[Senate Hearing 112-388]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 112-388
 
    STRENGTHENING SELF-SUFFICIENCY: OVERCOMING BARRIERS TO ECONOMIC 

                   DEVELOPMENT IN NATIVE COMMUNITIES

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


                             FIELD HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                            AUGUST 17, 2011

                               __________

         Printed for the use of the Committee on Indian Affairs





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                      COMMITTEE ON INDIAN AFFAIRS

                   DANIEL K. AKAKA, Hawaii, Chairman
                 JOHN BARRASSO, Wyoming, Vice Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
KENT CONRAD, North Dakota            LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN HOEVEN, North Dakota
MARIA CANTWELL, Washington           MIKE CRAPO, Idaho
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
TOM UDALL, New Mexico
AL FRANKEN, Minnesota
      Loretta A. Tuell, 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
Field hearing held on August 17, 2011............................     1
Statement of Senator Akaka.......................................     1

                               Witnesses

Allen, Hon. W. Ron, Tribal Chairman/CEO, Jamestown S'klallam 
  Tribe; Treasurer, National Congress of American Indians........    48
    Prepared statement with attachment...........................    50
Danner, Robin Puanani, President/CEO, Council for Native Hawaiian 
  Advancement....................................................    24
    Prepared statement...........................................    26
Kauhane, Michelle, Deputy Director, Department of Hawaiian Home 
  Lands, State of Hawaii.........................................     9
    Prepared statement...........................................    11
Patterson, Brian, President, United South and Eastern Tribes.....    17
    Prepared statement...........................................    21
Small, Hon. Nathan, Chairman, Fort Hall Business Council, 
  Shoshone-Bannock Tribes........................................    38
    Prepared statement...........................................    40
Smith, Michael R., Deputy Bureau Director, Field Operations, BIA, 
  U.S. Department of the Interior................................     3
    Prepared statement...........................................     7

                                Appendix

Kimmel, James D., Hawaiian National, prepared statement..........   103


                    STRENGTHENING SELF-SUFFICIENCY: 

                    OVERCOMING BARRIERS TO ECONOMIC 

                   DEVELOPMENT IN NATIVE COMMUNITIES

                              ----------                              


                       WEDNESDAY, AUGUST 17, 2011



                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                  Kahului, Maui, HI
    The Committee met, pursuant to notice, at 9:25 a.m. at the 
Maui Beach Hotel, Kahului, Maui, Hawaii, Hon. Daniel K. Akaka, 
Chairman of the Committee, presiding.

          OPENING STATEMENT OF HON. DANIEL K. AKAKA, 
                    U.S. SENATOR FROM HAWAII

    The Chairman. I call this hearing of the Committee on 
Indian Affairs to order. Aloha mai kakou.
    Audience. Aloha.
    The Chairman. Thank you so much for being here with us 
today. Today's hearing on Strengthening Self-Sufficiency: 
Overcoming Barriers to Economic Development in Native 
Communities is a very important topic for Native communities 
here in Hawaii and across our country. I want to, with much 
aloha pumehana, warm love, to welcome you to Hawaii, to my 
island home. Many of the barriers to economic development 
Alaska Native and American Indian communities struggle with 
such as remoteness, limited infrastructure, access to capital 
and trust land status are challenges Native Hawaiian 
communities must also overcome in order to strengthen community 
self-sufficiency.
    Critical to any self-sufficient community is a healthy 
economy. For many Native communities, developing and sustaining 
strong economies has been a challenge complicated by a number 
of factors. These factors include the unique challenges 
associated with leveraging lands held in trust and ensuring 
that their people have the skills necessary to compete in a 
global economy. Economic development goes well beyond simply 
being able to open businesses and create jobs. Smart economic 
development builds for the strengths of the community. It 
contemplates the needs of the markets of today and tomorrow. It 
often requires community visioning and strong leadership to 
help foster its growth. It takes individual initiative and 
collective goal setting. The Federal Government has a trust 
responsibility to help stimulate strong economies in Native 
communities to advance the well-being of their people. Our goal 
is to set policies to help them be sustainable and maximize the 
assets of their communities.
    I want to extend a special mahalo or thank you to all of 
those who have traveled far to join us today. We have important 
work to do, and we need and appreciate your input. Your 
expertise and experience is invaluable to helping us craft the 
right policies. As Chairman, it is my goal to ensure that we 
hear from all of you who want to contribute to the discussion. 
And for that, let me say that the hearing record is open for 
two weeks from today, and I encourage everyone to submit your 
comments through written testimony. I want to remind the 
witnesses to limit your oral testimony to five minutes today.
    And let me just add we are in Hawaii. We are on Hawaiian 
time, and so, we want to hear from you. Serving on our first 
panel are two members of our communities, and that's Michael R. 
Smith, Deputy Director of Field Operations with the Bureau of 
Indian Affairs and the Department of the Interior in 
Washington, D.C. Also Ms. Michelle Kauhane, Deputy Director for 
the State of Hawaii's Department of Hawaiian Home Lands based 
in Kapolei, Hawaii. I want to welcome Mr. Smith and Ms. 
Kauhane. Will you please come and take your seats at the table.
    In the meantime, I have so much gratitude here and want to 
say mahalo nui loa to so many people, and I know it's not 
really a time to begin to mention names, because I don't have 
all of your names here. But let me say mahalo to my staff, who 
has worked really hard, the staff in Honolulu and Washington, 
D.C. And I want to say mahalo to Loretta Tuell, who is seated 
back here, who is the Staff Director, and also Rhonda Harjo, 
Minority Deputy Counsel, who is here with us.
    And also, I should mention we did invite Senators to come, 
and of course, they're busy. And I also invited them to, if 
they cannot come themselves, to send a staffer from their 
office. And so, we have two staff members here, Jeanette Lyman 
from Senator Udall, and also Kenneth Martin from Senator 
Johnson as part of the staff from Washington, D.C. And there 
are others here who have come to help us with this hearing. So, 
mahalo nui to all of them. And so, let me read some of the 
names that are here. And I know I'm not naming them all, but 
Annelle Amaral, who is Vice-President of the Association of 
Hawaiian Civic Clubs. Leimomi Kahn, who is the past President 
of the Association of the Hawaiian Civic Clubs. Trustee Boyd 
Mossman of the Island of Maui from OHA. And Tasha Kama from 
SCHHA and Tony Lee from Hawaii Maoli. And these are folks who 
are really helping with the cause in Hawaii. Rosemary Morillo, 
who is a council member of the Soboba Tribe, who is here, too. 
There are others who I will introduce who are witnesses here, 
so I want to again welcome Mr. Smith and Ms. Kauhane.
    And Mr. Smith, would you please proceed with your 
testimony.

         STATEMENT OF MICHAEL R. SMITH, DEPUTY BUREAU 
    DIRECTOR, FIELD OPERATIONS, BIA, U.S. DEPARTMENT OF THE 
                            INTERIOR

    Mr. Smith. Thank you, Mr. Chairman.
    Good morning. It is a pleasure to be here. It's my pleasure 
to be here today to present the Department of Interior's 
statement on the Strengthening Self Sufficiency, Overcoming 
Barriers to Economic Development in Native Communities. My name 
is Michael Smith, and I'm an enrolled member of the Laguno 
Pueblo Tribe in New Mexico, and I was born on the reservation 
of Fort Hall Idaho, Shoshone-Bannock, which was my mother's 
Tribe.
    I am the Deputy Director of Bureau of Indian Affairs for 
Field Operations within the Department of the Interior. The 
Bureau of Indian Affairs provides services directly or through 
contracts, grants or compacts to a service population of about 
1.7 million American Indians and Alaska Natives, who are 
enrolled members of 565 federally recognized Tribes living on 
or near Indian reservations in the 48 contiguous states and the 
State of Alaska. In addition, the BIA is responsible for the 
administration and management of approximately 56 million acres 
of land held in trust by the United States for American 
Indians. These are Tribes and Alaska Natives. Building strong, 
prosperous Native American economies is a priority for this 
administration.
    Earlier this month, the White House's Domestic Policy 
Council and the National Economic Council convened a meeting 
with Native American economic development experts for a White 
House Native American business leaders round table. This round 
table is part of the White House rural council's ongoing 
engagement with leaders across rural America and gave 
administration officials an opportunity to hear from Native 
American business leaders and policy experts about how we can 
work together to improve economic conditions and create jobs in 
Tribal communities.
    While each Tribal community and their economy is unique, 
there are a number of common factors that have inhibited 
economic development in Indian country. Primary road blocks 
include, one, lack of collateral in which Tribes and 
reservation businesses can obtain capital; number two, lack of 
a business development environment; number three, lack of 
physical and legal infrastructure; number four, difficulty in 
developing natural resources due to multiple governments having 
regulatory and taxing jurisdiction over development; number 
five, lack of educational and training opportunities to develop 
a skilled work force; and number six, lack of access to modern 
technology.
    Many of these road blocks are products of the history of 
Federal, State, Tribal relations and have Tribe-specific 
nuances that must be addressed on a Tribe-by-Tribe basis. 
Therefore, Indian Tribes must be the driving force behind 
Federal policies targeted toward job creation and economic 
development in Indian Country, which is consistent with the 
policy of Indian self determination. Nonetheless, the 
Department does support a couple of pieces of legislation that 
will assist with spurring economic development in Indian 
Country.
    In addition, the Department has also recently identified 
the following strategies and actions that could be implemented 
to enhance business and infrastructure development in Indian 
Country. Recently, the United States Accountability Office, 
GAO, stated that the uncertainty in accruing land in trust for 
Tribes as a result of the United States Supreme Court decision 
in Carcieri versus Salazar in 2009 is the primary barrier to 
economic development in Indian Country.
    Taking land into trust is one of the most important 
functions that the Department undertakes on behalf of Indian 
Tribes. Home lands are essential to the health, safety and 
welfare of the Tribal Nations. The Department strongly supports 
Congress' effort to address the Carcieri decision. In addition, 
President Obama's fiscal year 2012 budget proposal included 
Carcieri fix and language signaling his strong support for a 
legislative solution to resolve this issue. Since the Carcieri 
decision, the Department must examine whether each Tribe 
seeking to have land acquired in trust under the Indian 
Reorganization Act, IRA, was under Federal jurisdiction in 
1934.
    This analysis is done on a Tribe-by-Tribe basis. It is 
time-consuming and costly for Tribes, even for those Tribes 
whose jurisdictional status is unquestioned. It requires 
extensive legal and historical research and analysis and has 
engendered new litigation about Tribal status and secretarial 
authority. Overall, it has made the Department's consideration 
of deeded trust applications more complex. The Department 
believes that legislation is the best means to address the 
issues arising from the Carcieri decision and to reaffirm the 
Secretary's authority to secure Tribal home lands for all 
federally-recognized Tribes under the Indian Reorganization 
Act.
    A clear congressional reaffirmation will prevent costly 
litigation and lengthy delays for both the Department and the 
Tribes to which the United States owes a trust responsibility. 
The Department also recently testified before this Committee in 
strong support of Senate Bill 703, the Helping Expedite and 
Advance Responsibile Tribal Home Ownership Act of 2011, which 
would restore Tribal authority to govern leasing of Tribal 
lands for those Tribes who wish to exercise that authority.
    Under this legislation, Tribes would submit their own 
leasing regulations to the Secretary for approval and then 
process leases under Tribal law without prior express approval 
from the Secretary. This bill has the potential to 
significantly reduce the time it takes to approve leases for 
homes, small businesses and renewal energy. The Department is 
also working internally on ways to spur economic development in 
Indian Country. First, the Department recognizes that Indian 
Tribes must be able to determine how their home lands would be 
used. Thus, the Department is revising 25 CFR Part 162, the 
regulations governing leasing on Indian lands.
    Once completed, this effort will mark the most significant 
reform in Indian land leasing in 50 years. The Department's 
revisions will streamline the process by which leases of Indian 
lands are approved; thereby, promoting home ownership, economic 
development and renewable energy development on Indian Tribal 
lands. The Department conducted three Tribal consultation 
sessions on this initiative in April and has reviewed and 
considered all Tribal comments on the draft leasing 
regulations. The Department expects to proceed to a formal 
notice of proposed rule-making in the near future. We intend to 
conduct further consultation at that time in addition to 
receiving public comments on the proposed regulations. As it 
stands, our plan is to complete the rule-making for these 
regulations in early 2012.
    Second, for the United States to adequately identify and 
focus on unemployment in Indian Country, we must first collect 
reliable data that will allow us to track progress over time. 
The Assistant Secretary for Indian Affairs is charged and 
specifically in its office of the Indian Energy and Economic 
Development, IEED, is stimulating economics, fostering job 
creation and improving the quality of life in Native American 
and Alaska Native communities.
    I will be referring to that office quite often as IEED, 
Indian Energy and Economic Development. The Department of the 
Interior, the departments, Interior, Commerce, Agriculture and 
Labor, all have programs that target economic development in 
Indian Country. Several agencies estimate conditions in Indian 
Country, but no department has specifically targeted Indian 
Country to produce reliable and accurate economic data. 
Therefore, Indian Affairs has recently hired an economist, who 
has begun to work with IEED on collecting better economic data 
to support various programs.
    In addition, in July of this year, Larry EchoHawk, the 
Secretary for Indian Affairs, signed a memorandum of 
understanding with Harvard University's Project on American 
Indian Economics. Whereby, the Department and Harvard will 
collaborate on promoting Tribal economic development to 
research, outreach and leadership education. The Department and 
the Harvard project have identified areas of possible 
collaboration. One, and these are in bullet form, research 
efforts that focus on improving economic opportunities in 
Tribal communities that facilitate Tribal development in the 
legal and political infrastructure that will promote economic 
development in Tribal communities. And that addresses 
disparities in economic indicators.
    Two, the identification and development of outreach efforts 
having high potential impact on economic development 
initiatives in Tribal communities. The capacity for those 
communities to promote economic development, opportunities for 
productive research and curriculum programs on economic 
development and Tribal Government management. And three, 
expanded outreach and recruitment opportunities for graduate 
education in Harvard University and its allied organizations 
and leadership management in the professional fields relevant 
to Indian Country economic development policy as well as the 
orientation and training of the Department's Indian Affairs 
managers to foster a climate of economic growth in Tribal 
communities.
    The Department has been engaging in Tribal Governments in 
our national energy priorities, including renewable energy 
development on Tribal lands. We know that Tribal lands hold a 
great capacity for solar, wind and geothermal projects. And we 
are committed to helping Indian Tribes unlock that potential. 
IEED has identified reservations with renewable energy 
potential. The IEED addresses energy, conventional and 
renewable, and mineral potential in Indian Country is part of 
its mission. IEED is currently working with one of 50 projects 
on approximately 35 reservations with 29 additional projects 
recommended for over 4.1 million in energy and renewable 
program development funding for fiscal year 2012.
    This, however, is barely tapping the potential that exists 
in Indian Country for energy development. IEED has identified 
267 reservations with renewable energy potential, but the 
resources on these reservations has not yet been adequately 
determined. The potential on these reservations is as follows: 
Wind energy, 535 million kilowatts; solar energy, 17,600 
million kilowatts; woody biomass 3 billion kilowatts; 
geothermal, 21 million kilowatts; and hydroelectric, 5.7 
million kilowatts.
    A tremendous need exists to quantify these potentials on 
individual reservations to gain a better understanding of how 
best to develop these resources. On June 21, 2011, the 
Department published the Department of the Interior's Economic 
Contributions. This report shows that energy and mineral 
development play a very substantial role in Tribal economies. 
Highlights of the report are as follows. BIA/BIE, which is the 
Bureau of Indian Education, and IEED have an estimated economic 
impact of $14.45 billion. 85 percent or $12.3 billion of this 
impact is derived from energy and mineral development on Tribal 
lands.
    The economic impact reiterated by BIA/BIE and IEED create 
an estimated 136,761 jobs. 88 percent or 120,934 of these jobs 
are directly associated with energy and mineral development on 
Tribal lands. I will be submitting a graph as part of my 
testimony. Royalty income in 2010 from energy development is 
projected to be greater than $650 million. Our new focus on 
resource development versus resource assessment is far more 
proactive and useful to Tribes as they can make informed 
decisions in resource development, thus providing a springboard 
to the development and realization of economic benefits from 
their energy and renewable resources.
    The IEED is concentrating on developing these capabilities 
in accordance with the Indian Mineral Development Act. The 
Federal Government responsibilities under the Indian Mineral 
Development Act of 1982 include providing economic evaluations 
of energy and mineral resources, providing expert technical 
advice on engineering, geology, geophysics and economics to 
Indian mineral owners and providing expert technical advice to 
Indian mineral owners in negotiating IMDA agreements with 
respective developers.
    Since 1982, the IEED has spent over $85 million on 
developing energy and mineral resource information. As a direct 
result of these expenditures, over $1.13 trillion of in-the-
ground potential energy resources have been identified. These 
results have provided the foundational information necessary 
for a future economic development of these resources. I know 
I've taken quite a long time to read this testimony, Mr. 
Chairman, and I appreciate your forbearance.
    I would like to add one thing as part of my testimony. This 
Administration sincerely supports the efforts of Hawaiian 
communities or Native Hawaiian recognition. And as indigenous 
people, they should be joined in the Bureau of Indian Affairs 
as one of our components to deliver services to. I thank you, 
Mr. Chairman, and I'm available for any questions.
    [The prepared statement of Mr. Smith follows:]

 Prepared Statement of Michael R. Smith, Deputy Bureau Director, Field 
            Operations, BIA, U.S. Department of the Interior
    Good morning, Mr. Chairman and Members of the Committee. It is a 
pleasure to be here today to present the Department of the Interior's 
statement on ``Strengthening Self-Sufficiency: Overcoming Barriers to 
Economic Development in Native Communities.'' My name is Michael Smith 
and I am the Deputy Bureau Director for Field Operations in the Bureau 
of Indian Affairs (BIA) within the Department of the Interior 
(Department).
    The Bureau of Indian Affairs (BIA) provides services directly or 
through contracts, grants, or compacts to a service population of about 
1.7 million American Indians and Alaska Natives who are enrolled 
members of 565 Federally recognized Tribes living on or near Indian 
reservations in the 48 contiguous United States and Alaska. In 
addition, the BIA is responsible for the administration and management 
of approximately 56 million acres of land held in trust by the United 
States for American Indians, Indian Tribes, and Alaska Natives. 
Building strong, prosperous Native American economies is a priority for 
this Administration.
    Earlier this month, the White House's Domestic Policy Council and 
the National Economic Council convened a meeting with Native American 
economic development experts for a White House Native American Business 
Leaders Roundtable. This Roundtable is part of the White House Rural 
Council's ongoing engagement with leaders from across Rural America, 
and gave Administration officials an opportunity to hear from Native 
American business leaders and policy experts about ways we can work 
together to improve economic conditions and create jobs in Tribal 
communities.
    While each Tribal economy is unique, there are a number of common 
factors that have inhibited economic development in Indian Country. 
Primary roadblocks include: (1) lack of collateral with which Tribes 
and reservation businesses can obtain capital; (2) lack of a business 
development environment; (3) lack of physical and legal infrastructure; 
(4) difficulty in developing natural resources due to multiple 
governments having regulatory and taxing jurisdiction over development; 
(5) lack of educational and training opportunities to develop a skilled 
work force; and (6) lack of access to modern technology. Many of these 
roadblocks are products of the history of federal-state-Tribal 
relations, and have Tribe-specific nuances that must be addressed on a 
Tribe-by-Tribe basis. Therefore, Indian Tribes must be the driving 
force behind federal policies targeted toward job creation and economic 
development in Indian Country, which is consistent with the policy of 
Indian self-determination. Nonetheless, the Department does support a 
couple of pieces of legislation that would assist with spurring 
economic development Indian Country. In addition, the Department has 
also recently identified the following strategies and actions that 
could be implemented to enhance business and infrastructure development 
in Indian Country.
    Recently, the United States Government Accountability Office (GAO) 
stated that the uncertainty in accruing land in trust for Tribes, as a 
result of the United States Supreme Court decision in Carcieri v. 
Salazar, 129 S. Ct. 1058 (2009), is the primary barrier to economic 
development in Indian Country. \1\ Taking land into trust is one of the 
most important functions that the Department undertakes on behalf of 
Indian Tribes. Homelands are essential to the health, safety and 
welfare of the Tribal Nations. The Department strongly supports 
Congress's effort to address the Carcieri decision. In addition, 
President Obama's FY 2012 budget proposal included Carcieri fix 
language signaling his strong support for a legislative solution to 
resolve this issue.
---------------------------------------------------------------------------
    \1\ See, Testimony of Anu K. Mittal, Director, Natural Resources 
and Environment, Observations on Some Unique Factors that May Affect 
Economic Activity on Tribal Lands, Subcommittee on Technology, 
Information Policy, Intergovernmental Relations and Procurement Reform, 
Committee on Oversight and Government Reform, U.S. House of 
Representatives (April 7, 2011).
---------------------------------------------------------------------------
    Since the Carcieri decision, the Department must examine whether 
each Tribe seeking to have land acquired in trust under the Indian 
Reorganization Act was ``under federal jurisdiction'' in 1934. This 
analysis is done on a Tribe-by-Tribe basis; it is time-consuming and 
costly for Tribes, even for those Tribes whose jurisdictional status is 
unquestioned. It requires extensive legal and historical research and 
analysis and has engendered new litigation about Tribal status and 
Secretarial authority. Overall, it has made the Department's 
consideration of fee-to-trust applications more complex.
    The Department believes that legislation is the best means to 
address the issues arising from the Carcieri decision, and to reaffirm 
the Secretary's authority to secure Tribal homelands for all federally 
recognized Tribes under the Indian Reorganization Act. A clear 
congressional reaffirmation will prevent costly litigation and lengthy 
delays for both the Department and the Tribes to which the United 
States owes a trust responsibility.
    The Department also recently testified before this Committee in 
strong support of S. 703, the Helping Expedite and Advance Responsible 
Tribal Homeownership Act of 2011, which would restore Tribal authority 
to govern leasing on Tribal lands, for those Tribes that wish to 
exercise that authority. Under this legislation, Tribes would submit 
their own leasing regulations to the Secretary for approval, and then 
process leases under Tribal law without prior express approval from the 
Secretary of the Interior. This bill has the potential to significantly 
reduce the time it takes to approve leases for homes, small businesses, 
and renewable energy.
    The Department is also working internally on ways to spur economic 
development in Indian Country. First, the Department recognizes that 
Indian Tribes must be able to determine how their homelands will be 
used. Thus, the Department is revising 25 C.F.R. Part 162, the 
regulations governing leasing on Indian lands. Once completed, this 
effort will mark the most significant reform to Indian land leasing in 
50 years. The Department's revisions will streamline the process by 
which leases of Indian lands are approved, thereby promoting 
homeownership, economic development, and renewable energy development 
on Tribal lands. The Department conducted three Tribal consultation 
sessions on this initiative in April, and has reviewed and considered 
all Tribal comments on the draft leasing regulations. The Department 
expects to proceed to a formal Notice of Proposed Rulemaking in the 
near future. We intend to conduct further consultation at that time, in 
addition to receiving public comments on the proposed regulations. As 
it stands, our plan is to complete the rulemaking for these regulations 
in early 2012.
    Second, for the United States to adequately identify and focus on 
unemployment in Indian country, we must first collect reliable data 
that will allow us to track progress over time. The Assistant 
Secretary, Indian Affairs, and specifically its Office of Indian Energy 
and Economic Development (IEED) is charged with stimulating economies, 
fostering job creation, and improving the quality of life in Native 
American and Alaska Native communities. Adequately gauging the impact 
of IEED's economic development strategies, programs, and initiatives is 
difficult as there is no reliable baseline index of unemployment and 
productivity in Indian Country. The Departments of the Interior, 
Commerce, Agriculture and Labor all have programs that target economic 
development in Indian Country. Several agencies estimate conditions in 
Indian Country, but no Department has specifically targeted Indian 
Country to produce reliable and accurate economic data. Therefore, 
Indian Affairs has recently hired an economist who has begun to work 
with IEED on collecting better economic data to support various 
programs.
    In addition, in July of this year, Larry Echo Hawk, the Assistant 
Secretary--Indian Affairs, signed a Memorandum of Understanding (MOU) 
with Harvard University's Project on American Indian Economic 
Development whereby the Department and Harvard will collaborate on 
promoting Tribal economic development through research, outreach and 
leadership education. The Department and the Harvard Project have 
identified areas of possible collaboration:

   Research efforts that focus on improving economic 
        opportunities in Tribal communities, that facilitate Tribal 
        development of the legal and political infrastructure that will 
        promote economic development in Tribal communities, and that 
        address disparities in economic indicators.

   The identification and development of outreach efforts 
        having high potential impact on economic development 
        initiatives in Tribal communities, the capacity of those 
        communities to promote economic development, opportunities for 
        productive research and curriculum programs on economic 
        development and Tribal government management.

   Expanded outreach and recruitment opportunities for graduate 
        education at Harvard University and its allied organizations in 
        leadership, management and other professional fields relevant 
        to Indian Country economic development policy, as well as the 
        orientation and training of the Department and Indian Affairs 
        managers to foster a climate of economic growth in Tribal 
        communities.

    Third, the Department has been engaging Tribal governments in our 
national energy priorities, including renewable energy development on 
Tribal lands. We know that Tribal lands hold a great capacity for 
solar, wind and geothermal projects, and we are committed to helping 
Indian Tribes unlock that potential. IEED has identified reservations 
with renewable energy potential.
    The IEED addresses energy (conventional and renewable) and mineral 
potential in Indian Country as part of its mission to fulfill the 
Administration's New Energy Frontier Initiative. IEED is currently 
working on more than 50 projects on approximately 35 reservations. 
This, however, is barely tapping the potential that exists in Indian 
Country for energy development. A tremendous need exists to quantify 
these potentials on individual reservations to gain a better 
understanding of how to best develop these resources in accordance with 
Indian Tribes.
    This concludes my statement. I am happy to answer any questions the 
Committee may have.

    The Chairman. Thank you very much for your testimony, Mr. 
Smith. We thank you for what you're doing. You've mentioned 
many programs that we need to utilize to help our economy. And 
we'll ask you specific questions about some of the programs.
    Ms. Kauhane, would you please proceed with your statement.

 STATEMENT OF MICHELLE KAUHANE, DEPUTY DIRECTOR, DEPARTMENT OF 
              HAWAIIAN HOME LANDS, STATE OF HAWAII

    Ms. Kauhane. Thank you. Aloha, Chairman Akaka and Members 
of the Senate Committee on Indian Affairs. Mahalo for the 
invitation and the opportunity to provide testimony on behalf 
of the State Department of Hawaiian Home Lands regarding the 
barriers to economic development in Native communities. My name 
is Michelle Kauhane, Deputy Director of the Department of 
Hawaiian Home Lands. I'm also a Native Hawaiian homesteader 
residing in Kapolei, Oahu in Honolulu.
    DHHL is responsible for the administration, compliance and 
meeting the mission of the Hawaiian Homes Commission Act. We 
are a State agency managing a federally-created land trust to 
reconnect Native Hawaiians to their ancestral lands in Hawaii. 
It is well understood that the progress made to implement the 
primary purpose of returning Native Hawaiians to their lands 
under the Hawaiian Homes Commission Act is and has been 
inadequate. The homesteading program to issue lands to Native 
Hawaiians, although the cornerstone of the Act with the 
potential to create economic opportunities, has been challenged 
by the location of our trust lands, lack of infrastructure 
investment by the Federal Government and also a lack of 
operational funding to support the administration of our trust.
    The Hawaiian Home Lands trust is one of the best hopes to 
advance the economic self-sufficiency of our Native people. 
Moreover, the economic development potential for Native 
Hawaiians, if realized, can and will advance the economic 
prosperity of the entire State of Hawaii. My testimony today 
will focus on four topical areas to overcoming some of the 
barriers to economic development that we face on homesteads. 
First, reauthorization of NAHASDA. In 2000, the Congress 
enacted Title VIII of NAHASDA creating for the first time a 
modest allocation of Federal funding to support the development 
of affordable housing for low and moderate income 
beneficiaries.
    We recommend the Committee work to update and reauthorize 
the Native Hawaiian Housing Block Grant, as has been done for 
Indian Country. Second, infrastructure investments. 
Approximately 75 percent of the open lands of the Hawaiian Home 
Lands trust remain undeveloped. One of the largest barriers to 
issuing land to the 20,000-plus individuals on our wait list is 
investment into the infrastructure for roads, utilities, water/
wastewater facilities, broadband and renewable energy sources.
    We recommend the inclusion of all Native lands in the 
Substantially Underserved Trust Areas, the SUTA definition of 
trust lands as enacted in the 2008 Farm Bill. Access to capital 
for infrastructure development on the unique trust lands of the 
America's indigenous peoples need only be included in the 
capital strategies of the Congress that have built and will 
continue to build the country.
    Third, access to consumer capital. One of the most common 
sources of consumer capital for business startups, enterprise 
investments and fueling economic development in any community 
is home equity. There is a significant disparity between the 
loan products available to homesteaders in comparison to loans 
available in the fee simple marketplace in Hawaii. Likewise, 
there are similar disparities in product availability on trust 
lands in Hawaii in comparison to the lands held in trust on the 
continent. Specifically, while the rest of the nation is 
allowed to refinance existing FHA mortgages to reduce interest 
rates and access equity up to 85 percent of the loan to value, 
our FHA 247 loan product on Hawaiian Home Lands limits 
refinancing transactions and access to equity at 75 percent.
    On the only other federally-backed consumer mortgage 
product available on Hawaiian Home Lands, the HUD 184(a) loan 
program, the authorizing language was inadvertently silent on 
the eligibility to refinance at all. Unlike its Indian Country 
counterpart, the HUD 184 program here in Hawaii stifles 
refinancing as a standard practice for our people.
    The result of the deficiencies in the FHA 247 and the HUD 
184(a) products creates an even greater economic divide by 
closing off a lifeline of capital that is a requirement for any 
healthy community. We recommend that the Committee work with 
the Administration to assess and implement action necessary to 
bring parity to the FHA 247 and 184(a) programs available to 
Native Hawaiians on their trust lands.
    Finally, improved administration of the trust. The 
Department of Hawaiian Home Lands understands there's an 
incredible opportunity to tap into the experiences and best 
practices the Federal Government has in Indian Nations. We 
recognize that the Federal trust land management practices have 
taken a journey that include missed opportunities and pitfalls, 
but also includes evolved policies that have resulted in 
substantial improvements.
    An example of a substantial improvement that DHHL has 
embraced is the adoption of our policy of Beneficiary 
Consultation, recommended by beneficiary advocacy groups and 
based on the Federal Tribal Consultation process in place under 
Presidential Executive Order. Though the policy of Beneficiary 
Consultation is relatively new to our department and to our 
homestead communities, we are finding it to be a best practice 
that will yield positive results, including the advancement of 
the self determination policy inherent in the Hawaiian Homes 
Commission Act.
    Simply said, consultation strengthens our connection to the 
people our agency was created to serve through the provision of 
our land, and also engages the incredible ingenuity and 
knowledge of the people themselves, to implement solutions that 
matter the most. We recommend the Committee encourage more 
active engagement and interaction by the Department of the 
Interior, the Federal agency with oversight responsibility of 
the Hawaiian Homes Commission Act and the State of Hawaii with 
the Department of Hawaiian Home Lands and the homestead 
communities.
    We further recommend the enactment of the Native Hawaiian 
Government Reorganization Act by the Congress, which would 
extend the Federal policy of self government to the Native 
Hawaiian people. Native Hawaiians need Federal recognition.
    I thank you for the opportunity to present our testimony 
and to identify areas that we can work together to overcome 
barriers of economic development.
    [The prepared statement of Ms. Kauhane follows:]

Prepared Statement of Michelle Kauhane, Deputy Director, Department of 
                  Hawaiian Home Lands, State of Hawaii
    Aloha Chairman Akaka and Members of the Senate Committee on Indian 
Affairs.
    Mahalo for the invitation and opportunity to provide testimony on 
behalf of the State of Hawaii, Department of Hawaiian Home Lands (DHHL) 
regarding the barriers to economic development in Native communities.
    My name is Michelle Kauhane, Deputy Director at the Department of 
Hawaiian Home Lands, appointed by Governor Neil Abercrombie. Prior to 
my appointment, I spent 10 years in the Native non-profit sector, as 
the Executive Director of one of Hawaii's most active financial 
literacy and foreclosure prevention agencies, Hawaiian Community Assets 
(HCA). HCA is also the first non-profit mortgage broker in Hawaii, 
established to promote homeownership on the trust lands of the Native 
Hawaiian people by providing specialized expertise necessary to 
navigate financing unique to Hawaiian Home Land communities.
Hawaiian Homes Commission Act
    Since Hawaii's overthrow as an independent nation and the 
subsequent annexation to the United States, one of the most significant 
federal policy achievements for Native Hawaiians was the enactment by 
the U.S. Congress of the Hawaiian Homes Commission Act of 1920 (HHCA). 
The HHCA began as a resolution in the territorial government in Hawaii, 
and advocated by the territory's congressional representative, Prince 
Jonah Kuhio Kalanianaole. Similar to other land allotment acts of that 
era for Alaska Natives and American Indians, the HHCA established a 
land trust of approximately 200,000 acres of land, to provide for the 
rehabilitation of Native Hawaiians through the provision of land for 
residential, agricultural and pastoral homesteading. In addition, the 
HHCA encourages economic development on trust lands through land 
licenses for commerce and public purpose development.
    The Admissions Act of 1959 required the HHCA to be administered by 
the state of Hawaii with federal oversight by the Department of 
Interior and the Congress. DHHL became the state agency responsible for 
the administration of the HHCA since 1961, governed by a 9-member 
Hawaiian Homes Commission appointed by the Governor of the state of 
Hawaii. Its Director, a member of the Governor's cabinet, also serves 
as the Chairman of the Commission. In short, DHHL is responsible for 
administration, compliance and meeting the mission of the HHCA. We are 
a state agency managing a federally created land trust to reconnect 
Native Hawaiians to their ancestral lands in Hawaii.
    The most commonly used terms in our communities to describe Native 
Hawaiians eligible for the HHCA land trust, are ``lessee'', 
``beneficiary'' or ``homesteader''. For the purpose of my testimony, 
these terms will be used to describe Native Hawaiians defined as 
eligible to receive land under the HHCA. Equally important to the 
committee topic, is to share the existence of beneficiary organizations 
governed by beneficiaries or homesteaders themselves. These 
organizations, called homestead associations, have existed for decades, 
and are important partners to state government in reaching the full 
potential of the HHCA.
Homesteading Progress
    After 91 years since the enactment of the HHCA, just over 8,000 
land leases have been issued to beneficiaries for homesteading 
purposes. In the last 10 years, approximately 2,500 leases were issued. 
An estimated 35,000 lessees and family members reside on homestead 
lands throughout Hawaii. Approximately 48 percent are located on Oahu, 
23 percent on the island of Hawaii, 22 percent in Maui County, and 7 
percent on Kauai. Among the lessees, the majority of leases are 
residential (89 percent), followed by 8 percent agricultural and the 
remaining 3 percent in pastoral.
    According to a 2008 lessee survey conducted by SMS Research, DHHL 
lessee households consist of 3 to 7 people with a mean of 4.2 household 
members. The median household income among lessees was $48,731 in 2008, 
lower than the median household income for the State at $63,746. In 
addition, the survey estimated 51 percent of DHHL lessee households had 
incomes below 80 percent of the HUD median.
    In addition to the beneficiaries on the land, the waiting list of 
beneficiaries to receive a land award under the HHCA exceeds 20,000, 
with waiting times ranging from 5 years to 50 years. It is well 
understood, that the progress made to implement the primary purpose of 
returning Native Hawaiians to their lands under the HHCA, is and has 
been inadequate. The primary barriers to improved and increased 
progress by DHHL can be described as follows:

        1.  Location of Trust Lands--As was common with other Native 
        peoples in the country, the lands allocated to the Hawaiian 
        Home Land trust consist of some of the most difficult to 
        access, with terrains that make development challenging and 
        expensive.

        2.  Infrastructure Funding to Develop Trust Lands--Since the 
        enactment of the HHCA and Hawaii Admissions Act which required 
        the state of Hawaii to administer the land trust, the Federal 
        Government has not appropriated funding to DHHL to administer 
        the trust, nor made any significant investment to 
        infrastructure that would render the lands inventory adequate 
        for homesteading use. Only within the last decade, in 2000, 
        with the enactment of the Native Hawaiian Housing Block Grant, 
        an amendment to the federal Native American Housing Assistance 
        and Self Determination Act (NAHASDA), DHHL began receiving a 
        modest allocation for the development of low to moderate income 
        housing. Due to land conditions described in item 1 above, much 
        of these funds have been directed toward subdivision 
        development to build roads, utilities and residential lots.

        3.  Operating Funding to Administer Trust Lands--The 
        administration of the Hawaiian Home Land trust requires an 
        operating budget and staffing resources to implement the 
        purposes of the HHCA. Since administration began by the state 
        of Hawaii in 1959, a fraction of the annual operating costs of 
        DHHL have been appropriated by state government. This reality, 
        together with the modest annual federal support under NAHASDA 
        only beginning in 2000 described in item 2 above, DHHL is 
        operated almost entirely through revenues generated by trust 
        lands leased or licensed for nonhomesteading purposes. As a 
        result, the ability to further the homesteading program for 
        Native Hawaiians through the provision of land is hindered.

    In summary, the homesteading program to issue lands to Native 
Hawaiians for residential, agricultural or pastoral homesteads, which 
is the cornerstone of the HHCA and which would create economic 
opportunities for the beneficiaries of the Hawaiian Home Land trust, 
has been challenged by the location of trust lands, lack of 
infrastructure investment by the Federal Government, and a lack of 
operational funding to support the administration of the trust.
Overcoming Barriers to Economic Development in Homesteads
    The Hawaiian Home Land trust is one of the best hopes to advance 
the economic selfsufficiency of Native Hawaiians. Moreover, the 
economic development potential for Native Hawaiians if realized, can 
and will advance the economic prosperity of the entire state. When a 
dollar is invested in infrastructure on Hawaiian home lands, a Hawaii 
business is building a road, or installing utility lines. When a dollar 
is spent in the administration of the trust, a vital job necessary to 
administer the trust is created, and becomes a part of the spending 
power of the people of Hawaii. The significance of the hearing topic of 
``Overcoming Barriers to Economic Development in Native Communities'' 
could not be more relevant and beneficial as the nation maintains its 
attention on a national economic recovery.
    My testimony will focus on four topical areas to overcoming 
barriers to economic development on homesteads, as follows:

        1.  Reauthorization of NAHASDA--In 2000, the congress enacted 
        Title VIII of NAHASDA, creating for the first time, a modest 
        allocation of federal funding to support the development of 
        affordable housing for low and moderate income beneficiaries. 
        We recommend the committee work to update and reauthorize the 
        Native Hawaiian Housing Block Grant, as has been done for 
        Indian Country.

        2.  Infrastructure Investments--Approximately seventy-five 
        percent of the open lands of the Hawaiian Homes land trust 
        remain undeveloped. One of the largest barriers to issuing land 
        to the 20,000+ individuals on the wait list is investment in 
        infrastructure for roads, utilities, water/waste water 
        facilities, broadband and renewable energy sources.
           As the congress moves infrastructure investments for the 
        country through various federal agencies and programs, we 
        recommend that the trust lands of all Native peoples, including 
        Native Hawaiians through the inclusion of the Substantially 
        Underserved Trust Areas (SUTA) definition of trust lands as 
        enacted in the 2008 Farm Bill (P.L.110). Access to capital for 
        infrastructure development on the unique trust lands of 
        America's indigenous peoples need only be included in the 
        capital strategies of the congress that have built and will 
        continue to build the country.

        3.  Access to Consumer Capital--One of the most common sources 
        of consumer capital for business start ups, enterprise 
        investments and fueling economic development in any community, 
        is home equity financing. There is a significant disparity 
        between the loan products available to homesteaders in 
        comparison to loans available in the fee simple marketplace in 
        Hawaii. Likewise, there are similar disparities in product 
        availability on trust lands in Hawaii in comparison to trust 
        lands on the continent.
           Specifically, while the rest of the nation is allowed to 
        refinance existing FHA mortgages to reduce interest rates and 
        access equity up to 85 percent of loan to value, the FHA 247 
        loan product for Hawaiian Home Lands limits refinancing 
        transactions and equity financing to 75 percent loan to value. 
        Further, the product prohibits business purposes, educational 
        tuition and other meaningful financing purposes that advance 
        economic security and economic opportunities for Native 
        Hawaiians. The rest of the nation, including the counterpart 
        FHA 248 program for Indian lands, does not have these 
        prohibitions, creating a significant disparity in accessing 
        consumer capital.
           On the only other federally backed consumer mortgage product 
        available on Hawaiian trust lands, the HUD 184a program, the 
        authorizing language inadvertently was silent on the 
        eligibility to refinance at all. Unlike its Indian Country 
        counterpart, the HUD 184 program, refinancing is a standard and 
        normal transaction that enables Indian borrowers to refinance 
        and capture interest rate savings as the market re-prices. 
        Perhaps more important, is the eligibility of Indian borrowers 
        to utilize the HUD 184 program on homes located on or off their 
        trust lands. This is a powerful tool in anti-poverty strategies 
        of asset-building through homeownership and equity assets.
           The result of the deficiencies in the FHA 247 and HUD 184a 
        products creates an even greater economic divide by closing off 
        the lifeline of capital that is a requirement of any healthy 
        community. We recommend that the committee work with the 
        Administration to assess and implement actions necessary to 
        bring parity to the FHA 247 and HUD 184a program available to 
        Native Hawaiians and their trust land assets.

        4.  Improved Administration of the Trust--Given the history of 
        the last 91 years since enactment of the HHCA of which the 
        state of Hawaii has administered since 1959, and the federal 
        oversight of the Hawaiian Homes land trust, there is an 
        incredible opportunity to tap into the experiences and best 
        practices of the Federal Government and Indian nations. We 
        recognize that federal trust land management practices have 
        taken a journey that includes missed opportunities and 
        pitfalls, but also includes evolved policies that have resulted 
        in substantial improvements.
           An example of a substantial improvement DHHL has embraced is 
        the adoption of our policy of Beneficiary Consultation, 
        recommended by beneficiary advocacy organizations and based on 
        the federal Tribal Consultation process in place under 
        Presidential Executive Order. By examining the historical 
        context of Tribal Consultation, its implementation approach, 
        and the purpose of this policy in every federal agency, DHHL 
        drew similarities to our status as a state government agency, 
        and our need to consult with beneficiaries of the Hawaiian Home 
        Land trust, and the organizations most comparable to Tribes in 
        the federal consultation policy, homestead associations 
        organized by and governed by Native Hawaiian beneficiaries of 
        the trust.
           Though the policy of Beneficiary Consultation is relatively 
        new to DHHL and to our homestead communities, we are finding it 
        to be a best practice that will yield positive results, 
        including the advancement of the self determination policy 
        inherent in the HHCA. Simply said, consultation strengthens our 
        connection to the people our agency was created to serve 
        through the provision of land, and also engages the incredible 
        ingenuity and knowledge of the people themselves, to implement 
        solutions that matter most.
           There are other examples of improved administration by DHHL 
        where we have sought information and examined the trust land 
        management strategies of the Federal Government, and Indian 
        organizations on the continent. These include facilitating the 
        flow of Community Development Financial Institution (CDFI) 
        services by partnering with Native community organizations, and 
        involving homestead associations in economic strategy 
        development.
           We recommend the Committee encourage more active engagement 
        and interaction by the Department of Interior, the federal 
        agency with oversight responsibility of the HHCA and the state 
        of Hawaii, with DHHL and the homestead communities. Sharing 
        experiences is one of the most powerful sources of good policy-
        making. As DHHL defines its role more clearly in the 
        administration of the HHCA and implements stronger 
        relationships with the beneficiary organizations that represent 
        the beneficiaries of the land trust, every stakeholder can 
        benefit from greater engagement with the federal Government and 
        the counterpart Indian organizations on the continent and 
        Alaska.
           We further recommend the enactment of the Native Hawaiian 
        Government Reorganization Act by the congress, which would 
        extend the federal policy of self government to the Native 
        Hawaiian people, regardless of eligibility under the HHCA. As 
        the state of Hawaii has done in recent months, through the 
        passage of a state recognition bill, we know that the well-
        being of our state is tied directly to the wellbeing of 
        Hawaiian communities in every area, including economic, 
        education, and health, which can only be achieved through the 
        strength of Hawaiian ways of life and culture.

    Thank you for the opportunity to present testimony and to identify 
areas we can work together to overcome barriers to economic 
development.

    The Chairman. Thank you very much, Michelle, for your 
testimony. I would like now to proceed to questions.
    Mr. Smith, in your testimony, you mentioned two Committee 
bills that are intended to streamline the land in trust and 
leasing processes on Indian lands. If these bills are passed, 
do you think they will significantly improve economic 
development opportunities for Tribal Governments?
    Mr. Smith. Yes, Mr. Chairman. I sincerely believe that and 
we have been working toward that effort with the idea that this 
will take a Tribal Governance from each Tribe and the proper 
codes, the proper ordinances or business codes in order for 
them to move forward with their leasing regulations. So we 
believe this. We know that we have at least a half dozen or 
more model Tribes that are ready to go.
    And the minute that we are able to, you know, act upon any 
congressional intent, then we will be able to offer this to 
Tribes, and they will have very little interference, if any at 
all, from the Federal Government. We may still be available for 
technical assistance and guidance, but they will be in charge 
of those leasing activities.
    The Chairman. Thank you. Ms. Kauhane, you identified the 
need to address the disparity in the FHA 247, the HUD 184 
mortgage products as a key solution to creating economic 
development. What are additional access to capital examples 
that promote economic development in Native communities, and 
what is needed so they can be utilized on Hawaiian Home Lands?
    Ms. Kauhane. The FHA 247 and 184, Senator Akaka, as I 
mentioned, limit access to capital. And in any community, we 
need access to our home equity when we want to send our kids to 
college, start up new businesses, for all sorts of reasons to 
have an infusion of cash into communities anywhere. An easy and 
quick fix for us to do is to negotiate with the current 
Administration at the Department of HUD to correct the MOU that 
is currently in place with the State Department of Hawaiian 
Home Lands that are limiting these loan to value limits and 
bring parity to our loan products equivalent to that of our 
Indian counterparts.
    The Chairman. Mr. Smith, you mentioned that the Department 
of Interior has hired an economist to collect more reliable 
economic date in Native communities so Federal programs can be 
better to help those communities. When did you expect the 
report to be completed, and what will the Department do with 
that data to specifically improve economic conditions in Native 
communities?
    Mr. Smith. Mr. Chairman, it's been almost 37 years since we 
had an economist at the Department of Interior Bureau of Indian 
Affairs, and I'm not sure exactly why that has happened. But we 
did hire earlier this year an economist who has a proven track 
record of being able to gather data and analyze that data and 
put it in a format that would be usable by Tribes.
    We're also depending on the Tribal side of things. The 
Tribal Data Task Force has been able to provide information in 
almost every format you can think of, so that together, we can 
provide something that will be usable early on in 2012. And I 
believe the efforts are being recognized by the Assistant 
Secretary through the Office of Self Governance. I believe at 
least one of the members of the data management team is in the 
audience, Chairman Ron Allen from the Jamestown S'Klallam 
Tribe, and that information will be so valuable, because it 
will be offered to Tribes in a format that will be best 
utilized whenever they develop their plans to move forward.
    The Chairman. Thank you very much.
    Ms. Kauhane, according to your testimony, there is a 
serious disparity in the loan to value ratios for Native 
Hawaiians and for everyone else. Native Hawaiians living on 
homesteads cannot take out a second mortgage or refinance to 
take out home equity to start a business. How does this create 
a barrier to economic development in homestead communities, and 
what can be done to remove the barrier to creating parity?
    Ms. Kauhane. Again, I will say out loud for the record that 
access to capital in our communities is paramount, that in 
order for us to continue development that we need to have 
access to capital. The homesteaders, again, the easy fix is to 
correct the MOU with HUD and to change the existing language--
with the department's agreement, so that we can remove the 
barrier or remove the loan to value ratio to bring parity to 
the loan products.
    The Chairman. Since you mentioned starting businesses, what 
is the DHHL doing to encourage economic development on home 
lands?
    Ms. Kauhane. Currently the department is focused in 
community development on regional plans where we consult with 
our beneficiaries and the various homestead areas to talk about 
economic development ideas that the community may have, whether 
that be for early childhood education, community centers. And 
we are facilitating processes where our homestead associations 
then are allowed the leases holding the licenses to the lands 
in their homestead regions so that they can practice self 
determination and start businesses and do economic development 
activities, they desire within their homestead communities and 
within the Department's regional plans.
    The Chairman. Mr. Smith, the Department's Indian Loan 
Guaranteed Program has been a successful tool for allowing 
Tribes to gain access to capital. But funding is expected to 
decrease. What type of outreach has the Department done with 
Tribes and other Federal agencies to make sure that Tribes 
still have access to similar programs?
    Mr. Smith. Well, initially the 1972 Indian Financing Act 
that established the Guaranteed Loan Program was highly 
successful. Because along with the oversight and guidance, 
there was a pot of money that was called, I believe, the Indian 
business development grant. Those funds were offered to Tribes 
and individuals over a period of time, probably about 20 years. 
And now those funds are no longer available.
    So, the outreach that has resulted in recent times has been 
through other Federal agencies, the USDA, the SBA and others. 
And more importantly, we have relied on the ceiling, in other 
words, about $7 million of the ceiling that has a multiplying 
factor or a multiplier factor where we go to a lender such as a 
bank, and the Tribe is the client but we are the guarantor of 
that loan, so that no matter what the loan amount is, we are 
sitting at the table with the Tribe and the lender to assure 
the success of that project.
    The Chairman. Now that you are talking about business, has 
the Department issued loan guarantees for developing ADA 
companies as part of its efforts to spur economic development 
in Indian Country?
    Mr. Smith. I believe we have, and we've also reached out to 
the military in that regard because the military controls quite 
a lot of the capital that's being used to develop 
infrastructure throughout the United States, including Indian 
reservations. In that regard also, I mentioned earlier the 
Harvard project that we have entered into a memorandum of 
understanding that will assist us in developing a strategy 
that's going to be used in Indian Country.
    The Chairman. Yes. Well, I also wondered about how that MOU 
has been helpful. And I'm glad to hear that it has been.
    Well, I thank you both so much for your testimony as well 
as your answers here. This without question will be helpful to 
us. Thank you so much for being here at this hearing.
    Ms. Kauhane. Thank you, Senator.
    Mr. Smith. Thank you, Mr. Chair.
    The Chairman. I would like to invite the second panel to 
the witness table. Also, I want to extend my thank you to my 
staff in Hawaii; Joan Ohashi, who is Chief of Staff, and also 
Jesse Broder Van Dyke, who is my communications man here.
    And I also have two staff, Daphne Tong and Lopaka Baptiste 
from Honolulu, who is helping us with these kinds of issues and 
the Native Hawaiian Government Reorganization Act. So, it's 
good to have them here, too.
    I would like to ask the second panel to please come forward 
to the table, Mr. Brian Patterson, President of the United 
South and Eastern Tribes of Nashville, Tennessee. And Robin 
Danner, who is the President/CEO of the Council for Native 
Hawaiian Advancement in Honolulu, Hawaii. Welcome to both of 
you.
    Mr. Patterson, will you please proceed with your statement.

  BRIAN PATTERSON, PRESIDENT, UNITED SOUTH AND EASTERN TRIBES

    Mr. Patterson. Good morning, Senator. Aloha as it is in the 
home land of the Hawaiian people. It's good to be in this land 
to embrace the people, to hear the language, hear the songs. 
The USET family of 26 Federally-recognized Tribes has long been 
a supporter and an advocate for the Hawaiian recognition of the 
Hawaiian protection of the landscape, cultural landscape, the 
bones of our people, the cultural and sacred sites. USET, the 
United South and Eastern Tribes, has been a long supporter and 
advocate for the Hawaiian rights platform. And we look to 
continue to develop and leverage that relationship between our 
peoples.
    So, thank you for the opportunity to come here and present 
today. I'm grateful that you have and other Senators on the 
Committee have a strong staff to support the much needed work 
that needs to be done, but ultimately, it is Indian Country 
that needs to drive its agenda. It is Indian Country that must 
define itself, but we can only do so through collaboration and 
partnership and using resources and opportunities available 
such as yourself to advance. So, we look to work in 
collaboration.
    We're grateful for all the hard work that's coming out of 
the Committee, the many roundtables, and as Loretta had many 
discussions with Tribal leaders throughout the country, Rhonda 
has had great communication with our Tribal leaders. We're most 
appreciative of their efforts. And so today, I bring to you 
perhaps a unique perspective to this discussion. As a 
representative on my Nation's Governing Council, the Oneida 
Indian Nation of New York, which I served on Council for 20 
years, I can tell you how my people and our neighbors have 
benefitted from the success of our businesses and operations, 
how our Turning Stone Casino Resort has formed the foundation 
for our economic rebirth, how we have created jobs for 4,500 
people in a region beset by chronic economic problems, how we 
have invested the proceeds from our resort in broadening our 
business enterprises and in providing health, housing, 
education and cultural programs for our people, how we have 
witnessed, our current generation have witnessed a complete 
rebirth of our nation through this effort.
    But on the other hand, the perspective I bring in is as 
President of the United South and Eastern Tribes, a coalition, 
a family of 26 Federally recognized Tribal Governments located 
all across the eastern half of the United States, I can tell 
you more than half of my USET Tribes do not have the same 
resources or opportunities to develop their own economies. We 
are limited in our ability to draw businesses to Tribal lands 
due to our limitations on being able to offer incentives and 
the trust status of the land.
    Although Tribal gaming has done many wonderful things for 
many Tribes, it is in no sense a panacea. And in some cases, 
Tribal home lands are often too remote to make gaming a viable 
economic development option. In other cases, Tribes have chosen 
not to pursue gaming for reasons of their own. And in still 
other cases, some Tribes cannot pursue gaming because they 
don't have their own land on which to build gaming facilities 
or because the status of that land is in dispute.
    Let me be absolutely clear on this point. Tribal 
Governments cannot fulfill their land, their responsibilities 
to their citizens if they don't have a stable land base from 
which to operate and grow. Without that basic, essential 
asset--undisputed control over their own land--nothing the 
Tribes or Congress or anyone else can do will succeed in 
eradicating the many ills that has plagued much of Indian 
Country. You cannot build business without land. You cannot 
build health clinics, housing, schools, community centers 
without land.
    You cannot rebuild a community without land. And you cannot 
ensure that what you build today will be there for our next 
generation if you do not have clear ownership and control and 
title of your land. Unfortunately, the United States Supreme 
Court has brought the ownership and control of vast amounts of 
Tribal lands into question. In Carcieri versus Salazar, the 
Court held that the Secretary of Interior has the authority to 
take land into trust under the Indian Reorganization Act of 
1934 only for those Tribes that were under Federal jurisdiction 
in 1934.
    The Court did not define the term under Federal 
jurisdiction, and as a result, Tribes that have been under 
active Federal supervision for 200 years or more are now facing 
the Carcieri-based challenges to trust acquisitions. The 
Federal Government long ago recognized that individual States 
must be treated the same under law, regardless of when they 
were admitted into the union. Imagine the public outcry if 
Alaska and Hawaii were denied the full rights to statehood 
simply because they did not become states until after 1934. 
Yet, under Carcieri, Tribal Governments are divided into two 
classes with two different rights--those that were under 
Federal jurisdiction in 1934, and therefore, have the full 
rights of Tribal sovereignty, and those that were not under 
Federal jurisdiction in 1934, and therefore, have fewer 
governmental rights.
    By creating these two classes of Tribal Governments, 
Carcieri opens the door to considerable confusion and potential 
inconsistencies concerning the status of all Tribal lands 
within Indian Country. Congressional action is needed to ensure 
permanent resolution of this issue. Although DOI may continue 
to acquire land the trust for Tribes, any decisions to do so 
remain under the threat of the Carcieri-based administrative 
and court challenges. Until Congress takes action to clarify 
that the Secretary has the authority to take land into trust 
for all Federally recognized Indian Tribes, Carcieri will 
undoubtedly be a great source of controversy.
    While Carcieri has the potential to affect all Tribes, I 
would like to draw your attention to land issues that affect a 
great number of my USET-member Tribes. Like Carcieri, the 
unintended consequences of the Land Claim Settlement Acts 
affecting at least eight of my USET Tribes are essentially 
prohibiting these Tribes from exercising their full sovereignty 
as self-determining peoples.
    The Settlement Acts were always intended to be living, 
dynamic agreements that necessarily must be able to change over 
time as circumstances and the needs of the Tribes and States 
also change. Unfortunately, in practice, the Tribes affected by 
the Settlement Acts have been unable to engage in good faith 
negotiations with the States to make meaningful, positive 
changes in those agreements--simply because State Governments 
have no reason to engage in change or in negotiations.
    In addition, language in several of these Settlement Acts 
bars Tribes from fully enjoying the benefits of Federal law 
intended to help Tribes rebuild their community and exercise 
their governmental rights. For example, the Maine Indian Claims 
Settlement Act provides that Federal laws applicable to Indian 
Tribes generally shall be applicable, unless they affect the 
civil, criminal, or regulatory jurisdiction of the State of 
Maine.
    The Settlement Acts for all the Tribes I mentioned either 
expressly make the Indian Gaming Regulatory Act inapplicable, 
or have been interpreted to make the IGRA inapplicable. States 
clearly have no genuine interest in correcting this inequity. 
The Federal Government therefore must get involved to ensure 
that all Tribes can participate in the benefits that Federal 
laws are intended to bring to Indian Country. Ongoing study and 
analysis of the Settlement Acts must be mandatory, especially 
if it has potential that Federal laws passed for the benefit of 
Tribes will be made inapplicable by Settlement Acts language, 
via State implementing legislation.
    A Tribal State task force at the Federal level directed to 
address Settlement Act language, and empowered to make 
recommendations to State legislatures via Federal and Tribal 
representatives must and should become a reality. The 
Department of the Interior must ensure that recommendations to 
change the Settlement Act language are not ignored, but are 
instead given serious consideration by the States as is the 
intent of the Settlement Act language.
    As I said earlier, until and unless these issues are put to 
rest, no other efforts to improve or encourage economic 
development in Indian Country will have a lasting impact. Both 
Tribal Governments and their neighboring communities need--and 
deserve to have--responsible expectations that the investments 
they make today will still be here to generate benefits for the 
future generations yet to come. This is not to stay that we 
cannot or should not make those investments today.
    On the contrary, individual Tribes and Indian Country as a 
whole are investing every day in the future of their 
communities. Unfortunately, resources are scarce, and even with 
the resources that are available, complex and confusing Federal 
rules and regulations often hamper efficient and effective 
partnerships between Tribal Governments and private sector 
entities. Tribes and Federal elected and civil service 
officials must work together to find creative ways to 
streamline processes so that whole Tribal communities and their 
partners may reap the benefits of cooperative ventures.
    Within USET, we have a number of discussions about how to 
promote economic development. It is clear to us that all too 
often the barriers to economic development are artificial in 
nature. For example, there's too much Federal and sometimes 
State control over economic development decisions on Tribal 
lands, as alluded to in the earlier presentation. Because of 
the need for excessive studies and reviews and often complex 
process requirements, many projects fail before they are given 
the chance to succeed. Excessive regulatory and bureaucratic 
requirements create long delays and add to project costs.
    The good news is that such barriers can be changed. The 
path forward should include freeing up Tribes to make their own 
decisions; for example, it would be worth exploring on a 
demonstration basis allowing some Tribes to move trust lands 
into restricted fee status. These lands will be subject to a 
restriction against alienation and should be tax free zones, 
but as restricted fee lands, the Tribe should be freed of 
Federal influence over the Tribal development and leasing 
decisions.
    Your Committee's recent passage of the HEARTH Act is much 
appreciated and a great step in this direction.
    There is a lot of work that can be done, and there is a lot 
of work that remains to be done in the area of taxation. Tribes 
are governments. Just as any other government depends upon tax 
receipts, so should Tribes be able to do so. However, Tribes 
have to deal with both Federal and State intrusion. The often 
unclear tax rules in Indian Country jeopardizes the interest by 
outsiders wanting to do business; for example, because States 
are allowed to tax non-Indian activity on Tribal lands, Tribes 
effectively cannot exercise their own taxation rates.
    If they do so, the effect of double taxation is to drive 
out these potential investment partners. In general, Tribal 
lands should be Federal and State tax free zones. There should 
also be investment tax credits for entities that choose to 
invest in Indian Country. It would also be beneficial to 
clarify that the National Labor Relations Act allows Tribes to 
manage and regulate labor issues on their own land. Finally, it 
would be helpful to amend Federal law to allow Tribes subject 
to state jurisdiction under Public Law 280 and similar acts, to 
elect to have that jurisdiction rescinded and return to the 
normal Tribal jurisdictional status under Federal law.
    Tribes are consumed with fighting to maintain their 
existing resources. If the Federal Government would honor and 
fulfill its trust obligations, Tribes could spend greater time 
on growth and progress. It is the time for systemic changes 
that free us from the change of dependency and offer the 
opportunity for empowerment.
    In my opinion and both in the personal experience and the 
experience of many of my Oneida people, one of the most urgent 
and critical needs for such partnership is in the area of 
education. My ancestors understood this, and taught our 
children how to hunt and fish and build shelter and farm the 
land. We must teach our children today the skills they need to 
thrive in the 21st century. We must establish mentoring 
programs so that our youth can exercise talents in law, 
medicine, engineering, research and information technology. 
Above all, we must create a system in which no Indian child is 
held back from fulfilling his or her potential because of lack 
of opportunity. The Federal Government may be able to provide 
significant help in meeting these objectives for Indian 
Country. Many Tribes may benefit from technical assistance in 
setting up mentoring programs, for example, or from grants to 
build libraries and study centers on Tribal lands, or to 
provide transportation to and from these facilities for 
students. If we work together to identify specific needs, we 
can then come up with creative solutions to address those 
needs.
    Indian people are not looking for a handout. Even though 
our treatise defines such, we don't want the Federal Government 
to be taking care of us. We want the Federal Government to 
fulfill its responsibilities in helping us take care of 
ourselves. Sometimes that means providing technical or 
financial assistance. Sometimes it means getting out of the way 
so that we can exercise our rights as self-governing self-
determining people. And sometimes, as in Carcieri and 
Settlement Act fixes, it means correcting mistakes and ensuring 
that all Tribal Governments are on equal footing under the laws 
of this land.
    Always, however, fulfilling those responsibilities means 
understanding the issues that hinder Tribal Governments in 
their efforts to ensure the health and well being of our 
citizens. I applaud your efforts and the Committee's efforts 
for this important work in matters affecting Indian Country and 
for its willingness to learn from the Tribes themselves. The 
tradition of my people and the tradition of my ancestors, I 
wish you the power of the good mind and as you continue your 
work with a good heart and a good mind.
    I wish to close by saying mahalo, thank you, and stay with 
me on this one. Kupuna, my elder, a hui hou, until we meet 
again, until we meet again. And I will mauka, head towards the 
mountain, makai, be by the sea if you come to look for me.
    [The prepared statement of Mr. Patterson follows:]

  Prepared Statement of Brian Patterson, President, United South and 
                             Eastern Tribes
    Chairman Akaka, Vice Chairman Barrasso, members of the Committee, 
thank you for the opportunity to address you on overcoming barriers to 
economic development in Indian Country.
    I bring, perhaps, a unique perspective to this discussion. As a 
representative on the governing Council of the Oneida Indian Nation of 
New York, I can tell you how my people and our neighbors have benefited 
from the success of our business operations--how our Turning Stone 
Resort Casino has formed the foundation for our economic rebirth, how 
we have created jobs for 4,500 people in a region beset by chronic 
economic problems, how we have invested the proceeds from this Resort 
in broadening our business enterprises and in providing health, 
housing, education and cultural programs for our Members.
    On the other hand, as president of United South and Eastern Tribes, 
a coalition of 26 Tribal governments located all across the eastern 
half of the United States, I can tell you that more than half of our 
USET member Tribes do not have the same resources or opportunities to 
develop their own economies. We are limited in our ability to draw 
business to Tribal lands due to our limitations on being able to offer 
incentives and the trust status of the land. Although Tribal gaming has 
done many wonderful things for many Tribes, it is in no sense a 
panacea. In some cases, Tribal homelands are too remote to make gaming 
a viable economic development option. In other cases, Tribes have 
chosen not to pursue gaming for reasons of their own. And, in still 
other cases, some Tribes cannot pursue gaming because they don't have 
their own land on which to build gaming facilities--or because the 
status of that land is in dispute.
    Let me be absolutely clear on this point. Tribal governments cannot 
fulfill their responsibilities to their citizens if they don't have a 
stable land base from which to operate and grow. Without that basic, 
essential asset--undisputed control over their own land--nothing the 
Tribes or Congress or anyone else can do will succeed in eradicating 
the many ills that plague so much of Indian Country.
    You cannot build businesses without land.
    You cannot build health clinics or housing or schools or community 
centers without land.
    You cannot rebuild a community without land.
    And you cannot ensure that what you build today will be here for 
the next generation if you don't have clear ownership and control of 
your land.
    Unfortunately, the United States Supreme Court has brought the 
ownership and control of vast amounts of Tribal lands into question. In 
Carcieri v. Salazar, the Court held that the Secretary of the Interior 
has authority to take land into trust under the Indian Reorganization 
Act of 1934 (IRA) only for those Tribes that were ``under federal 
jurisdiction'' in 1934. The Court did not define the term ``under 
federal jurisdiction,'' and, as a result, Tribes that have been under 
active federal supervision for 200 years or more are now facing 
Carcieri-based challenges to trust acquisitions.
    The Federal Government long ago recognized that individual states 
must be treated the same under the law, regardless of when they were 
admitted to the Union. Imagine the public outcry if Alaska and Hawaii 
were denied the full rights of statehood simply because they didn't 
become states until after 1934. Yet, under Carcieri, Tribal governments 
are divided into two classes with different rights--those that were 
``under federal jurisdiction'' in 1934 and therefore have the full 
rights of Tribal sovereignty, and those that were not ``under federal 
jurisdiction'' in 1934 and therefore have fewer governmental rights. By 
creating these two classes of Tribal governments, Carcieri opens the 
door to considerable confusion and potential inconsistencies concerning 
the status of all Tribal lands, Tribal businesses, and important civil 
and criminal jurisdictional issues.
    Congressional action is needed to ensure permanent resolution of 
this issue. Although DOI may continue to acquire land in trust for 
Tribes, any decisions to do so remain under the threat of Carcieri-
based administrative and court challenges. Until Congress takes action 
to clarify that the Secretary's authority to take land into trust 
applies to all federally recognized Tribes, Carcieri will undoubtedly 
be a source of controversy.
    While Carcieri has the potential to affect all Tribes, I want to 
draw your attention to land issues that affect several USET member 
Tribes. Like Carcieri, the unintended consequences of Settlement Acts 
affecting at least eight USET Tribes means that these Tribes are 
essentially prohibited from exercising their full sovereignty as self-
determining peoples.
    The Settlement Acts were always intended to be living, dynamic 
agreements that necessarily must be able to change over time as 
circumstances and the needs of the Tribes and states also change. 
Unfortunately, in practice, the Tribes affected by the Settlement Acts 
have been unable to engage in good-faith negotiations with states to 
make meaningful, positive changes in those agreements--simply because 
state governments have no reason to engage in such negotiations.
    In addition, language in several of these Settlement Acts bars 
Tribes from fully enjoying the benefits of federal laws intended to 
help Tribes rebuild their communities and exercise their governmental 
rights. For example, the Maine Indian Claims Settlement provides that 
federal laws applicable to Indian Tribes generally shall be applicable 
unless they affect the civil, criminal, or regulatory jurisdiction of 
Maine. The Settlement Acts for all of the Tribes I mentioned either 
expressly make the Indian Gaming Regulatory Act inapplicable, or have 
been interpreted to make the IGRA inapplicable.
    States clearly have no genuine interest in correcting this 
inequality. The Federal Government, therefore, must get involved to 
ensure that all Tribes can participate in the benefits that federal 
laws are intended to bring to Indian Country.
    Ongoing study and analysis of the Settlement Acts must be 
mandatory, especially if there is the potential that federal laws 
passed for the benefit of Tribes will be made inapplicable by 
Settlement Act language, via state implementing legislation. A fully 
funded Tribal-state taskforce at the federal level directed to address 
Settlement Act language, and empowered to take recommendations to State 
legislatures via federal and Tribal representatives, must become a 
reality. And the Department of the Interior must ensure that 
recommendations to change Settlement Act language are not ignored, but 
are instead are given serious consideration by states as is the intent 
of Settlement Act language.
    As I said earlier, until and unless these issues are put to rest, 
no other efforts to improve or encourage economic development in Indian 
Country will have any lasting impact. Both Tribal governments and their 
neighboring communities need--and deserve to have--reasonable 
expectations that the investments they make today will still be here to 
generate benefits for the generations yet to come.
    That is not to say that we cannot or should not make those 
investments today. On the contrary, individual Tribes and Indian 
Country as a whole are investing every day in the future of their 
communities. Unfortunately, resources are scarce, and even when 
resources are available, complex and confusing federal rules and 
regulations often hamper efficient and effective partnerships between 
Tribal governments and private-sector entities. Tribes and federal 
elected and civil service officials must work together to find creative 
ways to streamline processes so that both Tribal communities and their 
partners may reap the benefits of cooperative ventures.
    Within USET we have had a number of discussions about how to 
promote economic development. It is clear to us that all too often the 
barriers to development are artificial in nature. For example, there is 
too much Federal and sometimes state control over economic development 
decisions on Tribal lands. Because of the need for excessive studies 
and reviews, and often complex process requirements, many projects fail 
before they are given a chance to succeed. Excessive regulatory and 
bureaucratic requirements create long time delays and add to project 
costs. The good news is that such barriers can be changed.
    The path forward should include freeing up Tribes to make their own 
decisions. For example, it would be worth exploring on a demonstration 
basis allowing some Tribes to move trust lands into restricted fee 
status. These lands would still be subject to a restriction against 
alienation and should be tax free zones, but as restricted fee lands 
the Tribe should be freed of federal influence over Tribal development 
and leasing decisions. This Committee's recent passage of the HEARTH 
Act is a great step in this direction.
    There is a lot of work that can be done in the area of taxation. 
Tribes are governments. Just as any other government depends on tax 
receipts so should Tribes be able to do so. However, Tribes have to 
deal with both federal and state intrusion. The often unclear tax rules 
in Indian Country jeopardizes interest by outsiders wanting to do 
business. For example, because states are allowed to tax non-Indian 
activity on Tribal lands, Tribes effectively cannot exercise their own 
taxation rights. If they do so, the effect of double taxation is to 
drive out these potential investment partners. In general, Tribal lands 
should be Federal and state tax free zones. There should also be 
investment tax credits for entities that choose to invest in Indian 
country.
    It would also be beneficial to clarify that the National Labor 
Relations Act allows Tribes to manage and regulate labor issues on 
their lands. Finally, it would be helpful to amend Federal law to allow 
Tribes subject to state jurisdiction under Public Law 280 and similar 
acts, to elect to have that jurisdiction rescinded and return to the 
normal Tribal jurisdictional status under Federal law.
    Tribes are consumed with fighting to maintain existing resources. 
If the Federal Government would honor and fulfill its trust 
obligations, Tribes could spend greater time on growth and progress. It 
is time for systemic changes that free us from the chains of dependency 
and offer the opportunity for empowerment.
    In my opinion--and in both my personal experience and the 
experience of many of my Oneida people--the most urgent and critical 
need for such partnerships is in education. Bringing business ventures 
onto Tribal lands is important, but it doesn't really help the Tribal 
community if our young people aren't qualified and prepared to hold the 
jobs those businesses offer. Just as our ancestors taught their 
children how to hunt and fish and build shelter and farm the land, we 
must teach our children the skills they need to thrive in the 21st 
century. We must establish mentoring programs so that our youth can 
exercise their talents in law, medicine, engineering, research, and 
information technology. We must provide tutors to help students 
overcome learning difficulties and master the material they need to 
succeed. We must make it as easy as possible for our children to get a 
good basic education, and we must provide the tools that can help them 
take their education as far as they wish to go. Above all, we must 
create a system in which no Indian child is held back from fulfilling 
his or her potential because of lack of opportunity.
    The Federal Government may be able to provide significant help in 
meeting these objectives for Indian Country. Many Tribes may benefit 
from technical assistance in setting up mentoring programs, for 
example, or from grants to build libraries and study centers on Tribal 
lands, or to provide transportation to and from these facilities for 
students. If we work together to identify specific needs, we can then 
come up with creative solutions to address those needs.
    Indian people are not looking for a handout. We don't want the 
Federal Government to take care of us; we want the Federal Government 
to fulfill its responsibilities in helping us take care of ourselves. 
Sometimes that means providing technical or financial assistance. 
Sometimes it means getting out of the way so that we can exercise our 
rights as self-governing people. And sometimes, as in the Carcieri and 
Settlement Act fixes, it means correcting mistakes and ensuring that 
all Tribal governments are on an equal footing under the laws of this 
land.
    Always, however, fulfilling those responsibilities means 
understanding the issues that hinder Tribal governments in their 
efforts to ensure the health and well-being of their citizens. I 
applaud this committee for its important work in matters affecting 
Indian Country and for its willingness to learn from the Tribes 
themselves. In the tradition of my ancestors, I wish all of you the 
power of a good mind as you continue your work.
    Skana.

    The Chairman. Thank you very much, Mr. Patterson, for your 
testimony and your heartfelt feelings as well. So, Ms. Danner, 
will you please proceed with your testimony?

    ROBIN PUANANI DANNER, PRESIDENT/CEO, COUNCIL FOR NATIVE 
                      HAWAIIAN ADVANCEMENT

    Ms. Danner. Aloha, Chairman Akaka. Welcome home.
    The Chairman. It's good to be home.
    Ms. Danner. I would like to welcome Committee staff, from 
your staff and also Senator Barrasso and Senator Johnson and 
Senator Udall. It's awesome to have the staff here. I would 
like to welcome the esteemed Tribal leader, President 
Patterson, my colleague here, coming to our homeland.
    For the record, my name is Robin Puanani Danner. I'm the 
President of the Council for Native Hawaiian Advancement, which 
is most comparable to other advocacy organizations like USET or 
NCAI or the Alaska Federation of Natives. We are governed by a 
21-member board of directors consisting of Native Hawaiian 
leaders from across the state. I'm also a 13-year homesteader 
on the Hawaiian Home Lands Federal land trust enacted by 
Congress in 1920, just 14 years after the enactment of the 1906 
Indian Allotment Act.
    Before I summarize my testimony, Chairman, I would like to 
take a moment to especially thank you as Chairman of the 
Committee and Vice Chairman Barrasso for authorizing this field 
hearing here in the State of Hawaii. From a citizen view, one 
of the biggest challenges to advancing successful solutions in 
our communities is the unacceptable view that Hawaii is a 
junket, a paradise of prosperous and lighthearted islanders and 
a place where Federal officials do not belong.
    We have record high homelessness, foreclosures that are 
climbing every day, teen suicides that are above the national 
average and frightening dependency on offshore energy and food. 
So, I want to thank you, Chairman Akaka, for rejecting those 
ill-informed notions by holding this hearing right here at home 
and firmly acknowledging, sir, that our children, our elders, 
our well-being in Hawaii is no more important and no less 
important than the families of any other State or communities. 
So, I thank you.
    CNHA's full testimony submitted to the record takes really 
a twofold approach to the Committee's topic. We separated our 
comments by economic development solutions for general business 
expansion and economic development solutions necessary for 
trust land areas. Together we identified five major categories 
and 14 specific recommendations. Of significance, Mr. Chairman, 
11 of our 14 recommendations require no new funding and have no 
budgetary impact to the Federal Government; yet, these 
recommendations truly have the potential to crush barriers 
impeding economic growth in our communities.
    For example, we recommend that the trust lands of Indian 
Tribes, Alaska Native villages and Hawaiian Home Lands be 
automatically included in the investment areas of Federal 
programs like the U.S. Treasury new market tax credits or the 
new $1 billion program the CDFI bond guarantee program that 
will be rolling out next year, or the USDA facilities and 
infrastructure programming, regardless of Census data or rural 
definition.
    Historically, the capital markets have really just ignored 
the trust land areas. We have an opportunity, however, 
Chairman, to change that reality by including our trust lands 
located in 35 states across the country, including Hawaii 
automatically as eligible for successful Federal programs that 
incentivize the private sector investments in geographic areas 
around the country. As a more specific example, the new market 
tax credit enjoys strong bipartisan support, funded at $3 
billion annually for the last ten years.
    The inclusion of trust lands in the investment area 
definition does not require any additional funding. It merely 
creates expanded opportunities for capital investors to 
consider expanding locations. So, trust land communities must 
be automatically included and not left behind.
    Another no-budget impact recommendation under the 
stabilizing homesteading rules category that we talk about in 
our testimony, we recommend the Federal Government begin the 
Federal rule-making process that has never been accomplished in 
the 90 years since the Hawaiian Homes Commission Act was 
enacted or in the 16 years since the Hawaiian Home Land 
Recovery Act was enacted in 1995.
    Business and economic development needs certainty, 
certainty of process and rules in order to make capital 
investment decisions. And our Native people need the same to 
fully engage the opportunities under their land trust. And I 
think that all would agree the Department of Hawaiian Home 
Lands, our State of Hawaii partner, would greatly benefit from 
more definitive Federal rules under which to administer its 
responsibility to issue land to their Hawaiian people.
    And yet another example of a no budgetary impact 
recommendation contained in our testimony is a legislative or 
administrative fix to enable our borrowers under the HUD 184(a) 
and FHA 247 mortgage loans programs to refinance for lower 
interest rates or to invest home equity or small business 
enterprises, purchase farm equipment, et cetera. Without this 
fix, we estimate upwards of $187.5 million in equity remains 
trapped and out of reach by our trust land residents to invest 
in college tuition, home expansions and business startups.
    We would also like to see, Chairman, these products have 
parity with our Indian counterparts that allow these mortgage 
products to be utilized on trust lands or off trust lands in 
the fee simple market. It was inadvertent. It was not included 
in ours. President Patterson was able to use his HUD 184 
anywhere in the country, whether it's in his reservation or 
not.
    Unlike Hawaiians, we are limited only to small four percent 
land base that is the Hawaiian Home Commission Act. And my 
final example of a no-budget impact recommendation, Senator, is 
for Congress to reaffirm the Federal trust relationship under 
the Native 8(a) business firms under the Small Business 
Administration program; thereby, eliminating graduation 
requirements for Tribal 8(a)'s, Native Hawaiian 8(a)'s or 
Alaska Native corporation 8(a)'s, which will strengthen truly 
one of the most successful economic development programs ever 
created.
    In closing, overall, Chairman, the most effective solution 
to overcoming economic development barriers is the extension of 
the Federal self-governance policy to our Native people in 
Hawaii through enactment of the Native Hawaii Government 
Reorganization Act. Thank you for the opportunity to be with 
you here today.
    [The prepared statement of Ms. Danner follows:]

Prepared Statement of Robin Puanani Danner, President/CEO, Council for 
                      Native Hawaiian Advancement
    Aloha Chairman Akaka and Members of the Senate Committee on Indian 
Affairs,
    My name is Robin Puanani Danner. I am the President and Chief 
Executive Officer of the Council for Native Hawaiian Advancement 
(CNHA), founded in 2001 to enhance the cultural, economic and community 
development of Native Hawaiians. CNHA, with a membership of over 150 
Native Hawaiian Organizations, dedicated to addressing the challenges 
in our communities from education to business, affordable housing to 
cultural preservation, is a statewide advocate most comparable to the 
National Congress of American Indians (NCAI), and the Alaska Federation 
of Natives (AFN).
    I am Native Hawaiian, born on the island of Kauai, raised in the 
fishing village of Niumalu, the Indian reservations of the Apache, 
Navajo and Hopi, and spent many years among the Alaska Native peoples. 
For the last 13 years, I have lived on my Native homestead issued under 
the Hawaiian Homes Commission Act, with my children and husband. My 
background includes former positions in finance as a bank executive, a 
Tribal Housing Authority executive director, and county housing 
director serving Native populations. Currently, I am the chair of the 
board of the Homestead Community Development Corporation that in 
addition to my position with CNHA, is highly relevant to the field 
hearing topic of Overcoming Barriers to Economic Development in Native 
Communities.
Field Hearing
    First and foremost, mahalo for holding an oversight field hearing 
in our homeland of Hawaii, the 50th state of the United States. It is a 
constant challenge to ensure that decision makers, policy makers and 
federal officials come to Hawaii, to see firsthand, to walk the issues 
as we do every day, just as these officials do in other states of the 
union. Many who are uninformed, assume incorrectly, that Hawaii is a 
``junket'' and a paradise without needs. We have an epidemic of 
homelessness, fast rising in the ranking of states with the most 
foreclosures, and as an island state, we are almost entirely dependent 
on imports of fossil fuel and food.
    The significance of the committee, embracing the reality that data 
feeds good policy, that there is no substitute to raising awareness and 
seeing first hand, and that no matter the distance or the logistical 
difficulty, Hawaii is as important as Montana or Wyoming, or Nebraska 
or Arizona or South Dakota. Our children, our elders, and the solutions 
that are possible to work on with the Committee are as important as any 
other. This field hearing is a powerful re-enforcement of the 
Committee's jurisdiction on our issues, and that we are not invisible 
to our Federal Government.
Native Hawaiians and the Federal Trust Relationship
    As the Committee knows, Native Hawaiians are among the families of 
Native peoples of the United States, and although not as well known, 
are included in the federal Indian policy and trust relationship. In 
1920, the U.S. Congress enacted the Hawaiian Homes Commission Act 
(HHCA), establishing a federal land trust that nearly mirrors the 
content of the 1906 Indian Allotment Act. In 1959, the U.S. Congress 
enacted the Hawaii Admissions Act, which includes language to further 
recognize the trust relationship with Native Hawaiians. Over the last 
90 years, the U.S. Congress has enacted over 150 statutes recognizing 
my people as Native, like American Indians and Alaska Natives, using 
the plenary power authorized under the U.S. Constitution to address a 
myriad of issues.
    Similar to the Office of Insular Affairs for the territorial 
peoples of the U.S. and the Bureau of Indian Affairs for American 
Indians and Alaska Natives in the Department of the Interior, Congress 
created the Office of Native Hawaiian Relations to continue the process 
of reconciliation in accordance with P.L. 103-150, the Apology 
Resolution, and to oversee the trust responsibilities of the United 
States to Native Hawaiians, with a particular emphasis on the HHCA and 
the 1995 Hawaiian Home Land Recovery Act.
Native Hawaiians and the State Trust Relationship
    One of the conditions of statehood enacted by the United States was 
a compact between the federal and state governments, to administer the 
HHCA referenced above through the establishment in 1961 of the state of 
Hawaii Department of Hawaiian Home Lands (DHHL). The Hawaii state 
constitution incorporates and embraces the United States' trust 
relationship to Native Hawaiians, which was further strengthened by the 
1978 Constitutional Convention which established a second state agency, 
the Office of Hawaiian Affairs (OHA). Each of these state agencies are 
public trusts of the people of Hawaii, not representing Native 
Hawaiians, but rather representing all of the people of our state to 
deliver on the trust mandates established under federal law and state 
law. There are similar ``Offices of Indian Affairs'' in other state 
governments, including Utah and Arizona.
    In 2011, the state of Hawaii enacted Act 195, to recognize a Native 
Hawaiian government, as have been done more than 60 times in other 
states of the union. In 2011, this honorable committee, the Senate 
Committee on Indian Affairs, voted to approve the Native Hawaiian 
Government Reorganization Act, to similarly recognize the self-
governance of Native Hawaiians, creating parity with the more than 560 
Native governments in approximately 35 states of the country.
    In summary, the relationship of Native Hawaiians to state and 
federal governments, is very similar and mirrors the policies and 
agencies of our counterpart Native peoples in the other 49 states. The 
Department of Hawaiian Home Lands (DHHL) and the Office of Hawaiian 
Affairs (OHA), are Hawaii state agencies with trust responsibilities to 
Native Hawaiians. Similarly, the United States government has 
acknowledged its federal trust responsibility to Native Hawaiians and 
administers it through agencies such as the Departments of the 
Interior, Health and Human Services, and Housing and Urban Development.
Native Hawaiians and Their Trust Land Representative Organizations
    Similar to Indian Country and the organization of Native 
governments around trust land areas, eligible Native Hawaiians have 
long held and established governing organizations organized around the 
trust lands established under the HHCA. These organizations are 
commonly referred to as homestead associations, or homestead 
beneficiary organizations. Over 30 such homestead associations exist 
across the state, tied directly to homestead trust lands of the HHCA. 
Each has enrolled homestead members and residents, and each 
democratically elects its leadership.
    In many ways, these homestead associations mirror the mission and 
representation that pueblos, Tribes, or villages do in other areas 
where federally created trust land areas exist. Participation is 
voluntary in nature by eligible members, and the actions of these 
homestead associations are governed by the participating eligible 
members.
    There exist many other significant types of Hawaiian organizations, 
including social justice private nonprofits, member nonprofits like 
CNHA or the civic clubs and Royal Hawaiian Societies. These 
organizations are similar to the service focused, cultural and advocacy 
organizations of many Native organizations around the country. The 
homestead associations are significant in the context of the hearing 
topic of Overcoming Barriers to Economic Development in Native 
Communities, as the solutions discussed require an understanding of the 
distinction between Native Hawaiian communities that are on trust lands 
similar to Indian reservations and Native Allotments which are unique 
and distinct from Native Hawaiian communities that are not on trust 
lands.
Overcoming Barriers to Economic Development
    Our testimony is organized into two distinct areas of discussion 
and recommendations--General Economic Development and Trust Land 
Economic Development.
I. General Economic Development
    This discussion content focuses on information and recommendations 
relevant to advancing Economic Development regardless of geographic 
location. Although Native Hawaiians represent roughly 23 percent of the 
population in the state of Hawaii, we represent fewer than 9 percent of 
the total small business firms. The two top barriers to economic 
development we will focus on are business development and access to 
capital.
A. Business Growth: The SBA 8(a) Program
    The SBA 8(a) Business Development program was born in the 1960s to 
address the economic disparity of minority populations, including 
veterans, women, and racial minorities. The program sought to connect 
under-represented Americans in the commerce of the country--doing 
business with and serving one of the best customers on the planet, the 
Federal Government. A brilliant and successful program that not only 
increased the number of vendors available to our government, but it 
also created opportunities to establish and grow healthy American-
owned, American-run companies that added to the nation's economic 
growth and health.
    In the decades that followed, the Congress recognized the success 
of the SBA 8(a) program for individual American-owned firms, and 
connected it to the federal trust responsibility to its Native peoples 
by amending the program to include Native community owned enterprises 
for Tribal governments, congressionally mandated Alaska Native 
Corporations and Native Hawaiian nonprofits. With a historical view of 
over 200 years of Indian policy to address the impact of building a 
great nation with the lands of Native peoples, it is absolutely clear 
that the amendments to the SBA 8(a) program to include Native 8(a) 
firms is one of the single most successful policies to be made.
    Native 8(a) firms are not owned by individuals like their 
counterpart Minority firms, but rather by organizations that are 
accountable to millions of Native members and not to private investors. 
These organizations exist to lift up entire Native populations, to 
invest any and all resources available to this mission, whether an 
American Indian Tribe, an Alaska Native Corporation or a Native 
Hawaiian Organization. Every business success under the Minority 8(a) 
is one more individual with economic hope and the chance for 
prosperity. Every business success under the Native 8(a) brings 
economic hope to millions, and provides a tool that is so well suited 
under the federal trust policy--the tool of commerce with our own 
Federal Government, to advance and lift up our communities for which 
the government has a solemn trust responsibility.
    Moreover, every Native 8(a) is an American company. We don't move 
overseas when the economy gets difficult. We are American firms, with 
roots deeper than the country itself. We are engines for economic 
recovery for our communities, for the counties and the states where we 
are located, and we hire our fellow Americans. There is no question 
that the Congress was exactly right, to amend the SBA 8(a) Business 
Development program that has and continues to be a successful program 
for individually-owned American firms, to extend it to be a successful 
program for community-owned Native firms with a unique federal 
relationship as long as the country is old.

    SBA 8(a) Recommendations

    As the most successful program to advance the economic self 
determination under the federal trust policy, the Native 8(a) program 
should be expanded and strengthened! There are six areas of 
recommendation presented:

        1.  No Funding Required: Establish Federal Contracting Goals 
        for Native 8(a) Firms. Minority 8(a) firm categories have 
        established contracting goals. We recommend that the Congress 
        establish minimum contracting goals for Native 8(a) firms 
        separate and in addition to the existing goals for Minority 
        firms.

        2.  Minimal Funding Required: Adequately Fund SBA Oversight, 
        Training and Technical Assistance. Native 8(a) firms are unique 
        given their unique ownership, and unique business mission. We 
        recommend that the Congress appropriate $10 million a year to 
        the SBA dedicated to oversight of the entire SBA 8(a) program, 
        including Native 8(a) firms, and to implement consistent and 
        qualitative training, technical assistance and compliance 
        monitoring for Native 8(a) firms and Federal Government 
        contracting officers.

        3.  No Funding Required: Reaffirm the Federal Trust 
        Relationship. Native 8(a) firms are defined as firms owned by a 
        very specific group of Native organizations, specifically, 
        Tribal governments, Alaska Native corporations mandated by 
        Congress and Native Hawaiian controlled nonprofits with a 
        social mission. We recommend that Congress enact legislation to 
        reaffirm the participation of these organizations in the 8(a) 
        program as part and parcel of the federal trust responsibility 
        to advance economic self determination.

        4.  No Funding Required: Remove Barriers to Facilitate Growth 
        of Native 8(a) Firms. As Native organizations that are uniquely 
        dedicated to and mandated to exist to address the social and 
        economic well-being of Native peoples over any dedication to 
        investors or individual wealth, these organizations should be 
        exempted from graduating out of the SBA 8(a) program, should be 
        exempted from size standards or economic disadvantaged criteria 
        applied to individuals, and should have an SBA 8(a) application 
        form that is relevant to these organizations, so long as the 
        federal trust responsibility exists.

        5.  Minimal Funding Required: Build Capacity of Native 8(a) 
        Firms. Establish and fund a mentor protege program to encourage 
        mature Native 8(a) firms to mentor emerging Native 8(a) firms. 
        There are no better mentors than those that understand the 
        mentee's history, challenges, structural composition and 
        business goals to advance community solutions. We are seeing 
        some success by pockets of Native organizations around the 
        country. Leveraging this success to share it along with best 
        practices is a powerful tool of capacity building.

        6.  No Funding Required: Congressional Oversight and Reporting. 
        Native organizations are unique and have a very different 
        business goal and model. They are very much an important 
        stakeholder in achieving the purposes of the federal trust 
        policy. As such, the participation and progress of these 
        organizations in the SBA 8(a) program should be monitored by 
        the Congress. We recommend that every 5 years, the SBA Office 
        of Native American Affairs produce a Congressional Report to 
        measure the progress, success and impact of these organizations 
        in the business of government contracting.
B. Access to Capital: The Native CDFI Assistance Program
    In the 1990s, the U.S. Treasury Department established one of the 
most successful ``access to capital'' programs in the country, serving 
under-served and rural populations and communities in every state, the 
Community Development Financial Institutions Fund (CDFI Fund). 
Essentially, the CDFI Fund creates opportunities for capital to flow to 
communities through nonprofit loan funds certified by Treasury, and 
receives seed funding that attracts private capital. The program has 
facilitated access to billions of dollars of capital to areas unable to 
be served by conventional financial institutions. In 1999 and 2000, the 
Treasury Department engaged in analysis and consultation with Native 
leaders to ascertain why there was low participation by Native 
communities in the CDFI Fund and to bring this successful program to 
bear.
    Sol Kahoohalahala, Blossom Feiteira, myself and many others 
participated in roundtable discussions with Tribal leaders from Alaska 
and around the country. The result of the national dialogue established 
the Native American CDFI Assistance program (NACA), part and parcel of 
the larger CDFI Fund for the country. Having a subset product on Native 
areas, has proven to be an outstanding strategy, and resulted in 60 
Native CDFIs being certified across the country, now deploying capital 
on the ground in their communities. It is a great beginning, and will 
result in a highly effective tool to overcoming the access to capital 
barrier that has prevailed for centuries in our Native areas.

    Native CDFI Recommendations

    There are two areas of recommendation presented:

        1.  No Funding Required: NACA Permanence. Make Permanent the 
        subset NACA program with established formula based funding.

        2.  No Funding Required: Matching Funds. Allow funding from 
        other federal agencies to be eligible as matching funds to the 
        NACA program, to increase overall impact in Native communities 
        and trust land areas which will reduce duplicate lending 
        related functions delivered by multiple sources of funding.

II. Trust Land Economic Development
    This discussion content focuses on information and recommendations 
relevant to advancing Economic Development on and in trust land areas. 
Access to trust lands, access to capital, and stability in the 
homesteading program rules are the top barriers to economic development 
for trust land areas and Hawaiians.
A. Access to Land for Economic Development
    The trust lands established under the Hawaiian Homes Commission Act 
of 1920, fourteen years after the 1906 Indian Allotment Act, 
essentially calls for the issuance of homestead allotments to eligible 
Native Hawaiians for residential, agricultural and pastoral purposes, 
otherwise referred to as ``homesteading''. The HHCA also allows for 
trust lands to be issued for ``nonhomesteading'' purposes, with 
specific language and sections established to promote the self 
determination and self-sufficiency of Native Hawaiians through land 
instruments for commerce and other purposes.
    Over the 90 year history of the administration of the trust by the 
federal, territorial and state governments, the non-homesteading aspect 
of land use, has almost entirely been used to benefit state government 
operating budgets, or businesses and organizations not controlled by 
Native Hawaiians, even though section 204 and section 207 of the HHCA 
clearly sets out a priority for Native Hawaiians.
    In the limited instances where access to land has been made 
available for commerce under the HHCA to Native Hawaiians and/or their 
economic development organizations, extraordinary work and economic 
impact has resulted. For example, on Hawaii Island, the homestead 
association, Makuu Farmers Association, was licensed a small parcel of 
trust lands under section 207 of the HHCA. They run a very successful 
Farmers Market serving the entire community of vendors and consumers, 
while utilizing net revenues to self sustain the operation of the 
marketplace.
    On the island of Kauai, yet another homestead association, the 
Anahola Hawaiian Homes Association, was licensed two parcels of trust 
lands under section 207 of the HHCA as well. Today, an outdoor 
marketplace is in full operation with vendors from across Kauai, and 
consumers from the visitor industry engaging in commerce in this 
homestead community. The second parcel is under way to be developed as 
a Cultural Camp & Academy which will be sustained through revenues and 
occupancy fees year round.
    On the island of Oahu, the Nanakuli Homestead Association is 
working to develop a commercial center to bring business and consumer 
goods to their homestead community, as well as a cultural center and 
affordable housing project. Also on the island of Oahu, the Waimanalo 
Hawaiian Homestead Association has successfully developed a community 
center, certified kitchen and other self-sustaining projects serving 
the entire community.
    These examples represent hundreds of jobs collectively. These 
examples are also far too few, but have the potential to be greatly 
increased, if access to land by Native Hawaiians is implemented as the 
Congress intended with the enactment of the HHCA in 1920.

    Access to Land Recommendations

    There are two areas of recommendation on Access to Land presented:

        1.  No Funding Required: Active Federal Oversight on Land 
        Instruments. Engage an oversight hearing scheduled every 4 
        years by the SCIA to require the state of Hawaii, DHHL to 
        report to the Congress, on the land disposition of Hawaiian 
        Home Lands to Native Hawaiians and/or organizations controlled 
        by them for homesteading, economic development and commerce.

        2.  Minimal Funding Required: Tribal & Native Land Development 
        Capacity. Establish a Trust Land Development Capacity pilot 
        program within the Department of Commerce for Tribes and 
        Homestead Associations with trust lands to pursue development 
        projects that promote jobs, economic impact and wealth in the 
        states where trust lands are located. Funded at a pilot level 
        of $5 million for 5 years each, is an extremely small 
        investment to achieve results that align trust lands with the 
        economic recovery of the country, in education, in energy and 
        business districts.

B. Access to Capital on Trust Lands for Economic Development
    The trust land nature of Hawaiian Home Lands is both a blessing and 
a curse for economic development. It is a blessing for many of the same 
reasons it is for Indian Country, which is a preserved land base held 
in trust that cannot be alienated, for our people to nurture Native 
Hawaiian language and culture, and continue our life ways as the 
original peoples of the Hawaiian Islands, regardless of homesteading 
eligibility by any individual Native Hawaiian. However, access to 
capital is made more difficult due to the trust nature of our lands.
    It need not be a curse, with strategic approaches that ensure 
capital intended for all of America, is also considered for trust land 
areas like Hawaiian Home Lands, Indian Reservations and Alaska Native 
villages.

    Access to Capital on Trust Land Recommendations

    There are two recommendations to systematically improve access to 
capital on trust lands.

        1.  No Funding Required: Eligibility of Trust Lands for Federal 
        Programs. Make trust lands in the 35 states where they exist, 
        automatically eligible as investment areas under all federal 
        programs, including U.S. Treasury, USDA, HUD, regardless of 
        census tract income data or rural definitions. This no cost 
        action and policy making by the Federal Government will advance 
        the incentives and awareness of economic development 
        opportunities by the capital markets in a greater way. Access 
        to capital is the lifeline to any healthy community, and its 
        ability to produce economic impact. The particular areas where 
        this recommendation will increase the flow of capital includes 
        but is not limited to:

        New Market Tax Credits (Treasury)--wherein private 
        sector, financial institutional dollars are incentivized to be 
        deployed in certain census tracts around the country. Inclusion 
        of trust land areas will broaden the spectrum for these 
        investors to consider projects in trust land areas, whether for 
        energy, business, school facilities or marketplaces.

        USDA Funding--wherein agricultural, rural business, 
        water/waste water infrastructure and telecommunication programs 
        are incentivized to grow the nation's agri-business, healthy 
        foods, broadband and development infrastructure in rural 
        defined areas. Inclusion of trust land areas will ensure access 
        for trust land areas, that are woefully underserved, but have 
        tremendous potential for some of the greatest job creation and 
        economic recovery strategies for Native peoples and the local 
        and state economies where they are located.

        CDFI Bond Guarantee Program (Treasury)--a program 
        enacted by Congress in 2010 to increase capital through bond 
        guarantees to eligible census tracks in the country. Inclusion 
        of trust land areas in the eligible definition, provides yet 
        another platform for the barrier of accessing capital to be 
        addressed. This program is framed to deliver $100 million 
        dollar blocks of bond guarantees to projects and infrastructure 
        nationwide.

        2.  No Funding Required: Mortgage Product Parity on Hawaiian 
        Home Lands. One of the primary sources of capital for economic 
        development and small business start up, is home equity. We 
        recommend that the HUD 184a and FHA 247 mortgage loan products 
        developed based on Indian Country's products, be updated to 
        bring parity to the ability to refinance and invest home equity 
        in business ventures.

C. Stability in Trust Land Rules
    Trust land allotments to Native Hawaiians consist of long term 
leases of land for residential, agricultural and pastoral homesteading. 
Particularly in the case of farms and ranches, the success of these 
activities can greatly depend on generations of family farmers and 
ranchers. Original lessees may designate successors to these 
allotments, however are limited to certain familial designations, which 
can be a barrier to the long term investment and success of farming and 
ranching under the homestead program of the HHCA.
    Moreover, the Federal Government has never promulgated 
administrative rules under which its delegated authority to the state 
of Hawaii is to be implemented, resulting in disputes that can be 
avoided through the federal rule making process. Economic development 
and business, like anywhere in America, requires certainty in the rules 
and processes--trust land areas are no different.

    Stability in Homesteading Program Rules Recommendations

    Federal consultation policies have a proven record of being a best 
practice in addressing challenges of Native communities. As such, we 
have two recommendations to engage this successful practice:

        1.  No Funding Required: Consultation by State of Hawaii and 
        DOI. Under the committee's jurisdiction on Native issues, 
        encourage the state of Hawaii, DHHL, or the federal Department 
        of Interior, to engage in consultation to dialogue with 
        Homestead Associations, to identify priorities for the HHCA 
        which would provide stability for homesteading for generations 
        of families, creating a stable environment for economic 
        investment, economic development and economic self-sufficiency.
        2.  No Funding Required: Implement Federal Rulemaking on HHCA 
        and HHLRA. Request the federal Secretary of Interior to begin 
        the process of federal rulemaking for the Hawaiian Homes 
        Commission Act, and the Hawaiian Home Land Recovery Act, to 
        adequately provide guidance to the state of Hawaii, on the 
        implementation of these laws.

Conclusion and Summary
    In conclusion, eleven of the fourteen recommendations contained in 
this submission represent action items that have no federal budget 
impact. Funding is an ever-needed resource however there are huge steps 
that can be taken to advance economic development in Native communities 
that require no funding at all. We hope the committee will consider our 
recommendations for Native Hawaiians, but also for all Native peoples 
in the country.
    In addition, Chairman Akaka and Members of the Committee, we extend 
our thanks for the committee's work on the Native Hawaiian Government 
Reorganization Act of 2011. The real root barrier to economic 
development for any Native peoples, whether on trust lands or anywhere 
in our homelands, is the ability to take responsibility and control of 
our assets and resources under the federal policy of self-governance.
    History is a great teacher. Over the last 2 centuries, the country 
has struggled to balance the building of a great democracy and the 
impact on its indigenous peoples. Our Federal Government tried 
extermination, wardship, assimilation, termination, and under an 
evolving policy under the Kennedy and Johnson Administrations, and then 
with decisiveness under the Nixon Administration, the Federal 
Government firmly embraced the policy of self-determination and self-
governance toward Native peoples.
    Study after study, including those completed by Harvard University 
in the last decade, validates this policy as the most successful. The 
Congress has the plenary power to enact legislation on behalf of Native 
peoples. While we have made advances in the areas of housing, 
healthcare, and education where Congress has taken action--the real 
game changer for our socio-economic condition, lies in our self-
governance and responsibility for our collective assets and resources 
to advance the solutions that connect us to our homelands.
    If the trust relationship has meaning, if we are to honor those 
that have gone before us, if we are to build upon a difficult past to 
create the future we can all be proud of, then we must embrace and lift 
up the solutions that take down the barriers to economic self-
determination. CNHA is firmly in support of the passage of the Native 
Hawaiian Government Reorganization Act.
    Mahalo for the opportunity to submit comments to the Committee.

    The Chairman. Thank you very much for your testimony.
    Mr. Patterson, USET represents approximately 25 Tribes who 
have very diverse economic development needs and opportunities. 
Some Tribes are well established. Of course, others are in the 
beginning stages. Given the diversity of USET Tribes, what are 
your recommendations for how Congress and the administration 
can help Tribes achieve economic self-sufficiency?
    Mr. Patterson. Absolutely great comment. Thank you, 
Chairman. It is, you know, it is a very difficult landscape to 
manage. Even Tribes with great success, which I have Tribes 
that have the largest resort casinos in the world. You know, it 
takes time to manage and overcome the 200 years of poverty, 
deprivation and multigenerations of trauma that people have 
endured. But it's very difficult to manage and advance the 
priorities with Tribes that have little or no economic 
development, which are many in USET. And we're going to begin 
to focus on that.
    And I believe there exists a great opportunity for our 
Tribes across Indian Country to really work in collaboration 
and through leadership to identify the restrictions in 
recommendations that affect economic development, to identify 
the challenges in overcoming those restrictions that are faced 
by Indian Country. Some of those include access to capital, job 
skills and training, need for interagency collaboration. And in 
doing so, I think it provides great opportunities to Tribes to 
identify the Federal resources and technical experience, the 
programs that are there that exist within the Federal 
Government. That we have that opportunity to identify all the 
Federal programs available to Tribes, and by addressing --by 
becoming aware of these cases, I think we have the opportunity 
to remove the regulatory barriers such that exist in energy 
development.
    And by doing so, it also goes along the lines, as Mr. Smith 
has identified, I think by advancing in this direction, we 
bring real leadership to the Indian Country, real opportunity 
to Indian Country. And we go to promote a better future for our 
youth across Indian Country. You know, I'm a lifelong member of 
ASES, American Science and Engineering Society, and I just so 
admire the work they do with Indian Country. And if you go to 
one of their conferences and you look, there's NASA. There's 
Chrysler, IBM, all these prominent, prominent opportunities 
recruiting the brightest and greatest minds of Indian Country.
    But you know what, I've never heard of an American Indian/
Native Hawaiian youth saying, you know what, I want to grow up 
and go to work for one of these leading companies. It is always 
I want to go to work and come back and make a difference for my 
people. I need to make an impact for my future generations. And 
I think, you know, the results of this collaborative process 
would allow for our young people to turn inward back to their 
home communities to address the many issues and trauma, 
multigenerations of trauma that we've endured. So, I really 
think the key is we can get issue specific such as access to 
capital and the tax issues, but I really think if we could work 
in a collaborative fashion, we can really lead our leaders in 
an effort that identifies the opportunity that currently exists 
and brings strategies to advance those. Thank you.
    The Chairman. Thank you very much for that response.
    Ms. Danner, I found your written testimony to be 
thoughtful, providing 14 recommendations to improve economic 
development for all Native peoples. If the Committee could 
advance just one or two of your recommendations, which ones do 
you think have the highest priority for economic development?
    Ms. Danner. Senator, Native 8(a) absolutely would be number 
one on my list. It touches American Indians, Alaska Natives and 
Native Hawaiians. It is the most successful economic 
development program for Indian business, for Hawaiian business. 
Indian Country has been in it for a couple of decades. The 
Alaska Natives have been in it for a couple of decades. Native 
Hawaiians have just started just in the last ten years.
    But it has enabled our community-owned companies, American 
companies, to engage in having the best customer there ever is 
to ever be on the planet, which is the Federal Government 
itself. Native 8(a) contracting is powerfully important. When 
economic times get tough, Indian companies, Native Hawaiian 
companies, we don't leave town. We stay in our communities. Our 
companies stay, and we continue to hire people. That would be 
my number one if this Committee could move legislation.
    My second top priority for economic development across the 
board would be to move an initiative that establishes trust 
lands wherever they are located in the 35 states that I'm aware 
of to be automatically included as eligible for successful 
Federal programs. We keep becoming the afterthought of the 
afterthought. For example, when Congress or the Administration 
establishes a program, they'll say, okay, we want to make sure 
we take care of rural. We want to make sure we take care to low 
to moderate income. Those are mandatory standards.
    I would like to add a third standard, Senator, that says 
we've got take care of the more difficult places, the deserts 
of capital, which is trust land areas where the capital markets 
continue to ignore us. So, we need to be third leg of that 
double stool. So, that the preferences are for rural. That 
takes care of rural America. The preferences are for low to 
moderate Americans no matter where they live, and trust land 
areas, which scare the markets or because they're uncertain.
    But what it does is it creates an incentive and an 
invitation to come check it out, come to talk to President 
Patterson, come talk to Chairman Allen about trust land. And if 
we could do that, Senator, that would not be a short-term fix. 
That would be one of the long term legacy policies that would 
make sure that Native business people, Native government 
leaders are at the table when the capital markets are moving. 
We're right there with them. We're on their minds, and they're 
on our minds.
    So, those would be my top two recommendations, Senator, to 
move a strong legislative agenda on Native 8(a) and to move a 
strong legislative agenda to influence and get trust lands, 
SUTA, Substantially Underserved Trust Land Areas, as a standard 
just like a low to moderate income is, just like rural is.
    The Chairman. Thank you. Thank you for your answer there 
and your response.
    Mr. Patterson, the Committee recently held a Tribal 
taxation roundtable where issues were discussed such as 
taxation of Tribal Government programs, lack of access to tax 
exempt bonds and tobacco taxation. Can you tell the Committee 
what recommendations you have for dealing with these various 
tax issues?
    Mr. Patterson. Absolutely. Great platform. I think the 
first thing that needs to be a fundamental, systematic, 
systemic kind of issue is that whenever we're talking of these 
issues, we recognize that Indian Country and Tribal Governments 
have standing in the unique relationship with this country. I 
would also, whenever States are interjected into language, that 
Tribal Governments are also included in that same breath. I 
think that that is a great disparity, and the States feel that 
they have a greater right than the Tribes, because there's not 
this basic awareness.
    When we talk of the issues affecting taxations, we can get 
specific on issues such as tax exempt bonds, Tribal economic 
development bonds, security bonding, et cetera, which I am by 
no means an expert. But what I am concerned with is that these 
continued direct frontal attacks that are infringing on our 
Tribal abilities and Tribal sovereignty, that Tribal leaders 
from across the country become engaged and discuss platforms to 
advance their issues.
    To date, the United South and East Tribes along with the 
Affiliated Tribes with Northwest Indians, ATNI, held a meeting. 
And we invited NCAI along for the ride. And we met down at the 
Miccosukee Indian Reservation. And it was a Tribal leader 
effort to advance the issues which are many that we are facing 
in taxing. And from that initial meeting, we're going to have a 
second meeting in California. It was supposed to be this month. 
It needs to be rescheduled.
    We have identified four priority areas in which we feel we 
can move forward. I will mostly certainly advance them to 
Loretta and the staff, so you can see specifically what the 
Tribal leaders are talking about. My intent, my interest is 
first and foremost in ensuring that the Tribal leaders have a 
vision to ensure that the Tribal leaders have a goal and to 
strategize the priorities to meet those objectives. But I think 
the greatest need is when we're talking on taxation in Indian 
Country, that whenever States are mentioned that Indian 
Country, Tribal Governments are mentioned right along with 
States. Thank you.
    The Chairman. Thank you for your response.
    Ms. Danner, following up on what you had mentioned, what 
does the SBA 8(a) program help to advance economic development 
in Native communities, and how can we maximize this program's 
potential?
    Ms. Danner. The SBA program advances business. It is 
responsible, probably one of the single-most impressive Federal 
programs to advance business ownership control by Native 
peoples across the nation creating jobs, not just for our own 
communities and our own members of our communities, but also 
for the economies in our counties and in our States. Where we 
are located, we are creating waves of economic development. And 
I think that the recommendations included in my testimony 
around the SBA is I think that we have to take a frontal 
approach of what the critics of the program are, which is they 
confuse the Native 8(a) program with the minority individual 
8(a) program; whereas, our Native 8(a) program, these are 
business firms owned not by individuals. They are owned by 
entire communities.
    They are owned by Tribal Governments. They are owned by 
Congressionally created Alaska Native Corporations. They are 
owned by Native Hawaiian non-profits. All three of them are 
accountable, not to any shareholder or investor, these business 
enterprises, social enterprises are accountable to millions in 
communities. And so, I think we need to just embrace that 
reality, and we're not trying to do a Native 8(a) inside a 
minority program. I think if we have a legislative approach, 
Senator, that reaffirmed the Federal trust relationship and 
that that is the source of the Native 8(a) program from the 
very beginning, I think if we eliminate the graduation 
requirements of our Native 8(a) firms out of that program every 
nine years having to reapply--the trust relationship is the 
trust relationship.
    It is forever. And so, that relationship of economic 
development, and hand on our shoulder is forever. It doesn't 
end in nine years and restart every nine years. I think that if 
we could be bold and courageous about that Federal trust 
relationship and put forward legislation that acknowledged it 
and provided technical assistance for emerging 8(a)'s. For 
example, the SBA has a mentor protege program for big companies 
to mentor little companies. The reality in our company is we 
are better mentors for one another. So, I would love to see a 
section of the Native 8(a) program for those who are successful 
in the 8(a) programs, that are Tribal 8(a), there's a mentor 
protege program for them to incentivize to mentor the smaller 
Tribes or Native Hawaiian organization 8(a)'s.
    We have a lot we can share with one another. We don't 
necessarily need to go through the barriers to convince the big 
corporate dynamo why it is we have a corporation that gives up 
all our revenues cultural development and language 
preservation. So, I think as part of the economic recovery of 
the nation, it is a bright spot. It is hugely a great 
opportunity for Native American companies to show that we can 
do business. We've been training for thousands of years. If, as 
President Patterson said, the Federal Government can just get 
out of the way. But before you do, embrace and strengthen the 
fact that Native 8(a) is not an affirmative action program. It 
is a trust relationship program, that we're in this marriage 
forever together.
    The Chairman. Ms. Danner, based on your experience and your 
expertise, I was interested in the need for more certainty for 
capital investments through Federal rule-making for the 
Hawaiian Homes Commission Act and the Hawaiian Home Land 
Recovery Act, which I sponsored in 1995.
    Can you share how the Federal rule-making process will 
strengthen the purposes of those important land acts for Native 
Hawaiians, how it will help to remove barriers to economic 
development in these communities?
    Ms. Danner. Chairman, Federal administrative rules to some, 
and even to me sometimes, can be bureaucratic. Sometimes we run 
away from them, and sometimes we should run toward them. This 
is an area that I think after 90 years of not having Federal 
Administrative Rules for the Hawaiian Homes Commission Act, not 
having Federal administrative rules for 16 years after the 
Hawaiian Homes Recovery Act was passed, this is a time for us 
to take, to start the ball, to create a beginning and start to 
develop those administrative rules for the next generation and 
the generation after that.
    Because first and foremost, the development of rules 
creates a certainty, a process and land use goals for 
partnerships and land users. And for 50 years, the State of 
Hawaii has been the trust agent for the Federal Government and 
the administration of the Hawaiian Homes Commission Act. 
They've pretty much been absent. There has been no oversight or 
capacity building of their state agency partner, their state 
government partner.
    And so, I think that the Federal rules process, if we start 
it, what it will do is begin to build capacity at our state 
government level interacting with people like Mr. Smith, and we 
don't have to take so long to learn the power of consultation. 
It will happen much faster if the Federal Government will step 
forward and take its oversight role over state government, 
start those engaging conversations that we would advance the 
empowerment and self-determination successes that I hear 
through President Patterson and others when they speak.
    I also want to say that if we do this Federal 
administrative--promulgate Federal administrative rules, I 
think we will begin to see a mitigation of lawsuits. Right now, 
the State of Hawaii and its attorney generals are not meeting 
with other attorney generals that have people like your staff 
director Loretta Tuell. These are people who invest their lives 
in Indian law, in Federal management. We're way out here, and 
so our attorney generals and our lawyers here look at 
everything through the affirmative action lens, where we should 
be looking through the trust administration.
    So what happens is we have a state agency, the Department 
of Hawaiian Home Lands. It means well, does not have the 
experiences of other Native peoples and doesn't have the 
guidance and oversight of the Federal Government. There are no 
clear administrative rules, so interpretations change four 
years to four years, every time there is a new governor, every 
time there's a new administration. So, the Hawaiian people, 
we're left to figure out those disputes by either battling it 
out politically or in the courts.
    And so, I think that if the Federal oversight Department of 
Interior did its job and began to have oversight over the 
Department of Hawaiian Home Lands, which will create capacity 
building by having that interaction, then I think we will see 
less lawsuits. Because the State of Hawaii will have a more 
clear path of administrative rules on how to implement, and 
they'll have the benefit of Indian Country and how the 
Department of Interior impalements certain aspects of the law.
    So, while, you know, no one wants to see papers and papers 
and papers of the Federal Register, it's just true that without 
that Federal administrative rule guidance for us as 
beneficiaries, as Hawaiians, for the state government, there's 
more disputes.
    So, I just think it would be a capacity building issue, and 
it would help us to stop spending our valuable resources on 
legal fees and start collaborating together and start 
implementing some of the great lessons that Indian Country has 
spent 200 years teaching the Federal Government.
    The Chairman. Thank you for your response.
    Finally, let me ask Mr. Patterson whether you have any 
comments to make on that particular question?
    Mr. Patterson. You know, I really like the thoughts. She 
reminds me, back home, the matrilineal culture, led by our 
grandmothers represent the heart and soul of our communities. 
They are the true leaders of our nation. Us men, we certainly 
just operate within the scope of authority, but it's the women 
who hold the heart and soul of our people in our country and 
our nation. And I like to see Ms. Robin Danner's strength and 
courage to stand up there. And when she said we've got to 
fight, I almost wanted to duck away.
    [Laughter.]
    It reminded me of back home, we say, we have to fight that 
issue. We have to stand up for our rights. Let's send our women 
up there.
    [Laughter.]
    And that's true. That's a true story. Our women have 
sustained us. I thank her for her astuteness, strength and 
courage to advance those issues. But I think these are some of 
the regulations and restrictions that I talked about, and I 
think it warrants further discussions to identify, so we can 
begin to make specific recommendations that would remove some 
of these barriers. As Mr. Smith was talking and we were talking 
about --he was talking about the economists and the loan 
program and USDA. Well, you know, in USDA, Indian Country is 
included as a socially disadvantaged minority. We are not a 
minority. We have a unique specific relationship defined by 
treaty through Constitution that states our relationship.
    And so, I think that if we were to sit down and begin to 
formulate strategies and move forward to identify this 
relationship--you know, it took me going to Harvard to talk to 
Harvard earlier to realize that relationships are paramount, 
and everything else is derivative. Something my second grader 
understands in the sand box. If she doesn't play with others in 
the sand box, she's not playing in the sand box. It took me 
quite a few years to come to that realization. So, my children 
are ahead of me in many ways, which is a good thing. But I 
think the more we can work to reexamine the restrictions, we 
could come to some specific recommendations that won't cost 
anybody anything.
    The Chairman. Well, I thank you both for your responses. It 
will be helpful for the Committee. And again, I thank you for 
being our witnesses on Panel 2. So mahalo. Thank you very much.
    I would like to invite the final panel to the witness 
table. Serving on our third panel is Honorable Nathan Small, 
Chairman of the Shoshone-Bannock Tribes in Fort Hall, Idaho. 
Also, the Honorable Ron Allen, Tribal Chair of the Jamestown 
S'Klallam Tribe in Sequim, Washington.
    And so, it's good to have both of you here with us this 
morning. And I would like to say to Mr. Smith, please send our 
aloha to Assistant Secretary Echo Hawk when you get back. And I 
want to wish all of you folks well in the Administration and 
what you're doing for the indigenous people of our country. And 
also, I just want to mention today we've had our friend here 
who has been rather prominent, and I just want to mention him 
and his family, Branscombe Richmond and his lovely wife Lei and 
his son were here. And I just want you to know he has an 
interest in what's happening here. Thank you very much for 
being here. And we will proceed with your testimony, Mr. Small.

 STATEMENT OF HON. NATHAN SMALL, CHAIRMAN, FORT HALL BUSINESS 
                COUNCIL, SHOSHONE-BANNOCK TRIBES

    Mr. Small. Thank for this opportunity to testify. My name 
is Nathan Small. I'm the Chairman of the Fort Hall Business 
Council, which is the governing body of the Shoshone-Bannock 
Tribes of Idaho. We don't like to say Idaho. It's of Idaho, 
because we've been there long before Idaho became Idaho. But I 
guess for geographical purposes, we mention Idaho.
    I'm honored to discuss the Tribes' economic development 
initiatives and the challenges we face to improve our economy. 
Before discussing our specific initiative, I would like to 
first raise our concern with the Budget Control Act. While the 
act was critical to avoid a governmental default, we urge that 
many programs be protected from cuts. In treaties with Indian 
Tribes like the Shoshone-Bannock Tribes, there were ceded 
millions of acres of our homelands to build this great nation. 
In return, the U.S. promised to provide for our health care, 
education, public safety and general welfare.
    Our treaty was a peace treaty between us and the United 
States. And to uphold these obligations, Indian programs must 
be held harmless from spending cuts. We urge the Committee to 
work with the Super Committee and the rest of the Congress to 
make sure they understand the government's obligations to the 
Tribes.
    That brings me now to some of the Tribes' economic 
initiative and the Federal barriers that we face in moving this 
project along. One of our biggest projects is our wind farm 
initiative. We have partnered with another Tribe to develop a 
$400 million wind farm on the reservation. This project is 
major step for us, but we've run into many obstacles.
    Because the project is on trust land, it is subject to 
NEPA, which is costly and time-consuming. The EIS alone will 
cost us $1.9 million and two years of study. In addition, the 
EIS approval process has taken an excessive amount of time with 
many delays. A nearby wind farm near the reservation is already 
up and running, even though we started our project first. This 
non-Tribal wind farm did not have to navigate all the 
bureaucratic red tape that we do. We urge Congress to consider 
reforms to NEPA that would provide extensions for our economic 
development projects and for an expedient and cost efficient 
review.
    The Federal Tax Code also presents a major obstacle for 
renewable energy development on Indian lands. Approximately 25 
percent of the revenue generated from these projects comes in 
the form of tax credits; however, Tribes aren't taxable 
entities and can't use the credits. There are contractual ways 
to organize the transactions so that Tribes can obtain the 
credits, but the process is cumbersome and complex. We 
encourage the Committee to work with the finance committee to 
amend the code to enable Tribes to trade tax credits or sell 
them on an open market.
    Another significant barrier to our economic development is 
access to capital. The Treasury Department reports that 
inequity investment gap in Indian Country is $44 billion. The 
Indian Guaranteed Loan Program has been somewhat of a bright 
spot for us. This program assisted in financing our $20 million 
state-of-the-art justice center, which opened last year. This 
program is also helping us secure a $33 million loan for a new 
hotel and convention center that's currently under 
construction.
    As you can see, we have regularly benefitted from this 
program. We urge the Congress to fully fund these critical 
programs to spur economic development in Indian Country. It has 
been sorely underfunded for decades. No other agency provides 
the same kind of financing support for Tribes as this program.
    Another opportunity for our people is farming. 
Approximately 110,000 acres of our lands are used for farming. 
With an annual production value of more than $80 million. A 
sizeable percentage of Idaho's famous potatoes are grown on our 
land. However, we lack capital to fund operations, equipment, 
infrastructure for farming on a large scale. Banks typically 
will not loan money to us to farm our land because the land 
cannot be used as collateral.
    Having prime farm land, cheap water, low lease rates and 
lack of competitive bidding on our lands have made non-Indian 
farmers on the Reservation very wealthy.
    We seek your assistance so that we can farm our own lands. 
If we can do this, we can make great strides in revitalizing 
and diversifying our economy. While there's an urgent need to 
create new economic opportunities in Indian Country, we won't 
succeed without a strong Tribal work force. To help improve 
Indian Country's work force, we urge the Committee to make 
necessary amendments to the 477 program.
    The program saves us thousands of dollars in administrative 
costs each year. However, despite this success, agencies are 
engaged in forcing Tribes to separately account for certain 
programs. These actions directly conflict with the purpose of 
the program and are a great cost to the Tribes. Legislation to 
reverse this change has been included in the FY 2012 House 
Senate Appropriations Bill. We urge the Senate to pass that and 
to make other necessary changes.
    Lastly, we cannot successfully improve our economy without 
basic infrastructure such as adequate roads and affordable 
telecommunication systems. We are working hard to make progress 
in these two areas, which is described in our written 
testimony.
    Chairman, we thank you for your efforts to improve the 
economy conditions in Indian Country. The Tribes are very proud 
of what we've been able to accomplish, but we still have a long 
ways to go.
    And with your permission, I would like to submit some other 
documents. Mainly, that is our economic impact statement that 
the five Tribes of Idaho have put together for the purposes of 
I guess you could say getting some respect from the State of 
Idaho and its legislature.
    [The prepared statement of Mr. Small follows:]

 Prepared Statement of Hon. Nathan Small, Chairman, Fort Hall Business 
                    Council, Shoshone-Bannock Tribes
    Good morning, Chairman Akaka and Members of the Committee. My name 
is Nathan Small and I am the Chairman of the Fort Hall Business 
Council, which is the governing body of the Shoshone-Bannock Tribes 
(Tribes) located on the Fort Hall Indian Reservation (Reservation) in 
southeast Idaho. I am honored to be here today to discuss the Tribes' 
economic development initiatives, our success stories, and the 
challenges we face to bring economic vitality to our people, our 
community, and the surrounding area.
Background on the History of the Shoshone-Bannock Tribes
    The Tribes are a federally recognized Indian Tribe organized under 
the Indian Reorganization Act of 1934. The Shoshone and Bannock people 
are comprised of several related bands whose aboriginal territories 
include land in what are now the states of Idaho, Wyoming, Utah, 
Nevada, Colorado, Oregon, and parts of Montana and California. In 1867, 
President Andrew Johnson by Executive Order designated the Fort Hall 
Indian Reservation for various Shoshone and Bannock bands that occupied 
the area since time immemorial. On July 3, 1868, the Shoshone and 
Bannock Tribes concluded the Second Treaty of Fort Bridger, which was 
ratified by the United States Senate on February 24, 1869. Article 4 of 
the Fort Bridger treaty promises that the Reservation would be a 
``permanent home'' to the signatory Tribes. Although the Fort Bridger 
Treaty called for the Reservation to be approximately 1.8 million 
acres, various ``surveying errors'' in 1873 reduced its actual size to 
approximately 1.2 million acres.
    One of the United States' purposes in setting aside the Reservation 
was to protect the Tribes' rights and to preserve for them a home where 
their Tribal relations might be enjoyed under shelter of authority of 
the United States. Subsequent cession agreements with the United States 
reduced the Reservation to the present day size of 544,000 acres. Of 
the 544,000 acres, 97 percent of the land is Tribal land or held by the 
United States in trust for the benefit of the Tribes or its individual 
members. The Reservation is the largest reservation in Idaho. Our 
Reservation provides an irreplaceable homeland for economic activity 
and cultural practices based on strong religious traditions premised on 
the sacredness of our land. Our current Tribal membership is 
approximately 5,300 members.
    Our Reservation is blessed with an extensive biodiversity including 
rangelands, croplands, forests, streams, three major rivers (the Snake, 
Blackfoot, and Portneuf), reservoirs, springs, and wetland areas, an 
abundance of medicinal and edible plants, wildlife (elk, deer, moose, 
bison, big horn sheep, etc.), various species of fish, birds, and other 
animal life. The Reservation lands are mountainous and semi-desert, and 
overlay the Snake River aquifer, a large groundwater resource. The 
culture and continued existence of the Shoshone and Bannock peoples 
depend on these resources.
Our Current Economic Situation
    The Ft. Hall Indian Reservation is named after a trading post that 
was an important stop in the 1800s along the Oregon Trail and 
California Trail. The Reservation is situated in the counties of 
Bannock, Bingham, Power, and Caribou in southeastern Idaho with the 
city of Pocatello on its southern border and the city of Blackfoot on 
its northern border.
    The Shoshone-Bannock Tribes commissioned a report titled 2009 
Economic Impacts of the Shoshone-Bannock Tribes on the Regional 
Economy. The report was completed in October 2010. * Below are 
highlights from the report to help paint a picture of the current 
economic conditions on the Reservation:
---------------------------------------------------------------------------
    * A full copy of the report has been retained in Committee files.

   The Shoshone-Bannock Tribes have increased total regional 
        employment by 4,097 jobs including the multiplier effects 
---------------------------------------------------------------------------
        (i.e., the direct, indirect, and induced impacts).

   Total sales from Tribal economic activity was $330.6 million 
        in 2009 including the mutliplier effects.

   The Shoshone-Bannock Tribes have raised gross regional 
        product (value-added) by $183.0 million, of which approximately 
        29 percent is from agriculture.

   New tourist traffic to the Tribes' casinos is estimated at 
        200,000 people per year; over 40 percent are from out of state, 
        representing new dollars to the state economy.

   In terms of employment rankings, the Shoshone-Bannock Tribes 
        would rank 1st place in Bingham County if all 920 direct 
        employees were situated in Bingham County. The Tribes would 
        rank 4th place in Bannock County if all direct employees were 
        situated in Bannock County. Statewide the Tribes rank in the 
        top 66 Idaho employers (public and private) and would rank 40th 
        place against private employers alone.

   In the four-county regional economy, the Tribes constitute 
        5.7 percent of all jobs, 3.6 percent of all sales, and 4 
        percent of all wage and salary earnings (including the 
        multiplier effects).

   In comparison to Bannock County (alone), the Tribes would 
        constitute 9.6 percent of all jobs, 7.3 percent of all sales, 
        and 7.6 percent of all wage and salary earnings (including the 
        multiplier effects) if all Tribal activities were situated in 
        Bannock County.

    The Tribes are very proud of what we've accomplished in 
revitalizing our economy despite the barriers described below but we 
still have a long way to go in improving the quality of life of our 
people. Below, I set forth specific areas where the Tribes seek 
assistance to address obstacles and concerns in order to create 
opportunities for economic development.
Grave Concerns Over the Budget Control Act of 2011
    The need for this hearing and the need to develop economic 
solutions in Indian country are heightened by the debt limit crisis and 
the faltering U.S. economy. We commend Senator Crapo, our Senator, for 
his tremendous efforts as part of the ``Gang of Six'' to work across 
party lines to avert a government default. We know that he spent a 
great deal of time working on this problem, and we thank him for his 
service. America needs more leaders like Senator Crapo who truly puts 
the country and its economic future first instead of getting mired in 
unyielding partisan and ideological bickering. After all, you can't cut 
up principles on a plate.
    Congress passed and the President signed the Budget Control Act of 
2011 (Public Law 112-25) on August 2, 2011, which ultimately raised the 
debt ceiling through 2013 and put in place a number of austerity 
measures to cut government spending. The Act cuts government projected 
spending by $2.3 trillion over the next decade, starting with $841 
billion in spending caps and $44 billion in projected cuts for FY12. A 
Joint Select Committee on Deficit Reduction (also known as the ``Super 
Committee'') created under the Act would then issue recommendations for 
another $1.5 trillion in cuts over the next decade. The Congress must 
pass and the President must sign legislation containing the Super 
Committee's recommendations by January 15, 2012; otherwise, agency 
budgets will automatically be cut across the board by $1.2 trillion. 
While we acknowledge that this agreement was vital to avoid a 
government default, we are very concerned about this agreement.
    The Federal Government must learn to live within its means; but, at 
the same time, it must honor its treaty and trust obligations with 
Indian Tribes. The status of Indian Tribes as governments is 
specifically acknowledged in the U.S. Constitution, and our treaties 
are affirmed in it to be the ``supreme Law of the Land.'' Through 
hundreds of treaties with the United States, Indian Tribes, like the 
Shoshone-Bannock Tribes, ceded hundreds of millions of acres of our 
homelands to build this great nation. In return, the United States 
promised to provide for the health care, education, public safety, and 
general welfare of Indian citizens.
    To uphold the Federal Government's solemn treaty and trust 
obligations, Indian programs must be held harmless in the face of 
projected cuts. In other words, these programs should not be viewed as 
``discretionary'' spending or as ``pork'' that can be cut. For these 
reasons, we urge Congress to use a scalpel as it makes reductions to 
federal spending instead of a cleaver. We urge the Senate Committee on 
Indian Affairs to dialogue and educate the Super Committee and its 
colleagues in the Congress about the government's obligations to Indian 
Tribes as these bodies work to meet the requirements of the Budget 
Control Act.
Federal Barriers to Tribal Economic Development
    Past and current federal laws and policies have wreaked havoc on 
Tribal economies, ignored Tribal infrastructure needs, and suppressed 
Indian economic development. While the current federal policy 
supporting Indian self-determination has enabled some Tribes to make 
headway towards reaching the ultimate goal of economic self-
sufficiency, many barriers remain.
    The barriers range from the most basic needs to spur reservation 
businesses and investment, such as infrastructure (it is estimated that 
unmet Tribal infrastructure needs exceed $50 billion), to the more 
complex, such as a general lack of understanding of Tribal court 
systems and jurisdiction in Indian country. In addition, Tribal 
governments and individual Indian entrepreneurs have long lacked the 
access to capital that many non-Indian small businesses have. The 
Treasury Department reports that the equity investment gap in Indian 
country is $44 billion. Both Indian businesses and non-Indian 
businesses seeking to initiate or continue commercial activity in 
Indian country also face difficulty in staffing their operations 
because generational poverty and unemployment have resulted in an 
untrained workforce on a number of reservations. In addition, the 
status of Indian lands, which are held in trust by the United States, 
creates barriers to investment and business. The trust status of Indian 
lands--and federal laws that attach to that status--force Tribal 
governments to obtain federal agency approval for even the most minute 
decisions and require Tribal governments to comply with costly and 
time-consuming environmental requirements set forth in the National 
Environmental Policy Act (NEPA). These same federal burdens are not 
present outside of Indian country.
    The remainder of my testimony discusses proposals to address many 
of the barriers identified above.
Need for Access to Capital
    The Ft. Hall Indian Reservation has historically faced many 
barriers to economic development that continue to this day. Due to the 
historic downgrade of the U.S. credit rating and the potential 
downgrade in the municipal bond market, we are concerned that the 
economic barriers we face will multiply as a result of a decrease in 
liquidity and possible rising interest rates in the future. This will 
negatively impact our economic development, housing, and infrastructure 
projects. It is already difficult for us to find capital for major 
projects, and now we fear that it will only get more difficult and more 
expensive to the point of being cost prohibitive.
    For example, the Tribes expect to open its new $47 million 164,000 
square feet Hotel and Event Center by May 2012. The event center will 
seat up to 1,400 people and accommodate meetings, conferences, 
banquets, and entertainment venues. The five-story hotel will include 
156 rooms, laundry facilities, a guest pool, a spa and fitness center, 
and a sports grill and deli. This facility has been years in the 
making, and the groundbreaking was on April 27, 2011. This project will 
be an economic boon for the Reservation and for southeastern Idaho, 
bringing in hundreds of millions of dollars. However, we are concerned 
how the economic downturn and the drying up of financing may impact our 
new facility and are, therefore, closely monitoring the situation. The 
Bank of Albuquerque approved a $33 million loan secured with a 
guarantee under the Indian Guaranteed Loan Program for the project. We 
went through a long, difficult journey to secure the financing despite 
the fact that the Tribes have stellar credit, so we can only imagine 
how much harder it will be to move on future projects with the 
stagnating economy. Moreover, this saga continues to this day as we 
must jump through hurdles to keep the financing in place. Even with a 
sizeable guarantee on the loan, it seems the lender keeps coming back 
for a double guarantee to the point that we feel like we are 
practically signing our lives away.
    The Indian Guaranteed Loan Program, which was established by the 
Indian Financing Act of 1974 (P.L. 93-262), has been a bright spot for 
us in accessing capital. The program helps Indian businesses obtain 
loans from private lenders that would otherwise be unwilling to make 
such loans on commercially reasonable terms. In addition to our Hotel 
and Event Center, the Indian Guaranteed Loan Program has assisted us 
with our new state-of-the-art Justice Center, which opened last year on 
February 16, 2010. It houses our police department, juvenile and adult 
detention, and Tribal courts under one roof. Over a decade ago, the BIA 
informed the Tribes that it must vacate its justice facilities due to 
their poor condition. After years of unsuccessful efforts to find 
federal funding for construction of a new justice facility, we 
committed $4 million of our own funds and took out a $15.9 million loan 
to construct the new facility, which was also secured with the help of 
the Indian Guaranteed Loan Program.
    It would have been very difficult to construct the Justice Center 
in the current economic climate, especially given the proposed cuts to 
the program by the Administration that would put the program on life 
support. We urge the Congress to fully fund this critical program in 
order to spur economic development in Indian country. Despite the 
success of this program, it has been sorely underfunded for decades. No 
other agency provides the same kind of financing support for Tribes as 
this program. As you can see, we have truly benefitted from it.
Changing the Tax Code to Spur Reservation Economies
    We believe that Congress needs to amend the Internal Revenue Code 
(IRC) to provide incentives to invest in renewable energy, 
infrastructure, and other economic development projects on Indian 
reservations. Without changes, we will continue to be at a 
disadvantage. Tax credits would assist on renewable energy projects for 
Tribes because we would have a better opportunity at ownership at 
earlier stages. We support provisions in H.R. 1599, introduced by Rep. 
Tom Cole, which would, among other things, provide for tax credits for 
tech companies in Indian country (Title VI) as well as expanding the 
ability of Tribal governments to issue taxexempt bonds (Title V) and 
the streamlining of the Tribal leasing process (Title VII). In 
particular, the provision to expand Tribal governments' ability to 
issue tax-exempt bonds for on-reservation projects would provide much 
needed access to outside investment capital to Tribes nationwide. We 
urge enactment of these provisions.
    Also, in 2005-2006, the accelerated depreciation provision for 
businesses located on reservations lapsed. This provision was very 
helpful in attracting high-tech, capital-intensive employers to 
reservations. Since the lapse, the provision has been sporadically 
extended for usually no longer than one year. The short duration of the 
extensions has not provided enough certainty to incentivize businesses 
to invest in Indian country.
    The accelerated depreciation credit and similar tax credits should 
be permanently reinstated. S. 1008, introduced by Senator Jim Inhofe, 
would amend the IRC to permanently extend the depreciation rules for 
property used predominantly within an Indian reservation. H.R. 1039, 
introduced by Rep. John Sullivan, would amend the IRC to permanently 
extend the Indian employment credit and depreciation rules for property 
used predominantly within an Indian reservation. However, while we 
support permanent accelerated depreciation in Indian country, we cannot 
support S. 1008 or H.R. 1039 as written. Provisions should be added to 
these bills requiring Tribal consent for the accelerated depreciation 
on property located on a reservation. Otherwise, like on the Ft. Hall 
Indian Reservation where there are some non-Tribal entities located 
there due to historical circumstances and over our objections, some may 
seek undue tax advantages not intended for them.
    The Tribes also urge the creation of incentives to help start-up 
businesses of Tribal members on the Reservation. The Tribes spend $315 
million a year on goods and services but very little of its stays here. 
If we could keep even $4-5 million here in our own small businesses, 
then it would make a tremendous dent in our poverty and unemployment 
rates. There is a small business association on the Reservation that 
has been providing some services and support but it is all volunteer-
based.
Opening Opportunities for Tribes to Engage in Trade
    Like other Indian Tribes, we have interstate highways, railroad 
lines, and even shipping channels and airports crossing our 
Reservation, adjacent to it, or even located on it. Our Reservation 
actually has an airport capable of handling air cargo jets. We--and 
other Tribes with similar advantages--could be participating in the 
world economy if our reservation were designated as a Foreign Trade 
Zone (FTZ). Unfortunately, most Indian reservations are in somewhat 
remote locations and cannot operate Foreign Trade Zones because of the 
``60 mile/90 minute rule,'' which requires that an FTZ be within 60 
miles or 90 minutes driving time of a U.S. Customs office. The closest 
one to us is in Salt Lake City, which is a 2\1/2\ hour drive or 150 
miles away. The next closest are in Boise, Idaho, and Butte, Montana--
both about 250 miles away. These distances were much greater barriers 
to customs oversight when the Foreign Trade Zone Act was passed in 1934 
than they are today. The Act should be updated to reflect modern 
advancements and the United States' unique obligations to Indian Tribes 
so that Tribes can more readily engage in commerce with the world. 
    To that end, we propose legislation that would provide the 
Secretary of Commerce, acting through the Foreign Trade Zone Board, 
with discretionary authority to waive the ``60 mile/90 minute'' rule 
found at 15 CFR  400.21(b)(2)(i) for Tribal FTZ grantees and 
operators. This would give Indian Tribes something to ``bring to the 
table'' in partnerships for regional development.
    We also laud Rep. Cole for introducing H.R. 2362, the Indian Tribal 
Trade and Investment Demonstration Project Act of 2011, because of its 
innovative approach to developing commerce between Indian Tribes and 
foreign countries.
Challenges in Developing Energy Resources on the Reservation
    Tribal communities tend to have some of the highest energy costs in 
the nation due to the rural/remote nature of many reservations, the 
lack of energy infrastructure, and the lack of high density population 
centers. As a result, energy efficiency and conservation upgrades have 
very high success rates in Indian country. We support funding directed 
toward energy efficiency and conservation programs as these programs 
have been very successful on our Reservation thus far. For example, we 
are currently replacing diesel fuel water pumps for solar-powered pump 
systems to use for watering troughs for cattle, performing energy 
audits and efficiency upgrades on some of our major facilities, and 
installing solar panels on some of our Tribal buildings.
    Indian reservations have some of the highest concentrations of 
clean renewable energy resources in the country. In 2004, the 
Department of Energy estimated that 14 percent of the wind energy 
potential in the nation is located on reservations and that 
reservations will be a key factor in energy security and independence 
in the future. The Tribes seek to harness its wind and other renewable 
energy resources to promote energy production on the Reservation. 
Specifically, the Tribes have partnered with another Tribe to develop a 
$350-$400 million wind farm on the Reservation. This project is a major 
step in economic development for the Tribes, but we have run into many 
obstacles that threaten the success of the project.
    Because the wind project is on trust land, it is subject to NEPA. 
Therefore, the BIA requires an Environmental Impact Statement (EIS) in 
order to approve the lease. The EIS is estimated to cost $1.9 million, 
and we are the ones that must pay this cost. We have hired a third 
party consultant to perform the majority of the work. However, the 
approval processes have taken an excessive amount of time with the 
turn-around time from the BIA for even minor paperwork taking months. 
For example, a 6-page document took 4 months for the BIA and the 
Solicitor's Office to review due to insufficient staff handling NEPA 
matters. Further, the BIA staff tasked to this project consistently 
miss important calls and meetings that cause severe delays and add 
unnecessary risk to the financial viability of the project.
    Moreover, given that the project is a very large undertaking, it 
requires constant risk mitigation to be successful. Unfortunately, one 
of the major impediments to the success of this project is the lack of 
BIA involvement in the process due to limited BIA staff resources. We 
believe that, if a NEPA analysis is required on Tribal lands and if we 
must pay the costs to comply with NEPA, then the BIA should, at a 
minimum, have sufficient staff resources on the national, regional, and 
local levels to move these projects forward on a timely basis. In stark 
comparison, a nearby wind farm on fee land is already up and running 
even though we started our project first. This non-Tribal wind farm did 
not have to navigate all the bureaucratic red tape that we do.
    We urge increased funding for the environmental review process so 
that BIA, instead of Tribes, will cover the costs for compliance with 
NEPA and hire staff who have the time to assist in advancing these 
projects. AlterNatively, Congress should consider reforming NEPA to 
provide exceptions or an expedited review for Indian country economic 
development projects. The Tribes have always been strong environmental 
stewards since time immemorial, and we agree with many of the goals of 
NEPA. However, the government promised to make our lands a permanent 
home, and federal laws should reflect and support this promise.
    Another major obstacle for renewable energy development on Tribal 
lands is that tax credits for renewable energy, like wind, are only 
useful for tax-based entities. Tribes, counties, and municipalities are 
at a disadvantage when they pursue energy projects. The Tribes strive 
to own a wind farm on the Reservation but approximately 20-25 percent 
of the revenue generated from these projects is in the form of tax 
credits that cannot be utilized by Tribes. This puts Tribes at a direct 
disadvantage and promotes non-Tribal ownership of projects on Tribal 
lands. We request that there be equal opportunities for Tribal 
ownership of renewable energy projects and that the Congress amend the 
laws so that tax credits generated can be traded to a taxable partner 
or sold on an open market. To that end, we support H.R. 1992, 
introduced Rep. Raul Grijalva, which would allow Tribes to assign 
renewable electricity production to their partners for tax credits. 
AlterNatively, we recommend that the Federal Government create a grant 
program for Tribes or Tribally-owned businesses so that we can compete 
with non-Tribal entities on energy projects on Tribal lands.
Challenges to Secure Adequate Telecommunications Infrastructure
    The Tribes lack reliable, affordable high-speed communications and 
Internet services, including in emergency situations, for homes and 
businesses on the Reservation, restricting educational opportunities 
and greatly hindering economic development. The Tribes have been a 
long-time consumer of communications services from the big 
telecommunications companies. Like many other Indian Tribes, we have 
always been underserved or not served at all by the big companies. 
Mountain Bell became U.S. West, then Qwest, now CenturyLink. But the 
service remains slow and expensive, and the local distribution and 
service lines consist of old and deteriorating copper. The Reservation 
does not have high-speed Internet service except where there are 
purchasers of dedicated T-1ines, which are very expensive. Currently 
there is no incentive for the carriers serving the Reservation to 
improve service. The current incumbent service provider has opted out 
of state regulation and its rates are soaring. Moreover, the provider 
has a history of trespass on our Reservation, cannot document its 
rights of way, and is out of compliance with Tribal ordinances. Even 
though the provider is profiting in the range of $1 million each year 
for ``service'' on the Reservation, it has yet to employ Tribal members 
or even get a Tribal business license.
    Over the last ten years many entrepreneurs have approached the 
Tribes with proposals to ``partner'' with us to develop cell phones, 
wireless Internet, or other wireless services. The deals have always 
been the same. They always want a commitment of Tribal money or Tribal 
resources for a system that someone else would own.
    In 2007, the Tribes conducted a feasibility study to determine the 
best course to follow in addressing our communications needs. This 
study recommended that the Tribes develop our own telecommunications 
enterprise. It further recommended that the Tribal telecom enterprise 
be the ``incumbent local exchange carrier'' as defined in the 
Telecommunications Act of 1996. Doing this would mark a new expression 
of sovereignty--Tribal ownership of the means of communication. It 
would have the economic benefit of plugging a million-dollar annual 
leak in the Tribal economy, keeping Tribal dollars in circulation on 
the Reservation.
    The greatest obstacle the Tribes face on this endeavor is the same 
obstacle faced by many rural-state telecoms: a widely dispersed and 
less affluent customer base spread out over many miles of line. The 
Federal Government has addressed this issue through FCC Universal 
Service Fund (USF) payments. These payments, or absence of them, can 
make or break a Tribal telecom. The highest level of USF payments 
typically go to the incumbent carrier, which is usually the non-Indian 
firm that established a prior presence on the Reservation.
    We applaud the FCC's June 21, 2011, order designating the Standing 
Rock Telecommunications, Inc., a Tribally-owned wireless carrier, as a 
competitive eligible telecommunications carrier (ETC) that can receive 
USF support in providing wireless service to reservation residents 
regardless of the presence of non-Tribal incumbent carriers and 
regardless of wire center boundaries or partial wire centers. The order 
expressed support for increasing critical communications infrastructure 
in underserved areas, such as Indian reservations, and promoting 
economic development in these areas as well as educational 
opportunities through distance learning programs. This order will pave 
the way for other Tribally-owned carriers to receive USF support so 
that finally Tribes can address the problem of unreliable and costly 
telecommunications service options on reservations to connect to the 
rest of the world.
    To realize our goal of our own Tribal telecom, the Tribes have 
secured a $116,000 grant for technical services and planning from the 
Rural Utility Service (RUS), USDA, and have selected a Native telecom 
firm to provide these services. Signature of the contract is pending 
the arrival of funds. There will be approximately one year to complete 
technical studies and set up an operating telecom carrier. The Tribal 
telecom carrier will apply for certification and then apply for RUS or 
``Farm Bill'' loans as appropriate. Our hope is to designate the 
Reservation as our service area and to train Tribal members to run the 
telecom.
    We encourage legislation and/or policies that would expedite the 
transfer of reservation service areas from non-Tribal incumbents to 
Tribally-owned ETCs as well as compensate current incumbent carriers on 
a per-service line basis for these transfers. Further, we support the 
continuation of the USF for the benefit of not only Indian country but 
also for the rest of rural America to ensure that there are 
opportunities for affordable telecommunications services. To this end, 
we request that the Committee determine if legislation would assist in 
promoting telecommunications opportunities in Indian country.
The Need for Adequate Transportation Infrastructure
    The Ft. Hall Indian Reservation, as stated above, is 544,000 acres 
and our communities are located far apart. Our Reservation is located 
within four counties in Idaho. Without adequate roads, we will not be 
able to improve our Reservation economy. It is the lifeline for 
everything. Currently, the Tribes receive $700-800 per road mile under 
the BIA's Indian Reservation Roads (IRR) Program compared with the 
amount of federal dollars that states and county governments receive, 
which is approximately $2400 per road mile. As you can see, we are 
behind before we start.
    Idaho is a PL 280 state; and, in 1963, the state passed laws 
providing, among other things, for concurrent civil and criminal 
jurisdiction with the Tribes and the Federal Government over any of our 
roads that are maintained by the county or state (Idaho Code   67-
5101 and 5102). Starting in the 1940's through the 1990s, because the 
BIA did not have the funds or equipment to keep up with the road 
maintenance on all our IRR roads, it entered into road maintenance 
agreements with the counties in which the Reservation is located. Under 
these agreements, upon construction of certain roads by the BIA, the 
counties were to maintain them. As a result, the counties and the state 
assumed concurrent jurisdiction over these roads.
    While the Tribes receives its IRR funds from the BIA, the state and 
the counties are able to count our IRR roads in their inventories under 
the maintenance agreements and, thus, gain road funds for these miles. 
However, the state and the county provide very little maintenance for 
roads over which they have responsibilities.
    In January 2009, the Tribes entered into a Memorandum of Agreement 
(MOA) with Bingham County (County), one of the four counties in which 
the Reservation is located, so that the Tribes exercise regulatory 
authority over land use and zoning matters on the Reservation and the 
County defers to the Tribes on these matters. This MOA reflects the 
parties' cooperative approach to land use regulation for lands located 
within the boundaries of the Reservation and the County. In 2010, the 
County relinquished all the maintenance agreements they held on about 
20 miles of IRR roads on the Reservation. As a result, the Tribes can 
begin to receive IRR road maintenance dollars for these miles.
    The Tribes plan to reach out to Bannock County, which has 
concurrent jurisdiction and maintenance agreements over approximately 
33 miles of our IRR roads, and to Power County, which has concurrent 
jurisdiction and maintenance agreements over approximately 20 miles of 
our IRR roads, to see if similar agreements can be executed with them 
as with Bingham County. Currently, the Tribes have approximately 450 
miles of roadway under the IRR road system we maintain. If the Tribes 
gain back the remainder of the roadways that were placed in maintenance 
agreements with the counties, then our road miles under IRR maintenance 
would be approximately 520 miles, allowing us to receive IRR road 
maintenance funds for them.
    As for the national controversy amongst Tribes over the allocation 
of funds under the IRR Program, we believe that state and county roads 
should not be counted in the IRR inventory given the limited pot of 
money. IRR funds should lawfully only be used for IRR roads. Counties 
and states have responsibilities to maintain their roadways and receive 
funding to do so. Basically, allowing non-IRR roads into the system 
changes the amounts all Tribes receive for road maintenance of IRR 
roads--for the worse. Large land-based Tribes like the Tribes with 
large amounts of IRR road miles suffer as a result. For instance, we 
used to receive about $1.2 million per year for our contract dollars 
but now we receive about $930,000 per year under our 638 contract at 
least partially due to some of the smaller or roadless Tribes 
supplanting some of our dollars by including state/county roads in 
their IRR system. Our funding for road maintenance is now $393,000, 
down from $470,000 in recent years, due to the inclusion of state and 
county roads in the IRR system.
Challenges to Agricultural Economic Development
    Historically, as explained above, the working capital needed to 
fund operations, equipment, and infrastructure for farming on a large 
scale has not been accessible to Tribes and individual Indian 
landowners on reservations. Banks typically will not loan money to 
Tribes or individual Indian landowners to farm on trust land because 
the land cannot be used as collateral. We applaud the class action 
settlement in Keepseagle v. Vilsack, where the Federal Government 
acknowledged USDA's credit discrimination against Indians. Hopefully, 
justice will be served and one of the results of this case will be the 
creation of a federal process where we are treated equally and fairly 
on our agricultural economic development endeavors on our own lands.
    Approximately 83,000 acres of the Reservation's trust lands are 
used for farming spuds, wheat, barley and beets, with an annual 
production value of more than $80 million. A sizable percentage of 
Idaho's acclaimed ``Famous Potatoes'' are grown in the fertile sandy 
soil of the Reservation and watered by an extensive series of canals 
and ditches created by the BIA in the early 1900s. The Fort Hall 
Irrigation Project was built with the intention of turning the 
oncenomadic Shoshone and Bannock people into farmers, but lack of 
capital has historically prevented the Tribes from farming our own 
lands. Prime farmland, cheap water, low lease rates and lack of 
competitive bidding on Reservation lands have made non-Indian farmers 
on the Reservation some of the richest individuals in the state.
    In recent years, the Tribes and individual landowners at Fort Hall 
have taken a more active role in agricultural production on the 
reservation. Local Indian landowners formed the Fort Hall Landowners 
Alliance to provide education on the BIA leasing process, to promote 
sound farming practices, to encourage landowners to draw up wills to 
prevent further fractionation of reservation lands, and to assist 
landowners in negotiating higher lease rates. At the same time, the 
Tribes are now an active participant in the BIA's bidding process when 
farm leases--which are typically a mix of Tribal and individual Indian 
owned land--come up for renewal on the Reservation. We are partnering 
with a couple of the larger farmers with extensive irrigation systems 
already in place to share in the costs of production and the profits--
and the losses--from farming reservation land. What we have learned is 
that our land competitively leases from between $150-$350 per acre 
depending on soil conditions and can yield a profit of up to $800 per 
acre, depending on market conditions. The Tribes currently farm some 
550 acres on the Reservation in partnership with other farmers. Our 
goal is to use revenue from this partnership as capital to purchase the 
equipment needed (irrigation pivots, pumps, etc.) to eventually farm 
our own land for ourselves. As you can see, if we could farm our own 
lands, then we could make great strides in revitalizing and 
diversifying the economy on the Reservation. Further, we own our own 
fresh pack and rail spur and seek ways to develop our agricultural 
economy from ``the ground to the market'' and would appreciate 
assistance in this endeavor.
Training a Strong Tribal Workforce
    While there is an urgent need to create new economic opportunities 
in Indian country, it will not be truly successful unless individual 
Indians are prepared to step in when these opportunities arise. To help 
improve Indian country's workforce, we urge the Committee to make 
necessary amendments to the Indian Employment Training and Related 
Services Act, also known as the 102-477 Program. The 477 Program 
permits Tribal governments to consolidate federal employment training 
programs, cut Tribal administrative costs, and lessen the burden of 
federal bureaucracy--all at no cost to the U.S. taxpayer. The 477 
Program scored the highest rating for BIA's programs assessed by the 
Office of Management and Budget. The 477 Program has saved the Tribes 
thousands of dollars in Tribal administrative costs and enables us to 
stretch precious federal dollars for employment training and workforce 
development to maximize our efforts to help our Tribal members gain 
employment.
    Since 1992, Tribes nationwide have utilized the 477 Program to 
consolidate funding from various federal job-training programs, 
including the Temporary Assistance for Needy Families program (TANF), 
while streamlining accounting and reporting mechanisms. However, in 
spite of this documented success, officials at the Department of Health 
and Human Services (DHHS) have recently ceased the transfer of TANF 
funds to the Department of the Interior for inclusion in Tribal self-
governance compact and self-determination contracts. This action 
severely undermines the efficiency of the 477 Program.
    Some of these changes are included in the FY 2012 House Interior 
Environment and Related Agencies Appropriations bill, H.R. 2584 at 
Section 430. We urge the Senate to pass similar language to reverse the 
decision made by DHHS and make other necessary changes to this 
successful program.
Conclusion
    We thank you for your efforts to improve the economic conditions in 
Indian country. We hope you find this information helpful as you 
continue to develop ways to improve the quality of life on 
reservations.

    The Chairman. Thank you very much for your testimony, 
Chairman Small.
    Chairman Allen, please proceed with your statement.

STATEMENT OF HON. W. RON ALLEN, TRIBAL CHAIRMAN/CEO, JAMESTOWN 
   S'KLALLAM TRIBE; TREASURER, NATIONAL CONGRESS OF AMERICAN 
                            INDIANS

    Mr. Allen. Thank you, Mr. Chairman. I begin by saying 
aloha.
    Audience. Aloha.
    Mr. Allen. I have to admit I have had the honor of 
testifying before your Committee many times over my 34-year 
career with my Tribe, and I have to say that testifying before 
you in Hawaii is much more pleasing. I can dress accordingly. 
The humid heat in Washington, D.C. is not something I aspire to 
when I have to come in and talk to you and your colleagues 
about Indian affairs and our interests.
    I also am a board member, I'm the Treasurer for NCAI. I've 
been on that board for 20 years and have been a strong champion 
of Native Hawaiian pursuit of sovereignty. Sovereignty is 
something that is precious to all of Indian Country from Alaska 
to Florida and to the outreach of the Hawaiian islands. Our 
indigenous brothers and sisters out here are lacking the same 
legal and political status of the rest of their colleagues on 
the mainland. And I want to thank you personally as the Chair 
of my Tribe and as members of the NCAI, who have been strong 
supporters of the Native Hawaiian Sovereignty Bill. And we have 
high hopes before this session concludes, that we will get what 
we need to get that bill passed and restore the rightful 
sovereignty of Native Hawaiian peoples.
    Economic development is, of course, important to all of us, 
and I was very appreciative of hearing the testimony of Robin 
and Michelle regarding the Native Hawaiian issues, which is 
common issues for all of the Indian Country and all of our 
indigenous people. I think that the comments and observations 
and recommendations of the two panels before Chairman Small and 
myself are all very strong and very good. I'm delighted that 
you'll be entering my testimony into the record, and we've also 
asked that there is a paper, a briefing paper before the White 
House, you know, and it was referred to as the White House 
Native American Business Leaders Round Table Discussion Paper.
    And I would ask that it also be put in the record, because 
they from all the national Indian organizations and Indian 
Country, we made a number of similar recommendations that you 
witnessed this morning.
    The Chairman. It will be included in the record.
    Mr. Allen. Thank you, Mr. Chairman.
    The needs of Indian Country with regard to achieving our 
self-sufficiency and self-reliance, as our California brothers 
and sisters like to use that phrase, is an important agenda 
without a doubt. Self-determination and empowerment of our 
Tribal communities to be able to take control of our destinies, 
to be able to create jobs and create revenues aside from the 
Federal Government is going to be essential that we have the 
tools, we have the access to the resources, the capital 
necessary to generate employment opportunities for our Tribal 
businesses as well as businesses for our citizens of our 
communities that they can develop their own business 
opportunities.
    The BIA has an important role. The Department of Commerce 
and the SBA have important roles. The Department of Agriculture 
and Rural Development has an important role. HHS and the ANA 
programs over in that department has an important role. The 
Department of Labor has an important role. They all come 
together, and they all become a part of the solution. So, it's 
not just one. It's many.
    You heard this morning about the importance of 
infrastructure. You've heard the importance of protecting our 
land base. You've witnessed through this hearing and other 
hearings the challenges that we have in terms of accessing 
capital onto reservations where legal standing and legal 
protections for those trust lands, whether it's here in Hawaii 
or in our reservations or up in Alaska, that it causes us some 
peculiar challenges, that the financial industry has a 
difficult time penetrating and we access. They don't treat us 
the same.
    It is not an equitable relationship between that industry 
and our communities so that we can become more self-sufficient 
and self-reliant. So, those kinds of issues are going to be 
critical to us. I always have noticed that it seems like in 
America, when we advance the interest of America in our 
economy, which is a big deal to us and to Congress today, it's 
always kind of out of sight, out of mind. And it's an 
afterthought policy. Oh, yes, what about the indigenous people 
of this nation? What about those reservations, whether they're 
in Idaho or Washington or Hawaii or Alaska and so forth? How do 
we reach them?
    The new market of today is the broadband industry. It is 
the Internet, okay, so do we have the infrastructure? Do we 
have mobile communications out in our communities? The answer 
is predominantly no. And our adequate resources would be an 
advantage to the opportunity for us to move that agenda. You 
have heard this morning discussions of the energy needs so that 
we can create alterNative energy. Well, how much energy is the 
Department of Energy actually providing to access energy or 
pursue alterNative energies, whatever those energy 
opportunities are, whether it's wind or hydro or geothermal, et 
cetera?
    Are they out there, and are they really aggressively, are 
they meaningfully putting resources out there for the Tribes to 
be able to develop those kinds of opportunities to enhance our 
economies and our communities? And often, not all of our Tribes 
are in rural communities where there's strong markets. Most of 
our Tribes are in rural communities where there's weak markets, 
and we need to be able to access those markets, and it takes 
capital and infrastructure to make that happen. In my 
testimony, we show how the Jamestown Tribe has leveraged 
different opportunities.
    The SBA 8(a) program is really a good program. It does have 
some flaws in it, and it does have some unintended 
restrictions. But it does do a good job. The current conditions 
of the Section 8 of the Department of Defense helps provide the 
adequate resources. I have colleagues in the Senate who 
actually are looking at some of our sister Tribes and Alaska 
Native Corporations in a jaundiced way, which misrepresents how 
we move our agenda. So, moving economic agenda on certain rules 
is okay for corporate America, but it's not okay for Native 
America. There's something wrong with that story, something 
wrong with that picture. And we need to correct that message.
    Because, quite frankly, they should not be afraid of us. 
They should not be fearful of us becoming independent and 
becoming stronger. As governments and as business entities to 
be able to provide the kinds of resources to deal with the 
unemployment problems that we have in our respective 
communities and throughout the indigenous communities, that's 
the big deal to us. We want to be our own--we want to stand on 
our own two feet, to be able to take care of our own community 
needs. Washington, D.C. can't do it. The State capitals can't 
do it. But we can if you would provide us the right tools, the 
right legislation that gives us the authority, that instructs 
the IRS in terms of what is taxable and what's not taxable. The 
revenues of our businesses is our tax base. Where other 
governments have a tax base, we don't. That is our tax base, 
and that is an important agenda. So, we've shown where we've 
been successful. The loan guarantee program works. We need a 
surety bonding guarantee so that we have companies that go out 
there and become effective, so you have to have those kinds of 
resources. Where other industries will leverage assets that 
they have, we can't leverage our trust resources. You can't 
leverage it, because if something goes awry, they can't 
capitalize on it. So, it doesn't work.
    The loan guarantee programs work. BIA works. SBA works, but 
it needs to be stronger. And the surety bonding program can 
work. It's an irony of it's an insurance industry, but it's not 
an insurance industry. They don't want risk. They just want the 
money, and we need them to go get the contracts. So, those are 
programs that get our businesses on their two feet, and so we 
can become successful.
    I'll close, Mr. Chairman, by saying that we want to 
leverage. We want to become independent. We want to be self-
reliant. But we need the tools to do it, and we need the 
authority to do it. And that's what we need from Congress. 
Thank you, sir.
    [The prepared statement of Mr. Allen follows:]

Prepared Statement of Hon. W. Ron Allen, Tribal Chairman/CEO, Jamestown 
   S'klallam Tribe; Treasurer, National Congress of American Indians
    On behalf of the Jamestown S'Klallam Tribe, I want to thank you Mr. 
Chairman and the Senators of this Committee for the opportunity to 
provide testimony on this very important topic of Overcoming Barriers 
to Economic Development in Native Communities.
General observations regarding Economic Development in Indian Country
    Economic Development in Indian Country trails significantly behind 
the rest of the nation and the acute economic conditions experienced by 
our Tribal citizens are even more pronounced than those of the current 
economic crisis. Tribal citizens are more vulnerable to the impacts of 
the current economic conditions because Tribal governmental revenues 
depend entirely on effective economic development to support nearly 
every aspect of reservation life and Tribal governance. However, 
chronic underfunding by the U.S. Government and the severe lack of 
private investment has left the economic potential of Indian Country 
unrealized. Tribes are forced to rely on our own economic ventures to 
generate revenue to support citizen programs and maintain government 
services for our people. Yet, Tribes are expected to meet these 
economic challenges with fewer resources and greater restrictions 
placed on vital economic financing tools and incentives. It stands to 
reason that Tribes should be given all of the tools and incentives 
available to other governments to raise and attract capital.
    When given the right tools to exercise our inherent right of self-
government, Tribes can effectively lift our communities out of poverty 
and fully participate in the American economy. It is not just our 
Tribal citizens who benefit from federal investment in our communities, 
surrounding communities, and at times, entire regions, are also 
beneficiaries of Tribal success. The severe critical barriers to 
development that exist in Indian Country are the result of many 
factors, including, past federal policies that were imposed on Tribes. 
Congress has an opportunity to reverse these trends that are impeding 
the success of Tribal economies by providing appropriate financing 
tools and tax incentives and dismantling existing barriers for Tribes 
to fully utilize programs and services. These efforts will ultimately 
benefit Tribal communities and stimulate economic growth that, in turn, 
builds a stronger America and creates jobs.
    Tribal Self-Determination and Self-Governance works, but more 
investments would achieve even greater successes. Economic Development 
has been highly uneven, with many reservations remaining in great 
poverty. Regulations and legislation devised to address the needs of 
state and local government programs often neglect to include Tribes or 
promote ambiguous interpretation regarding Tribal participation. While 
this was not the intention of the legislation or regulations, resolving 
the uncertainty or unintended exclusion is an unfortunate means of 
promoting Tribal economies. Economic development is essential to our 
independence but we cannot achieve this without a strong revenue 
source.
    The Jamestown S'Klallam Tribal accomplishments are a result of 
vision, a progressive attitude, hard work and a respectful relationship 
with the Federal government. Economic self-sufficiency will enable us 
to continue to diversify into alterNative business opportunities, build 
stronger economic resources and diminish our dependence on the federal 
component of resources for the Tribe. We would like address and make 
recommendations of the following areas:
Small Business Association 8(a) Business Development Program
    One of the most effective economic development programs for Tribes, 
especially rural Tribes, has been the Small Business Administration's 
(SBA) 8(a) program. Tribe's use the 8(a) program to sustain the 
economic well-being of entire communities. The program has demonstrated 
its effectiveness as a viable economic tool for all Tribal governments 
because it has proven successful regardless of a Tribe's location or 
size.
    Despite the positive economic gains realized by Tribes and the 
demonstrated success of the program, the Native 8(a) program has been 
subject to more regulatory oversight than most other government 
contracting programs. Certain program provisions that were designed to 
promote Tribal participation are currently under scrutiny and are 
liable to be scaled back. For example, the newly imposed justification 
requirement for contracts exceeding $20 million is arbitrary and 
perplexing at best, given the fact that this is a far lower threshold 
than that applied to other non-Tribal sole source awards. This program 
should be commended for job creation and improving the dire economic 
conditions of Native communities. It is unfathomable that there are 
efforts to debilitate the program when it is beginning to make a 
difference for so many economically distressed Tribal communities and 
is an affront to the federal-Tribal relationship.
    The Native 8(a) program confirmed Congress' commitment to advance 
Tribal self-determination and self-sufficiency. Congress had the 
foresight to recognize that providing incentive tools for business 
development would be much more beneficial to Native communities than 
simply appropriating funds for economic development assistance.
Jamestown S'Klallam Tribe Native 8(a) Success
    The SBA 8(a) program has opened up a whole new business sector for 
our Tribe creating new employment opportunities for our Tribal citizens 
and revenue sources for our Tribal programs including health care, 
education and community support services. The 8(a) program enables our 
Tribe to enter into federal markets previously precluded from Tribal 
operations. For example, the program has paved the way for JKT 
Construction (JKTC) to seek Federal Government construction projects 
and to form a Mentor Protege relationship that has provided training 
and joint ventures, which has allowed our business to work on projects 
that we would not otherwise have had the funding resources to handle. 
The ability to contract over a term of years is critical to our Tribe's 
overall economic success and will greatly enhance our ability to 
provide critical government, social and cultural services to our 
citizens and build a solid infrastructure in our community. This is 
economic development that will assist the Tribe in moving toward its 
goal of economic self-sufficiency.
    We strongly urge the 8(a) program be left intact and subject to 
existing effective federal oversight mechanisms that are already in 
place. Participation of Native enterprises in the SBA's 8(a) Business 
Development Program has proven its importance to building strong Native 
economies and job opportunities, as well as employment for the 
surrounding communities.
Surety Bonding
    There has been a long standing need for a Surety Bonding program 
for Indian Country. Bonding companies, uncomfortable and unfamiliar 
with sovereign Tribes, have been simply unwilling to provide bonding 
for Tribal construction projects. The perceived risk associated with 
sovereign immunity has precluded and even obstructed Tribally-owned 
construction companies from accessing surety bonds even when such 
immunity is waived for certain contracts. This industry impediment 
clearly suppresses our business opportunities because small business 
contractors are being required to show that they can obtain surety 
bonds to perform subcontract work.
    There is an obvious need for a surety bonding program that would 
allow Tribal businesses to effectively compete without having to rely 
on an additional partner for the sole purpose of bonding. In order for 
Tribes to compete for and secure contracting opportunities, we need 
Congressional support of programs that ensure access to surety bonding 
for eligible Indian-owned construction companies.
    Although, construction is an area with a much higher probability of 
providing direct employment for Tribal citizens, surety bonding is one 
of the largest barriers for Tribes seeking entry and growth in this 
highly competitive and capital intensive sector.
    Tribes therefore, urge Congress to authorize waivers for Tribes to 
facilitate entry and expansion into federal construction and explore 
options that will benefit contractors as opposed to sureties, such as 
loan guarantees for operating capital. Expansion of the Bureau of 
Indian Affairs (BIA) guaranteed loan program to include Surety Bonding 
guarantees will reduce the perceived risk associated with Tribal 
sovereign immunity that is assumed by insurance companies. It will also 
increase access to infrastructure and other construction related 
projects, and generate job opportunities and business growth during 
difficult economic times at no, or very limited, cost to the Federal 
Government.
Tribal Government Tax Status Act
    We strongly urge that the Tribal Government Tax Status Act be 
amended so that Tribes have better access to secure bonding for 
economic development.
    Although the intent of the Tribal Government Tax Status Act was to 
implement measures that would afford Tribes equal parity with their 
state and local governmental counterparts for purposes of issuing tax 
exempt debt, the law, as interpreted by the Internal Revenue Service 
(IRS), substantially limits the ability of Tribes to raise revenue for 
economic development activities that would generate new revenue for 
community-service purposes. The IRS) has unduly and narrowly defined 
how it can be used to access financing to address community, 
governmental and economic development goals.
    As a result of this limited and narrow interpretation of 
``essential governmental functions'', Tribes are precluded from 
utilizing the same revenue raising authority and tax advantages that 
other governmental entities enjoy. Under the Internal Revenue Code, 
income accruing to state and local governments is not taxable. Tribal 
tax free bonds, however, can only be used for essential governmental 
functions, a restriction not imposed upon states and local governmental 
entities. In essence, Tribes are treated as political entity anomalies, 
enjoying some of the tax benefits of states and localities and 
suffering many of the burdens of ordinary tax payers. Congress has a 
trust obligation to ensure that Tribal governments are afforded an 
equal federal tax status.
    As the federal budget becomes more restrictive, Tribal governments, 
like state and local governments will have to find new revenue sources 
to support the delivery of essential government services. If Tribes are 
not granted a tax and bonding status similar to states and local 
governments, Indian governments will not be able to stimulate 
development nor sustain governmental services for our Tribal citizens. 
States and local governments are able to levy property and income taxes 
upon their constituents in order to raise revenue for financing 
economic development ventures. Tribes, however, have virtually no 
corresponding tax-advantaged financing tools to promote economic 
development. The goal of the Tribal Government Tax Status Act of 1984 
was to provide a mechanism that would address this financial void and 
provide Tribes with the types of financial tools that further the 
development of an environment necessary for economic and social self-
sufficiency.
    In 2009, the American Recovery and Reinvestment Act (``ARRA'') 
authorized Tribal governments for the first time, to issue tax exempt 
bonds for private development activities in the same manner as state 
and local governments. Prior to the passage of ARRA, tax exempt bonds 
issued by Tribal governments could only be used (with limited 
exceptions) for essential government purposes. ARRA lifted this 
restriction on a temporary, limited basis allowing Tribal economic 
development bonds to be issued subject to a $2 billion cap.
    We strongly urge this Committee to advance measures that would 
permanently authorize Indian Tribal governments to use qualified tax-
exempt private activity bonds for similar types of projects and 
activities as those allowed for State and local governments.
Urgent Need to Enhance Access to Capital
    Indian Country has been ignored by investors as a result of many 
factors, including, geographic isolation, lack of resources, and 
perceived political risk. The trust status of Tribal land precludes its 
use as collateral for financing economic development incentives. 
Furthermore, businesses that prefer fee ownership of a business site 
for tax-incentive purposes are discouraged from seeking business 
development opportunities in Indian Country. As a result, Tribes 
encounter countless barriers to acquiring developmental capital and 
conventional sources of credit to finance economic initiatives. Federal 
policies that ignore these barriers, or underestimate their 
significance, hold little potential for success.
    Sustaining growth beyond the federal investment means having access 
to capital and incentives to achieve such goals. Access to capital is 
fundamentally an issue of equal opportunity for Tribal citizens. 
Congress can help support the development of Tribal financial 
institutions serving Indian Country and shape the services provided by 
outside financial institutions currently situated to aid Tribal 
governments and their citizens. It is urgent for Congress to correct 
the unfair and unequal treatment of access to capital as the private 
sector has available to them, particularly the corporate sector.
Loan Guarantee Programs
    Guaranteed financing is needed for Tribal economic development 
projects. For over a decade, one of the Bureau of Indian Affairs 
(BIA)'s most successful programs is the Guaranteed Loan Program for 
businesses. This program provides an attractive incentives and 
assurances for banks to expand and underwrite loans in Indian country, 
assisting Tribes and their members in accessing capital and encouraging 
lending to Indian-owned businesses. Loan guarantees are also an 
attractive financial measure because they result in the leveraging of 
federal dollars. Federal program funding and guarantees have been 
critically important in support of developing an economic foundation.
    This program, however, was targeted for deep cuts despite its 
positive returns because not all of the funds were allocated in a 
timely manner to Tribal entities. Tribes should not be forced to bear 
the brunt of the agencies failure to properly manage the program and 
dispense financing in a timely manner. The BIA Loan Guarantee Program 
is a very important tool for raising the level of Tribal Self-
Sufficiency. If not for the BIA Guarantee Loan Program, many Tribes 
would not, in most cases, be able to get loans from the standard 
sources available to other entities and businesses.

    The BIA Loan Guarantee Program has been very instrumental to the 
Jamestown S'Klallam Tribe.

    The BIA loan guarantees allowed Jamestown Properties, Inc. to 
construct needed facilities and create economic opportunities and jobs. 
The first BIA loan was used to guarantee a loan to construct two 
buildings on the Tribal campus. These buildings consist of the 
Community Center/Dental Clinic and the Social and Communities Services 
Building. The Community Center is the focal point of our Tribal campus 
and is used for Tribal events, as well as available for use by Tribal 
citizens. It is a business facility that brings great pride to the 
Tribe.
    The Dental clinic which is located in the lower level of this 
building has created economic opportunities not only for the Tribe, but 
for the Tribal citizens employed there. The dental clinic sees both 
Tribal citizens, as well as members of the larger regional community. 
It creates resources to help fund the Tribal citizen dental program. 
The clinic is also one of the few clinics in the area that provides 
services to Medicaid dental patients. The Social and Community Services 
building houses Tribal programs which have a great impact on the Tribal 
citizens. These programs include youth, education, elders, and Indian 
Child Welfare.
    Jamestown Properties also received loan guarantees to build the 
Longhouse Market and Deli. This building, which is leased to JKT 
Gaming, Inc., houses a unique and culturally stunning gas station and 
market. The Longhouse Market has proven to be highly successful not 
only in operating profits for the Tribe, but also increases the Tribe's 
tax base. Proceeds from the cigarette tax compact with the State of 
Washington helps provide funds for government services, which are 
severely underfunded by the Federal government. Fuel tax compact funds 
are used for needed transportation infrastructure projects. The Market 
has helped the Tribe diversify its economic base by providing non-
gaming revenues.
    Our Tribe urges the need for an enhanced loan guarantees for Tribal 
governments that will, at the very least, open the door to credit, 
reasonable rates, and the ability to repay tax-exempt debt. Part of the 
Congressional and Federal rationale to cut back this program is that 
the program could be duplicating other services, such as the SBA loan 
programs. This assumption is wrong and will undermine the Tribes 
economic development efforts. This important program has very positive 
benefits and successes for Indian country. The default rate is low and 
key in assisting Tribes with economic development and providing 
additional jobs to Indian country. We respectfully urge this Committee 
to preserve and even enhance this successful program.
Conclusion
    Investing in our Jamestown Tribal community and business operations 
and Tribes across Indian Country is worthwhile. The Tribe's progressive 
approach has proven that a small Tribe can be a major force for good in 
the community--not only for Tribal citizens, but for the entire region. 
This success has led to a decreased dependence on federal funding, and 
the return of the independent, self-reliant nature that has always 
characterized the S'Klallam people. We effectively and efficiently 
combine federal and Tribal resources to support economic development 
projects.
    When Congress invests in Indian Country, we prove to be good 
investments to strengthen our local, state and national economies. We 
can put our labor force to work right away, build our infrastructure 
for future growth, benefit surrounding communities, and most important, 
improve the health and well-being of our citizens, the goal of every 
government.
    In conclusion, the Jamestown S'Klallam Tribe endorses and promotes 
the positions and recommendations of our National Inter-Tribal 
organizations, including the National Congress of American Indians 
(NCAI), the Native American Finance Officers Association (NAFOA) and 
the Native American Contractors Association (NACA). In particular, we 
respectfully request to include in the Congressional Record the 
briefing materials prepared by NCAI titled, ``White House Native 
American Business Leaders Roundtable'' and ask the Committee to support 
this proposal and the recommendations contained therein.
    Thank you again for the opportunity to present these views. We look 
forward to continuing our work with the Committee in advancing these 
goals.
    Attachment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

    The Chairman. Thank you very much, Chairman Allen.
    Chairman Small, how do you plan to use the impact report to 
further economic development on the reservation and in the 
region?
    Mr. Small. The impact statement was put together by the 
five Tribes of Idaho. The five Tribes are the Fort Hall Tribe, 
Shoshone-Bannock; and the Coeur d'Alene Tribe up in Northern 
Idaho; the Kootenai Tribe clear up further north near the 
Native border; as well as the Nez Perce Tribe and the Shoshone-
Paiute Tribes. The Shoshone-Bannocks and the Shoshone-Paiutes 
are on the southern part of Idaho. We're on the southeastern 
side, and the Shoshone-Paiute is on the southwestern side of 
the state.
    The reason that we put this together was to try to have 
some type of commitment from the State of Idaho in fostering 
business creations, expansion and job roles. The Tribes had had 
a long history of working with the respective regional 
communities and other governments. The common interest and 
goals shared by the local, Tribal, State and Federal 
governments can be best served through cooperation and 
communication by working together, which can ensure the 
agreements made between our forefathers are honored.
    This whole impact statement was specifically, like I 
indicated a little bit, was to try and get some respect from 
the State of Idaho and from the governor. We wanted the 
governor to at least have an Indian seat in the governor's 
office like a lot of other states have. But our current 
governor basically refuses to do that. He hasn't even visited 
our reservations. He travels through there bite a bit, but he 
doesn't stop there. He doesn't visit our government.
    Sometimes when we've talked with him, he has no idea who we 
are, what we are, why we are and where we came from. He doesn't 
even understand what treaties are with us. So, we have a huge 
problem with our current governor, and he needs to understand 
as well as some of the State legislators need to understand 
that we are an economic force when it comes to our reservation. 
Particularly, the Shoshone-Bannock.
    We're the largest reservation. We have over 544,000 acres 
of land. 97 percent of that is still in trust, still in trust. 
It's either owned by Tribes, by the Tribe or by the individual 
Indians out there. And that's uncommon for these days. A lot of 
Tribes are checkerboard to the point of are they even 
considered, you know, where are they at right now. So, we've 
been able to very jealously guard what we have had. We're 
purchasing land when we can to make it 100 percent soon. But 
again, when you look at all of the farming activity of farming 
on our reservation, how does any and all other economic 
opportunities that the Tribe could get into?
    We have gaming. It's not one of our top money-makers on the 
reservation. The top money-maker would be our agricultural land 
base. However, as I indicated in my testimony, that we cannot, 
for some reasons cannot get the capital to do our own farming. 
We've entered into some agreements with some of the major 
potato processing plants in our part of state. And we've seen--
we've seen what can be done with our land. We've made 
millionaires out of some of the corporate farmers on the 
reservation, but we're not.
    The Chairman. Thank you for your response on that.
    Chairman Allen, in your testimony, you described the 
success your Tribe has had with the 8(a) program. Your concern 
with that program is that additional barriers will be placed on 
participating Tribes as you mentioned. What do you think will 
happen to Tribes if that program is made more restrictive?
    Mr. Allen. Well, personally, Mr. Chairman, I think that 
it's going to suppress and squeeze out the potential for the 
existing and the potential Tribal and individual businesses 
that want to become independent and want to become competitive 
in that environment. What the SBA 8(a) does is it narrows down 
the competition and allows us to create mentorships with 
companies that are larger than ours. And then we can develop a 
relationship and skills, the talents and the capacity to become 
successful in a competitive world. That's what its intent is.
    If they continue to restrict, if they continue to narrow it 
down, what it does is it takes us out of the competitive arena 
for those Federal contracts. So, it's not just Department of 
Defense. There are contracts over in HHS, contracts in the 
other departments and agencies that we should and could access. 
And 8(a) opens up those opportunities. Now, but what would 
happen if they make it more --what actually Section 811 does, 
it narrows it down. So, those companies that are competing for 
those contracts don't have that same restriction. It's only for 
Native 8(a)'s. It's not for the other 8(a)'s, so we're treated 
differently again. So, if they narrow it down some more, then, 
quite frankly, it just diminishes the potential success of both 
Tribal and individual 8(a) opportunities.
    The Chairman. Thank you.
    Chairman Small, in your testimony, you noted that had the 
Shoshone-Bannock Tribes have increased regional employment by 
4,097 jobs. How many of the jobs went to Tribal members, and 
how many went to local community members? What impact have 
these jobs had on the reservation and on surrounding 
communities?
    Mr. Small. We have about 1,000 of our people that are 
working for the Tribes itself, the Tribal Government. We have 
others of our people that are working for the local BIA agency 
offices. We have Indian Health Services. That is also, we have 
a lot of our Tribal members that are working there, and we also 
have some enterprises that are Tribal enterprises. So, we've 
probably got, of all of those jobs, about 1,000 of our people 
are actually working. The rest of the work force is made up of 
other Indians and other non-Indians.
    Most of the jobs that we looked at that are there comes 
through or farming activities. These corporate farmers that are 
out there, they've provided the bulk of the jobs on the 
reservation through the farming activity that is there. So 
again, enough about our agricultural process.
    The Chairman. Thank you. Chairman Allen, in prior committee 
hearings, you predicted that Tribal economic development 
opportunities would be impacted if the Carcieri fix did not 
pass Congress. Has your prediction come true?
    Mr. Allen. It's going in the direction of my prediction, 
Mr. Chairman. The problem with the Carcieri, as testified by 
Brian Patterson, is that it creates a very precarious legal 
standing for many of the Tribes. It did create two sets of 
Tribes, those that were recognized by the Federal Government 
before 1934 and those after, without a doubt. And a lot of land 
has come into trust since then, which includes reservations 
that have gaming operations, of which we have a great deal of 
financial investment in the financial industry.
    And so, it's much harder for us to access that Federal 
financing, simply because of ``can you engage in this 
activity'' or ``what is the status of this property with regard 
to the businesses that you want to engage in'' and its status 
on that property after 1934 if you are recognized as such. So, 
it's moving in that direction. And the problem is--there's many 
problems it's creating, but among those problems, it's creating 
a lot of legal problems. And Robin Danner was talking about 
legal costs. When you're fighting for your rights, you're 
fighting for your opportunity as opposed to using the legal 
profession to put together packages and deals and the legal 
details of a successful business. So, that's what unfortunate. 
Now we find ourselves in court defending our legal standing. Is 
the activity taxable, because is it on trust land or not? And 
so, it's always about jurisdiction between the Tribes and the 
local government and State government.
    And they're always looking for revenues, and they would 
just love to be able to come in and tax our businesses or our 
citizens that are conducting business on our reservation. So, 
yes, it's moving in a very negative direction and creating a 
fuel to this anti-Indian sentiment that always was prevailing 
throughout America. And now, it's resurfacing in a different 
way. And it's very unfortunate, because we were hoping that we 
were healing those wounds that are generations old.
    The Chairman. Well, thank you very much. Finally, let me 
ask this both of you what impact do you think these recent 
financial issues could have on Tribes, and what are your 
concerns when the Congressional Debt Committee begins its work?
    Mr. Small. I'm very worried about our ability to secure 
future financing for our projects with the downgrade of the 
U.S. credit rating. One example is our ongoing $33 million 
hotel and event center project. We are seeing the impacts of 
the last few weeks from the debt ceiling negotiations on this 
project. We are experiencing financing complications in our 
efforts to move forward on it. We do have a BIA guarantee. But 
they're not giving that guarantee much respect, because of the 
downturn.
    And that's just the bank that we're currently negotiating 
with. They don't feel the BIA guarantee is a total guarantee 
for this project because of the recent stuff that's been going 
on. And it's always been difficult for us to access capital for 
our projects, and the economic downturn is going to make things 
tough. We are worried that the banks will freeze lending to us 
in the future, especially if the government doesn't provide 
loan guarantees or other incentives to lenders.
    We're also worried that the Congressional Debt Committee is 
going to make massive cuts to basic services to our Tribal 
members such as education, health care and public safety. For 
Tribes in the U.S. like ours, we have--we feel that the U.S. 
has some treaty responsibilities, which are recognized and in 
the Constitution. So, we feel that we know there's going to be 
some massive cuts. We've all heard about them. But we would 
like to make sure that we are not or we will be immune from 
those cuts because of the obligations under the treaties that 
we made with the United States Government.
    The Chairman. Thank you for your response. Chairman Allen.
    Mr. Allen. Mr. Chairman, I share Chairman Small's concerns 
and even fears about the current condition of the financial 
climate and environment. You see very large Tribal packages 
being renegotiated and establishing new kinds of conditions and 
even encroachment on Tribal sovereignty in the protection of 
our trust resources and assets. That has to be alarming for 
Indian Country as those developments unfold. The rules, as I 
had stated earlier, when we deal with the financial industry, 
it's not the same. We're not treated the same. If we have a 
casino, the amortization schedules and the balloon 
requirements, the payment requirements that are imposed on our 
financing is not the same as a private sector.
    If you were going to build a hotel, it's not the same as 
the private sector. If we are going to build a hotel, that's 
one issue. If Best Western builds a hotel, it's a different 
standard in terms of the kinds of criteria and conditions of 
leveraging those finances, it's much more restrictive. The cost 
of money is higher. And now with the current financial climate, 
it's even more expensive. Many of the Tribes want to develop 
businesses and enterprises or it doesn't matter whether it's 
hospitality industry or some other venture. It's difficult to 
access, and it's very expensive money to pursue.
    The Stimulus Bill that you passed a couple of years ago 
required the Department of Treasury and the IRS to provide you 
a report. Over a year ago, it was due, and that report was 
supposed to say, supposed to describe what's wrong with the 
1984 Tribal Government Tax Status Act that allowed Tribal 
Governments to have the same status as other governmental 
entities to go out and secure low cost, low interest tax exempt 
bonds for the purposes of economic development and governmental 
infrastructure. It is very problematic.
    The rules, the interpretation of the IRS is much more 
restrictive for Tribes than it is for local and State 
governments. And that report was supposed to come back to you 
with recommendations. I haven't seen it yet I've heard it was 
done, and I think that the Senate should ask where is that 
report and demand it and hold hearings on its recommendations 
in terms of what I believe is appropriate amendments to that 
Act that would enhance that kind of opportunity for us to be 
able to move in that direction.
    I think that there are other financial incentive 
opportunities for the Tribes, because it targets really large 
projects. We're talking 50, 100 million or more. It doesn't do 
any good for a Tribe that just needs 10 million, which it 
doesn't pencil out in terms of going and getting that kind of 
money, you know, for a project with a small Tribe, like the Hoh 
Tribe out in the West Coast with 100 people and they just want 
something small. So, we need to review the financial industry 
and even discuss with the financial industry why are the rules 
different when you're lending to the Indian Tribes and the 
Indians citizens than elsewhere, and what you can do about it.
    The Chairman. Well, I want to thank you very much for 
participating in today's hearing. This has been very valuable. 
You have helped to define the barriers to economic development, 
but more importantly, you have helped to identify concrete 
things we can do to help clear the barriers an encourage Native 
communities towards self-sufficiency. When Native economies 
strive, the benefits are far-reaching. Job creation and 
economic benefits reach county, regional and State economies as 
well.
    So, I look upon what we're doing as building on a basis 
here and continue to expand it as we go along. And to do it in 
what Hawaiians call a pono way, meaning correct justification, 
and to do it right. And so, I look forward to continuing this 
school in the pono way to help the indigenous people of our 
country. And that's my reason for being here, and I tell you I 
feel so proud and privileged to be Chairman of the Indian 
Affairs Committee, only the second indigenous person. Of 
course, the first was Ben Nighthorse Campbell, Senator, who was 
the first.
    And so for me, this has been a pleasure. And I intend to 
continue to work on those issues that have in a sense been 
pushed aside, but we need to take care of these in the time 
that we have. So mahalo nui loa. Thank you so much for your 
help in all of this. And again, I just want to remind you, 
because I want to hear from everybody, though you've not been a 
witness, if you want to write, please, you know, let us know 
what you think. And remember that the hearing record is open 
for written testimony for two more weeks.
    So, if you can do that within that, we would certainly 
appreciate it. Again, mahalo nui loa. Aloha, safe trim home to 
all of you here. And I thank God for you, our indigenous 
people, our country, and thank God for what we're able to do 
for our people. Mahalo nui loa. This hearing is adjourned.
    [Whereupon, at 11:30 a.m., the hearing was adjourned.]
                            A P P E N D I X

        Prepared Statement of James D. Kimmel, Hawaiian National






                                  
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