further, in the context of energy development, the NEPA process 
penalized tribes. Energy development on private lands adjoining tribal 
land does not require NEPA compliance. Thus, while Federal officials 
undertook detailed evaluation of alternatives to a tribal energy lease, 
for example, tribal oil and gas resources were being drained by their 
neighbors. Particularly for tribes, like the Southern Ute Indian Tribe, 
with sophisticated energy and environmental staffs and decades of 
proven success, the NEPA review process was frustrating and damaging.
    After several years of legislative consideration, Congress offered 
tribes the alternative reflected in Section 2604 of the Energy Policy 
Act of 2005, through the vehicle known as a ``Tribal Energy Resource 
Agreement'' (``TERA''). A TERA is a master agreement which may be 
entered into between a tribe with demonstrated capacity and the 
Secretary. Upon entering into a TERA, an energy-related lease, business 
agreement, or right-of-way with a TERA-tribe no longer requires 
Secretarial approval, and, thus, no longer requires NEPA review. In 
place of NEPA, however, Congress required that a TERA-tribe establish a 
tribal environmental review process that allows for limited public 
participation. Under the statute, a TERA would also permit a Tribe to 
assume Federal administrative functions related to review and operation 
of energy development on tribal lands.
    Inexplicably, Title 1--Section 104 appears to increase rather than 
decrease application of NEPA in Indian country. Section 104 establishes 
mechanisms, utilizing 638 Contracting, under which Indian tribes may 
undertake preparation of comprehensive programmatic environmental 
review documents related to energy resource development. These 
programmatic environmental review documents are themselves subject to 
NEPA review. Even if a tribe were to participate under Section 104, 
nothing in the discussion draft would eliminate Secretarial approval or 
subsequent NEPA review of an actual energy lease, business agreement, 
or right-of-way proposed in conformity with the programmatic NEPA 
planning document. Significantly, Section 104 would also re-write the 
prior TERA statute to now require that a tribal TERA environmental 
review process satisfy new Federal standards to be developed by the 
Office of Indian Energy and Economic Development. In our view, Section 
104 is a step backwards, not a step forward.
    In summary, with respect to Title 1 of the March 12th discussion 
draft our position is as follows:

        Section 101 (Indian Energy Development Offices)--Seriously 
        question.

        Section 102 (Indian Energy Program Integration Demonstration 
        Projects)--Seriously question.

        Section 103 (Predevelopment feasibility activities)--Strongly 
        support, but would allow for renewals.

        Section 104 (Comprehensive energy resource planning)--Strongly 
        oppose.

        Section 105 (DOE Indian energy education planning)--Support.

        Section 106 (Appraisals)--Strongly support, but would expand.

        Section 107 (Technical assistance from DOE National 
        Laboratories)--Support.

        Section 108 (Preference for hydroelectric preliminary 
        permits)--Support.

        Section 109 (Study on inclusion in electrical infrastructure 
        planning)--Support.

C. Title II--Energy Development and Energy Efficiency
    Title II--Section 201(Leases and Rights-of-Way on Indian Land) 
proposes a number of statutory changes designed to address existing 
statutes affecting Indian mineral and non-mineral leasing and rights-
of-way. The first issue addressed by Section 201(a) and (b) is to 
confirm that a mineral lease of allotted or tribal land may also 
include an associated right-of-way without the necessity of a separate 
right-of-way document. We generally support this proposal; however, we 
also believe that this provision requires a drafting change. 
Specifically, in addressing the contemporaneously issued right-of-way 
under the Allottee Mineral Leasing Act of March 3, 1909 (25 U.S.C. 
Sec. 396), Section 201(a)(2)(B)(i) would eliminate the separate 
approval of ``the applicable Indian tribe . . . pursuant to the Act of 
February 5, 1948 (25 U.S.C. 323 et seq.).'' See page 34, lines 14-17 of 
the March 12th discussion draft. This provision should be changed to 
confirm that any proposed right-of-way crossing tribal land issued 
contemporaneously with an oil and gas lease of allotted land, must be 
separately approved by the applicable Indian tribe pursuant to the Act 
of February 5, 1948 (25 U.S.C. Sec. 323 et seq.). Since passage of the 
Indian Reorganization Act of 1934 (``IRA''), Congress has consistently 
recognized that tribal consent is a pre-condition to the valid use of 
tribal land. That consistent treatment should not be altered in this 
provision.
    The second issue, which is addressed in Section 201(c) and (d) of 
the March 12th discussion draft, is the duration of leases that may be 
issued by tribes under the Long-Term Leasing Act (25 U.S.C. 
Sec. 415(a)) or by tribal corporations chartered under Section 17 of 
the IRA (25 U.S.C. Sec. 477). Section 201(c) and (d) would expand the 
terms of those durational provisions, and, because they would increase 
the options available to tribes, we support those provisions.
    Title II--Section 202 (Application for Permit to Drill Fees Not 
Applicable) of the March 12th discussion draft would confirm that 
increased fees imposed by the Bureau of Land Management for each 
application for a permit to drill (``APD'') submitted to that agency 
would not apply to APDs submitted with respect to Indian lands. We 
support this change.
    Title II--Section 203 (Distributed Energy and Community 
Transmission Demonstration Projects) of the March 12th discussion draft 
would authorize the Director of the Office of Indian Energy Policy and 
Programs for the Department of Energy to conduct not less than 5 
demonstration projects to increase the availability of energy resources 
to Indian tribes and Alaskan Natives. We support this proposal.
    Title II--Section 204 (Environmental Review) authorizes 
participating Indian tribes to undertake NEPA review for energy 
projects developed on tribal land that would otherwise be applicable to 
the Secretary of Energy if the Secretary of Energy were conducting that 
activity with respect to a Federal project. We do not clearly 
understand the context of this provision, but surmise that it is 
intended to address NEPA compliance that might arise in the context of 
a DOE loan or grant to an Indian tribe for an Indian energy project. We 
object to the purpose as stated to the extent that it suggests that 
NEPA should apply to ``all energy projects developed on tribal land.'' 
See page 41, lines 5-12 of March 12th discussion draft. In that regard, 
if a tribe undertakes such activity directly without a lease or other 
instrument requiring Secretary of the Interior approval, then NEPA 
would not typically apply to the tribe's direct energy development 
activity, and we do not believe that the statement of purpose in 
Section 204 should conflict with existing law. A more accurate 
statement of purpose, consistent with existing law, would be to ensure 
that NEPA review for Indian energy projects is completed with respect 
to the Secretary of Energy's actions, when applicable. In addressing 
that substantive issue, we submit that the best approach would be to 
exempt NEPA review by the Secretary of Energy with respect to any such 
projects on tribal land that do not require NEPA review by the 
Secretary of the Interior and to also authorize the Secretary of Energy 
to rely upon and concur in NEPA review undertaken by the Secretary of 
the Interior when applicable under existing law. Notwithstanding the 
positive approach authorizing delegations to tribes to conduct NEPA 
review undertaken on behalf the Secretary of Energy, the current 
language of Section 204 implicitly doubles the NEPA review that must be 
undertaken in instances in which both the Secretary of the Interior and 
the Secretary of Energy have some involvement. We believe that the 
assumptions underlying Section 204 should be more carefully examined 
and that a more constructive solution to non-duplication of NEPA review 
for actions involving multiple Federal agencies should be pursued.
    We generally support Title II--Section 205 (Department of Energy 
Loan Guarantee Program), which would provide clarification and assist 
in implementation of loan guarantees by the DOE for Indian energy 
projects proposed by Indian tribes or tribal energy resource 
development organizations.
    We also support Title II--Section 206 (Inclusion of Indian Tribes 
in State Energy Conservation Plan Program), which would expand tribal 
participation in energy conservation planning programs currently 
available to states.
    Additionally, we support Title II--Section 207 (Home Weatherization 
Assistance) which would expand access for home weatherization 
assistance to tribes and would increase the administrative role of the 
Secretary of the Interior for such programs.
    We also support Title II--Section 208 (Tribal Forest Assets 
Protection), which would provide for tribal demonstration projects 
related to use of woody biomass for electrical power generation and 
distribution.
    In summary, with respect to Title II of the March 12th discussion 
draft our position is as follows:

        Section 201 (Leases and rights-of-way on Indian land)--Support 
        with drafting revision.

        Section 202 (Application for permit to drill fees not 
        applicable)--Strongly support.

        Section 203 (Distributed energy demonstration projects)--
        Support.

        Section 204 (Environmental Review)--Oppose unless substantially 
        revised.

        Section 205 (DOE loan guarantee program)--Support.

        Section 206 (Inclusion of tribes in state conservation 
        programs)--Support.

        Section 207 (Home weatherization assistance)--Support.

        Section 208 (Tribal forest assets protection)--Support.

D. Title III--Energy Financing
    Title III--Section 301 (Transfer by Indian tribes of credit for 
electricity produced from renewable resources) creates a special rule 
allowing an Indian tribe's ownership interest in a renewable energy 
facility to be treated as that of a co-owner for purposes of allocating 
production tax credits under Section 45 of the Internal Revenue Code. 
We strongly support this provision; however, we also believe that 
additional provisions should be included in any final legislation to 
reflect the indirect participation of an Indian tribe. Currently, there 
is an economic disincentive for Indian tribes to acquire or retain 
ownership interests in renewable energy facilities because there is no 
way to monetize production tax credits associated with the tribe's 
ownership interest. Production tax credits are a critical component in 
the economics of renewable energy projects. Our tribe is the sole owner 
or member of an alternative energy limited liability company that has 
attempted to invest in major wind projects in the West. The absence of 
tax credits attributable to our ownership interests adversely affects 
the economic viability of those projects if we participate. 
Additionally, under existing law, tribal participation complicates the 
structure and the timing of our potential investments.
    It is our understanding that the intended result of Section 301 
would be to allow an Indian tribe to transfer the tax credits 
associated with power production from a renewable energy facility and 
attributable to the tribe's ownership interest to the taxpaying 
partner. Currently, the proposal addresses only the transfer of energy 
production, and we hope that final legislative language eliminates any 
ambiguity with respect to the assignable character of the production 
tax credits, while allowing the tribe to retain the sales revenue 
attributable to its ownership percentage.
    With regard to such facilities, it is most likely that a taxpaying 
partner and an Indian tribe, or a business entity wholly owned by the 
tribe, would form a special purpose entity, such as a limited liability 
company, which would own the renewable energy facility. Tax liabilities 
would typically track ownership percentages in the limited liability 
company. Use of such special purpose entities is a common and accepted 
way to limit general (non-tax) liability for the participating partners 
beyond the value of the assets of the project. We urge the Committee to 
consider modifying the definition of ``Indian tribe'' for purpose of 
Section 45 of the Internal Revenue Code to also include a business 
entity wholly owned by an Indian tribe. See page 56, line 22 through 
page 57, line 8 of March 12th discussion draft. Modification of the 
definition would allow for the following structure: (i) owner of 
renewable energy facility is a limited liability company; (ii) owners 
or members of the limited liability company that owns the renewable 
energy facility, are (x) a wholly-tribally owned business entity, and 
(y) a taxpaying entity. We urge the Committee to give Indian tribes the 
same business flexibility that other investors possess by allowing for 
the tribe's participation to be indirect rather than direct ownership 
of a portion of the facility.
    We also strongly support Title III--Section 302 (Investment Tax 
Credits), which we understand would allow investment tax credits 
attributable to an Indian tribe's ownership interest in an energy 
property to be monetized. This provision would clearly provide 
increased tax incentives for energy investment in Indian country, while 
also encouraging ownership retention by an Indian tribe in such 
projects. Again, for the same reasons discussed with respect to Title 
III--Section 301, above, we would urge the Committee to consider 
language that would allow the contemplated allocation of basis to flow 
from an Indian tribe's wholly-owned business entity to the other 
investor so that tribes would have the option of holding ownership of 
an energy property indirectly rather than only directly through the 
tribal government. This treatment would, for example, be consistent 
with the use of tribal corporations under Section 17 of the IRA.
    Title III--Section 303 (Permanent Extension of Depreciation Rules 
for Property on Indian Reservations) is another provision of Title III 
that we strongly support. Use of accelerated depreciation under Section 
168(j) of the Internal Revenue Code has encouraged investment in Indian 
country, and tribal leaders have repeatedly requested that the 
accelerated depreciation rules be made permanent with respect to on-
reservation investments. Again, with respect to utility scale 
investments, accelerated depreciation is a key factor in economic 
feasibility. As with Section 301 and Section 302 above, we would urge 
the Committee to incorporate language permitting a disproportionate 
allocation of depreciation to a taxpaying partner of an Indian tribe or 
a business entity wholly owned by the tribe.
    We also support Title III--Section 304 (Permanent Extension of 
Indian Employment Credit). Permanent extension of the Indian employment 
credit under Section 45A of the Internal Revenue Code would continue to 
encourage employers in Indian country to hire Indians.
    Finally, we also support the statutory changes reflected in Title 
III--Section 305 (Extension of Grants for Specified Energy Property in 
Lieu of Tax Credits). These proposed changes would extend the time 
periods during which investors in qualified renewable energy equipment 
could make such investments and request grants in lieu of tax credits 
under Section 1603 of division B of the American Recovery and 
Reinvestment Act of 2009. Additionally, this section would make Indian 
tribes eligible for such grants. Currently, tribes are not eligible for 
this favorable tax treatment, yet they are looked to by their 
communities for leadership with respect to such investments.
    In summary, with respect to Title III of the March 12th discussion 
draft our position is as follows:

        Section 301 (Transfer by Indian tribes of renewable energy 
        production tax credits)--Strongly support, but also urge 
        modification to include wholly-owned business entities of 
        tribes.

        Section 302 (Investment tax credits)--Strongly support, but 
        also urge modification to include wholly-owned business 
        entities of tribes.

        Section 303 (Permanent extension of depreciation rules)--
        Strongly support but also urge modification to include 
        assignments of depreciation from Indian tribes or wholly-owned 
        business entities of tribes.

        Section 304 (Permanent extension of Indian employment credit)--
        Support.

        Section 305 (Extension of grants under 1603 of ARRA)--Support.

E. Title IV--Amendments to Indian Energy Policy Laws
    Title IV--Section 401(Amendments of Indian Energy Policy Laws) 
proposes a number of clarifying changes to the Energy Policy Act of 
2005, some of which would help implement changes addressed in previous 
sections of the March 12th discussion draft. We have no objections to 
those changes; however, our previous comments regarding Section 101 
(Indian Energy Development Offices) should be considered with respect 
to Section 401(b) of the discussion draft.
IV. General Comments to Discussion Draft of April 16, 2010
    The April 16th discussion draft addresses two principal matters: 
(i) Amendments to the Indian Land Consolidation Act (25 U.S.C. 
Sec. Sec. 2201 et seq.) and (ii) Amendments to the Energy Policy Act of 
1992 (25 U.S.C. Sec. Sec. 3501 et seq.). Our remarks are limited to the 
proposed amendments to the Energy Policy Act. As our previous comments 
have indicated, our Tribe was a vigorous supporter of Title V of the 
Energy Policy Act of 2005, including the provisions allowing for a TERA 
between the Secretary and a qualified Indian tribe. Our support for the 
TERA provisions was driven not only by frustrations in obtaining prompt 
NEPA review for energy related transactions requiring Secretarial 
approval, but was also motivated by our belief that our internal 
capabilities in evaluating such transactions exceeded those of the BIA. 
Since the mid-1970s, we have taken a hands-on approach to management 
and development of our energy resources. Our extensive staff includes 
geologists, engineers, land specialists, environmental specialists, 
information technology experts, and lawyers. Our successful operations 
in energy development have not been limited to on-Reservation 
activities, but have also included exploration and production 
activities in more than 10 states and the Gulf of Mexico. For us, the 
costs associated with delays in obtaining Secretarial approval were not 
offset by added value arising from Secretarial review.
    Notwithstanding our support for the TERA provisions contained in 25 
U.S.C. Sec. 3504, neither our Tribe nor any other tribe has yet entered 
into a TERA. There are a number of reasons why no TERA has yet been 
completed. First, the process of adoption of implementing regulations 
took several years. Second, the regulations once promulgated withheld 
from tribes the opportunity to assume ``inherently Federal functions'' 
related to their lands. This term was not mentioned as a limitation in 
the statute and remains undefined in the regulations. The regulations 
also left unanswered how the Secretary would measure tribal capacity. 
Third, tribes remain reluctant to include the public in a tribal 
environmental review process. Fourth, the financial expense of taking 
over Federal administrative duties is imposing and TERAs provided no 
funding mechanism. And fifth, TERAs are viewed by some tribal leaders 
as relieving the Federal Government of its trust duties, primarily 
because of the Federal Government's poor performance of those duties.
    The April 16th discussion draft proposes statutory changes that 
address some of the factors mentioned above, and we generally support 
the proposed modifications. The remaining comments address specific 
provisions contained in the April 16th discussion draft.
A. Definitions (25 U.S.C. Sec. 3501)
    The April 16th draft would supplement the definition of ``tribal 
energy resource development organization,'' which is an organization of 
two or more entities, at least one of which is an Indian tribe, to 
allow such an organization to enter into a lease or business agreement, 
or acquire a right-of-way from an Indian tribe under specific 
circumstances subsequently addressed in the statute. It should be noted 
that one of the suggestions contained in Section 401 of the March 12th 
discussion draft would amend the term ``sequestration'' set forth in 25 
U.S.C. Sec. 3501(10). We are supportive of both of those definitional 
changes.
B. Amendments to 25 U.S.C. Sec. 3504(a)(2) and 3504(b)
    The proposed amendments to 25 U.S.C. Sec. Sec. 3504(a)(2) and 
3504(b) would significantly and beneficially expand the instances in 
which energy leases, business agreement, and rights-of-way involving 
tribal land could be entered into without Secretarial approval. So long 
as the Indian tribe retained majority control of the energy lease, 
business agreement or right-of-way throughout the duration of the 
instrument, and provided that a tribe had successfully carried out its 
responsibilities over a 7-year period under a land use-related 638 
Contract, Secretarial approval would not be required. We strongly 
support this approach. First, it substantially eliminates the 
uncertainty associated with measuring tribal capacity under the TERA 
mechanism. Second, it eliminates the Secretarial approval process when 
the affected, qualified tribe retains ownership and control over the 
activities being conducted on tribal land.
C. Amendments to 25 U.S.C. Sec. 3504(e) (TERA Requirements)
    The changes to 25 U.S.C. Sec. 3504(e) found on pages 17, 18, and 19 
of the April 16 discussion draft are largely clarifying measures, which 
we support. We also support the additions of 25 U.S.C. 
Sec. 3504(e)(2)(F) and (G), which add certainty to the TERA disapproval 
process and tribal capacity determinations for tribes with track 
records of positive performance under the 638 Contract or self-
governance programs of the Indian Self Determination and Education 
Assistance Act. The changes to 25 U.S.C. Sec. 3504(e)(6) maintain the 
basic concept of retained Federal trust responsibility reflected in the 
existing statute, but affirmatively restate the circumstances under 
which Federal liability for breach of those duties will exist. We 
believe that this clarification will provide meaningful assurance to 
Indian tribes considering the TERA option.
D. Proposed 25 U.S.C. Sec. 3504(g)
    This proposed addition would include a funding component to TERAs 
that is lacking under existing law, by incorporating the 638 
Contracting and self-governance mechanisms and applying them to TERAs. 
Addressing the administrative cost issue associated with TERAs is a 
significant positive development.
E. New Provisions Related to APD Fees
    Unlike the discussion draft of March 12th, the fee provisions of 
April 16th would allow APD fees associated with Indian lands to 
continue to be collected; however, the use of those fees by the BLM 
would be required to address permitting and inspection costs associated 
with development of Indian lands. While we support the discussion draft 
provisions of March 12th, the provisions of the April 16th draft are a 
significant improvement over existing BLM practices.
Conclusion
    The two discussion drafts addressing Indian energy issues are 
responsive to concerns raised by tribes in testimony already presented 
to this Committee. We have been honored by your interest and by our 
inclusion in the process. We hope that our comments are useful to the 
Committee in refining and formally introducing legislation on these 
matters in the near future.

    Senator Tester. We certainly appreciate your comments and 
everyone's comments on the witness panel today.
    Michael Marchand?

         STATEMENT OF HON. MICHAEL MARCHAND, CHAIRMAN, 
            ECONOMIC DEVELOPMENT COMMITTEE; ENERGY 
   COMMITTEE MEMBER, AFFILIATED TRIBES OF NORTHWEST INDIANS; 
  COUNCILMAN, CONFEDERATED TRIBES OF THE COLVILLE RESERVATION

    Mr. Marchand. Thank you, Members of the Committee, and 
thanks for inviting the Affiliated Tribes of Northwest Indians 
to speak today. I am speaking on behalf of President Cladoosby 
who was not able to make it today.
    My name is Michael Marchand. I am a Councilman at the 
Colville Tribes. Also, I am teaching at my college. I am a 
doctoral student in bioenergy at the University of Washington, 
so a Husky.
    The ATNI organization in the Pacific Northwest is 57 tribes 
and they have been around for 50 years. For 15 years, ATNI has 
had an active energy program, working with our membership on 
these issues and trying to promote their needs and develop this 
area.
    ATNI member tribes are very interested in this because it 
is a key to economic development on many of our reservations, 
many of which are impoverished and our unemployment rates are 
very high.
    ATNI member tribes appreciate the efforts of this Committee 
and the staff who seek the advise of tribes and organizations 
prior to the drafting of this bill. Our representatives 
attended roundtables regarding the concerns on energy 
development in Indian Country. We are pleased to see many of 
our suggestions for improving opportunities for energy 
development in the bill, including the amendments to the Tribal 
Forest Protection Act, which enhances our capabilities to 
coordinate with our Federal neighbors both on and off 
reservations. We have additional suggestions for improving the 
bill as follows.
    First, a number of the directives and authorities described 
in the bill are for the Director of the Office of Indian Energy 
Policy and Programs of the Department of Energy. This petition 
remains vacant at this time. We strongly urge Congress to 
request that the President make the appointment to this 
important position as soon as possible. Apparently, funding 
designated for use in this office is being diverted to other 
offices within DOE pending the appointment.
    We would like you to consider an option that would allow 
tribal leadership to be more involved in this appointment by 
establishing a timely process for tribal leaders to make 
nominations and then requiring an appointment from the list of 
nominees within a reasonable time frame upon the change of any 
Administration.
    Secondly, because many of our tribes have treaties that 
cover the ocean and they are currently heavily dependent upon 
ocean health, we request that a provision be added to give 
Indian tribes participation on any federally funded group that 
is studying or otherwise making recommendations related to the 
Outer Continental Shelf. In addition, to the extent that States 
have rights to share in royalties in energy development on the 
Outer Continental Shelf, coastal and ocean treaty tribes should 
also have the same right.
    Third, we also support the amendments disseminated earlier 
this week by Vice Chairman Barrasso, specifically those that 
would amend that the Indian Land Consolidation Act to provide 
tribes with more flexibility and additional funding for 
consolidating fractionated lands.
    Fourth, ATNI member tribes have strong recommendations for 
improving the use of Federal funds for energy efficiency and 
conservation in Indian Country. Most energy conservation 
programs were designed with States and cities in mind and could 
be improved for areas with substandard housing and old and even 
dangerous government buildings such as many reservations have.
    For example, we have found that the term ``weatherization'' 
has too narrow a definition when applied to funding sources. 
Many buildings in Indian Country are substandard, even 
dangerous. Weatherizing them does not make any sense. We 
request a new provision that authorizes the use of fund for 
repair or replacement of existing substandard buildings where 
there would be overall cost and energy savings.
    Another issue is that on many reservations, a large 
percentage of housing is old mobile homes. Mobile homes built 
prior to 1976 were not subject to building standards and are 
therefore not energy efficient. We request that weatherization 
programs be broadened to allow tribes the flexibility to assist 
the community in the replacement of these older mobile homes 
with newer, more efficient homes.
    Thank you for this opportunity.
    [The prepared statement of Mr. Cladoosby follows:]

Prepared Statement of Hon. Brian Cladoosby, Chairman, Swinomish Tribe; 
   President of the Executive Board, Affiliated Tribes of Northwest 
                                Indians
    Good afternoon Chairman Dorgan, Vice Chairman Barrasso, and Members 
of the Committee. Thank you for inviting the Affiliated Tribes of 
Northwest Indians to provide testimony regarding the Indian Energy 
Promotion and Parity Act of 2010. I am Brian Cladoosby, the Chairman of 
the Swinomish Tribe in Washington State and President of the Executive 
Board of the Affiliated Tribes of Northwest Indians (ATNI). ATNI is an 
organization of Indian Tribes that has celebrated over 50 years 
representing tribes from Alaska, California, Nevada, Washington, 
Oregon, Montana and Idaho on issues of concern to our people. For 
fifteen years, ATNI has had an active energy program that has advised 
our membership on policy issues and has provided technical assistance 
and training to tribes, and has assisted federal agencies in better 
serving our members.
    The ATNI member tribes are very interested in this subject matter 
because it is a key to economic development on our reservations, many 
of which are impoverished and have unemployment rates that are much 
higher than other areas of the country. Our member tribes include:

   The Blackfeet Tribe, who has oil and gas issues, and also 
        the best wind energy opportunity in the United States, but also 
        lacks transmission access;

   The Colville, Warm Springs, Coquille, Spokane, Salish & 
        Kootenai and Yakama Nations who all have excellent biomass 
        opportunities but are struggling to complete the development of 
        their projects;

   At least ten Coastal tribes, and many other tribes with 
        treaties that protect salmon, all of whom are extremely 
        interested in energy development and protection in the Outer 
        Continental Shelf;

   Numerous tribes developing vast potentials of wind, solar, 
        geothermal, and hydroelectric power;

   Tribes who wish to address the impacts of renewable energy 
        endeavourers on and off the reservation by increased capacity 
        in the areas of legal, science and policy to ensure the 
        protection of their treaty and subsistence resources.

   All our members are interested in energy conservation, and 
        who wish to make weatherization and low income programs more 
        useful to Indian tribes;

   Many members, such as the Swinomish Tribe who has completed 
        a climate change adaptation and mitigation plan and who are 
        concerned about the effects of climate change in ocean, rain 
        and snowfall, and changes in fish and wildlife, and in our 
        culture;

   Tribes who are developing traditional generation, wind, 
        biomass, hydroelectric, and transmission projects such as 
        Tulalip, Shoshone-Bannock, Crow, Umatilla, and Slitez that will 
        be able to move their projects forward and create many new jobs 
        by using the tax credits, accelerated depreciation, grants, and 
        employment credits provided for in this bill.

   Many Tribes who will benefit from strong legal and policy 
        capacity building and coordination with neighboring industries 
        to address the challenges of converting the renewable energy 
        opportunities to profit.


    ATNI and our member tribes appreciate the efforts of this Committee 
and your excellent staff in seeking the advice of Indian tribes and 
organizations prior to drafting this bill. Our representatives attended 
the Roundtables held regarding the concerns of energy development in 
Indian Country. We are pleased to see many of our suggestions for 
improving the opportunities for energy development in Indian Country in 
the bill. For example, our member tribes have emphasized the importance 
of coordinating with neighboring federal and other government entities, 
and with industry. We also emphasized building tribal internal capacity 
to ensure the immediate and long term success of energy projects. Many 
of the provisions in the bill reflect these suggestions and others that 
were requesteded by ATNI member tribes (along with other tribes and 
tribal organizations); including Sections:

        103 (Predevelopment Feasibility)

        105 (Including intertribal organizations as potential 
        recipients of energy assistance)

        106 (Improving the land appraisal process)

        108 (Hydroelectric Permits Preference to include Tribes)

        109 (Including Tribes in Transmission Planning Studies)

        201 (Coordinating leases and right of ways)

        204 (Streamlining NEPA requirements during preliminary study 
        phases)

        206 (Include Tribes in State Weatherization Plan Programs)

        207 (Home Weatherization)

        208 (Tribal Forest Protection)

        301 (Production Tax Credit transferability)

        302 (Extend Investment Tax Credits)

        303 (Extend Accelerated Depreciation)

        304 (Extend Employment Credit)

        305 (Extend Grants for Energy in Lieu of Tax Credits)

        401 (Agricultural practices are added to sequestration; 
        intertribal organizations added as potential recipients of 
        energy assistance, adding weatherization to energy department 
        priorities)

    Some additional suggestions we would like to provide include:

    A number of the directives and authorities described in the bill 
are for the Director of Office of Indian Energy Policy and Programs of 
the Department of Energy. This position remains vacant at this time. We 
strongly urge Congress to request that the President make the 
appointment to this important position as soon as possible. Currently 
funds designated for use in that office are being diverted to other 
offices within DOE pending the appointment. We would like you to 
consider an option that would allow tribal leadership to be more 
involved in this appointment, by requiring a timely process for tribal 
leaders to make nominations, and then requiring an appointment from the 
list of nominees within a reasonable time frame upon the change of any 
administration.
    Because many of our tribes have treaties that cover the ocean, and/
or currently heavily depend on ocean health, we request that a 
provision be added to give Indian Tribes participation on any federally 
funded group that is studying or otherwise making recommendations 
related to the Outer Continental Shelf. In addition, to the extent that 
states have rights to share in royalties from energy development on the 
Outer Continental Shelf, coastal and ocean treaty tribes should also 
have the same right.
    We also support the amendments disseminated earlier this week by 
Vice-Chairman Barrasso, specifically those that would amend the Indian 
Land Consolidation Act to provide tribes with more flexibility and 
additional funding for consolidating fractionated lands. ATNI has 
previously expressed support for these and other initiatives, such as 
the Indian Trust Asset Demonstration Project in S. 1439 (as introduced 
in the 109th Congress), that would improve the federal government's 
administration of the trust and encourage economic development. ATNI 
urges the Committee to continue to address these issues both in the 
discussion draft and in other contexts.

    Some of the Bill's provisions that can be improved include:

    Section 102 authorizes various federal agencies to coordinate on 
Integrated Demonstration Projects. A provision authorizes the agencies 
to waive certain regulations in order to implement an approved plan. We 
believe that the authority to waive regulations would be strengthened 
in the event of a court challenge if criteria for a waiver were 
included in law. Potential criteria could include that a finding by the 
Secretary be made that the waiver would not likely significantly impair 
human health, cultural resources, or the environment, or that 
alternative measures were in place to address these issues.
    Section 203 directs the Director of Office of Indian Energy Policy 
and Programs of the Department of Energy to conduct not less than five 
distributed energy demonstration projects. These projects are excellent 
ways in which we can immediately and cost effectively improve energy 
use at the local level. This section would be improved by providing a 
time limit, or by requiring a certain number of such projects ``per 
year''.
    We had strong recommendations for improving the use of federal 
funds for energy efficiency and conservation in Indian Country. Most 
energy conservation programs were designed with states and cities in 
mind, and could be improved for areas with substandard housing, and old 
and even dangerous government buildings such as many reservations.
    For example, we have found that ``Weatherization'' has too narrow 
of a definition when applied to funding sources. Because many buildings 
in Indian Country are substandard and even dangerous, ``weatherizing'' 
them does not make sense. For example, the bill prioritizes the use of 
``weatherization'' funds for windows, doors, repair of floors walls, 
ceilings and secondarily for heating and cooling. These priorities 
ignore problems with building roofs, needed structural repairs, mobile 
home upgrades, water conservation measures, and many other conservation 
programs that would be very beneficial in substandard housing or 
buildings.
    We also recommend adding a provision that authorizes energy 
efficiency and conservation funds use for leveraging the replacement of 
existing substandard buildings where there would be overall cost and 
energy savings. On many reservations a large percentage of housing is 
mobile homes. Mobile homes built prior to 1976 were not subject to 
building standards and are therefore not energy efficient. We request 
that ``weatherization'' programs be broadened to allow tribes the 
flexibility to assist their community in the replacement of these older 
mobile homes with new energy efficient mobile homes.
    We support your efforts to improve energy development opportunities 
in Indian Country. We also support this Committee's efforts to improve 
the federal government's trust reform issues as they related to energy 
policy. We encourage you to consider energy related changes and 
clarifications to the Indian Land Consolidation Act by providing tribes 
with more flexibility and additional processes for working with 
fractionated lands and improving the flexibility for using income from 
these lands.
    We would be happy to answer any questions.

    Senator Tester. I want to thank you for your testimony.
    Before we hear from you, Mr. Andersen, I want to kick it 
over to Senator Murkowski for a proper introduction.

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

    Senator Murkowski. Thank you, Mr. Chairman. I appreciate 
the opportunity to introduce to the Committee a gentleman, a 
friend from Alaska and a true leader within our State. Ralph 
Andersen is the CEO of Bristol Bay Native Association. He hails 
originally from Clark's Point, which is outside of Dillingham.
    He is the Co-Chair of the Alaska Federation of Natives 
Human Resources Committee and has been a leader on so many 
issues. He has had an opportunity to appear before the 
Committee on numerous issues, but we look to him on guidance in 
so many areas as they relate to the health and well being of 
our Alaska Natives.
    So Ralph, it is good to have you before the Committee 
again.
    Mr. Andersen. Thank you.
    Senator Tester. Mr. Andersen?

         STATEMENT OF RALPH ANDERSEN, CEO, BRISTOL BAY 
  NATIVE ASSOCIATION; CO-CHAIR, ALASKA FEDERATION OF NATIVES 
                   HUMAN RESOURCES COMMITTEE

    Mr. Andersen. Thank you, Senator.
    Mr. Chairman, Members of the Committee, ladies and 
gentlemen, thank you for the invitation to provide testimony 
today. It is quite an honor for me to be here.
    As introduced, my name is Ralph Andersen. I am the CEO of 
the Bristol Bay Native Association and Co-Chair of AFN's Human 
Resources Committee composed of the Chief Executives of the 12 
regional nonprofit tribal consortiums in Alaska.
    I also serve as Chairman of AFN's Energy Working Group and 
as Chairman of the Bristol Bay Partnership, our leadership 
group composed of the Chief Executives of the five regional 
organizations in Bristol Bay.
    BBNA is a nonprofit tribal consortium of 31 federally 
recognized tribes in Southwest Alaska. Our region covers about 
40,000 square miles and is about the size of the State of Ohio. 
BBNA provides a wide range of social, economic, cultural and 
educational services to benefit the tribes and the native 
people of Bristol Bay.
    A common goal of all these organizations that I chair or I 
am involved with is to help find answers to lowering the high 
cost of energy in rural Alaska. Rural Alaska faces unique 
energy challenges that are hard for most to imagine. We pay the 
highest per capita for electric power and fuel in the United 
States.
    The summer of 2008 was painful for us in rural Alaska. That 
is when the price of crude went to nearly $200 a barrel and the 
prices we pay for gas, diesel and heating fuel doubled or 
tripled. The high crude prices added millions to the State's 
revenues, but emptied the bank accounts of us living in rural 
Alaska.
    In the summer of 2008, a study by the University of 
Alaska's Institute of Social and Economic Research showed that 
rural Alaskans pay 41 percent of our monthly incomes on energy, 
while urban residents pay four percent. Last winter, our hearts 
went out to village people who have to choose between paying 
the heating or fuel bill or buying food for their families.
    During the past two years, we have seen more friends, more 
families, more neighbors move out of our villages and out of 
our regions because of the high cost of living. The high price 
of fuel is the biggest factor raising our cost of living, 
discouraging economic and business investments. It affects 
every part of our lives.
    Costs for groceries, fresh milk, a dozen eggs, airline 
tickets, toothpaste, medicine, baby diapers, clothes, lumber 
and building materials, car and truck parts, everything has 
gone up. Rural Alaskans are experiencing an energy crisis and 
we continue to feel its impacts. Despite the drop of crude 
price, we continue to pay high costs. Retail prices for heating 
fuel ranges from $2.88 a gallon to $10 a gallon. Retail prices 
for gasoline ranges from $2.96 to $10 a gallon.
    Delivering fuel to rural Alaska is complicated and 
expensive. There is no comparable delivery model anywhere else 
in the world. Fuel is transported thousands of miles from 
either Anchorage or Seattle. Delivery windows are narrow and 
often complicated by inclement weather or inhospitable 
conditions such as low water levels needed for barges to reach 
tribal communities along rivers and deltas. Fuel delivery 
arrangements are often made several months in advance, 
requiring significant financial commitments and the inability 
to participate in the market fluctuations fully and to 
appreciate low prices when they are available.
    One way to reduce these costs for economic development is 
to develop our power resources locally, become more energy 
efficient, and practice conservation. We are strong supporters 
of the development of alternative energy sources and many rural 
Alaskan communities are actively working toward that goal.
    I offer the following comments and recommendations on 
sections of the discussion draft now before you. The draft has 
been available to us for only a short time and I respectfully 
request the Committee to give us some additional time for 
comments and suggestions.
    My remarks are today focused on sections in Title I and 
Title II.
    Title I, we are encouraged by the provisions in the 
section, but believe it can be improved and strengthened by 
requiring tribes to be consulted in the appointment of 
directors to head the Indian Energy Development Offices. This 
section should also include provisions for tribes or tribal 
consortia to provide IEDO services under self-determination 
compact or contract agreements.
    Our experiences with existing DOI or BIA Indian energy 
programs have not been as beneficial as we would like. We are 
not sure how the energy funds are appropriated, how they are 
being spent, because we don't see any solicitations or notices 
in the Federal Register.
    We are encouraged by the language in this section 
supporting tribal energy resource development organizations. 
BBNA and other tribal consortia in Alaska have established 
tribal energy programs, but we lack funding to get them into 
full operation or to fully develop their potential. The scope 
of our program is limited by the amount of BIA compact funding 
and funding my Administration is able to dedicate every year.
    Soon after this Committee's energy oversight hearing in 
Bethel two years ago, led by Senator Murkowski, we sent a 
funding proposal at least twice to BIA, the Department of 
Interior's Tribal Energy Program. We finally received a 
response about a month ago that was not very encouraging.
    Funding to establish and maintain tribal energy programs 
should be provided for in this section, establishing three to 
five-year power projects will help to improve their 
effectiveness.
    Title II, Section 203, we have offered in the past to be 
part of a national demonstration project to help reduce energy 
costs. We are encouraged by language in Title II, Section 203 
calling for at least five distributed energy demonstration 
projects for Indian tribes and Alaska Natives. We suggest the 
number of demonstrations should be at least doubled to 10, with 
a specific dollar amount of funds allocated over the pilot 
project years based upon accomplishment of certain milestones, 
and the funds be distributed through Public Law 93-638 contract 
agreements.
    Rural Alaska is comprised of small, isolated transmission 
grids within each community. Many of our villages are not 
connected to each other or to a larger energy grid where 
economies of scale could keep prices down. There are a few 
communities closely situated that are connected by an electric 
intertie and others close enough together where interties would 
be a natural.
    I don't want to take up a lot of time. I want to encourage 
that pilot demonstration projects under this section be 
provided for.
    Under Title II, Section 206, there are no programs funded 
that support tribal energy efficiency and conservation efforts. 
The Energy Efficiency and Conservation Block Grants established 
by the Energy Independence and Security Act of 2007 wasn't 
funded until ARRA, the American Recovery and Reinvestment Act 
of 2009. This block grant calls for direct funding to local, 
State and tribal governments to develop and implement projects 
to improve energy efficiency, reduce energy use and fossil fuel 
emissions.
    Regardless of the future prospects of funding for EECBG, we 
support the inclusion of a five percent tribal setaside of the 
State Energy Conservation Plan Program, a more established 
funding opportunity within the Department of Energy.
    Title II, Section 207, the Department of Energy's Home 
Weatherization Program is minimally funded compared to the vast 
need in our Nation and in our region. Alaska is fortunate that 
DOE funds have historically been used by the five recognized 
contractors for the State for housing in our villages. In 
addition, the Alaska Legislature has funded a program mirrored 
on the Federal program, with funds allocated to the five 
recognized contractors receiving DOE funds, but also to 14 
Native Tribal Housing Authorities in our State.
    Even with these new resources reaching our tribes, the need 
far exceeds available resources. In Bristol Bay, approximately 
1,300 of 2,500 homes in the region are classified as low income 
according to the income guidelines. The need for weatherization 
on low income homes exceeds $50 million. Of the 1,300 homes 
that are classified as low income, with a mix of State and 
Federal funding, we are able to weatherize 100 homes per year. 
If we relied strictly on Federal funds, we would be able to 
weatherize only 20 homes per year.
    Current available resources will fund 10 percent of the $50 
million needed, leaving a 90 percent gap. It is this gap that 
must be filled.
    That concludes my formal testimony. Again, I request that 
we be allowed additional time to submit comments and 
recommendations.
    I will be happy to answer any questions. Thank you.
    [The prepared statement of Mr. Andersen follows:]

     Prepared Statement of Ralph Andersen, CEO, Bristol Bay Native 
  Association; Co-Chair, Alaska Federation of Natives Human Resources 
                               Committee




    Attachments have been retained in Committee files.

        Current Community Conditions: Fuel Prices Across Alaska--
        January 2010 Update.
        Bristol Bay Energy Policy and Energy Crisis Recovery Plan: 
        Phase 1 and 2.

    These attachments can be found at:
        www.commerce.state.ak.us/dca/pub/Fuel_Report_Jan_2010_final.pdf
        www.bbna.com/Energy/3_ImplementationStrategies_5-6-08.pdf
        www.bbna.com/BBEPECRP_Apr15_gg_RA_5-7-08.pdf

              STATEMENT OF HON. BYRON L. DORGAN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    The Chairman. [Presiding]. Mr. Andersen, thank you very 
much.
    Let me before I call on the last witness apologize to my 
colleagues and to the witnesses for my absence. I was involved 
in the debate on the Floor of the Senate and I was determined 
to get the last word and it took me some while.
    [Laughter.]
    The Chairman. So thanks to Senator Tester and thanks to my 
colleagues, and I will recognize them first for questions when 
our next witness completes.
    The next witness is Peter Stricker, Vice President of 
Strategic Asset Development at Clipper Windpower, Inc., at 
Carpinteria, California.
    Mr. Stricker?
    Mr. Stricker. Yes, thank you.
    The Chairman. Thank you very much. You may proceed.

         STATEMENT OF PETER STRICKER, VICE PRESIDENT, 
      STRATEGIC ASSET DEVELOPMENT, CLIPPER WINDPOWER, INC.

    Mr. Stricker. Clipper Windpower and I would like to share 
with you, Senator Dorgan and the entire Committee, our 
appreciation and support for this Committee's commitment to 
explore new ways to meet the challenges of tribal clean energy 
and infrastructure development.
    The discussion draft of the Indian Energy Promotion and 
Parity Act is an encouraging step forward in addressing the 
challenges and opportunities to finally create a sensible 
development environment for the vast amounts of world class 
renewable energy that is located in Indian Country.
    We are encouraged by this Committee's recognition that 
unlocking the renewable energy potential on tribal lands is a 
key to meeting this Country's goals of energy independence and 
reducing carbon emissions. Today, we are pleased to share with 
the Committee our perspective as a U.S. wind development and 
turbine manufacturing company that is partnered with and are in 
mature stage discussions with numerous Indian tribes.
    First, I would like to introduce you to Clipper Windpower. 
Clipper began as a startup company in 2000, and now is the 
developer of an 8,500 megawatt project portfolio and 
manufacturer of one of the premier utility scale wind turbines 
in the U.S. Well-placed DOE funding was key to creating our 
turbine technology company, which now directly employs over 700 
people and several times that indirectly in our supply chain.
    We contend that similarly placed Federal incentives can 
fundamentally help bring renewable energy development on tribal 
lands into the windpower market.
    Now, to the question of existing tribal wind projects. We, 
no doubt like many others in this room, at some point have 
asked ourselves: Why is there now only one commercial wind 
project in Indian Country? It is an interesting question. 
Without getting into great detail, I would like to list the key 
issues as we see them.
    One, project development costs. Given lack of existing 
infrastructure on remote reservation lands and higher project 
return requirements associated with higher development risk, 
elevated costs are inevitable.
    Two, regional siting competition. Additional permitting and 
approvals are required on tribal land unless certainty as to 
the associated process make tribal projects less desirable to 
develop than adjacent non-tribal projects.
    Three, transmission access and infrastructure. Access to 
transmission is a substantial benefit for many tribal projects 
primarily due to the scarcity of infrastructure and lack of 
available capacity on existing lines.
    Four, unworkable financial incentives for tribes as project 
participants. Tribes have a keen interest in participating in 
project ownership, but are fundamentally handicapped by their 
inability to use tax-based incentives.
    From Clipper's perspective, despite our commitment to 
tribal projects, those projects must be weighed against others 
in our portfolio as we wrestle with risk and budget 
considerations.
    Okay, so now let's talk about incentives, specific tribal 
incentives. As an established member of the U.S. wind industry, 
we recognize that tribal projects are disadvantaged and that 
the provisions in this Act will move them in the direction of 
being more competitive. In our mind, that is a reasonable 
direction to take for tribal projects.
    We also recognize that in addition to the broad benefit of 
producing clean, renewable energy for the U.S., the benefits to 
tribes are significant: sustainable and diversified tribal 
economies, infrastructure development and professional training 
of tribal members, to name a few.
    Tailored financial incentives. This proposed legislation 
would encourage private and tribal ownership of projects with 
very limited impact on taxpayers. These targeted financial 
incentives will help make tribal projects competitive, and 
importantly, would only be granted to viable, successfully 
completed projects.
    Transmission planning and incentives. As currently 
contemplated, the proposal for a large scale transmission study 
in Indian Country is a positive step. But actually enhancing 
access and building transmission infrastructure is what is 
needed to make tribal projects go forward. For example, we are 
well aware of limitations to move power out of the Dakotas, 
which is home to many of the windiest tribal lands in the U.S. 
Studies are plentiful, but very little transmission has been 
built.
    Now, I would like to mention the importance of a national 
renewable energy standard. Finally, when considering tribal 
incentives, it is important to note that the bottom line for 
all renewable energy projects is the electric power markets. 
Projects are driven by their ability to sell power, and 
renewable energy standards drive markets.
    To get meaningfully beyond wind energy's current installed 
capacity of two percent of the U.S. power market, the piecemeal 
approach of State renewable standards must be stepped up to a 
Federal level with a national renewable energy standard. I 
cannot emphasize enough the importance of a renewable standard 
to the success of tribal and non-tribal projects to capture 
this clean, inexhaustible energy resource for the long-term 
benefit of the Country.
    Without a capital commitment to projects and transmission, 
infrastructure will be severely constrained and our industry 
will never realize its potential. All other incentives, 
including those proposed for tribes, will be less effective if 
not in concert with a national renewable standard.
    In closing, I would like to mention the interesting twist 
of fate that has placed reservation lands in some of the 
sunniest and windiest areas of the Nation. In addition, 
critical transmission corridor siting has often occurred on 
tribal lands. These two factors now present unparalleled 
opportunities to tribes and their partners to finally develop 
these world class wind and solar resources on a scale which can 
fundamentally shift how we generate electric power in the U.S.
    We thank the Committee for asking us to share our 
perspective with you today, and look forward to the final 
Indian Energy Promotion and Parity Act.
    Thank you.
    [The prepared statement of Mr. Stricker follows:]

 Prepared Statement of Peter Stricker, Vice President, Strategic Asset 
                  Development, Clipper Windpower, Inc.
Introduction
    Clipper Windpower and I would like to share with you, Senator 
Dorgan, and the entire Committee, our appreciation and our support for 
this Committee's commitment to explore new ways to meet the challenges 
of Tribal clean energy and infrastructure development.
    The discussion draft of the Indian Energy Promotion and Parity Act 
is an encouraging step forward in addressing the challenges and 
opportunities to, finally, create a sensible development environment of 
the vast amounts of world class renewable energy that is located in 
Indian Country. We are encouraged by this Committee's recognition that 
unlocking the renewable energy potential on tribal lands is a key to 
meeting this Country's goals of energy independence and reducing carbon 
emissions.
    Today we are pleased to share with the Committee our perspective as 
a U.S. wind development and turbine manufacturing company that has 
partnered with and are in mature stage discussions with numerous Indian 
Tribes. We are excited at the opportunities that lie ahead, but will 
share with you today the particular vantage point that we have 
regarding some of the complex obstacles facing the future of Indian 
Country and prospects for any significant clean energy development into 
the future.
Clipper Windpower
    Clipper Windpower Development Company, Inc. manages over 8,500 MW 
of wind resource development assets, and provides a full range of wind 
energy project development capabilities focused on the sale of these 
projects and the deployment of Clipper wind turbines.
    Clipper Windpower has its origins as a start-up company in 2000 
which received critical Department of Energy funding in its early years 
to develop what is now one of the premier utility-scale turbines in the 
United States. We employ over 700 people today and are proud that this 
initial federal incentive allowed Clipper to realize its potential as a 
U.S. company and to now advance our wind turbine technology in the 
world market.
    We share this particular company background today to illustrate the 
power of well-placed Federal investments and incentives in clean 
energy. We contend that similar combinations of incentives and Federal 
leadership can make a significant difference for Indian Tribes seeking 
a more balanced and competitive position with non-tribal projects, in 
the form of Federal streamlining initiatives as well as appropriate 
incentives for renewable and infrastructure investments in Indian 
Country.
The Challenge of Developing Tribal Resources: Why Is There Now Only One 
        Commercial Wind Project on Tribal Lands?
    We, no doubt like many in this room, prior to entering into 
negotiations with several Indian Tribes on commercial wind projects, 
asked ourselves initially why there is now only one commercial wind 
project in Indian Country? What are the reasons for this lack of 
progress when, clearly, there is plentiful world class wind resource in 
Indian Country?
    Although Clipper Windpower has made and is making commitments with 
tribes, we remain concerned about key development challenges-which I 
will note-are often further hampered by the larger market and 
infrastructure challenges we as industry face on a broader level. That 
being said, the fundamental obstacles have been and largely remain:

        1. Project Development Costs. Reservation sites are often 
        further from grid and markets, placing an upfront cost burden 
        on the project in areas and often in incumbent utility markets 
        that have low-cost federal hydro and/or coal-fired power 
        supply. Keeping this in mind, the added risk of regulatory 
        uncertainty, creates an inverse need for higher rates of return 
        to compensate for probable regulatory delays.

        2. Regional Siting Competition. Frankly, many Tribes are 
        competing with surrounding private property, as well as state 
        and federal lands, all of which have clarified and streamlined 
        and eased leasing and permitting processes. As a developer and 
        partner, it is far from clear what the processes are to lease 
        and permit tribal trust and allotted lands. There is a lack of 
        established protocols or even a pro forma renewable and 
        transmission leasing and permitting process for tribal lands, 
        making it more attractive to invest precious capital on lands 
        and jurisdictions which can provide both a clear path and level 
        of regulatory certainty so we as developers can stick to 
        development schedules.

        3. Transmission Access and Infrastructure. A critical component 
        that is substantively missing in this discussion draft bill is 
        any incentives or initiatives related to transmission. We 
        cannot realistically talk about generation development without 
        discussing transmission development.

        4. Unworkable Financial Incentives for Tribes as Project 
        Participants. We have seen in negotiations that Tribes have a 
        strong interest in ownership participation in wind projects but 
        realize that the opportunity to do so is constrained by their 
        inability to utilize tax-based incentives for wind For 
        instance, we have had prolonged discussions with Tribes in the 
        Dakotas as we have struggled together to identify ways in which 
        the Tribe could access equity or other capital, or structure 
        partnerships, to participate more actively in the development 
        and ownership of the projects. In the meanwhile, investments 
        and project development moves forward around them.

    Certainly there are other hurdles to be overcome, but I will leave 
it to other witnesses today to cover some of those. So let us circle 
back again to the initial question and maybe we simply conclude that 
the fact that there is only one commercial wind project in operation, 
speaks for itself. Clearly something needs to be done to confront the 
embedded challenges of developing on tribal land if there is going to 
be any progress towards accessing the vast wind resources that exist 
there.
    Speaking from our experience, and although Clipper has made 
development commitments in Indian Country, none of our prospective 
tribal projects have yet reached the full leasing and permitting stage. 
In making those commitments, we are looking to advance these projects 
but are already faced with lack of clarity in the leasing and 
permitting process, constrained transmission access and lack of 
certainty on how tribal ownership may be structured--all of which is, 
frankly, slowing us down. In the project development business, time is 
money, and those projects which have built-in delays will be far less 
competitive. In reviewing the projects in our development portfolio, 
those on tribal lands must be weighed against others as we assess risk 
and budget constraints.
The Need for Tribal Renewable Energy and Transmission Incentives
    Specific Tribal Incentives Needed to Overcome Challenges of 
Developing Projects on Reservations. We need tailored and specific 
incentives because it is a fact that tribal reservation lands are 
unique and pose unique challenges and opportunities. As a member of the 
wind industry, we recognize that tribal projects are disadvantaged 
coming out of the starting gate so that special consideration and 
support is needed to make them viable. Unlocking tribal wind resources 
will provide the U.S. a substantial source of renewable energy which 
will not only reinforce our energy security but will also help to keep 
that energy competitively priced for consumers. And the benefits to 
tribes are significant: sustainable and diversified tribal economies, 
infrastructure development and professional training for tribal 
members.
    Tailored Financial Incentives. And this proposed legislation, as it 
is currently contemplated, would encourage private and tribal ownership 
of projects with very limited impact on tax payers. It includes some of 
the most significant elements to achieving financeable projects on 
tribal lands: loan guarantees, assignability of tax credits, grants-in-
lieu-of-tax-credits, extension of the tribal accelerated depreciation 
and employment tax credit provisions. Targeted financial incentives, 
like these that are proposed, will help make tribal based projects 
competitive with non-tribal projects and allow them to be financed, and 
importantly would only be granted to successful projects.
    Transmission Planning and Incentives. As you are probably well 
aware transmission is critically needed to support the expansion of 
U.S. wind energy. As currently contemplated, the proposal for a large-
scale transmission study in Indian Country is a positive step forward. 
But this is one of the biggest conundrums facing tribal renewable 
development: transmission--access to it and expansions of it in Indian 
Country. From a tribal perspective, although a sizeable federal 
hydropower and transmission footprint runs through Indian Country, 
ironically, tribal renewable projects experience great difficulty in 
securing access to the transmission infrastructure on their lands. 
Clipper Windpower is deeply involved in transmission issues across the 
U.S. and has particular experience with transmission development from 
the Upper Midwest to Eastern load centers. We have observed the 
opportunity for tribes in the Dakotas to interconnect with the Western 
Area Power Administration, but are also keenly aware to the need to 
deliver beyond WAPA's system to urban load. Like most non-tribal wind 
development across the country, expansion of transmission is a key 
element of tribal wind development.
    The opportunity for renewable energy based transmission expansion 
is that it can benefit tribal and non-tribal projects alike. 
Transmission is a collaborative process requiring multiple stakeholders 
to complete. Utilities, private developers, state regulators, the 
Federal Government--and in some cases tribes--must all jump into the 
ring and push for transmission expansion. In the case of tribal 
projects, more Federal leadership will be required to overcome the 
inherent challenges transmission projects, including encouragement of 
public-private partnerships or tailored financial incentives for siting 
transmission on tribal lands or providing for a more streamlined 
interconnection process for tribal projects.
    Secondary benefits of these efforts to expand renewable energy 
transmission/collection systems would be creating a sustainable 
infrastructure as well as bringing electricity to areas of reservations 
presently not connected with the grid. The Tribes, the states, the 
regions and the country will benefit from a more secure and robust 
transmission infrastructure.
Setting the Stage for Tribal Renewable Energy Success: The Importance 
        of a National Renewable Energy Standard (``RES'') and 
        Consistent Energy Policy
    Again, it is critical to place this historic tribal opportunity in 
context of the power markets in which they will operate and the 
viability of those markets. It is a fact, with a few exceptions, that 
renewable projects are currently being built at rates that track 
requirements of state renewable energy standards, the current 
underlying driver for all renewable energy development in U.S. This 
piecemeal state-by-state approach so far has resulted in barely 2 
percent of national electricity demand being met by wind energy--for 
renewable energy to make any sort of meaningful dent in the U.S. energy 
portfolio, a Federal Renewable Energy Standard, or ``RES'' will be 
needed.
    All other incentives less effective if not in concert with a 
national RES--above all, we must have a market to buy renewable energy. 
Consistent and long-term energy policy will not just help tribal 
projects, it will create a stable foundation for the renewable energy 
industry as a whole. We have already experienced the development lags 
when disrupted tax credit extensions have made it more difficult to 
attract investment for longer lead-time projects, especially hurting 
tribal projects.
    As energy legislation moves this month and next, these tribal 
provisions, which are wholly congruent, are important piece of the 
puzzle and needs to be included in whatever legislation that moves 
forward. Clarifying and streamlining tribal-federal processes as well 
as leveling the playing field for Tribes are critical tools to be used 
in concert to help tribal projects play catch up. However, after these 
tribal-specific incentives and provisions are put into place, what 
would tip the scale would be the creation of stable marketplaces 
through a national RES.
    An interesting twist of fate has placed reservation lands in some 
of the sunniest and windiest areas in the nation. In addition, critical 
transmission corridor siting has often occurred on tribal lands. These 
two factors now present unparalleled opportunities to Tribes and their 
partners to finally develop world class wind and solar resources not 
just for the benefit of tribal communities but for the country.
    We thank the Committee for asking us to share our perspective with 
you today and look forward to the final Indian Energy Promotion and 
Parity Act.
Peter Stricker, Vice President--Strategic Asset Development
    Peter Stricker has been with Clipper since its beginning and 
initially joined Clipper as Director of Project Engineering in August 
2000. After serving within a number of senior positions at Clipper, 
including leading project development, in September 2008, he was named 
Vice President, Strategic Asset Development. An engineer by training, 
Mr. Stricker came to Clipper from Enron Wind Corp. where he served as 
Manager of Service Engineering. At Enron, he and his team of engineers 
and data analysts provided comprehensive technical support and warranty 
failure analysis for a fleet of 763 wind turbines installed worldwide. 
In early 2001, Mr. Stricker led the development of CWD's project 
portfolio to upwards of 6,500 MW distributed across the U.S. and in 
Latin America, and directed commercial engagement and delivery of 
transactions involving over 2,500 MW of project assets.
    In addition to cultivating a team skilled in the acquisition and 
development of finance-ready project assets, Mr. Stricker formalized 
origination and transaction functions to support full market entry and 
transactional capability within CWD. Mr. Stricker earned his Bachelors 
and Masters in Mechanical Engineering degrees from the University of 
Washington in Seattle, where he specialized in control system 
engineering.

    The Chairman. Mr. Stricker, thank you very much for that 
perspective. We appreciate that.
    Let me call on my colleague, Vice Chairman Barrasso.
    Senator Barrasso. Thank you very much, Mr. Chairman.
    Chairman Box, if I could visit with you. You are down in 
that kind of four corners area, Southwestern Colorado, and you 
have had phenomenal success, in my opinion, in the things that 
you have been able to accomplish. You have achieved incredible 
success in developing oil resources, gas resources, and by and 
large, I think you have done it through your own efforts, 
rather than reliance on the Bureau of Indian Affairs.
    And I am wondering if you could share with the Committee, 
tell your story, if you would, about how your tribe really 
assumed greater control over energy development on the 
reservation. When did that happen? What steps did you take? 
Because this really is incredible success.
    Mr. Box. In the 1970s, our leaders, as I spoke earlier in 
the testimony, basically because of the chipping away of 
sovereignty or the way the Bureau of Indian Affairs was 
handling the leases, recognized that they could develop the 
core capacities to do, if not a better job, with more care for 
the membership and control their own destiny with those 
resources.
    So they did, with a small amount of finances at that time, 
invest in gathering those leases together and managing those 
leases. Through those leases, they were able to get into the 
gathering not only the development of the resource of natural 
gas, but the gathering and the treatment of it through Red 
Cedar Gathering Plant. And then from there, we were able to 
take off.
    There are probably some very key component things to 
recognize in that. The way our tribal government was 
structured, the Tribal Council was able to take those steps, 
recognizing that for a period of time the membership were 
unable to receive some of those benefits that normally would 
have been available, although they were very minor at that 
time. They took a sacrifice as a whole, as a membership, in 
going into that direction.
    So it was quite difficult, and I applaud the efforts of 
those tribal leaders at that time that were able to take that 
direction, knowing that in the future better planning through 
financial planning, what we call the financial plan, which 
developed the growth fund, the permanent fund in these entities 
in which we were able to secure a protected government from 
liability, so to speak, and allow for those entities under 
their own management to make those decisions and move forward.
    And so it is quite complex in regards to how the structure 
was developed and then where it took off from there.
    Senator Barrasso. If I could ask, I know you have been a 
strong supporter of Title V of the Energy Policy Act of 2005, 
including the provisions related to the Tribal Energy Resource 
Agreements. But as you explain, some of the provisions in Title 
V and the implementing regulations have discouraged your tribe 
from entering into that. I have had some provisions that I have 
been drafting and working on to try to improve it.
    Do you have some additional ideas, things we ought to be 
considering when we are preparing amendments for Title V?
    Mr. Box. I believe what is put forth initially in the 
beginning did have concerns of many tribes in regards to the 
definition of the inherent Federal trust responsibility. I 
think that some of the things that have been provided in this 
discussion draft meet those expectations for our tribe, at the 
least, in regards to those directions.
    But also, more importantly, is the ability for tribes to 
build that core capacity. As you know, in the 2005 title, Title 
V, there were monies for that. And so that was another key 
component in regards to those TERA regulations.
    So I believe that we are very supportive of the work that 
has been done on it to date.
    Senator Barrasso. Thank you.
    Mr. Marchand, if I could please, it is my understanding 
your organization supports efforts, including the provisions in 
some of the things that I have been working on, to address the 
problem of fractionation. So having had an opportunity to 
review some of this, can you talk a little bit about what your 
thoughts are when we are preparing amendments to the Indian 
Land Consolidation Act?
    Mr. Marchand. I would just say in general, realty and land 
is always the first stumbling block involved in any 
development. Our Bureau of Indian Affairs people, many of them 
are tribal members and I think they do their best, but they are 
just really understaffed and the systems are really not working 
really well. And the tribe is usually able to get its bigger 
projects through, but it is almost impossible for the small 
business sector to get through the system.
    Fractionation is just a very difficult problem to deal 
with, and I hope we can solve it.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Tester?
    Senator Tester. Yes, thank you, Mr. Chairman.
    I want to touch a little bit on the Tribal Energy Resource 
Agreements. I will start with you, Joe.
    The information I have in front of me says that in the four 
and a half years since the Energy Policy Act of 2005 was 
adopted, and these Tribal Energy Resource Agreements were a 
part of that, that no tribe has applied for TERA. Does that 
mean no tribe has filled out the application and the 
application has not been approved? Or does that mean that no 
tribe has applied for TERA? And could you shed some light on 
why that is the case and what can be done to fix it?
    Mr. Garcia. Senator Tester, I believe part of the issues 
stem from an understanding of what the entire process is for 
applying for any grant or any program or any funding. Sometimes 
the tribes are under the impression than unless a project is 
ready to go, it is hard to apply for anything.
    That is part of the problem, but I think part of the other 
issues have to stem from the bureaucracy that the tribes face. 
And it is a matter of, I call it ``historical trauma.'' They 
have been accustomed to dealing with any funding, and the red 
tape that we had to deal with in going forward.
    So that may be part of the issue, but as far as I know, New 
Mexico tribes have not applied for any of that.
    Senator Tester. Okay.
    Chairman Box, do you see it the same way?
    Mr. Box. I would like to add on that, too, in regards to my 
statement with the TERA regulations. But there was also the 
formula, I guess, that would be for secretarial use to 
determine what core capacity really is and what that capacity 
is. And so I believe what has been developed in regards to 
proven track records of land management certainly provide more 
incentive for tribes to take on that direction.
    Senator Tester. Okay.
    Mr. Stricker, I want to talk to you a little bit. You had 
talked about incentives and some that work, some that don't 
work very well. But in the end of your presentation, you talked 
about the RPS and the need for an RPS.
    Just to boil it right down to its basics, if we don't set 
an RPS up, are we wasting our time with the incentives?
    Mr. Stricker. I would say not. I think the incentives are 
important elements of moving tribal projects forward and making 
them more competitive with non-tribal projects. But I think 
that the big picture is that the industry as a whole is 
certainly confronted with what seems to be a strong desire for 
this type of energy to be produced. But there is a declining 
electricity market, and so the RPS is needed in order to 
continue the replacement of fossil-burning generation with 
wind.
    So the problem the tribes are facing, just like the rest of 
us who are developing non-tribal projects, is that there is a 
large market that we all are selling into and the stronger the 
market, the more chance there is for success.
    Senator Tester. Okay. And you are working with the tribes 
in, well, just tell me. Which tribes are you working with to 
set up some wind development?
    Mr. Stricker. We are working with Colville. We have a study 
going on with Colville. We are negotiating an MOU with another 
tribe who I won't mention at this point.
    Senator Tester. That is fine.
    Are these the first tribes you have been in contact with to 
develop wind?
    Mr. Stricker. No. We have actually spent considerable time 
working with tribes along the Missouri River in the Dakotas. We 
haven't signed agreements with them, but we have worked a long 
way down the path towards understanding their issues and they 
understand ours better as well.
    Senator Tester. If this bill was passed, would it expedite 
your ability to sign agreements to get your projects going?
    Mr. Stricker. Yes, it would. Absolutely, yes.
    Senator Tester. Okay. Last question. I will make it real 
quick, and there are some other ones.
    But Ralph, you talked about weatherization. You said if it 
was Federal dollars, it would only be 20 houses, and with the 
State dollars combined with the Federal, you can do 100. Can 
you tell me why the money isn't flowing to the ground for 
weatherization?
    Mr. Andersen. Well, the money is flowing, I guess was my 
point.
    Senator Tester. Well, 20 is not many.
    Mr. Andersen. Well, that is strictly with Federal funds, 
but we are able to use a mix of State and Federal. And I think 
a lot of it has to do, Mr. Tester, with a number of things. One 
is income guidelines, because the cost of living is so high in 
Alaska that many households that are actually barely making it, 
that the household income would disqualify them from 
participating in the program.
    I had a long discussion with the CEO for our Housing 
Authority before coming down here, and I asked him that 
question as well. There are a whole mix of problems that are 
involved in trying to increase the amount or use of Federal 
funds in Alaska. The number one, or probably one of the top 
issues that is involved is basically the income guidelines that 
might work in America, but don't work in Alaska.
    Senator Tester. Got you. Okay. Thank you very much.
    Thank you, Mr. Chairman.
    The Chairman. Senator Murkowski?
    Senator Murkowski. Thank you, Mr. Chairman.
    Mr. Andersen, I will go ahead and follow on to Senator 
Tester's comments because I think your testimony was very 
important to put into the record today.
    I think it is difficult for people who have not been out to 
some of our villages, been out to rural Alaska and had an 
opportunity to appreciate the difficulties that are faced with 
just the day to day living and the expenses that are associated 
with being in a very remote area that is not accessible by 
road.
    So much of what you receive out in your area in Bristol Bay 
comes to you by barge or it is flown in. People say, well, you 
have barges coming up and down your river all the time. Well, 
we don't. We have two barges that come in. Sometimes you only 
have one barge a year. And to any one of you sitting out there, 
I challenge you, plan your whole business for a year, your 
whole family food sources for a year. You are the village 
store. You have to think about what your community is going to 
need because you have one barge.
    Hopefully, in the bigger communities, you are going to have 
access to two barges coming in a year. And otherwise, you are 
stuck flying in your fuel, which happens in too many of our 
villages because they misjudged. They are not able to pay for 
the fuel up front as is required.
    When I have an opportunity to bring folks from the Lower 48 
up and go out into the villages, we look at the water and 
sewer. We go into the schools, but we also go to the grocery 
store. We look at the price of a box of clothes detergent, 
Tide, and then you realize that you are paying close to $45 for 
a box of Tide. Go and price the diapers. Go and price milk, if 
you can find milk. In most of the villages, the smaller 
villages, you won't have fresh milk.
    It is a fact of what we deal with, and your testimony this 
morning was very important in trying to convey some of the 
challenges that you face. People cannot understand how you 
could live in an area where 40 percent to 45 percent of your 
income is spent on meeting your basic energy needs, when in the 
rest of the Country you may be looking to, you say, four 
percent. In some parts, it may be as high as six, seven, eight 
percent. But we are talking close to 50 percent of your income. 
So it is very important that you place that into the record.
    I wanted to ask you a question about the access to 
transmission and recognizing that we can do more with our 
energy efficiencies if we have the ability to intertie, to hook 
in with others. In some parts of the State, it is very 
difficult because of the geography, because of the distances 
that we deal with.
    We are looking to some opportunities to tie in. I know up 
in the Naknek area we are hopeful that we are going to do 
better with the geothermal resource and then be able to tie in 
as many as 11 villages to rely on that.
    From a Federal perspective, and I appreciate your role 
within AFN and your position as leadership on the Energy 
Committee there, what more can we be doing at the Federal level 
in partnering with the State to enhance and build out not only 
some of our renewable energy projects, but how we deal with the 
transmission side of it?
    Mr. Andersen. Thank you, Senator.
    There are a number of ways that assistance can be provided. 
First, I want to explain to the Committee and to the people 
listening here that I grew up in a small village. The 
population is now 20. When I was a child, the population was 
125 people, Clark's Point. I grew up without running water. I 
grew up without electricity. I grew up in very what are 
considered now primitive conditions. That was a way of life. 
And in some cases the way in some of our villages throughout 
rural Alaska, those conditions still exist.
    How can we help or how can our Federal Government help to 
deal with transmission issues? Well, one of the things that the 
Bristol Bay Partnership did is we developed the Bristol Bay 
Energy Policy and Crisis Recovery Plan. We did this a year 
before a year before the big crunch hit us. We saw what was 
coming down the pike and the partners, my counterparts in the 
organizations agreed that the most we could do, the best we 
could do now at this point is figure out a way or try to find 
ways to deal with the most immediate problems, the most 
immediate problem being the price of electricity.
    Our energy policy and plan focuses on developing interties. 
Like I mentioned in my testimony, there are some communities 
that are very closely situated where interties are a real 
natural. There are some where interties are now in place, such 
as Newhalen and Iliamna. There is an intertie at Naknek, South 
Naknek, and King Salmon. They are all intertied there.
    There is more than one issue involved here, Senator, 
because there is a definite connection between certain 
activities. And a lot of our communities, my hometown of 
Clark's Point of 20 people, we don't have the capacity there to 
develop proposals to pursue funding agreements, to develop 
complicated and technical programs and plans and things like 
that.
    One of the ways that we can use help on is really funding 
our Tribal Energy Programs, because each of the regions in 
Alaska, each of the rural areas in Alaska, this same need 
exists, except we don't have the capital or funding to cover 
costs for capacity-building, for plan development to pursue 
grants.
    The transmission issue, again we lay out a number of 
scenarios in our recommendations in the Bristol Bay Energy 
Policy and Plan, but we don't have the capital to develop any 
of them, to put them in place.
    In addition to that, there are multiple utility owners. I 
will give you an example. In Dillingham, we have a local 
resident who went and purchased wind generators for his own 
home. The problem is that the utility company was very 
reluctant to do any net metering so that he would be able to 
sell back the excess power so that he can lower his electric 
rates.
    The same kind of issue is mirrored on a much larger scale 
up at Nome, the Bering Straits region, where the Bering Straits 
Regional Corporation installed an array of wind generators and 
spent a lot of time negotiating the net metering with Nome 
utilities.
    So while there are some ways, again, that I believe we can 
use a lot of help on, but then the issues become more and more 
complicated as we try to develop some of those areas.
    Senator Murkowski. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Udall?

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you, Chairman Dorgan.
    And I first just want to thank you and your staff for all 
the hard work you have put into the Indian Energy Promotion and 
Parity Act of 2010. I think it is a very important piece of 
legislation.
    And once again, and I know you serve on the Energy 
Committee also in the Senate. In order to put ourselves as a 
Country on a path to energy independence, it is very important 
to get the tribes to play a role in that.
    And I would like to just put my opening statement in the 
record and proceed directly to questions.
    The Chairman. Without objection.
    Senator Udall. Thank you.
    [The prepared statement of Senator Udall follows:]

   Prepared Statement of Hon. Tom Udall, U.S. Senator from New Mexico
    I first would like to thank Chairman Dorgan and his staff for the 
hard work they have put into the Indian Energy Promotion and Parity Act 
of 2010, and for holding today's hearing on this important piece of 
legislation. There has been an impressive amount of outreach to tribes 
on this piece of legislation--including hearings, letters, and 
roundtable discussions on draft legislation.
    I would also like to thank all of the witnesses for joining us 
today, especially my good friend Joe Garcia from Ohkay Owingeh Pueblo 
in New Mexico. Joe is president of the All Indian Pueblo Council, and 
former president of the National Congress of American Indians. He has 
done much to benefit native communities across the country, and I 
applaud his work to promote energy development on tribal lands.
    Approximately 5 percent of the nation's land base is tribal land 
that contains approximately 10 percent of the nation's energy 
resources. Development of these resources means jobs for native 
communities, electricity in rural areas, the national security that 
comes with domestic production, and a great potential for development 
and expansion into the renewable energy sector.
    Native American Communities have long been hindered in energy 
development efforts by bureaucratic delays and complications, 
difficulty securing financing and tax credits, and a lack of access to 
the grid. Chairman Dorgan's bill that under consideration today 
addresses these longstanding problems.
    In these times of economic difficulty and international turmoil, it 
is more important than ever to remove the longstanding roadblocks to 
energy development on tribal lands. I look forward to hearing testimony 
today and to working with my colleagues on this Committee to push this 
bill forward through the legislative process.

    Senator Udall. A question for my good friend Joe Garcia 
from New Mexico, from the Ohkay-Owingeh Pueblo. I don't quite 
know what to call him. He has been President of the NCAI. He 
has been Chairman. He has extensive experience and he has done 
such a good job of working with native communities across the 
Country, and I applaud his work in promoting energy 
development.
    Everybody should also know he is a lead singer in a band. 
That is one of the best performances that shows up at many of 
the parades across New Mexico.
    Chairman Garcia, we have a provision in our draft bill to 
direct more assistance from our national laboratories to Indian 
tribes in developing their energy resources. It is my 
understanding that New Mexico labs, Los Alamos and Sandia, are 
involved in this kind of outreach, but they only do it on an ad 
hoc basis and a limited basis.
    Do you have any experience or knowledge of the labs' work 
in this area? And what could our national labs do to help 
develop tribal energy resources? Do you see a key role they 
could play there?
    Mr. Garcia. Thank you, Senator, for the introduction and 
acknowledgment. My opening statement also includes an invite to 
Chairman Dorgan, that when I first met him, we were going to 
get together and play some guitar and sing.
    [Laughter.]
    Mr. Garcia. And maybe when you leave and your retirement 
party or whatever, we can do so. That would be nice.
    The Chairman. Maybe on ``American Idol.''
    [Laughter.]
    The Chairman. It would be the only and first duet on 
``American Idol.''
    Senator Udall. That would be a good combination.
    Mr. Garcia. Yes.
    Well, first off, Senator, I think one of the issues that 
hinders progress in Indian Country is that there are these 
partnership opportunities with such places as the national 
laboratories, but it is not out in the plans, and they do do it 
ad hoc and only when tribes ask for assistance in a specific 
area.
    And so I think in terms of energy development, that is why 
it is important for expertise coming from places like the 
Department of Energy, and the partnership between tribes and 
the Department of Energy means a lot more and makes more sense 
so that we can directly work on projects that directly work on 
the development of a long-term plan, not just a piece here and 
a piece there because that randomizes everything.
    And I think, as you know, projects don't work well when you 
do it that way. And so a long-term effort would be to include 
the interactions and the partnerships of tribes directly with 
the Department of Energy, not just on weatherization, but on 
full scale development of energy.
    What we also need to do is not look at just energy 
development in the community. That is a different level, a 
different scale versus the energy development in Indian Country 
for commercial purposes. I think the big hard thing right now 
is the transmission. There is not an easy way to get that 
energy that developed from tribal lands out onto the grid for 
transmission for internal use as a community or, in the bigger 
case, export. And as you see the stumbling blocks already off 
the bench that we can't sell it to the companies, although it 
is part of Federal law that the companies have to buy energy 
that is there available.
    But the way to get it onto the grid was in my testimony 
that if the grid is not ready, then there is no way we are 
going to get the energy to distribution. And I think that is a 
lot of work that we need to do on the grid building and the 
improvement of the grid, but as well on the commercialization. 
A lot of the technology that the laboratories possess and the 
laboratories are not an expert in commercializing a lot of the 
new technology that they build.
    So we have to partner up with the tribes in identifying 
what it is that we need to commercialize, and the tribes can be 
sort of the grounds by which we can do the development with 
both Sandia and the National Lab Los Alamos, but as well 
throughout the others in the Country like Argonne, Hanford and 
other places.
    Senator Udall. Thank you very much.
    I know you make a very important point on transmission. 
Senator Murkowski said that. I know Chairman Dorgan feels that 
ways, too. In order to access on a commercial basis, we have to 
make sure when we do our transmission development we include 
Indian tribes.
    So thank you for that. Thank you for being here.
    Thank you, Chairman Dorgan.
    The Chairman. Senator Udall, thank you very much as well.
    Let me ask, if I might, Mr. Stricker you talked about the 
urgency of transmission. There is a great deal of potential for 
wind energy development on Indian reservations across the 
Country. In fact, many reservations are located where the sun 
shines a lot and the wind blows a lot. To collect energy from 
both of those sources is pretty easy to do these days with new 
technology, but to collect it and not be able to send it to a 
load center where it is needed is largely irrelevant.
    So is it your impression that if we can address the 
transmission piece of this, we will have addressed the most 
important piece for Indian reservations?
    Mr. Stricker. I think so. As you just said, there is the 
wind resource itself, and the reservations in the Upper Midwest 
is one area. Some of the best wind in the Country, and in fact 
some of the best in the world exists on Indian reservations in 
this Country.
    And so certainly the ability to get that power out to a 
market is fundamental. And I would say if you solve the 
transmission problem, you probably can treat the other problem, 
and the other problem is the market. You need to have a place 
to sell it. And in fact if could export from the Dakotas to 
Chicago, for instance, I think you are a long way to getting 
the power to a functional market.
    However, as you go through the different layers of trying 
to plan strategic deliveries of wind projects, you start to 
realize that in Illinois they are also wanting to build wind, 
and so there is some resistance to imported wind from the 
Dakotas because they want economic development in-State. And so 
you start to have more State by State issues that have to be 
resolved along with transmission.
    But I think that transmission is a fundamental and key 
piece that if there was let's say a substantial trunkline built 
from the Dakotas to Illinois, you would suddenly have companies 
buying, purchasers gravitating to that from the eastern side. 
You would have potentially tribal projects and perhaps other 
projects working together to get the transmission built.
    So you have the opportunity to do some great development 
around a transmission solution that in fact would really move 
the ball significantly down the field.
    The Chairman. Thank you.
    Mr. Garcia, first of all, thanks for all of your work. It 
is a pleasure to work with you on these issues and has been for 
a long while.
    You, in your testimony, described with interesting 
language, you say the impact of this awkward statutory and 
regulatory arrangement upon tribes is significant when you were 
talking about weatherization, the delivery of a substantial 
body of money to the States of $5 billion, with no assurance 
that the tribe was going to get the funding.
    Give me your best assessment of the experience so far with 
respect to weatherization?
    Mr. Garcia. Thank you, Mr. Chairman.
    I think it is a variety of levels of functionality, if you 
will. And certainly New Mexico is different than a lot of the 
other States because the tribal-State relationship in New 
Mexico is a lot better than, say, another State. And so we have 
a lot of partnerships within the State of New Mexico working 
with the local counties in terms of weatherization.
    But if you sum it up in the bigger picture is that the 
funds actually do go to the State and it is almost at the mercy 
of the State that you have to apply for weatherization funds. 
And that ought not to be the case. And I think Alaska is a 
demonstration that if the relationship between the tribes and 
the villages and the State are not very good, then you are 
almost already hitting the wall from the word get-go and you 
don't get access to those funds. And it is the same with a lot 
of other programs, not just the Department of Energy funds. 
That has been the dilemma.
    And I think if we overcome that, the way to overcome that 
is to provide direct funding to the tribes directly from the 
Department of Energy, but also to have working relationships 
with the Department versus having to go a roundabout way of 
getting to those funds.
    That is the only efficient way that we can do it because 
you talk about the need, you talk about the priorities, you 
talk about what you can address with the current funding, and 
the dollars, you might say the middleman is out of the picture. 
And so you have directly efficiency in the way you implement 
the funding to meet the needs of the people.
    The Chairman. Let me also say, I should have at the start, 
that Senator Barrasso has recommended in a draft some 
improvements that I think are a fine addition to what we are 
trying to do here. I appreciate his work in those areas and 
they are also incorporated in the discussions today.
    Mr. Box, I was looking at your testimony. You have, it is 
safe to say, mixed feelings about this legislation. Some parts 
of it you have concerns with, and I think it is helpful to us 
to understand your concerns.
    You have a 700,000-acre reservation. Is that correct?
    Mr. Box. Yes.
    The Chairman. Give us again a description of the energy 
that you produce. As Senator Barrasso said, you have been very 
successful.
    Mr. Box. The main energy that we produce is natural gas 
from the Northern San Juan Basin. Like most tribes, the area 
where we were situated didn't seem to be worth very much, but 
in fact it did hold that large resource. And that, in fact, is 
partly to our success is to have that resource.
    The Chairman. Have you had difficulty in accessing it, 
permitting, anything of that sort?
    Mr. Box. Secretarial approval, signatures, mostly during 
the BIA modernization era, I like to call it, millions of 
dollars because of those delays. And so these are important in 
regards to approval processes.
    The Chairman. Yes. I asked the question because of our 
experience with the Three Affiliated Tribes in North Dakota. 
The most significant oil play in America is occurring there 
now. It is called the Bakken Shale.
    Mr. Box. Yes.
    The Chairman. It is the largest assessed amount of 
recoverable oil using today's technology that has ever been 
assessed in the Lower 48 States, up to 4.3 barrels recoverable.
    What our experience was is that the Bakken extends 
throughout the Three Affiliated Tribes Reservation land and 
that there was substantial oil development north of the 
reservation; substantial development west of the reservation; a 
lot of development south of the reservation; and virtually 
none, virtually no wells being dug on the reservation, or 
drilled, I should say.
    And what we discovered was the Interior Department had four 
separate agencies that had to weigh in on a drilling permit 
request and there was, I believe, a 49-step process. Well, it 
was just like walking through thick glue to get through it and 
most of the development by oil developers, independents, they 
said: You know what? We will just go north and west and south. 
We don't need to put up with all of this. On State-owned land, 
you get a permit like that. On private-owned land, just like 
that. And if you decide you want to drill a well on the 
reservation, you are going to be waiting forever.
    So we put together a virtual one stop shop. It is not 
perfect, but I am proud to tell you I think we have 37 
producing wells right now on the reservation. And I think, and 
I may be wrong, but about 17 drilling rigs that are drilling a 
new well every 30 days. So there is a lot of activity going on 
just because we unlocked the bureaucratic glue that existed 
that prevented full access and development.
    That is why I asked you the question of what your 
experience had been.
    Mr. Box. If I may as well, I understand the question, too, 
in regard to the one stop shop. But along with secretarial 
delays and those of our agencies signatures that need to be 
taken care of, it is also the NEPA compliance. And that is an 
important part of all of this.
    It is not that we are totally against a one stop shop. What 
we are concerned about is that agencies' expertise that exist 
in these agencies that are necessary to handle approval 
processes exist and oftentimes aren't very far from each other. 
And now it is going down further into other areas, and we are 
not sure that that expertise will carry on.
    That is not all where we are concerned. It is just that it 
is a great idea. We just want to be ensured that expertise will 
also be included at those levels.
    The Chairman. Yes, I understand your point. There are a lot 
of good ideas that don't quite work out because they are not 
implemented the right way. I take your point.
    I do think in this case the ability to streamline, if in 
fact when it is implemented is indeed streamlining, is very 
important to unlock the full opportunity of energy development 
on Indian lands.
    Mr. Marchand, you made a point about one of the 
recommendations of the Vice Chairman, which I strongly support, 
and that is the funding for the consolidation of fractionated 
lands. It has been my impression that fractionation is also an 
impediment to development in many cases.
    Can you describe that impediment?
    Mr. Marchand. One example might be where a casino is 
located. We have a casino located on an allotment called MA-8, 
and there is about 60 landowners on the property. In that 
property are also subleases to the master lease, and it has 
been property that has been under development long before there 
were casinos. It is on a tourist-based lake and there is some 
leases for an RV park, for example.
    And then trying to re-plan the area and redevelop it to 
take advantage of a casino and resort development, we have had 
to deal with these master leases and different groups. It has 
just been a nightmare to kind of keep this all coordinated. We 
have spent a lot of money on litigation. We were in court, and 
nobody really wants to be there, but that is where we are at on 
this particular piece.
    And that is kind of how, you know, for top of the line 
development for the Colville has been, but it is just a real 
difficult problem everywhere you go.
    The Chairman. Let me just say Mr. Garcia needs to leave for 
the airport, so we will excuse you. Thank you for being with 
us, Joe. Thanks for all of your work. You have been a great 
friend to this committee and to Indian people all across the 
Country.
    Mr. Garcia. Thank you for the opportunity. We need to 
discuss one other item, but I think we can do that over the 
phone. It has to do with storage of energy that is developed.
    The Chairman. All right. We will plan to do that.
    Mr. Garcia. Thank you.
    The Chairman. Sorry for interrupting you, Mr. Marchand.
    But I think your description, the point you have raised is 
probably a pretty apt description of the problem of 
fractionation. And it seems to me that we ought to, as the Vice 
Chairman says, we ought to try to more aggressively address 
that because if that impedes development, full development of 
the energy potential, it means we are losing jobs, losing 
revenue opportunities in areas of the Country that most 
desperately need the revenue.
    This is important to me, and I know to Senator Barrasso as 
well, for a very important reason. Number one, our Country 
needs additional energy. We need additional production here of 
all kinds of energy to make us less dependent on foreign oil 
and to make us more energy secure.
    But even as we look at that, when we understand that a 
substantial portion of energy is available to be produced on 
Indian lands, and that is where we most need economic 
development and the creation of new jobs and new income 
streams, it just seems to us there is an urgency to connect the 
two.
    And so what we are trying to do with legislation is to 
remove impediments and to create incentives, both.
    Now, some of these issues are much, much bigger than just 
one hearing of this Committee. For example, building an 
interstate highway of transmission capability that is modern, 
that will deliver energy from where you can produce it to the 
load centers where it is needed to be used, that all sounds 
good. I can say that in one sentence. But it is the case that 
it is very, very hard to do.
    We have produced 11,000 miles of natural gas pipeline in 
the last nine years in this Country, 11,000 miles. We have 
produced 660 miles of high voltage interstate transmission 
lines. Why? Can't do it. It is very hard. You have more 
jurisdictions out there who can say no and do and will than you 
can count.
    And so we have a lot of work to do to put together a 
national plan. And by the way, this is an advertisement just a 
bit. The Energy Committee bill that we reported out included a 
lot of work I and many others did, that sets up a planning 
process, a siting process and a pricing process. You have to do 
all three, planning, siting and pricing, in order to build new 
transmission.
    And we set that up, and we involved everybody in the local 
planning, but we also, and I strongly pushed this, we also have 
backstop authority for proceeding with FERC. Ultimately, if you 
can't get it done, you have to have backstop authority for 
somebody to say here's what America is going to do. Because our 
transmission system is largely created around what used to 
exist: a big power plant and then a bunch of wires in a circle 
around the power plant that extends out 50 miles or 100 miles 
or whatever it is.
    And so that is the kind of transmission that was built in 
this Country. And then what we did is we put some patches like 
you put a patch on an inner tube between a couple of our little 
spider webs of wires in order to see if we could connect the 
systems. But that is not the same as having an interstate 
highway system of modern transmission capability.
    So I am determined to try to make that happen, which will 
unlock substantial amounts of opportunity to produce 
electricity on Indian lands all across the Country. These are, 
in many cases, some more remote areas that really need the 
opportunity to tie into a modern transmission grid system.
    So let me thank all of you for contributing to this. And 
let me also say that we are going to keep the record open for 
two weeks. We would invite you, your tribes or others 
interested in this to submit comments for the official record 
on what you see as the merit and value of both the discussion 
draft we put out earlier, as well as the discussion draft and 
points that Senator Barrasso included in this hearing. And I 
think that will give us the basis and the capability on which 
to move forward.
    Let me thank all of you, and again my apologies for being a 
bit tardy today, but this is a very important hearing for this 
Committee.
    The Committee is adjourned.
    [Whereupon, at 3:49 p.m., the Committee was adjourned.]
                            A P P E N D I X

  Prepared Statement of Hon. David Wu, U.S. Representative from Oregon



                                 ______
                                 
               Prepared Statement of the Blackfeet Tribe
    The Blackfeet Tribe is pleased to submit the following comments on 
the draft ``Indian Energy Promotion and Parity Act of 2010''. This 
draft was the subject of a hearing before the Senate Indian Affairs 
Committee on April 22, 2010.
    The Blackfeet Tribe would first like to extend its thanks to the 
Senate Indian Affairs Committee and its staff for the hard work that 
has gone into the draft bill. We commend the Committee on its 
leadership in these important matters.
    The Blackfeet Reservation consists of over 1.5 million acres of 
land. Oil and gas activity has occurred on the reservation since the 
1930s. The Tribe also has significant potential for wind energy and 
hydropower development, and also has significant timber reserves. The 
Tribe therefore has a great interest in the draft bill and its 
potential for removing the obstacles and disincentives to tribal energy 
development that has been created by current laws. Our specific 
comments are set out below.
Title I--Energy Planning
Section 101--Indian Energy Development Office
    As a general matter, the Blackfeet Tribe supports much greater 
coordination among the various federal agencies in the development of 
Indian energy resources. We have supported the idea of one-stop 
offices, and we do support the designation of a person within a 
Regional Office to coordinate and insure the timely processing of 
Indian energy material. However, we are concerned that the 
establishment of only three such Indian Energy Development Offices 
throughout Indian country will make the process more difficult, not 
less difficult for the Tribe. Unless such an office is established 
nearby, we would be concerned that the Tribe will have less access to 
the relevant agencies.
    We believe that the issues of how to best coordinate the activities 
of the various federal agencies may need some additional consideration 
given the varying circumstances among the tribes as to location, size 
and significance of resources, and the particular expertise of 
officials within the various agencies.
Section 102--Indian Energy Program Integration Demonstration Projects
    We are not clear what Indian energy issue or problem this section 
is intended to address. The section appears to establish a very 
complicated process, but the benefits of the process for Indian energy 
development are not entirely apparent. We do support a process by which 
regulations can be waived where appropriate.
Section 103--Pre-Development Feasibility Activities
    The Blackfeet Tribe fully supports this section which allows for 
certain activities to be carried out without Secretarial approval to 
determine the feasibility of, or in preparation, for development of a 
renewable energy project, including the construction of temporary 
facilities. This provision will greatly facilitate the decision making 
process on tribal energy projects.
Section 104--Comprehensive Energy Resource Planning
    The Blackfeet Tribe strongly believes that the manner in which the 
National Environmental Policy Act (NEPA) is applied to Indian lands 
needs full review and reconsideration. While the development of 
programmatic documents under NEPA is helpful to streamline the NEPA 
process as applied to tribal energy development, as this section 
provides, it does not get at the heart of the problem--that Indian 
lands are not public lands and should not be treated as if they are. 
While the federal government is required to protect the public interest 
in development that occurs on public lands, there is no similar public 
interest in the development that occurs on Indian lands. Such 
development is strictly a matter for tribes, in their sovereign 
capacities, to determine. The NEPA process puts tribes at a very 
significant disadvantage in terms of time and cost compared to 
development on private lands where NEPA does not apply. This larger 
issue is what needs to be addressed.
    It is also not clear how this section is intended to work with or 
coordinate with the TERA process. A comprehensive energy resource plan 
is itself subject to NEPA and appears to require a more significant 
public process than might be required under a TERA.
Section 106--Appraisals
    The Tribe supports this section which allows for alternatives for 
the conduct of appraisals, including tribal appraisals through 638 
contracts or other arrangements and third party appraisers. Appraisals 
are required in order to obtain federal approval for a variety of 
activities, and this section will allow alternatives that will 
facilitate such approvals, given the significant delays in BIA 
appraisals. This provision will also allow for alternatives in 
conducting appraisals where BIA does not necessarily have the necessary 
expertise.
Section 108--Preference for Hydroelectric Preliminary Permits
    The Tribe strongly supports this provision which provides a 
preference for tribes in the issuance of preliminary permits for 
hydroelectric development under the Federal Power Act in the same 
manner as States and municipalities currently have preference. At the 
present time, states and municipal governments have preference to 
develop tribal water resources for hydro purposes on reservations, but 
the Tribe, itself, has no similar preference. We agree that situation 
needs to be remedied, and this provision is long overdue.
Section 109--Study on Inclusion of Indian Tribes in National and 
        Regional Electrical Infrastructure Planning
    The Blackfeet Tribe has significant potential for development of 
both wind power and hydropower. However the feasibility of such 
projects is greatly impacted by the lack of transmission facilities. 
Therefore, the Tribe fully supports this section which will identify 
alternatives to address the lack of access to critical transmission 
facilities.
    The Blackfeet Tribe also supports Section 105 (Department of Energy 
Indian Energy Education and Planning Management Assistance) and Section 
107 (Technical Assistance and National Laboratories of the Department 
of Energy).
Title II--Energy Development and Energy Efficiency
Section 201--Lease and Rights of Way on Indian Lands
    The Tribe supports this section which allows for approval of all 
necessary rights of way as part of a lease. In general, the Tribe also 
supports the increase of lease terms and rights of way to 99 years 
which will allow tribes more flexibility in entering into lease 
arrangements.
Section 202--Application for Permit to Drill Fees Not Application
    The Tribe fully supports this provision which will significantly 
level the field in tribal development.
Section 204--Environmental Review
    The Tribe fully supports this section which allows tribes to 
conduct environmental reviews associated with Department of Energy 
projects. Again, however, the Tribe believes that the more fundamental 
issue of whether and how NEPA will apply on Indian lands must be 
addressed.
    The Tribe also supports the other sections of this Title, including 
Distributed Energy and Community Transmission Demonstration Projects, 
Department of Energy Loan Guarantee Program, Inclusion of Tribes in 
State Energy Conservation Plan Program, Home Weatherization Assistance, 
and Tribal Forest Assets Protection.
Title III--Energy Financing
    Tribes have been unable to take advantage of tax credits and other 
accounting provisions in the law that are intended to encourage energy 
development. The Blackfeet Tribe therefore fully supports the 
provisions in Title III that will allow tribes to benefit from these 
tax credits and accounting provisions. Without such benefits, Indian 
energy development in some cases may not otherwise be feasible.
Title IV--Amendment to Indian Energy Policy Laws
    The Blackfeet Tribe further supports the proposed amendments to 
Indian energy policies.
    Again, we appreciate the opportunity to comment on the draft Indian 
Energy Promotion and Parity Act of 2010, and thank the committee for 
making these important issues a priority within the Committee.
                                 ______
                                 
 Prepared Statement of Curtis R. Cesspooch, Chairman, Ute Indian Tribe 
            Business Committee, Uintah and Ouray Reservation



                                 ______
                                 
   Prepared Statement of Hon. Michael Finley, Chairman, Confederated 
                   Tribes of the Colville Reservation




                                 ______
                                 
               Prepared Statement of the Pueblo of Laguna
    At the Pueblo of Laguna, our history and destiny are intertwined 
with energy production. The Pueblo Indians built the Country's first 
passive solar homes. We used the sun to warm us in the winter and 
careful planning brought us cool interiors in the summer.
    At the Pueblo of Laguna, we have also lived with the consequences 
of short sighted energy policy that would sacrifice human health and 
our fragile environment. As home to the world's largest open pit 
uranium mine for decades, we know first-hand the long lasting harm that 
energy production can cause--our miners and villages are still 
experiencing high rates of disease associated with radiation exposure, 
and after years of clean-up that met federal standards of the time, we 
can still see leaching from the old mine that covers nearly 1,000 acres 
of now unusable land.
    Because the Pueblo lives in the arid Southwest, we will bear a 
disproportionate burden of an anticipated climate change that will 
bring hotter summers, longer droughts, and less winter snow to feed our 
rivers, agriculture, wildlife and traditions.
    At the Pueblo of Laguna, we do not want to be passive in the face 
of climate change. We refuse to stand by while others develop solutions 
that may not solve our problems. We have the experience and resources 
to be active in both managing the negative effects from climate change, 
and developing energy production solutions that draw upon our historic 
reliance on the natural environment to warm us and give us sustenance.
    As an example, at the Pueblo of Laguna there are three (3) surveyed 
sites that could provide up to 400 MW of solar derived electricity if 
fully developed. The sites are adjacent to three (3) different high 
voltage electric transmission lines. Two of the solar sites are also 
crossed by a gas transmission line that could be used to complement a 
solar energy facility. The Pueblo is willing to invest its own funds in 
the development of these sites.
    Under the existing federal incentives and transmission regulations, 
however, these sites may not be developed because federal policy does 
not encourage alternative energy investment in Indian Country in the 
same manner as off-Reservation development. Utilization of the existing 
transmission lines is moribund and complicated because of FERC 
regulations and bottlenecked queues for transmission.
    Indeed, in 2008, the Pueblo of Laguna invested time, energy and 
resources as the land partner with a large solar developer interested 
in providing 175,000 megawatt hours to the Public Service Company of 
New Mexico. When PNM abruptly withdrew its RFP for the solar energy, 
our potential solar partner pulled out of Laguna. Because we were 
relying on the partner's utilization of federal incentives to make the 
deal work and the transmission lines could presently only be used to 
supply PNM--this ideal solar field is not in development. Our 
experience highlights several problems that Congress can address:

        First, Tribes need to be able to capture all the federal tax 
        incentives for generating new renewable energy plants similar 
        to non-Tribal businesses.

         Unfortunately, the existing federal tax incentives do not 
        favor a model of energy development on Indian lands where the 
        Tribes are full partners and beneficiaries in the business. The 
        tax incentives, if not monetized, are useless to Tribes, and 
        make Tribes very unattractive partners. The Pueblo has 
        repeatedly called for Congress to offer the same incentives 
        available to non-Indian renewable energy developers available 
        to tribally owned renewable energy projects. We asked Congress 
        to consider monetizing the production tax credits and the 
        accelerated depreciation. We are pleased that the proposed 
        Indian Energy bill would allow for the transfer of tax credits 
        for electricity produced from renewable resources on Indian 
        lands. However, we are disappointed that the bill does not 
        address the accelerated depreciation that is available to 
        developers off-reservation. It is only through the combination 
        of both the tax credits and the accelerated depreciation that 
        most renewable projects can be financially feasible. Like 
        Tribes throughout the country, we call upon Congress to 
        monetize the accelerated depreciation. The impact to the 
        federal treasury would be the same, but the potential benefit 
        to Indian country would be significant.

         Sect. 303 of the draft bill extends the accelerated 
        depreciation provisions found in IRC Sect. 168(j) for property 
        on Indian reservations by deleting the termination clause at 
        IRC 168(j)(8). Still, the benefits of accelerated depreciation 
        accrue to non-tribal owners, not tribes. There is no provision 
        for tribal owners to transfer this benefit to another owner as 
        is now allowed for Production Tax Credits, much less to sell 
        the accelerated depreciation benefit outright when a tribe is 
        the sole owner.

        Second, Tribes should be able to monetize the tax credits on 
        projects they undertake themselves.

         Section 301 only works if the Tribe can assign production to a 
        partner in a renewable energy facility thus forcing Tribes to 
        have a partner if they are to get the benefits of the tax 
        credits.

         We urge Congress not to limit the ability to monetize the tax 
        credits to solely a tribe's partner in the energy generation. 
        While certain large scale projects would require a partner, 
        there are many small scale projects that a Tribe may wish to 
        pursue without a partner.

         Requiring a tax paying partner would also add layers of 
        complication to the deal structure, which necessarily adds cost 
        to the project. The hundreds of thousands of dollars of extra 
        cost could financially doom a smaller project. We know of at 
        least one project that has at least $1 million in incremental 
        structuring costs that could be avoided under a monetized tax 
        credit approach.

         The Pueblo urges Congress to develop a simple solution to the 
        need to monetize the tax credit and accelerated depreciation 
        benefits. Allow Tribes to sell the tax benefits on the market 
        to any taxable entity. The cost to the Treasury would be same, 
        yet the cost to the Tribes would be significantly less--putting 
        more money directly into the renewable energy project instead 
        of into financial intermediaries.

        Third, the renewable energy potential of Indian Country must 
        not be restricted by the transmission bottlenecks. Tribes must 
        be included in national and regional transmission planning and 
        there must be a reform of the FERC queue process.

         Sec. 109 of the draft bill calls for a study on inclusion of 
        Indian tribes in national and regional electrical 
        infrastructure planning. The study will assess the potential 
        for electric generation on Indian land from renewable energy 
        resources and the electrical transmission needs relating to 
        carrying that energy to the market. The Pueblo has already 
        identified the valuable potential for solar electricity 
        generation on its land and determined that access to close-by 
        PNM transmission lines are key to the viability of that solar 
        project.

         Once again, Tribes do not want to be passive participants. The 
        transmission lines crossing our reservations should work for us 
        while at the same time helping to transition our country to 
        clean energy. The transmission lines crossing Laguna have 
        excess capacity for energy traveling away from Albuquerque. If 
        PNM does not want to buy power from a nearby reservation-based 
        solar plant, then we should be able to send that electricity to 
        other markets.

         If the country is to get the benefit of the tremendous 
        renewable resource potential located in the heart of Indian 
        Country in the Southwest, then the reform of the transmission 
        grid needs to take into account our unique position and 
        opportunities. We need to be able to move renewable energy out 
        to the rest of the country. The bottlenecked queue process 
        means that even if we had solar electricity to sell tomorrow, 
        we could not feed it into the grid because of the two year plus 
        backlog in the FERC regulated queue.

        Fourth, Congress should explicitly state that Tribes retain 
        jurisdiction over rights of ways.

         Section 201 of the draft bill provides for the ``inclusion of 
        necessary and reasonable rights-of-way in leases'' of Indian 
        land. The Pueblo of Laguna reminds Congress that several courts 
        have interpreted rights of way granted by the Secretary as the 
        equivalent of non-Indian land. Tribes never intended rights of 
        way to be transformed into non-Indian land. We have lost too 
        much land over the centuries to allow the courts to decree that 
        when we allow others to use our land for energy or 
        transportation, we are giving up our jurisdiction over that 
        land. At the Pueblo of Laguna we will no longer use the right 
        of way statutes to grant easements across our Reservation. 
        Instead, we will utilize the leasing statutes. We recently 
        concluded two energy transmission right of way renewals using a 
        lease instead of a right of way. We urge the Indian Affairs 
        Committee to ensure that any legislation it proposes to modify 
        the right of way or leasing statutes preserve the ability of 
        Tribes to use leases for expiring rights of way, and contain an 
        explicit statement that it is not the intent of Congress to 
        strip Tribes of jurisdiction over their lands even if there is 
        an existing right of way. Since many energy rights of way will 
        not come up for renewal for decades, an express congressional 
        statement that Tribes retain jurisdiction in rights of way 
        would resolve the problems posed by Strate and lead to better 
        cooperation between energy companies, Tribes and the states.

        Fifth, eliminate NEPA's application to approvals of leases or 
        rights of way.

         A significant portion of the bill addresses the delays that 
        occur in the permitting process when developing energy projects 
        in Indian country. In some projects where there is no direct 
        federal funding, the only federal action is approval of the 
        lease or right of way. Tribal leaders have been arguing for 
        years that this application of NEPA to tribal lands places 
        development on tribal lands at an unfair advantage when 
        compared to development on private lands. The fact that the 
        United States has a trust obligation to approve the lease, 
        should not impose upon tribal projects additional burdens--the 
        trust relationship becomes a hardship rather than a benefit. 
        Eliminating NEPA's application to approval of leases will bring 
        tribal developments into the same approval process timeline as 
        other projects occurring on non-Indian, non-federal lands. It 
        is the simplest and quickest way to remedy the finding set out 
        in Section 2(a)(2)(B) that ``Federal policies have created 
        uncertainty and inequality regarding tribal energy 
        development.''

        Finally, eliminate dual taxation on energy projects.

         At the Roundtable discussion on Indian Energy legislation held 
        in Albuquerque New Mexico, our representatives raised the issue 
        of dual taxation and called upon Congress to eliminate the 
        burden that dual taxation would place on energy development in 
        Indian Country. State and local taxes should not apply to 
        tribal renewable energy projects, since tribes provide all 
        services for such facilities, which have little or no off-
        reservation impact. As an example, in our negotiations over the 
        solar project, the non-Indian developer was asking the Pueblo 
        to waive its possessory interest taxes because they were going 
        to have to pay the county property tax on the lease. The Tribal 
        tax revenue was an important benefit of the project that would 
        have been hard to give up. Since there is not yet significant 
        renewable energy development in place in Indian Country, a 
        prospective pronouncement from Congress disallowing State and 
        County taxation of projects located on trust lands would not 
        have any negative impact on existing revenue streams to those 
        local governments.
                                 ______
                                 
    Prepared Statement of Hon. Marty Shuravloff, Chairman, National 
                    American Indian Housing Council



                                 ______
                                 
 Prepared Statement of Hon. Ron Suppah, Chair, Confederated Tribes of 
              the Warm Springs Reservation Tribal Council




                                 ______
                                 
 Prepared Statement of Jeff Crawford, Attorney General, Forest County 
                          Potawatomi Community
    On behalf of the Forest County Potawatomi Community (``FCPC'' or 
``Tribe''), I would like to greatly thank the Senate Committee on 
Indian Affairs (the ``Committee'') for its concern about and 
understanding of Tribal energy issues as shown in its preparation of 
the Draft Indian Energy Promotion and Parity Act of 2010 (the ``Draft 
Act''). The Tribe strongly supports your efforts to promote renewable 
and other energy development and energy-efficiency projects in Indian 
Country.
    The provisions in the Draft Act are greatly needed and will 
significantly benefit both Indian Country and our nation as a whole, 
since the Draft Act will allow Indian tribes more of an equal playing 
field in developing renewable energy and energy-efficiency projects. 
This is particularly important because of the vast renewable as well as 
traditional energy resources that tribal lands possess and because of 
the significant present hurdles to developing those resources.
    As is discussed below, FCPC has made it a great priority to 
implement energy-efficiency measures and to develop its available 
renewable resources. However, it presently faces significant hurdles in 
implementing these projects. Many of these hurdles would be addressed 
through passage of the Draft Act. These comments focus on some of the 
key elements of the Draft Act for the Tribe, as well as modifications 
and additions to the Draft Act to help address additional hurdles that 
the Tribe faces.
    Among the most important aspects of the Draft Act are the 
provisions that put tribes on an even playing field with other 
renewable energy developers, by being able to utilize production tax 
credits, investment tax credits and grants in lieu of investment tax 
credits. This is crucial, given the critical importance of these tax 
credits and grants to making renewable energy projects economically 
viable. Accordingly, FCPC wishes to especially stress the importance of 
these provisions in the Draft Act. In addition, because small changes 
to these provisions would make them substantially more valuable to 
tribes such as FCPC who are focused on developing their renewable 
assets, these comments also include suggested modifications to these 
provisions of the Draft Act.
Background Regarding FCPC Renewable Energy and Energy-Efficiency 
        Initiatives
    Because of the Tribe's long dedication to protection of the 
environment and because of the Tribe's goal of becoming energy 
independent through the use of only renewable carbon-free or carbon-
neutral resources, the Tribe has taken significant steps to improve its 
energy efficiency and to develop its renewable resources.
    Energy-efficiency efforts. The Tribe has implemented an extensive 
energy-efficiency program that has included energy audits of all of the 
Tribe's major energy-using buildings. These audits have identified over 
100 potential energy-efficiency measures, which the Tribe has been 
working diligently to implement. As a result, the Tribe now uses 11.6 
percent less energy per square foot of building space and has 19.7 
percent less carbon emissions than in 2007. The Tribe is continuing to 
put in place major energy-efficiency projects, in a continuing effort 
to improve its overall energy efficiency. However, many of these 
additional projects require substantial capital investments. 
Accordingly, the provisions in the Draft Act that provide incentives 
for energy-efficiency projects are very important to the Tribe's 
continuing efforts to become more energy efficient and to lower its 
carbon profile. In addition, as discussed below, allowing tribes to 
transfer energy-efficiency tax credits, as other governmental units are 
presently able to do, would be a very beneficial addition to the Draft 
Act.
    Renewable energy development. The Tribe is taking a number of steps 
to develop its available renewable resources. These steps include 
developing its Community Renewable Energy Project that utilizes the 
extensive forestry biomass material on and around the Tribe's 
Reservation, as well as biogas from digested waste materials, to 
produce green energy and steam for use by the Tribe and sale to its 
utility and potentially other third parties. The Project also includes 
a biomass drying facility that produces significant amounts of dried 
wood chips both for the on-Reservation biomass/biogas generation 
facility and for use to displace significant amounts of coal in 
existing off-Reservation power plants.
    On January 21, 2010, the U.S. Department of Energy (DOE) named the 
Tribe as one of the only five communities nationwide, and the only 
tribe, to receive the competitive Community Renewable Energy Deployment 
Grant. Under this grant, the Tribe would become a ``showcase'' 
renewable community, showing other communities how to become energy 
independent in a sustainable manner. DOE awarded the Tribe a potential 
$2.6 million grant based on DOE's recognition of the Tribe's 
longstanding environmental commitment and because of the thoroughness 
of the Tribe's application and its renewable energy plan. The Tribe's 
application included several renewable energy components, including the 
biomass/biogas energy and steam system and wood chip-drying facility 
described above, as well as smaller biomass heating and wind and solar 
generating systems.
    The Tribe is also performing a feasibility analysis to potentially 
develop a biogas digester and co-generation facility that will utilize 
waste from the Tribe's Milwaukee Casino and surrounding businesses to 
produce green energy and steam. In addition, the Tribe is evaluating 
installing a large geothermal heating and cooling system to serve its 
historic Concordia Trust Property, which is located in a Milwaukee 
urban neighborhood, as well as potentially the surrounding area.
    All of these projects involve significant planning and capital 
resources, as well as permitting and other complexities. Accordingly, 
the provisions in the Draft Act are very important to help make sure 
that these projects become a reality. In addition, it is very important 
that the Draft Act contain the suggested modifications below to help 
ensure that it is beneficial to FCPC's renewable energy projects, as 
well as numerous other projects in Indian Country.
FCPC Comments on Title I of the Draft Act
    FCPC's strong support for federal program integration in Title I. 
FCPC strongly supports Title I of the Draft Act, which allows for 
integrated federal support of Tribal energy projects through 
comprehensive planning, expedited permitting, and coordinated technical 
assistance. This is a critical issue for Indian Country, where agencies 
of overlapping jurisdiction and assistance are often involved in 
renewable energy projects. This is the case with the Tribe's Community 
Renewable Energy Project. Accordingly, the Tribe greatly appreciates 
the provisions in Title I that provide for streamlining and 
coordination among federal agencies of Indian energy matters and notes 
that its Community Renewable Energy Project would be significantly 
benefitted if it could participate as a Indian Energy Program 
Integration Demonstration Project.
    FCPC's strong support for development of Indian Energy Development 
Offices and request for office in Midwest Region. The Tribe also 
strongly supports establishing Indian Energy Development Offices in 
regional agency offices as one-stop shops for timely processing of 
Indian energy projects. The Tribe agrees that it is very important to 
focus on efficient processing of Indian energy matters, since tribes 
are a very important source of renewable and traditional energy and any 
slowdowns in processing Indian energy matters hurts both Indian Country 
and our country as a whole. The Tribe notes that it is very important 
to have an Indian Energy Development Office in the BIA Midwest Regional 
Office, which serves Minnesota, Michigan, Wisconsin and Iowa, given the 
significant biomass and wind energy resources available in this area. 
It is also very important that this office have expertise with respect 
to these and other renewable energy resources available in this area. 
Accordingly, the Tribe respectfully requests that the Draft Act 
designate that one of the Indian Energy Development Offices is to be 
located in the BIA Midwest Regional Office and that it focus on 
renewable energy resources.
FCPC Comments on Title II of the Draft Act
    FCPC's strong support for distributed demonstration projects and 
FCPC's noting of need for funding of projects. The Tribe also strongly 
supports Title II of the Draft Act. In particular, the Tribe supports 
Section 203, which calls for the Department of Energy to conduct at 
least five distributed energy demonstration projects. However, FCPC 
notes the importance of making sure that there is adequate funding for 
these demonstration projects. Accordingly, FCPC respectfully requests 
that efforts be taken to ensure adequate funding for these important 
demonstration projects.
    FCPC's strong support for amendments of DOE loan program and FCPC's 
noting of need for immediate effect of changes. The Tribe also strongly 
supports the amendments to the Department of Energy Loan Guarantee 
Program in Section 205 of the Draft Act. Since many Indian Country 
energy projects require significant private investment to make them 
work (especially if the investment tax credit, production tax credit 
and grant in lieu of investment tax credit rules are not changed), it 
is very important to make sure that DOE Indian loan guarantees are 
available to tribal energy resource development organizations, as well 
as tribes themselves. However, since these loan guarantees are 
important right now, FCPC respectfully requests that the changes to the 
Energy Policy Act of 1992 reflected in Section 205 take effect 
immediately, rather than up to one year after enactment of the Draft 
Act.
    FCPC's strong support for inclusion of tribes in State Energy 
Conservation and Home Weatherization Programs. The Tribe also strongly 
supports both the inclusion of tribes in the State Energy Conservation 
Plan Program (Section 206) and the Home Weatherization Assistance 
Program (Section 207). The Tribe strongly concurs with the drafters 
that there should be at least a 5 percent set aside for tribes under 
the State Energy Conservation Plan Program and at least a 10 percent 
set aside for tribes under the Home Weatherization Assistance Program. 
These levels of funding are critical to help ensure the development of 
energy efficiency, weatherization, and renewable resources in Indian 
Country and to address historic lack of funding for Indian Country in 
these important areas.
    Request for effective allocation system for Section 206 like that 
in Section 207. The Tribe notes that Section 206, regarding inclusion 
of Indian tribes in the State Energy Conservation Plan Program does not 
set forth factors regarding how resources under this program should be 
allocated among tribes. FCPC respectfully recommends that Section 206 
include an allocation provision similar to that provided under Section 
207, regarding home weatherization assistance. This would allow for one 
third of the funds to be allocated in equal shares among tribes that 
elect to receive funds, while two thirds are allocated under 
competitive grants. This would help ensure that sufficient funding 
flows to tribes that have well-developed plans for projects that can be 
effectively implemented once competitive funding is obtained, while 
still ensuring that all tribes have access to funds.
    Suggestion to not prioritize building repair and construction over 
new heating and cooling equipment in Section 207. With respect to the 
Home Weatherization Assistance Program, the Tribe strongly supports the 
provisions that recognize the government-to-government and trust 
relationships between the United States and Indian tribes and therefore 
remove potential barriers to the use of weatherization assistance funds 
such as energy audits, grant limitations, income and other 
administrative and other eligibility requirements. The Tribe notes, 
however, that the requirement that activities funded primarily involve 
the acquisition and installation of energy-efficient windows and doors 
and the repair, replacement or installation of floors, walls and 
ceilings and only secondarily involve the acquisition and installation 
of heating and cooling equipment may not allow tribal members to 
achieve maximum energy-efficiency gains. While for some Indian 
households the installation of energy efficient windows and doors and 
the repair, replacement or installation of floors, walls and ceilings 
may be the most pressing energy-efficiency need, with respect to other 
Indian households, with older and inefficient heating and cooling 
equipment, installation of new equipment may be a substantially more 
cost-effective measure. Accordingly, the Tribe respectfully recommends 
that the Draft Act remove the distinction in priority between energy-
efficiency measures related to building repair and construction and 
measures to install efficient heating and cooling equipment.
    FCPC's strong support for and request for modification and 
clarification of woody biomass demonstration projects. The Tribe also 
strongly supports the addition of woody biomass demonstration projects 
to the Tribal Forest Protection Act of 2004, as reflected in Section 
208 of the Draft Act. This provision, which allows for contracts 
between tribes and the Departments of Agriculture and Interior to 
provide reliable supplies of woody biomass from federal lands for 
Indian biomass demonstration projects, is critically important for 
biomass energy projects, such as the Tribe's Community Renewable Energy 
Project. While tribes such as FCPC often have significant forestry 
resources, to make a biomass-energy project feasible, it is often 
critical to obtain substantial additional forestry material. That is 
the case with the Tribe's Community Renewable Energy Project.
    The Tribe respectfully requests that the drafters add to the 
selection criteria whether the proposed demonstration would add to the 
electric reliability of the Indian land and surrounding areas. Many 
rural tribes, such as FCPC, are located in areas with poor electric 
reliability, and the siting of new biomass generation in these areas 
can provide significant reliability as well as renewable energy 
benefits. This added electric reliability is key to further economic 
development in Indian Country.
    In addition, the Tribe respectfully requests that this section be 
clarified to indicate that contracts can be entered between tribes and 
the U.S. Government to provide woody biomass so long as any portion of 
the tribe's reservation is adjacent to any portion of the federal 
lands. This confirmation is important, since many Indian lands, such as 
the FCPC Reservation, are ``checker boarded.'' This checker boarding, 
combined with the checker boarding of adjacent or nearby federal lands, 
such as the Nicolet National Forest (which is adjacent to portions of 
the FCPC Reservation but not others) may create confusion regarding 
whether a tribe such as FCPC can enter into contracts with various 
portions of the federal land at issue. With respect to the Tribe's 
Community Renewable Energy Project, it appears likely that the most 
effective location for the biomass/biogas generation facility may be on 
Reservation lands that are not directly adjacent to the Nicolet 
National Forest. Accordingly, the Tribe respectfully requests that this 
provision be modified to clarify that contracts can be entered into by 
tribes and the Departments of Agriculture and Interior for federal 
lands that are adjacent to any portion of a tribe's reservation.
FCPC Comments on Title III
    FCPC very strongly supports Title III of the Draft Act, especially 
the provisions that bring tribes into parity with states and local 
governments and private individuals with respect to production tax 
credit, investment tax credits and grants in lieu of investment tax 
credits.
    FCPC's strong support for Sections 301 and 302 and request for 
limited modifications to substantially increase flexibility and value 
of credits to tribes. The Tribe welcomes and strongly supports Sections 
301 and 302, which would allow tribes to at least indirectly take 
advantage of federal tax credits for investments in renewable energy 
projects. However, the Tribe respectfully suggests that the transaction 
costs associated with the transfer of these credits could be 
dramatically decreased, and that both the value of the credits and 
tribal flexibility with respect to Indian energy projects could be 
dramatically increased, if tribes could transfer these credits to 
taxable parties that do not have an ownership interest in a tribal 
energy facility or in tribal energy equipment. The Tribe respectfully 
proposes below, language that would allow tribes to more freely 
transfer these tax credits:

   Section 301: in proposed Section 45(e)(3)(B)(i) of the Code, 
        strike the words ``who has an ownership interest in the gross 
        sales from such facility'' immediately following the words 
        ``the Indian tribe may assign to any other person.''

   Section 302: in proposed Section 48(a)(6)(A) of the Code, 
        strike the words ``who has an ownership interest in the 
        property'' immediately following the words ``such government 
        may assign to any other person.''

    This added flexibility should greatly aid the development of Indian 
energy project without adding any additional costs to the Federal 
Government.
    FCPC's strong support for extension of Treasury grants to tribes. 
The Tribe also welcomes and very strongly supports extension of the 
Treasury grants to tribes. This change is critical since it allows, for 
the first time, tribes to own their renewable energy projects, while 
receiving critical financial incentives, available to other entities. 
This will help tribes achieve true energy autonomy. However, while 
extending the Treasury grants to tribes brings tribes closer to parity 
with for-profit developers of renewable energy projects, the Code still 
imposes a number of limitations on depreciation deductions for projects 
owned in part by, or leased to, tribal governments. These include the 
requirement that owners of projects leased to, or owned in partnership 
with, tribal governments calculate depreciation deductions for those 
projects using a straight-line depreciation method and much longer 
recovery periods than would be available under the modified accelerated 
cost recovery system. They also include the general limitation of 
losses imposed on owners of projects leased to tribal governments. 
These limitations on losses, and particularly the limitations on 
depreciation deductions attributable to property leased to or owned in 
part by tribal governments, impedes tribal governments from exercising 
control over renewable energy projects on Indian land and therefore 
hampers tribal energy autonomy. The Tribe believes that a logical--and 
enormously beneficial--corollary to the extension of Treasury grants to 
tribes would be to relax these limitations on a very limited basis and 
allow for-profit entities that work with tribes to develop renewable 
energy projects on Indian lands to take advantage of the accelerated 
depreciation generally available to for-profit entities that place 
business property in service on Indian lands. The Tribe feels that such 
a rule, properly tailored to cover only renewable energy projects that 
would otherwise be eligible for the Treasury grants, would remove a key 
remaining imbalance between tribes and for-profit developers of 
renewable energy projects, and would thus be integral to helping tribes 
take control of and develop the energy resources on their lands. The 
Tribe would, of course, be happy to work with the Committee in crafting 
appropriate language to address this issue.
    Request for harmonization of expiration dates of tax credits and 
grants. The Tribe respectfully notes a disconnect between both the 
placed-in-service deadline for the Treasury grants (December 31, 2015) 
and the expiration of the provision allowing tribes to transfer ITCs 
(December 31, 2014) and the latest placed-in-service deadline under the 
ITCs (December 31, 2016). The Tribe respectfully acknowledges that 
there may be myriad legislative concerns underlying this disconnect. 
Nevertheless, for simplicity in the tax code, and to ensure that the 
tribes have flexibility to choose the most appropriate ownership 
structure for a renewable energy project, the Tribe respectfully 
suggests that these expiry dates be harmonized to all fall on December 
31, 2016.
    Request for equal playing field regarding energy-efficiency tax 
incentives. The Draft Act does not include provision for tribes to take 
advantage of federal income tax incentives for energy-efficiency 
projects. Currently, tribes are shut out of energy-efficiency tax 
incentives that federal, state and local governments can allocate to 
the developers of their energy-efficiency projects. See, U.S.C. 
179D (d)(4). Unlike federal, state and local governments, 
which are allowed to transfer these incentives to the developer of 
their energy-efficiency projects, tribes are provided no such 
opportunity. These energy-efficiency tax incentives are critical to 
help FCPC and other tribes implement significant energy-efficiency 
initiatives. Accordingly, FCPC respectfully suggests that the Draft Act 
should allow for tribes to be provided equal access to energy-
efficiency tax incentives as are other government entities. This could 
occur simply by adding federally-recognized Indian tribes to the list 
of governmental entities that can allocate the tax incentive to the 
person primarily responsible for designing the energy-efficiency 
improvements.
    Thank you for your consideration of our comments, and we look 
forward to working with you to help ensure that tribal energy 
development (including renewable-energy development) and tribal energy-
efficiency measures can be successfully implemented.
                                 ______
                                 
  Prepared Statement of Hon. Edward L. Metcalf, Chairperson, Coquille 
                              Indian Tribe



                                 ______
                                 
                                             Vincent Yazzie
                                         Flagstaff, AZ, May 5, 2010
Dear Honorable Senators,
    I have been reading the draft version of the Indian Energy 
Promotion and Parity Act of 2010.
    It almost reminds me of the last chapter in the Book of Revelation. 
Kill in the Name of energy development. The tribal entities will run 
rough shod over the indigenous people for that gold, silver, uranium, 
coal, peat, oil, gas, etc.
    Again we have been pushed, shoved, and harassed off good grazing 
into the deserts to live humble lives many years ago. Now there is 
uranium, coal, oil, and gas under those lands and now you send 
holocaust guards to do the dirty work of moving their own people off 
the land and paying them in coupons.
    At 36 degrees 7 minutes 54.52 seconds North, 111 degrees 14 minutes 
22.90 seconds West, WGS 84 on Google Earth is a blown steam plant. A 
Navajo Navy man ran the steam plant, but he retired and the people 
replacing him did not know how to run it. One day it blew up spreading 
asbestos threw out the whole building.
    The tribes will start a power plant, but Indians will not be 
running it. If Indians are going to be running power plants, they need 
to spend two years at another power plant shadowing power plant people. 
Do not let the BIA train the people or you get another blown up steam 
plant.
    Another broken dam is at 36 degrees 3 minutes and 10.31 seconds 
North, 110 degrees, 35 minutes, 8.71 seconds West WGS 84 Google Earth.
    Another broken dam is at 35 degrees, 46 minutes, 57.29 seconds 
North, 109 degrees, 6 minutes, 21.36 seconds West. The dam was built 
and someone used too much plastic explosive and drained the lake.
    Giving tribes waivers is not good if they already had a history of 
messing things up.
    I say table the legislation.
                                             Vincent Yazzie
                                 ______
                                 
    **A copy of the Discussion Draft on the Indian Energy Promotion and 
Parity Act of 2010 has been retained in Committee files and can be 
found at www.indian.senate.gov under ``Issues''.**

                                  
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